Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Q2/H1 2014 Earnings Presentation
35 slides from Deutsche Pfandbriefbank's earnings presentation, Aug 14, 2014
Slide 1: Results Q2/H1 2014
Results Q2/H1 2014 PBT up +45% y-o-y to EUR 45 mn in Q2; H1 2014 with EUR 83 mn ahead of guidance Analyst Call Munich/Unterschleissheim, 14th August 2014 Andreas Arndt, CFO Results Q2/H1 2014, 14th August 2014
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe for or purchase any securities. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial condit
Slide 3: Key developments in Q2/14
Key developments in Q2/14 New business of EUR 2.7 bn in Q2 (+51% y-o-y) marks one of the strongest quarters New business & in pbb‘s history, matching high volumes of typically strong fourth quarters Markets Despite increasing competition, new business written at attractive margins while maintaining
Slide 4: Key figures H1/14
Key figures H1/14 H1/14 (EUR) Income Pre-tax profit up +38% y-o-y to EUR 83 mn (H1/13: EUR 60 mn) and thus ahead of guidance statement PBT 83 mn (full-year: EUR >140 mn) NII 195 mn − Net interest income strongly up by +27% (adjusted for one-off effects) LLPs -2 mn − Loan-loss provisions remain on lo
Slide 5: Income statement
Income statement Continued positive trend in base line revenues from lending business and significantly reduced operating cost base Pre-tax profit +38% Key drivers H1/14 vs. H1/13: EUR millions +45% Profitability of the portfolio continues to increase 83 LLPs remain on low level 62 60 31 43 38 45 Op
Slide 6: Income statement: net interest income continues positive trend
Income statement Net interest income continues positive trend Income/expenses from lending business EUR millions H1/13 H1/14 Key drivers H1/14 vs. H1/13: Net interest and similar 153 195 Ongoing replacement of lower margin existing income portfolio by higher margin strategic new thereof: one-off eff
Slide 7: Income statement: operating cost base significantly reduced
Income statement Operating cost base significantly reduced following the termination of the FMS-WM servicing by end of Sep 2013 and additional cost measures Income/expenses from further business activities EUR millions H1/13 H1/14 Key drivers H1/14 vs. H1/13: Net other operating 56 31 No fee income
Slide 8: Income statement: income/expenses from financial instruments
Income statement Income/expenses from financial instruments primarily driven by derivative valuation Income/expenses from financial instruments EUR millions H1/13 H1/14 Key drivers H1/14 vs. H1/13: Net trading income -2 -18 Net trading income driven by derivative valuation Net income from 1 1 financ
Slide 9: Capital: pbb with solid capital ratios under Basel III
Capital The regulatory capital ratios stated are calculated on an unaudited pro-forma basis. According to the ‘Waiver Rule’ regulated in Article 7 CRR, Deutsche Pfandbriefbank AG is exempt from calculating the pbb with solid capital ratios under Basel III equity capital ratio and the core capital ra
Slide 10: New business
New business New business of EUR 2.7 bn in Q2 (+51% y-o-y) marks one of the strongest quarters in pbb‘s history, matching high volumes of typically strong fourth quarters Total new business PIF Total new business PIF EUR billions (Commitments, incl. extensions >1 yr) EUR billions (Commitments, incl.
Slide 11: Balance sheet: well matched ALM profile
Balance sheet Well matched ALM profile Balance sheet 30/06/2014: EUR billions 77.8 77.8 Other assets 1.5 2.2 Other liabilities Hedging derivatives (pos. FV) 7.4 6.7 Hedging derivatives (neg. FV) Cash and overnight 2.0 2.3 Overnight ≤1yr 13.6 13.0 ≤1yr Well matched ALM profile >1-5yrs 24.6 25.7 >1-5y
Slide 12: Funding: new long-term funding of EUR 3.1 bn
Funding New long-term funding of EUR 3.1 bn reflects lower funding needs due to optimisation of funding profile on the basis of a more than adequate liquidity position New long-term funding Private placements Unsecured (avg. maturity) EUR billions1 EUR billions1 Pfandbriefe (avg. maturity) 2.1 (4.9
Slide 13: Funding: over-collateralisation in both cover pools
Funding Over-collateralisation remains on comfortable level in both cover pools Mortgage Cover Pool: Total cover funds Public Sector Cover Pool: Total cover funds EUR billions (Nominal) EUR billions (Nominal) OC (%) OC (%) OC (absolute) OC (absolute) Pfandbriefe outstanding Pfandbriefe outstanding 3
Slide 14: Funding: deposit platform pbbdirekt.com
Funding Positive development of deposit platform ‘pbbdirekt.com’ with total deposits of EUR 1.4 bn – product range further broadened Total deposits EUR billions ~32,000 Number of clients constantly growing despite two interest rate reductions since launch in 1.4(2.6 yrs) ~21,000 March 2013 Product r
Slide 15: Portfolio: strategic portfolios further growing in Q2
Portfolio Strategic portfolios further growing in Q2 12/13 03/14 06/14 Total portfolio EUR billions (EaD, Basel III) Strategic Non-strategic Bank steering/ 69.4 68.8 65.5 portfolios portfolios ALM (run-down) +6% 22.2 22.8 23.5 25.0 24.5 24.9 +4% 13.8 12.9 8.4 8.6 8.7 8.4 REF PIF VP1new C&A1 Total1 B
Slide 16: Portfolio: high quality and low share of problem loans
Portfolio High portfolio quality reflected in sound risk profile and low share of problem loans Total portfolio: Rating Non-investment grade2 REF portfolio: EL classes EL class 1-5 S&P scale AAA to A- 30/06/2014: EUR billions (EaD, Basel III)1 30/06/2014: EUR billions (EaD, Basel III) 6-8 BBB+ to BB
Slide 17: Key take-aways
Key take-aways ► Development of sustainable earnings base on track ► Positive earnings trend from lending business ► Strategic core business growing, providing for increasing earnings ► Solid capitalisation covers further growth and regulatory challenges comfortably ► Successful new business activit
Slide 18: Appendix
Appendix Results Q2/H1 2014, 14th August 2014
Slide 19: Income statement
Income statement Income/Expenses EUR millions 2010 2011 2012 Q1/13 Q2/13 H1/13 Q3/13 Q4/13 2013 Q1/14 Q2/14 H1/14 Operating income 652 526 467 101 113 214 155 113 482 89 114 203 Net interest and similar 600 371 296 79 74 153 79 87 319 89 106 195 income Net fee and commission -10 32 23 1 1 2 3 4 9 0
Slide 20: New business: Real Estate Finance (REF)
New business Real Estate Finance (REF) New business: Regions Portfolio: Regions H1 2014: EUR 3,702 million (Commitments, incl. extensions >1 yr) EUR billions (EaD, Basel III) 12/13 06/14 Germany 1,897 (51%) Germany 12.1 54% 12.3 52% UK 270 (7%) UK 3.5 16% 3.8 16% CEE 476 (13%) CEE 2.1 9% 2.4 10% Fra
Slide 21: New business: Public Investment Finance (PIF)
New business Public Investment Finance (PIF) New business: Regions Portfolio: Regions H1 2014: EUR 577 million (New commitments) EUR billions (EaD, Basel III) 12/13 06/14 Spain 42 (6%) Spain 2.1 25% 2.1 25% Germany 269 (47%) Germany 2.0 24% 2.2 26% France 181 (31%) France 1.7 20% 1.8 21% Italy 0 Ita
Slide 22: Funding: public benchmark issuances since 2013
Funding Public benchmark issuances since 2013 Type WKN Launch Date Maturity Date Size Spread1 Coupon Issue/Reoffer Price Senior Unsecured A1RFBU 17.01.2013 19.07.2016 EUR 500 mn +138bp 2.000% 99.587% Mortgage Pfandbrief A1RFBY 23.01.2013 30.01.2017 EUR 500 mn +8bp 0.875% 99.585% Senior Unsecured (1.
Slide 23: Portfolio: total portfolio
Portfolio Total portfolio Total portfolio: Regions EUR billions (EaD, Basel III)1 33.5 31/12/2013 / Total: EUR 69.4 bn 28.4 30/06/2014 / Total: EUR 65.5 bn 6.5 6.7 5.2 5.3 4.9 5.4 4.5 4.8 3.8 4.0 3.4 3.5 1.7 1.8 1.7 2.0 1.4 1.4 1.1 1.1 0.8 0.2 0.6 0.4 0.4 0.4 <0.1 <0.1 <0.1 <0.1 Germany2 Austria Spa
Slide 24: Portfolio: REF regions
Portfolio Real Estate Finance (REF) REF portfolio: Regions EUR billions (EaD, Basel III) 12.1 12.3 31/12/2013 / Total: EUR 22.2 bn 30/06/2014 / Total: EUR 23.5 bn 3.5 3.8 2.1 2.4 1.8 2.2 1.4 1.4 0.5 0.5 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.1 <0.1 <0.1 Germany UK CEE France Nordic Spain Benelux Switzer- Ita
Slide 25: Portfolio: REF property types
Portfolio Real Estate Finance (REF) REF portfolio: Property types EUR billions (EaD, Basel III) 6.9 7.2 6.7 31/12/2013 / Total: EUR 22.2 bn 6.2 30/06/2014 / Total: EUR 23.5 bn 4.9 4.6 1.7 1.8 1.4 1.2 1.3 1.0 0.4 0.5 Office Retail/ Residential Warehouse/ Mixed use Hotel/ Other Shopping Logistics Leis
Slide 26: Portfolio: REF loan types
Portfolio Real Estate Finance (REF) REF portfolio: Loan types EUR billions (EaD, Basel III) 21.4 20.4 31/12/2013 / Total: EUR 22.2 bn 30/06/2014 / Total: EUR 23.5 bn 1.2 1.5 0.4 0.5 0.2 0.1 Investment loans Development loans Customer derivatives Other 31/12/2013 30/06/2014 Customer derivatives 2% Ot
Slide 27: Portfolio: REF EL classes
Portfolio Real Estate Finance (REF) REF portfolio: EL classes EUR billions (EaD, Basel III) 5.7 31/12/2013 / Total: EUR 22.2 bn 4.9 30/06/2014 / Total: EUR 23.5 bn EL class S&P rating scale 3.4 3.5 3.4 1-5 AAA to A- 3.0 3.1 6-8 BBB+ to BBB- 2.6 9-11 BB+ to BB- 2.5 12-14 B+ to B- 2.0 15-18 CCC+ and b
Slide 28: Portfolio: PIF regions
Portfolio Public Investment Finance (PIF) PIF portfolio: Regions EUR billions (EaD, Basel III) 2.1 2.2 2.1 31/12/2013 / Total: EUR 8.4 bn 2.0 1.8 30/06/2014 / Total: EUR 8.7 bn 1.7 1.6 1.5 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 Spain Germany France Italy Benelux Austria Nordic countries Other Europe 31/12/
Slide 29: Portfolio: PIF counterparty types
Portfolio Public Investment Finance (PIF) PIF portfolio: Counterparty types EUR billions (EaD, Basel III) 4.6 31/12/2013 / Total: EUR 8.4 bn 4.2 30/06/2014 / Total: EUR 8.7 bn 1.8 1.8 1.7 1.7 0.9 0.3 Local Authorities Public Sector Entities1 Corporates2 Sovereign 31/12/2013 30/06/2014 Sovereign Sove
Slide 30: Portfolio: PIF PD classes
Portfolio Public Investment Finance (PIF) PIF portfolio: PD classes EUR billions (EaD, Basel III) 4.9 4.6 31/12/2013 / Total: EUR 8.4 bn 30/06/2014 / Total: EUR 8.7 bn 3.5 3.4 PD class S&P rating scale 1-7 AAA to A- 8-10 BBB+ to BBB- 11-13 BB+ to BB- 14-22 B+ to B- 23-27 CCC+ to CCC- 28-30 D 0.3 0.4
Slide 31: Portfolio: Value Portfolio new regions
Portfolio Value Portfolionew (VPnew) VPnew: Regions EUR billions (EaD, Basel III)1 10.1 9.7 31/12/2013 / Total: EUR 25.0 bn 30/06/2014 / Total: EUR 24.9 bn 6.0 6.2 1.8 1.8 1.6 1.7 1.6 1.5 1.4 1.4 1.1 1.1 0.8 0.9 0.3 0.3 0.2 0.2 0.1 0.1 <0.1 <0.1 <0.1 0.0 Germany Austria Spain Italy CEE Portugal Supr
Slide 32: Portfolio: VPnew counterparty types
Portfolio Value Portfolionew (VPnew) VPnew : Counterparty types EUR billions (EaD, Basel III)1 8.1 8.4 31/12/2013 / Total: EUR 25.0 bn 30/06/2014 / Total: EUR 24.9 bn 6.3 6.0 6.0 5.9 3.3 3.3 1.3 1.3 Sovereign Local Authorities Financial Institutions Public Sector Entities2 Corporates and other3 31/1
Slide 33: Portfolio: VPnew PD classes
Portfolio Value Portfolionew (VPnew) VPnew : PD classes EUR billions (EaD, Basel III)1 18.1 17.2 31/12/2013 / Total: EUR 25.0 bn 30/06/2014 / Total: EUR 24.9 bn PD class S&P rating scale 1-7 AAA to A- 8-10 BBB+ to BBB- 11-13 BB+ to BB- 14-22 B+ to B- 23-27 CCC+ to CCC- 28-30 D 3.6 4.1 3.4 2.9 0.5 0.
Slide 34: Portfolio: total problem loans
Portfolio Total problem loans Total problem loans: Segments No. of individual cases Total problem loans: Regions EUR millions (EaD, Basel III) EUR millions (EaD, Basel III) VPnew REF France 81 941 771 840 73 100% Japan 70 23% 23% Italy 27% Hungary -11% 18% 18% 16% Austria 941 771 840 18% Benelux 2 2
Slide 35: Contact details
Contact details Communications Walter Allwicher +49 (0)89 2880 28787 walter.allwicher@pfandbriefbank.com Investor Relations Michael Heuber +49 (0)89 2880 28778 michael.heuber@pfandbriefbank.com Website www.pfandbriefbank.com/investor-relations.html © Deutsche Pfandbriefbank AG Freisinger Strasse 5 8
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