Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — H1 2015 Earnings Presentation
56 slides from Deutsche Pfandbriefbank's earnings presentation, Aug 14, 2015
Slide 1: Analyst Conference Call Results Q2/H1 2015
Analyst Conference Call Results Q2/H1 2015 Positive operating development continued in Q2 – strong PBT of EUR 112 mn in H1 2015 (+35% y-o-y) Andreas Arndt, Co-CEO/CFO Munich, 14 August 2015 Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015
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: Agenda
Agenda 1 Highlights Q2/H1 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 3
Slide 4: Highlights Q2/H1 2015
Highlights Q2/H1 2015 Ongoing benefits from stringent execution of strategy Strong pre-tax profit of EUR 61 mn in Q2/15 (+36% y-o-y; Q2/14: EUR 45 mn) and EUR 112 mn in H1/15 (+35% y-o-y; H1/14: EUR 83 mn) resulting in H1/15 pre-tax RoE of 6.5%1 − NII up +17% y-o-y, loan-loss provisions remain at lo
Slide 5: Highlights Q2/H1 2015 Positive operating development continued
Highlights Q2/H1 2015 Positive operating development continued Business volume development Income statement development New business Q2 Net interest and similar income Q2 General and administrative expenses CIR EUR billions (Commitments, incl. extensions >1 yr) EUR millions (IFRS) EUR millions (IFRS
Slide 6: Agenda
Agenda 1 Highlights Q2/H1 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 6
Slide 7: Income statement: Net interest income
Income statement Net interest income benefiting from strategic portfolio growth, which more than compensates for run-down of the lower yielding non-strategic Value Portfolio Income from lending business EUR millions Key drivers H1/15: H1/14 H1/15 NII driven by strategic portfolio growth and an overa
Slide 8: Income statement: Loan-loss provisions
Income statement Loan-loss provisions continue to benefit from portfolio-based releases Loan-loss provisions: Income statement EUR millions Key drivers H1/15: H1/14 H1/15 EUR 5 mn release of LLPs mainly benefited from net release of portfolio-based allowances (EUR 10 mn), Specific allowances -13 -7
Slide 9: Income statement: Income/expenses from financial instruments
Income statement Income/expenses from financial instruments primarily driven by derivative valuation and one-off effects Income/expenses from financial instruments EUR millions Key drivers H1/15: H1/14 H1/15 NTI positively driven by Net trading income -18 7 − derivative valuation (EUR 13 mn; H1/14:
Slide 10: Income statement: Operating cost base further reduced
Income statement Operating cost base further reduced due to strict cost containment Income/expenses from further business activities EUR millions Key drivers H1/15: H1/14 H1/15 IT services for DEPFA terminated Net other operating 31 -8 income/expenses Bank levy adjusted on changed best estimate for
Slide 11: Agenda
Agenda 1 Highlights Q2/H1 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 11
Slide 12: Real Estate Finance (REF)
Real Estate Finance (REF) Net interest income with continued positive trend New business (incl. extensions >1 year) 2014 H1/15 New business: Regions/property types Volume (EUR bn, commitments) 9.0 5.2 H1/15: EUR 5.2 bn (commitments, incl. extensions >1 year) thereof: Extensions >1 year 2.1 1.6 No. o
Slide 13: Public Investment Finance (PIF)
Public Investment Finance (PIF) Profitability picking up, benefiting from a growing portfolio and increasing average portfolio margin New business (incl. extensions >1 year) 2014 H1/15 New business: Regions/counterparty types Volume (EUR bn, commitments) 1.2 0.8 H1/15: EUR 0.8 billions (commitments)
Slide 14: Value Portfolio (VP)
Value Portfolio (VP) Management measures support run-down of Value Portfolio with significant additional RWA relief Value Portfolio: Development Income statement (IFRS, EUR mn) H1/14 H1/15 EUR billions (Financing volumes)1 Operating income 39 -28 -10% thereof: Net interest and similar income 27 47 2
Slide 15: Agenda
Agenda 1 Highlights Q2/H1 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 15
Slide 16: Strategic portfolio increased, Value Portfolio runs down
Portfolio Strategic portfolio increased on the basis of strong new business – non-strategic Value Portfolio continues to run down, supported by management measures Total portfolio 12/141 03/15 06/15 EUR billions (Financing volumes) Strategic Non-strategic portfolios portfolios (run-down) 51.1 52.5 5
Slide 17: Sustained sound risk profile
Portfolio Sustained sound risk profile Total portfolio: Internal ratings (EL classes) Total problem loans EUR billions (EaD, Basel III)1 EUR millions (EaD, Basel III)3 24.3 25.1 7.8 8.3 26.2 23.0 6.9 7.3 65.2 63.7 Coverage 30% 42% 45% 0% 0% 1% 1% 0% 0% 4% 4% ratio 10% 8% Share in 1.8% 1.4% 1.4% tota
Slide 18: Agenda
Agenda 1 Highlights Q2/H1 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 18
Slide 19: Funding
Funding New long-term funding activities reduced on the basis of asset maturities and an adequate liquidity position New long-term funding H1/14 Pfandbriefe EUR billions1 H1/15 No benchmark issuance in H1/15 - focus on Ø Spread optimisation and re-balancing of cover pools 26 10 29 12 82 83 (bps vs.
Slide 20: Funding: cover pools
Funding Focus on optimisation and re-balancing of cover pools – cover pools managed on comfortable OC levels 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 outstand
Slide 21: Agenda
Agenda 1 Highlights Q2/H1 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 21
Slide 22: Capitalisation: strong capital ratios under Basel III
Capitalisation 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, being a subsidiary of Hypo Real pbb with strong capital ratios under Basel III Estate Holding AG as of 30/06/2015
Slide 23: Agenda
Agenda 1 Highlights Q2/H1 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 23
Slide 24: Key take-aways
Key take-aways Benefits from execution of strategy ongoing – operating performance indicators show a continued ✓ positive trend Successful new business activities reflect the bank’s standing as one of the leading players in the ✓ commercial real estate finance market ✓ Sustained strong asset quality
Slide 25: Appendix
Appendix Results Q2/H1 2015 (IFRS, pbb Group, unaudited), 14 August 2015 25
Slide 26: Key figures pbb Group
Key figures pbb Group Incl. EUR -82 mn burden from HETA Incl. EUR -120 mn burden from HETA Income statement (EUR millions) 2012 2013 2014 2014 H1/15 (adjusted)1 Net interest and similar income 296 319 421 421 229 Net fee and commission income 23 9 1 1 9 Net trading income 10 -51 -30 -27 7 Net income
Slide 27: Key figures pbb Group Q2/15
Key figures pbb Group Q2/15 Income statement (EUR millions) REF PIF VP C&A pbb Group Q2/14 Q2/15 Q2/14 Q2/15 Q2/14 Q2/15 Q2/14 Q2/15 Q2/14 Q2/15 Net interest and similar income 77 83 10 14 18 19 1 - 106 116 Net fee and commission income - 2 - - - - - - - 2 Net trading income -4 1 -1 - -4 1 - - -9 2
Slide 28: Key figures pbb Group H1/15
Key figures pbb Group H1/15 Income statement (EUR millions) REF PIF VP C&A pbb Group H1/14 H1/15 H1/14 H1/15 H1/14 H1/15 H1/14 H1/15 H1/14 H1/15 Net interest and similar income 149 158 17 22 27 47 2 2 195 229 Net fee and commission income - 9 - - - - - - - 9 Net trading income -8 3 -2 1 -8 3 - - -18
Slide 29: Key figures Real Estate Finance (REF)
Key figures Real Estate Finance (REF) Income statement (EUR millions) 2012 2013 Q1/14 Q2/14 H1/14 Q3/14 Q4/14 2014 Q1/15 Q2/15 H1/15 Net interest and similar income 249 258 72 77 149 77 68 294 75 83 158 Net fee and commission income 25 10 - - - - 2 2 7 2 9 Net trading income 2 -21 -4 -4 -8 -1 -4 -13
Slide 30: Key figures Public Investment Finance (PIF)
Key figures Public Investment Finance (PIF) Income statement (EUR millions) 2012 2013 Q1/14 Q2/14 H1/14 Q3/14 Q4/14 2014 Q1/15 Q2/15 H1/15 Net interest and similar income 17 24 7 10 17 11 12 40 8 14 22 Net fee and commission income -1 1 - - - - - - - - - Net trading income 1 -6 -1 -1 -2 -1 -1 -4 1 -
Slide 31: Key figures Value Portfolio (VP)
Key figures Value Portfolio (VP) Income statement (EUR millions) 2012 2013 Q1/14 Q2/14 H1/14 Q3/14 Q4/14 2014 2014 Q1/15 Q2/15 H1/15 (adjusted)1 Net interest and similar income 24 30 9 18 27 17 35 79 79 28 19 47 Net fee and commission income -1 -1 - - - - -1 -1 -1 - - - Net trading income 7 -24 -4 -
Slide 32: Heta Asset Resolution AG (HETA)
Heta Asset Resolution AG (HETA) Total valuation adjustments of EUR 197.5 mn – pbb’s HETA exposure (nominal EUR 395 mn) valued at ~50% HETA adjustment P&L impact (EUR mn) pre Q4 2014 Q4 2014 Q1 2015 Net income from (1.5) (109) (73) financial investments Total value Loan loss provisions (8) (6) adjust
Slide 33: Balance sheet
Balance sheet Specialist lender with attractive German Pfandbrief as major funding instrument Balance sheet: 30/06/2015 (31/12/2014)1 IFRS, EUR billions 69.6 (74.9) 69.6 (74.9) Hedging derivatives (pos. FV) 6.9 (8.5) 6.5 (8.0) Hedging derivatives (neg. FV) 13.0 (13.8) Liabilities to other banks and
Slide 34: Portfolio Total portfolio
Portfolio Total portfolio Regions 31/12/2014 / Total: EUR 65.2 bn EUR billions (EaD, Basel III)1,2 30/06/2015 / Total: EUR 63.7 bn 27.3 27.8 7.2 6.9 6.1 6.2 5.2 5.0 4.9 5.1 3.3 2.4 2.2 1.7 2.0 1.7 1.4 1.4 1.2 1.6 2.1 1.8 0.8 0.6 0.5 0.4 0.4 0.6 0.6 0.6 Germany3 Austria France Spain UK Italy Poland S
Slide 35: Portfolio Problem loans
Portfolio Problem loans Total problem loans No. of individual cases Regions EUR millions (EaD, Basel III)1 EUR million (EaD, Basel III)1 VP (thereof: HETA) REF 60 1,143 928 888 55 100% Japan 51 12% 16% 14% Italy 12% 20% Benelux -12% 21% 19% CEE 1,143 928 888 26% 27% Spain 2 27% Nordics 314 3 2 240 2
Slide 36: Portfolio Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) Portfolio: Regions Portfolio: Property types 30/06/2015: EUR 25.1 bn (EaD, Basel III)1 30/06/2015: EUR 25.1 bn (EaD, Basel III)1 Austria 1% Portugal <1% Finland <1% Italy <1% Czech Republic 2% Other Europe 3% Rest of World <1% Hotel/Leisure 3% Other 3% Hungary 1%
Slide 37: Real Estate Finance (REF) Regions
Portfolio Real Estate Finance (REF) Regions 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/06/2015 / Total: EUR 25.1 bn 12.5 12.1 4.9 4.2 2.7 2.6 1.4 1.4 1.2 1.5 0.8 0.8 0.4 0.4 0.4 0.3 0.3 0.5 0.3 0.2 0.2 0.3 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Germany UK France Poland Sweden Spain Hun
Slide 38: Real Estate Finance (REF) Property types
Portfolio Real Estate Finance (REF) Property types 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/06/2015 / Total: EUR 25.1 bn 7.7 7.7 7.2 6.7 4.7 4.8 2.3 2.3 1.6 1.1 1.2 0.7 0.7 0.8 Office Retail/ Residential Warehouse/ Mixed use Hotel/ Other Shopping Logistics Leisure 31/12/2014
Slide 39: Real Estate Finance (REF) Loan types
Portfolio Real Estate Finance (REF) Loan types 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/06/2015 / Total: EUR 25.1 bn 23.0 21.6 2.0 1.5 0.5 0.4 0.1 0.2 Investment loans Development loans Customer derivatives Other 31/12/2014 30/06/2015 Customer derivatives 2% Other <1% Custom
Slide 40: Real Estate Finance (REF) Internal ratings
Portfolio Real Estate Finance (REF) Internal ratings (EL classes) 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/06/2015 / Total: EUR 25.1 bn Investment grade Non-investment grade 6.5 5.7 4.4 3.4 3.6 3.1 3.0 3.0 2.9 1.9 2.1 1.2 1.2 1.2 0.8 0.9 0.8 0.7 0.5 0.5 0.2 0.5 0.5 <0.1 0.0
Slide 41: Portfolio Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) Portfolio: Regions Portfolio: Borrower classification1 30/06/2015: EUR 8.3 bn (EaD, Basel III) 30/06/2015: EUR 8.3 bn (EaD, Basel III) UK <1% Supra <1% Sweden <1% Corporation Finland 2% Other Europe 4% Sovereign Supra Austria 3% Public Sector Enterprise <1%
Slide 42: Public Investment Finance (PIF) Regions
Portfolio Public Investment Finance (PIF) Regions 31/12/2014 / Total: EUR 7.8 bn1 EUR billions (EaD, Basel III) 30/06/2015 / Total: EUR 8.3 bn 2.8 2.5 2.5 2.2 2.1 2.0 0.3 0.3 0.3 0.3 0.2 0.2 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Germany France Spain Austria Finland Supra UK Sweden Other Europe 31/12/20141 3
Slide 43: Public Investment Finance (PIF) Borrower classification
Portfolio Public Investment Finance (PIF) Borrower classification1 31/12/2014 / Total: EUR 7.8 bn2 EUR billions (EaD, Basel III) 30/06/2015 / Total: EUR 8.3 bn 3.7 3.4 1.5 1.2 1.1 1.1 1.1 0.7 0.8 0.5 0.3 0.4 0.1 <0.1 Sovereign Sovereign (related) Regional Government Regional Public Sector Supra Corp
Slide 44: Public Investment Finance (PIF) Internal ratings
Portfolio Public Investment Finance (PIF) Internal ratings (EL classes) 31/12/2014 / Total: EUR 7.8 bn1 EUR billions (EaD, Basel III) 30/06/2015 / Total: EUR 8.3 bn Investment grade Non-investment grade 4.7 4.5 1.4 1.6 1.0 0.8 0.4 0.5 0.3 0.3 0.2 0.3 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 0.0 0.0 0.0 0.0 0.0
Slide 45: Portfolio Value Portfolio (VP)
Portfolio Value Portfolio (VP) Portfolio: Regions Portfolio: Borrower classification2 30/06/2015: EUR 23.0 bn (EaD, Basel III)1 30/06/2015: EUR 23.0 bn (EaD, Basel III)1 Czech Republic <1% Finland <1% Hungary 1% Other Europe 2% Corporation <1% Poland 1% Rest of World 1% Structured Finance <1% Supra
Slide 46: Value Portfolio (VP) Regions
Portfolio Value Portfolio (VP) Regions 31/12/2014 / Total: EUR 26.2 bn2 EUR billions (EaD, Basel III)1 30/06/2015 / Total: EUR 23.0 bn 8.8 7.9 6.7 6.3 3.3 2.3 1.9 1.8 1.4 1.4 1.1 1.1 0.9 0.8 0.8 0.6 0.5 0.3 0.4 0.3 <0.1 <0.1 0.3 0.3 <0.1 <0.1 Germany Austria Italy Spain Portugal Supra France Poland
Slide 47: Value Portfolio (VP) Borrower classification
Portfolio Value Portfolio (VP) Borrower classification1 31/12/2014 / Total: EUR 26.2 bn3 EUR billions (EaD, Basel III)2 30/06/2015 / Total: EUR 23.0 bn 9.8 7.9 7.4 6.7 3.5 3.2 1.7 1.7 1.7 1.6 1.0 0.8 1.1 1.1 0.0 <0.1 <0.1 <0.1 <0.1 <0.1 Sovereign Sovereign Regional Regional Public Sector Public Sect
Slide 48: Value Portfolio (VP) Internal ratings
Portfolio Value Portfolio (VP) Internal ratings (EL classes) 31/12/2014 / Total: EUR 26.2 bn2 EUR billions (EaD, Basel III)1 30/06/2015 / Total: EUR 23.0 bn Investment grade Non-investment grade 17.6 15.6 3.1 2.3 1.6 1.4 1.1 1.0 <0.1 1.0 0.9 0.7 0.6 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.
Slide 49: Consolidation & Adjustments (C&A)
Portfolio Consolidation & Adjustments (C&A) Portfolio: Regions Portfolio: Borrower classification4 30/06/2015: EUR 7.3 bn (EaD, Basel III)1,2 30/06/2015: EUR 7.3 bn (EaD, Basel III)1,2 Austria <1% Sweden <1% Other Europe 3% Italy <1% Rest of World 3% Financial Institution France UK 14% Supra 2% 4% S
Slide 50: Consolidation & Adjustments (C&A) Regions
Portfolio Consolidation & Adjustments (C&A) Regions 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)1,2 30/06/2015 / Total: EUR 7.3 bn 5.0 3.5 0.9 0.8 0.8 0.6 0.7 0.4 0.3 0.3 0.2 0.3 0.2 0.2 <0.1 <0.1 <0.1 <0.1 0.0 <0.1 Germany3 Spain Supra UK France Italy Sweden Austria Other Europe Res
Slide 51: Consolidation & Adjustments (C&A) Borrower classification
Portfolio Consolidation & Adjustments (C&A) Borrower classification1 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)2,3 30/06/2015 / Total: EUR 7.3 bn 3.0 2.0 1.8 1.7 1.4 1.1 0.8 0.8 0.6 0.4 0.4 0.2 <0.1 0.0 Sovereign4 Sovereign (related) Regional Government Public Sector Supra Financia
Slide 52: Consolidation & Adjustments (C&A) Internal ratings
Portfolio Consolidation & Adjustments (C&A) Internal ratings (EL classes) 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)1,2 30/06/2015 / Total: EUR 7.3 bn Investment grade Non-investment grade 5.5 4.5 1.7 1.1 0.7 0.6 <0.1 0.0 <0.1 <0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.
Slide 53: 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 (1s
Slide 54: Ratings Mandated ratings
Ratings Mandated ratings as of 14 August 2014 S&P DBRS Moody’s1,2 Pfandbrief ratings Public Sector Pfandbrief AA-3 Aa1 4 Mortgage Pfandbrief AA+ Aa2 Bank ratings Long-term BBB A (low)5 Outlook/Trend Negative - Short-term A-2 R-1 (low)5 Stand-alone rating6 bbb- BBB Disclaimer: The rating information
Slide 55: 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 56: 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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