Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Q1 2016 Earnings Presentation
56 slides from Deutsche Pfandbriefbank's earnings presentation, May 12, 2016
Slide 1: Analyst Conference Call Results Q1/16
Analyst Conference Call Results Q1/16 Solid operating performance – PBT at EUR 45 mn in Q1/16 Andreas Arndt, CEO/CFO Munich, 12 May 2016 Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016
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 Q1/16 2 Financials 3 Segment reporting 4 Portfolio 5 Funding 6 Key take-aways Appendix Contact details Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016 3
Slide 4: Highlights Q1/16
Highlights Q1/16 Solid operating performance – PBT at EUR 45 mn in Q1/16 Pre-tax profit at EUR 45 mn (+50% q-o-q; -12% y-o-y) − Net interest income stable q-o-q (EUR 102 mn; Q4/15: EUR 102 mn) – however, y-o-y net interest income suffers from base effects of high early extensions/prepayments of high
Slide 5: Highlights Q1/16 Solid operating performance – pbb remains on track
Highlights Q1/16 Solid operating performance – pbb remains on track New business Q4 Net interest and commission income Q4 General and admin. expenses Q4 EUR billions (Commitments, incl. extensions >1 yr) EUR millions (IFRS) EUR millions (IFRS) Q3 Q3 Q3 Q2 Q2 Q2 Q1 Q1 CIR 64.7% Q1 57.3%2 12.0 440 51.
Slide 6: Agenda
Agenda 1 Highlights Q1/16 2 Financials 3 Segment reporting 4 Portfolio 5 Funding 6 Key take-aways Appendix Contact details Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016 6
Slide 7: Income statement: net interest income
Income statement Net interest income stable q-o-q, but y-o-y suffers from base effect on portfolio from high early extensions/ prepayments of higher margin loans Income from lending business EUR millions Key drivers Q1/16: Q1/15 Q4/15 Q1/16 NII stable q-o-q, but y-o-y suffers from base effect on por
Slide 8: Income statement: loan-loss provisions
Income statement No loan-loss provisions (net) in Q1/16 – markets overall intact but characterized by ongoing strong competition, conservative business approach continued Loan-loss provisions EUR millions Key drivers Q1/16: Q1/15 Q4/15 Q1/16 No major single cases – markets overall intact but charact
Slide 9: Income statement: general and administrative expenses
Income statement Operating cost base on low level – Q1 usually lower compared to the rest of the year General and administrative expenses EUR millions Key drivers Q1/16: Q1/15 Q4/15 Q1/16 Strict cost discipline continued – Q1 usually lower compared to the rest of the year General admin. -48 -57 -45
Slide 10: Income statement: result from financial instruments
Income statement Result from financial instruments primarily driven by derivative valuation Result from financial instruments EUR millions Key drivers Q1/16: Q1/15 Q4/15 Q1/16 NTI mainly driven by derivative valuation Net trading income 5 8 -5 − pull-to-par effect from positive derivative thereof: H
Slide 11: Income statement: result from further business activities
Income statement Result from further business activities includes bank levy in Q1 Result from further business activities EUR millions Key drivers Q1/16: Q1/15 Q4/15 Q1/16 Bank levy of EUR -21 mn recognised in Q1 vs. EUR -18 mn in 2015 (Q4/15: EUR +7 mn; Net other operating -11 -14 -14 Q1/15: EUR -2
Slide 12: Capitalisation
Capitalisation Strong capital ratios provide cushion for envisaged future strategic portfolio growth and regulatory uncertainties Basel III: RWA Basel III: Capital ratios (fully loaded)2,3,4 EUR billions (IFRS)1 % (IFRS) Mid-term in % 12/155 03/165,6 targets 13.4 13.3 CET 1 18.2 18.1 >12.5 Tier 1 18
Slide 13: Agenda
Agenda 1 Highlights Q1/16 2 Financials 3 Segment reporting 4 Portfolio 5 Funding 6 Key take-aways Appendix Contact details Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016 13
Slide 14: Segment reporting: Real Estate Finance (REF)
Segment reporting: Real Estate Finance (REF) New business volume (incl. extensions >1 yr) at good level of EUR 2.7 bn – unchanged conservative business approach Income statement (IFRS, EUR mn) Q1/15 Q1/16 New business EUR billions (commitments, incl. extensions >1 yr) Operating income 92 68 2.7 2.6
Slide 15: Segment reporting: Public Investment Finance (PIF)
Segment reporting: Public Investment Finance (PIF) New business usually lower in Q1 – net interest income benefits from portfolio growth (+7% y-o-y) Income statement (IFRS, EUR mn) Q1/15 Q1/16 New business EUR billions (commitments) Operating income 13 9 0.6 thereof: Net interest income 8 9 0.5 Loan
Slide 16: Segment reporting: Value Portfolio (VP)
Segment reporting: Value Portfolio (VP) VP down by -4% in Q1/16 and -19% y-o-y: freed-up capital continuously reallocated to core segments Income statement (IFRS, EUR mn) Q1/15 Q1/16 Value Portfolio RWA EUR billions (financing volumes) Operating income -14 11 thereof: Net interest income 28 14 Loan-
Slide 17: Agenda
Agenda 1 Highlights Q1/16 2 Financials 3 Segment reporting 4 Portfolio 5 Funding 6 Key take-aways Appendix Contact details Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016 17
Slide 18: Portfolio: Strategic portfolio more or less stable in Q1/16
Portfolio Strategic portfolio more or less stable in Q1/16 and up +4% y-o-y despite high level of early extensions/prepayments in 2015 and also in Q1/16 Total portfolio 03/15 12/15 03/16 EUR billions (Financing volumes) Strategic Non-strategic portfolios portfolios (run-down) 52.5 50.0 49.3 23.5 24.
Slide 19: Well diversified portfolio with focus on European markets
Portfolio Well diversified portfolio with focus on European markets, particularly on Germany 31/03/2016 (EaD, Basel III) Real Estate Finance1 Public Investment Finance Value Portfolio2 CEE Nordics Other Other Spain 9% 7% 15% Germany France Germany 20% 5% Portugal by region 13% 33% 6% 30% 3% Nordics
Slide 20: Portfolio: Conservative business approach, high portfolio quality
Portfolio Conservative business approach continued to retain high portfolio quality Total portfolio: Internal ratings (EL classes) REF Portfolio: Avg. weighted LTVs EUR billions (EaD, Basel III)1 (Commitments)3 25.8 26.1 8.3 8.3 21.7 21.8 5.6 5.3 61.4 61.5 58% 0% 0% 1% 1% 0% 0% 56% 8% 7% 4% 4% 92% 9
Slide 21: Sustained low share of problem loans
Portfolio Sustained low share of problem loans Total problem loans Workout1 Problem loan ratio Total portfolio (thereof: HETA) EUR millions (EaD, Basel III) Restructuring2 (thereof: HETA) % (EaD, Basel III) Real Estate Finance 44% 44% Coverage ratio 2.1% -18% 1.5% 777 1.3% 3 640 1.0% 241 3 243 533 3
Slide 22: Agenda
Agenda 1 Highlights Q1/16 2 Financials 3 Segment reporting 4 Portfolio 5 Funding 6 Key take-aways Appendix Contact details Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016 22
Slide 23: Funding: Strong funding activities
Funding Strong funding activities with already five benchmark issuances YTD – funding costs affected by overall higher spread environment and higher share of benchmark issuances New long-term funding Pfandbriefe EUR billions1 Two Mortgage Pfandbrief benchmarks placed in Q1/15 Q1/16 January ‘16 (EUR
Slide 24: pbb direkt – steady growth of retail deposit base
Funding pbb direkt – steady growth of retail deposit base Retail deposits: Total volume No. of clients Key drivers Q1/2016 EUR billions Overnight deposits Number of clients and total volume further up Term deposits − Clients: +5,800 (+21%) ~33,200 − Volume: EUR +0.5 bn (+19%) ~27,400 21,300 3.1 2.6
Slide 25: Agenda
Agenda 1 Highlights Q1/16 2 Financials 3 Segment reporting 4 Portfolio 5 Funding 6 Key take-aways Appendix Contact details Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016 25
Slide 26: Key take-aways
Key take-aways Financial performance remains solid – net interest income stable q-o-q, no loan-loss provisions (net), operating cost base remains at low level New business volume at good level, margins and LTVs stable Conservative business approach continued – portfolio quality remains high, problem
Slide 27: Appendix
Appendix Results Q1/16 (IFRS, pbb Group, unaudited), 12 May 2016 27
Slide 28: Key figures pbb Group
Key figures pbb Group Income statement (EUR millions) 2013 2014 2014 2015 Q1/16 (reported) (adjusted)1 Net interest income 319 421 421 426 102 Net fee and commission income 9 1 1 14 2 Net trading income -51 -30 -27 15 -5 Net income from financial investments 96 -77 32 -32 4 Net income from hedging r
Slide 29: Key figures pbb Group Q1/15 vs. Q1/16
Key figures pbb Group Q1/15 vs. Q1/16 Income statement (EUR millions) REF PIF VP C&A pbb Group Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16 Net interest income 75 77 8 9 28 14 2 2 113 102 Net fee and commission income 7 2 - - - - - - 7 2 Net trading income 2 -5 1 - 2 - - - 5 -5 Net in
Slide 30: Key figures Real Estate Finance (REF)
Key figures Real Estate Finance (REF) Income statement (EUR millions) 2013 2014 Q1/15 Q2/15 Q3/15 Q4/15 2015 Q1/16 Net interest income 258 294 75 83 68 82 308 77 Net fee and commission income 10 2 7 2 3 2 14 2 Net trading income -21 -13 2 1 4 7 14 -5 Net income from financial investments 96 14 13 5
Slide 31: Key figures Public Investment Finance (PIF)
Key figures Public Investment Finance (PIF) Income statement (EUR millions) 2013 2014 Q1/15 Q2/15 Q3/15 Q4/15 2015 Q1/16 Net interest income 24 40 8 14 6 16 44 9 Net fee and commission income 1 - - - - - - - Net trading income -6 -4 1 - -1 - - - Net income from financial investments -1 3 6 - - -1 5
Slide 32: Key figures Value Portfolio (VP)
Key figures Value Portfolio (VP) Income statement (EUR millions) 2013 2014 2014 Q1/15 Q2/15 Q3/15 Q4/15 2015 Q1/16 (reported) (adjusted)1 Net interest income 30 79 79 28 19 19 2 68 14 Net fee and commission income -1 -1 -1 - - - - - - Net trading income -24 -13 -12 2 1 -3 1 1 - Net income from finan
Slide 33: Balance sheet
Balance sheet Specialist lender with attractive German Pfandbrief as major funding instrument Balance sheet: 31/03/2016 (31/12/2015) IFRS, EUR billions 68.1 (66.8) 68.1 (66.8) Pos. FV of derivatives 7.5 (6.6) 7.4 (6.5) Neg. FV of derivatives 13.3 (13.3) Liabilities to other banks and customers 0.1 (
Slide 34: Portfolio: Total portfolio
Portfolio Total portfolio Regions 31/12/2015 / Total: EUR 61.4 bn EUR billions (EaD, Basel III)1,2 31/03/2016 / Total: EUR 61.5 bn 25.4 25.1 7.1 7.3 6.9 7.3 5.1 5.0 4.2 4.3 2.3 2.4 1.5 1.6 1.7 1.6 1.6 1.5 1.4 1.4 1.8 1.8 0.7 0.7 0.6 0.6 0.5 0.4 0.6 0.7 Germany3 France Austria UK Spain Italy Sweden S
Slide 35: Portfolio: Problem loans
Portfolio Problem loans Total problem loans VP (thereof: HETA) Regions EUR millions (EaD, Basel III) REF EUR million (EaD, Basel III) No. of individual 56 cases 44 41 Japan -31% Benelux 928 928 Italy 777 116 777 240 CEE 640 199 117 640 241 84 Spain 117 243 240 241 74 Nordics 685 243 Germany 536 397
Slide 36: Portfolio: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) Portfolio: Regions Portfolio: Property types 31/03/2016: EUR 26.1 bn (EaD, Basel III)1 31/03/2016: EUR 26.1 bn (EaD, Basel III)1 Finland <1% Spain <1% Portugal <1% Hungary 1% Italy <1% Austria 2% Other Europe 3% Hotel/Leisure 4% Other 4% Czech Republic 2% Mixed us
Slide 37: Real Estate Finance (REF): Regions
Portfolio Real Estate Finance (REF) Regions 31/12/2015 / Total: EUR 25.8 bn EUR billions (EaD, Basel III)1 31/03/2016 / Total: EUR 26.1 bn 12.2 12.4 5.0 4.8 3.2 3.4 1.4 1.6 1.3 1.3 0.6 0.6 0.3 0.4 0.4 0.4 0.3 0.2 0.3 0.2 0.8 0.8 <0.1 <0.1 <0.1 <0.1 0.0 0.0 Germany UK France Sweden Poland Czech Austr
Slide 38: Real Estate Finance (REF): Property types
Portfolio Real Estate Finance (REF) Property types 31/12/2015 / Total: EUR 25.8 bn EUR billions (EaD, Basel III)1 31/03/2016 / Total: EUR 26.1 bn 8.5 8.8 7.5 7.2 4.1 4.0 2.7 2.8 1.1 1.2 1.0 1.1 0.9 1.0 Office Retail/ Residential Warehouse/ Mixed use Hotel/ Other Shopping Logistics Leisure 31/12/2015
Slide 39: Real Estate Finance (REF): Loan types
Portfolio Real Estate Finance (REF) Loan types 31/12/2015 / Total: EUR 25.8 bn EUR billions (EaD, Basel III)1 31/03/2016 / Total: EUR 26.1 bn 23.3 23.4 1.9 2.3 0.4 0.5 0.2 <0.1 Investment loans Development loans Customer derivatives Other 31/12/2015 31/03/2016 Customer derivatives 1% Other <1% Custo
Slide 40: Real Estate Finance (REF): Internal ratings
Portfolio Real Estate Finance (REF) Internal ratings (EL classes) 31/12/2015 / Total: EUR 25.8 bn EUR billions (EaD, Basel III)1 31/03/2016 / Total: EUR 26.1 bn Investment grade Non-investment grade 6.3 5.8 5.1 4.6 4.14.1 2.6 2.7 2.2 2.2 1.7 1.8 1.4 1.6 0.9 0.9 <0.1 <0.1 <0.1 <0.1 0.6 0.7 0.50.5 0.4
Slide 41: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) Portfolio: Regions Portfolio: Borrower classification1 31/03/2016: EUR 8.3 bn (EaD, Basel III) 31/03/2016: EUR 8.3 bn (EaD, Basel III) Supra <1% UK <1% Sweden <1% Other Europe 4% Corporation Supra Finland 2% Sovereign Austria 3% 4% 7% <1% France Regional Gov
Slide 42: Public Investment Finance (PIF): Regions
Portfolio Public Investment Finance (PIF) Regions 31/12/2015 / Total: EUR 8.3 bn EUR billions (EaD, Basel III) 31/03/2016 / Total: EUR 8.3 bn 2.9 2.9 2.8 2.7 1.7 1.7 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 UK Supra Sweden Other Europe 31/12/2015 31/
Slide 43: Public Investment Finance (PIF): Borrower classification
Portfolio Public Investment Finance (PIF) Borrower classification1 31/12/2015 / Total: EUR 8.3 bn EUR billions (EaD, Basel III) 31/03/2016 / Total: EUR 8.3 bn 3.5 3.4 1.5 1.5 1.6 1.4 0.8 0.9 0.6 0.6 0.4 0.3 <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) 31/12/2015 / Total: EUR 8.3 bn EUR billions (EaD, Basel III) 31/03/2016 / Total: EUR 8.3 bn Investment grade Non-investment grade 4.64.6 2.02.1 0.80.8 0.40.4 <0.1 <0.1 0.20.2 0.00.0 0.20.2 0.00.0 0.00.0 0.00.0 0.00.0 0.00.0 0.00
Slide 45: Value Portfolio (VP)
Portfolio Value Portfolio (VP) Portfolio: Regions Portfolio: Borrower classification2 31/03/2016: EUR 21.8 bn (EaD, Basel III)1 31/03/2016: EUR 21.8 bn (EaD, Basel III)1 Czech Republic <1% Finland <1% Poland 1% Other Europe 2% Hungary 1% Rest of World 2% Supra Corporation <1% France 3% Financial Ins
Slide 46: Value Portfolio (VP): Regions
Portfolio Value Portfolio (VP) Regions 31/12/2015 / Total: EUR 21.7 bn EUR billions (EaD, Basel III)1 31/03/2016 / Total: EUR 21.8 bn 6.6 6.5 6.3 6.6 2.3 2.4 1.8 1.8 1.4 1.4 1.1 1.1 0.7 0.7 0.3 0.3 0.3 0.2 0.5 0.5 0.3 0.4 <0.1 <0.1 <0.1 <0.1 Germany Austria Italy Spain Portugal Supranational France
Slide 47: Value Portfolio (VP): Borrower classification
Portfolio Value Portfolio (VP) Borrower classification1 31/12/2015 / Total: EUR 21.7 bn EUR billions (EaD, Basel III)2 31/03/2016 / Total: EUR 21.8 bn 8.1 8.5 6.0 6.0 2.4 2.4 1.6 1.6 1.6 1.5 0.8 1.1 1.1 0.6 <0.1 <0.1 <0.1 <0.1 0.0 0.0 Sovereign Sovereign Regional Regional Public Sector Public Sector
Slide 48: Value Portfolio (VP): Internal ratings
Portfolio Value Portfolio (VP) Internal ratings (EL classes) 31/12/2015 / Total: EUR 21.7 bn EUR billions (EaD, Basel III)1 31/03/2016 / Total: EUR 21.8 bn Investment grade Non-investment grade 15.1 15.6 3.43.5 0.70.2 1.11.1 0.80.8 <0.1 <0.1 0.40.4 0.00.0 0.00.0 0.00.0 0.00.0 0.00.0 0.20.2 0.00.0 0.
Slide 49: Consolidation & Adjustments (C&A)
Portfolio Consolidation & Adjustments (C&A) Portfolio: Regions Portfolio: Borrower classification4 31/03/2016: EUR 5.3 bn (EaD, Basel III)1,2 31/03/2016: EUR 5.3 bn (EaD, Basel III)1,2 Rest of World 6% Corporation <1% Other Europe 4% France Financial Institution Sovereign3 UK 24% 1% 5% 29% Supra 8%
Slide 50: Consolidation & Adjustments (C&A): Regions
Portfolio Consolidation & Adjustments (C&A) Regions 31/12/2015 / Total: EUR 5.6 bn EUR billions (EaD, Basel III)1,2 31/03/2016 / Total: EUR 5.3 bn 3.8 3.4 0.6 0.6 0.4 0.3 0.3 0.3 0.2 0.2 0.3 0.3 <0.1 <0.1 0.0 0.0 0.0 0.0 Germany3 Spain Supranational France United Kingdom Austria Sweden Other Europe
Slide 51: Consolidation & Adjustments (C&A): Borrower classification
Portfolio Consolidation & Adjustments (C&A) Borrower classification1 31/12/2015 / Total: EUR 5.6 bn EUR billions (EaD, Basel III)2,3 31/03/2016 / Total: EUR 5.3 bn 1.9 1.6 1.6 1.4 1.3 0.9 0.6 0.4 0.4 0.4 0.2 0.2 0.0 <0.1 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) 31/12/2015 / Total: EUR 5.6 bn EUR billions (EaD, Basel III)1,2 31/03/2016 / Total: EUR 5.3 bn Investment grade Non-investment grade 4.4 3.5 0.50.7 0.60.7 0.3 <0.1 0.1 <0.1 0.0 <0.1 0.00.0 0.00.0 0.00.0 0.00.0 0.00.0 0.00.0 0.
Slide 53: Funding: Public benchmark issuances since 2014
Funding Public benchmark issuances since 2014 Type WKN Launch Date Maturity Date Size Spread1 Coupon Issue/Reoffer Price Mortgage Pfandbrief A1X3LT 14.01.2014 21.01.2022 EUR 500 mn +17bp 1.875% 99.362% Mortgage Pfandbrief (2nd Tap) A1MLUW 13.02.2014 03.06.2019 EUR 50 mn +10bp 2.125% 104.988% Mortgag
Slide 54: Ratings: Mandated ratings
Ratings Mandated ratings as of 12 May 2016 S&P DBRS Moody’s Pfandbrief ratings Public Sector Pfandbrief Aa1 Mortgage Pfandbrief Aa1 Bank ratings Long-term BBB BBB Outlook/Trend Stable Stable Short-term A-2 R-2 (high) Stand-alone rating1 bbb- BBB Disclaimer: The rating information published in this p
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 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 Website www.pfandbriefbank.com/investor-relations.html © Deutsch
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