Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Q2 2021 Earnings Presentation
49 slides from Deutsche Pfandbriefbank's earnings presentation, Aug 11, 2021
Slide 1: Results Q2/H1 2021 Analyst Conference
Strong PBT of € 114 mn in H1/21 provides good basis for increased full-year guidance of € 180-220 mn Results Q2/H1 2021 Analyst Conference 11 August 2021 Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe for or purchase any securities in any jurisdiction, including any jurisdiction of the United States. Securities may not be offered or sold in the United States absent registration or pursuant to an available exemption from reg
Slide 3: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 3
Slide 4: Highlights Q2/H1 2021
Highlights Q2/H1 2021 pbb well on track – PBT full-year guidance increased to € 180-220 mn Strong PBT of € 62 mn in Q2/21 (Q2/20: € 28 mn) results in € 114 mn in H1/21 (H1/20: € 30 mn) and reflects good operating performance NII + NCI up >9% (Q2/21: € 126 mn; H1/21: € 251 mn) supported by contin
Slide 5: Operating and financial overview
Operating and financial overview New business Q4 Net interest and commission income 1 Q4 General and admin. expenses Q4 € bn (commitments, incl. extensions >1 yr) Q3 € mn (IFRS) Q3 € mn (IFRS) Q3 Q2 Q2 43% 42% Q2 CIR 39% Q1 Q1 Q1 9.3 464 482 202 204 2.1 7.3 126 61 59 119 2.6 3.0 113 126 251 48 102 4
Slide 6: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 6
Slide 7: Overall positive trend is emerging, investment volumes recover in Q2
Markets Overall positive trend is emerging, investment volumes recover in Q2 European and US Investment volume1 (€ bn) European and US CRE investment volumes showing signs of recovery in Q2 600 € Quarterly US figures were 14% above the pre-pandemic 500 € trend 12 month rolling First figures fo
Slide 8: Future structural challenges – Green as positive differentiating factor
Markets Future structural challenges – “Green” as positive differentiating factor Current crisis (COVID-19) different from last crisis (GFC) – no cyclical downturn of CRE market prices and subsequent upwards adjustment; pandemic accelerates structural changes in real estate markets and their subse
Slide 9: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 9
Slide 10: Strong operating performance continued – risk provisioning remains on moderate level
Financials Strong operating performance continued – risk provisioning remains on moderate level Income statement € mn Q2/20 Q2/21 H1/20 H1/21 Key drivers Q2/H1 2021 Operating Income 122 141 232 287 NII up y-o-y, driven by continued low refinancing costs Net interest income 1 116 123 227 246 (incl.
Slide 11: NII + NCI increased by >9% y-o-y
Financials NII + NCI increased by >9% y-o-y, supported by continued low refinancing costs and floor income Income from lending business Key drivers Q2/H1 2021 € mn NII + NCI up by >9% y-o-y, supported by Q2/20 Q2/21 H1/20 H1/21 continued low refinancing costs (incl. positive effect from TLTRO II
Slide 12: Risk provisioning stays on moderate level
Financials Risk provisioning stays on moderate level – comfortable stock to cope with potential further impacts from COVID-19 pandemic Net income from risk provisioning Key drivers Q2/H1 2021 € mn Net income from risk provisioning of € -33 mn (H1/20: € -70 Q2/20 Q2/21 H1/20 H1/21 mn) – previous ye
Slide 13: Operating costs under control – only moderate increase of GAE
Financials Operating costs under control – only moderate increase of GAE despite ongoing investments in strategic and regulatory projects Key drivers Q2/H1 2021 GAE slightly up y-o-y as expected: Q2/20 Q2/21 H1/20 H1/21 Personnel expenses: Increase of € 1 mn y-o-y due to higher FTE number (06/21
Slide 14: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 14
Slide 15: Solid REF new business volume of € 3.8 bn
New business Solid REF new business volume of € 3.8 bn with avg. gross interest margin of ~170 bp and avg. LTV of 54% REF New business REF new business € bn (commitments, incl. extensions >1 yr) H1/20 FY20 H1/21 27.1 27.0 26.8 Financing Total volume (€ bn) 2.7 7.3 3.8 volume thereof: 9.0 Extensions
Slide 16: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 16
Slide 17: Portfolio: improved average LTV of 51%
Portfolio Business approach reflected in stable risk parameters and improved average LTV of 51%, which provides solid risk buffer REF Portfolio: Avg. weighted LTVs Total portfolio: Internal ratings (EL classes) % (commitments)1 € bn (EaD, Basel III) 03/21 06/21 Non-investment grade2 52% 52% 52% 52%
Slide 18: NPLs remain on low level
Portfolio NPLs remain on low level Key drivers Q2/H1 2021 Non-performing loans € mn (EaD, Basel III) Non-performing loans (NPLs) up to € 546 mn (03/21: € 503 mn, 0.9% 0.8% 0.9% 0.9% 12/20: € 470 mn, 06/20: € 500 mn) NPL ratio Restructuring loans up to € 532 mn (03/21: € 489 mn, 12/20: 546 € 456
Slide 19: ECB stress test 2021
ECB stress test 2021 Stress test results demonstrate pbb’s resilience to crisis and capital strength Stress test result 2021 Max. CET 1 ratio depletion in adverse scenario (pp.) / Min. CET 1 ratio (%) ECB stress test result 2021 demonstrates pbb‘s resilience to crisis and capital strength In the
Slide 20: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 20
Slide 21: Solid funding activities with focus on non-Euro Pfandbriefe
Funding Solid funding activities with focus on non-Euro Pfandbriefe and Senior Preferred – funding optimised through TLTRO III New long-term funding1 € bn Funding Q2/H1 2021 H1/20: € 2.4 bn4 H1/21: € 2.3 bn4 Solid funding in H1/21 with focus on foreign currencies USD 750 mn Pfandbrief Spread G
Slide 22: Secondary performance generally in line with broader market
Funding Secondary performance generally in line with broader market New long-term funding HyPfe ÖPfe Sen. Unsec. € bn1 1.4 0.9 0.9 0.6 0.5 0.5 0.3 0.7 Spread development of pbb Senior Benchmarks vs iTraxx Bank Senior 0.5 0.4 0.8 0.3 0.2 (Spread in bp vs. 6m Euribor) Q2/202 Q3/20 Q4/20 Q1/21 Q2/212 2
Slide 23: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 23
Slide 24: Capitalisation remains strong
Capital Capitalisation remains strong Basel III: RWA RWA development Q2/H1 2021 € bn (IFRS) RWA down q-o-q due to various effects mainly as a result from decrease in REF portfolio 18.3 18.0 17.7 some small effects from syndication and technical adjustments RWA increases due to individual rat
Slide 25: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 25
Slide 26: Summary & Outlook: increased full-year guidance of € 180-220 mn
Summary & Outlook Strong operative result in H1/21 provides good basis for increased full-year guidance of € 180-220 mn Strong H1 result with PBT of € 114 mn NII remains on high level plus some support from prepayment fees – stable REF portfolio margin GAE slightly up as expected – costs under c
Slide 27: Appendix
Appendix Results Q2/H1 2021 (IFRS, pbb Group, unaudited, but reviewed), 11 August 2021 27
Slide 28: Key figures pbb Group
Key figures pbb Group Income statement (€ mn) 2018 2019 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 H1/21 Net interest income 450 458 111 1169 1259 1249 4769 123 123 246 Net fee and commission income 6 6 2 1 1 2 6 2 3 5 Net income from fair value measurement -9 -7 -17 1 4 4 -8 2 0 2 Net income from rea
Slide 29: Segment reporting
Segment reporting Segment performance reflects impact from COVID-19 pandemic REF PIF Value Portfolio Income statement (IFRS, € mn) Q2/20 Q2/21 H1/20 H1/21 Q2/20 Q2/21 H1/20 H1/21 Q2/20 Q2/21 H1/20 H1/21 Operating income 104 124 207 250 11 9 20 18 6 8 3 18 thereof: Net interest income 1 95 104 188 20
Slide 30: Key figures pbb Group H1/20 vs. H1/21
Key figures pbb Group H1/20 vs. H1/21 Income statement REF PIF VP C&A pbb Group (€ mn) H1/21 H1/21 H1/21 H1/21 H1/20 H1/20 H1/20 H1/20 H1/20 H1/21 Net interest income 1881 208 19 18 18 19 2 1 227 246 Net fee and commission income 3 5 - - - - - - 3 5 Net income from fair value -3 1 -1 - -12 1 - - -16
Slide 31: Key figures Real Estate Finance (REF)
Key figures Real Estate Finance (REF) Income statement (€ mn) 2018 20193 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 H1/21 Net interest income 372 388 93 954 1044 1044 396 104 104 208 Net fee and commission income 6 7 2 1 1 2 6 2 3 5 Net income from fair value measurement -8 -8 -4 1 -2 -1 -6 1 - 1 Net
Slide 32: Key figures Public Investment Finance (PIF)
Key figures Public Investment Finance (PIF) Income statement (€ mn) 2018 20193 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 H1/21 Net interest income 34 37 9 10 10 9 38 9 9 18 Net fee and commission income 1 - - - - - - - - - Net income from fair value measurement -2 -2 -1 - - - -1 - - - Net income from
Slide 33: Key figures Value Portfolio (VP)
Key figures Value Portfolio (VP) Income statement (€ mn) 2018 20193 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 H1/21 Net interest income 39 29 8 10 10 10 38 9 10 19 Net fee and commission income -1 -1 - - - - - - - - Net income from fair value measurement 1 3 -12 - 6 5 -1 1 - 1 Net income from realisa
Slide 34: Balance sheet
Balance sheet Specialist lender with attractive German Pfandbrief as major funding instrument Balance sheet IFRS, € bn Assets 30/06/21 31/12/20 Liabilities & equity 30/06/21 31/12/20 Financial assets at fair value through P&L 1.3 1.4 Financial liabilities at fair value through P&L 0.6 0.6 thereof th
Slide 35: Total portfolio
Portfolio Total portfolio € bn (EaD, Basel III) Regions 31/12/2020 / Total: € 58.0 bn 30/06/2021 / Total: € 58.0 bn Hungary <1% Hungary <1% Other Europe 5% Czech Republic 1% Other Europe 5% Czech Republic 1% Other Rest of World 2% Finland 1% Other Rest of World 2% Finland 1% Sweden 1% Sweden 2% 5% 5
Slide 36: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) € bn (EaD, Basel III) Regions Property types 31/12/2020: € 29.3 bn 30/06/2021: € 29.0 bn 31/12/2020: € 29.3 bn 30/06/2021: € 29.0 bn Mixed use 2% Mixed use 1% Czech Republic 1% Other Europe Czech Republic 1% Other Europe Other 2% Other 3% Hotel 5% Hotel 5% Austria
Slide 37: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) Regions 31/12/2020 / Total: € 29.3 bn € bn (EaD, Basel III) 30/06/2021 / Total: € 29.0 bn 14.0 13.5 3.3 3.7 3.1 3.0 2.9 3.0 1.3 1.3 1.8 1.9 0.9 0.8 0.5 0.3 0.4 0.4 0.4 0.4 0.3 0.4 0.2 0.2 0.1 0.1 Germany France UK USA Poland Sweden Finland Austria Czech Spain Hung
Slide 38: Markets Sub-segments
Markets Sub-segments Property Regions Evaluation of current situation Challenges Risk positioning type Shopping centres: Increased pressure, Declining consumer purchasing Selective approach with foresighted fashion dominated shopping centres power and expected increase of reduction of retail p
Slide 39: Markets Sub-segments
Markets Sub-segments Property Regions Evaluation of current situation Challenges Risk positioning type Slight rise in vacancies Financial difficulties of tenants / Focus on good locations No strategic disinvestments, but in long insolvencies expected to increase Conservative risk positioni
Slide 40: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) € bn (EaD, Basel III) Regions Borrower classification1 31/12/2020: € 6.5 bn 30/06/2021: € 6.1 bn 31/12/2020: € 6.5 bn 30/06/2021: € 6.1 bn Infrastructure Corporation 2% Infrastructure Finance 1% Other Europe 3% Finland 1% Other Europe 3% Corporation 2% Finan
Slide 41: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) Regions 31/12/2020 / Total: € 6.5 bn € bn (EaD, Basel III) 30/06/2021 / Total: € 6.1 bn 3.4 3.3 1.3 1.2 0.9 0.8 0.3 0.3 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 France Germany Spain Austria UK Finland Other Europe Other Rest of World Borrower classification1 € bn (Ea
Slide 42: Value Portfolio (VP)
Portfolio Value Portfolio (VP) € bn (EaD, Basel III) Regions Borrower classification1 31/12/2020: € 15.2 bn 30/06/2021: € 14.2 bn 31/12/2020: € 15.2 bn 30/06/2021: € 14.2 bn Financial Financial Other Rest Other Other Rest Institution Supranational 4% Institution Supranational 4% Other Poland 1% of W
Slide 43: Value Portfolio (VP)
Portfolio Value Portfolio (VP) Regions 31/12/2020 / Total: € 15.2 bn € bn (EaD, Basel III) 30/06/2021 / Total: € 14.2 bn 6.1 5.7 3.9 3.7 1.9 1.7 0.9 0.9 0.7 0.7 0.7 0.6 0.8 0.8 0.2 0.1 <0.1 <0.1 Austria Germany Italy Spain France Poland Finland Other Europe Rest of World Borrower classification1 € b
Slide 44: Consolidation & Adjustments (C&A)
Portfolio Consolidation & Adjustments (C&A) € bn (EaD, Basel III) Regions Borrower classification2 31/12/2020: € 7.0 bn 30/06/2021: € 8.7 bn 31/12/2020: € 7.0 bn 30/06/2021: € 8.7 bn USA <1% Financial Financial USA 1% Sweden <1% France 2% Sweden <1% Institution Institution France 1% Other Europe Oth
Slide 45: Ambition level for Own Funds and Eligible Liabilities of 8% TLOF significantly exceeded
Funding Ambition level for Own Funds and Eligible Liabilities of 8 % TLOF significantly exceeded (in € bn as of 30/06/2021)1) Composition of MREL2 Liabilities Rundown (30/06/2021) (30/06/2021) Substantial buffer for Senior Preferred (SP) investors due to high volume of ~ 15.6 capital instruments a
Slide 46: Public benchmark issuances since 2018
Funding Public benchmark issuances since 2018 Types WKN Launch Date Maturity Date Size Spread1 Coupon Issue/Reoffer Price Senior Unsecured A2GSLC6 16/01/2018 23/02/2022 EUR 500 mn +40 bp 0.625% 99.956% Mortgage Pfandbrief (1st Tap) A2E4ZE 24/01/2018 05/09/2022 EUR 250 mn -18 bp 0.05% 99.579% Mortgag
Slide 47: Mandated Ratings
Mandated Ratings Bank ratings S&P Long-term BBB+ Outlook/Trend Negative Short-term A-2 Stand-alone rating1 bbb- Long Term Debt Ratings “Preferred” senior unsecured Debt2 BBB+ “Non-preferred” senior unsecured Debt3 BB+ Subordinated Debt BB Pfandbrief ratings Moody’s Public Sector Pfandbrief Aa1 Mortg
Slide 48: Definition of borrower classifications
Definition of borrower classifications Borrower classification Definition Sovereign Direct and indirect obligations of Central Governments, Central Banks and National Debt Agencies Sovereign (related) Indirect obligations of Non Sovereigns with an explicit first call guarantee by a Sovereign Regiona
Slide 49: Contact details
Contact details Walter Allwicher Head of Communications +49 (0)89 2880 28787 walter.allwicher@pfandbriefbank.com Michael Heuber Head of Investor Relations / Rating Agency Relations +49 (0)89 2880 28778 michael.heuber@pfandbriefbank.com Axel Leupold Investor Relations / Rating Agency Relations +49 (0
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