Aegon Ltd. · EURONEXT:AGN
Aegon — Aegon Bank — Debt Investor Presentation (June 2023)
41 slides from Aegon's debt investor presentation, June 2023
Slide 1: Aegon Bank N.V. Investor Presentation
Aegon Bank N.V. Investor Presentation June 2023 Helping people achieve a lifetime of financial security
Slide 2: Disclaimer 1/2
Disclaimer 1/2 This presentation was prepared by Aegon Bank N.V. (“Aegon Bank” or the “Company”) and may contain marketing materials and may be qualified as an advertisement within the meaning of Article 22 of the Prospectus Regulation ((EU) 2017/1129). In relation to the Securities (as defined belo
Slide 3: Disclaimer 2/2
Disclaimer 2/2 This presentation is provided for discussion purposes only, does not constitute an offer or invitation for the sale, purchase, exchange or transfer of any securities or a recommendation to enter into transactions hereby contemplated and it does not constitute a prospectus or offering
Slide 4: Contents
Contents Executive Summary Financials Aegon Bank N.V. 01 04 Slide 5 Slides 16 – 23 Aegon N.V. The Dutch economy and housing market 02 05 Slides 6 - 10 Slides 24 – 33 Introduction Aegon Bank N.V. Soft Bullet Covered Bond SBCB Programme 03 06 Slides 11 - 15 Slides 34 - 39 4
Slide 5: Executive summary
Executive summary Soft Bullet Programme summary Strategy • Aegon Bank N.V., operating under the Knab label, is a strongly positioned bank Issuer Aegon Bank N.V. focusing on the self-employed and small business segments. Programme size EUR 5 billion • In the medium term, Aegon Bank N.V. targets to gr
Slide 6: Aegon Nederland N.V.
Aegon Nederland N.V. 6
Slide 7: Position of the bank within organizational structure
Position of the bank within organizational structure Aegon Bank N.V. to become part of ASR after closing of deal Position of the bank within Aegon N.V. Simplified organization structure • Aegon N.V. announced (October 27, 2022) that it has reached an agreement with ASR Nederland N.V. (ASR) to combin
Slide 8: Successful Dutch mortgage loan operation
Successful Dutch mortgage loan operation Aegon is largest mortgage originator after the major Dutch banks Mortgage debt outstanding 4th largest mortgage lender in the Netherlands Source: Centraal Bureau voor de Statistiek (CBS) Source: Land Registry (Kadaster), Q1 2023, in percentages In EUR billion
Slide 9: Aegon mortgage loan funding
Aegon mortgage loan funding Aegon mortgages operates with a diversified set of funding channels Competitive advantages Nominal mortgage amounts Main characteristics ( (Q1 2023 in EUR bn) • Strong position with independent financial advisors • Registered SBCB Programme, with a nominal value of outsta
Slide 10: Aegon ratings
Aegon ratings Objective to maintain strong long-term ratings Quotes from S&P Research update1 Aegon Bank N.V. A-, Issuer credit rating, outlook stable Aegon SB Covered Bond AAA Programme Aegon Bank N.V. Issuer 02 June 2023 credit ratings last affirmed 1. Source: S&P Global Ratings press release on r
Slide 11: Introduction
Introduction Aegon Bank N.V. 11
Slide 12: Aegon Bank N.V. at a glance
Aegon Bank N.V. at a glance Capital position What we do (FY 2022, in percentages) Retail banking with payment services, savings and investment products for 346k fee-paying customers (FY 2022) 22.3% Total Capital Ratio History Launched online banking platform Knab in 2012 Size Total assets EUR 17.6 b
Slide 13: The business model of the bank
The business model of the bank Focusing on growing self-employed and small business customers under the Knab label Retail banking services Net interest margin • Aegon Bank’s purpose is to make “Entrepreneurs feel at • Asset mix mainly consists of high-quality mortgages originated1 ease when it comes
Slide 14: Risk Management Framework
Risk Management Framework AEB applies a comprehensive risk management framework Building blocks: Strategy, • The purpose of risk management is the creation and 1. Strategy & objective-setting scope, tone-at-the-top protection of value to Aegon Bank’s customers, employees Risk attitude and appetite a
Slide 15: Sustainability
Sustainability Aegon Bank N.V. Our objective is to make the world a better place for current and future generations Aegon Bank N.V. - Internal Investments carbon footprint1 • Our people are who make Aegon Bank. Not only do we believe that fostering a (FY 2022) Carbon Coverage Relative Weighted avera
Slide 16: Financials
Financials Aegon Bank N.V. 16
Slide 17: Balance sheet composition - Assets
Balance sheet composition - Assets 66% of total assets allocated to prime Dutch residential mortgage portfolio mainly complemented by cash and tradable debt securities Balance sheet (FY 2022, in EUR billions) Cash • High cash balance results in an LCR of 223% per EoY 2022 (202% EoY 2021). 17.6 17.6
Slide 18: Balance sheet composition - Liabilities & Equity
Balance sheet composition - Liabilities & Equity Primarily funded through savings deposits and Covered Bonds Balance sheet Savings (FY 2022, in EUR billions) 17.6 17.6 • Current savings base consists for 76% of ‘On demand’ variable rate Cash and amounts due from Savings deposits savings of which les
Slide 19: Capital and liquidity position
Capital and liquidity position Strong capital and liquidity position exceeding regulatory requirements Capital position Aegon Bank steers its capital and liquidity position within the regulatory requirements and (FY 2022, in percentages) applies its internal policy for this to ensure that sufficient
Slide 20: Results Aegon Bank N.V.
Results Aegon Bank N.V. Successful reduction of expenses and maintained its NII despite de-risking its asset base Consolidated Income Statement (FY 2021 – FY 2022, in EUR millions) • Aegon Bank has been able to maintain its net interest margin while de-risking its asset mix, partly through FY FY imp
Slide 21: Key financial metrics over time
Key financial metrics over time Balance sheet growth and expense reduction initiatives, targeting a RoC of 9% Cost-to-income ratio1 Return on Capital2 80% 9.0% 69% 60% 6.8% 4.2% 2021 2022 Medium-term target 2021 2022 Medium-term target • The cost-to-income ratio improved to 69% during FY 2022, • The
Slide 22: Clear strategic pillars and medium-term targets
Clear strategic pillars and medium-term targets A medium target of 9% RoC is applied Medium-term • KPI Optimize regulatory development target Strengthening the • Further embed risk awareness in our culture existing business • Strengthen IT and the data foundations Customer Net Promotor + 40 Score (N
Slide 23: Summary
Summary • Customer satisfaction is a core strategic priority of the bank, aiming to maintain a Net Promotor Score at +40 Strategic priorities • The bank needs to grow its customer base to achieve scale, targeting a net growth of 40k core fee-paying customers per year and KPIs • Merging the two label
Slide 24: The Dutch economy and housing market
The Dutch economy and housing market 24
Slide 25: Resilient Dutch mortgage portfolio with low defaults
Resilient Dutch mortgage portfolio with low defaults • Structural features of economy and strict bankruptcy laws lead to limited loan losses - The Netherlands has strong social security and adequate unemployment benefits - Homeowners separating from each other is the main cause of defaults - To the
Slide 26: Dutch economy recovered from COVID-19
Dutch economy recovered from COVID-19 GDP growth (YoY change) Unemployment rate (%) 15% 10% 9% 10% 8% 7% 6% 5% 5% 4% 0% 3% 2% -5% 1% 0% 2010 2010 2011 2012 2012 2013 2014 2014 2015 2016 2016 2017 2018 2018 2019 2020 2020 2021 2022 2022 -10% Dutch EMU Debt & Balance (%GDP) Inflation (%) 80% 16% 70% 1
Slide 27: Facts and figures Dutch mortgage market
Facts and figures Dutch mortgage market Total mortgage production Steep decline in the non-buyer HDN registered 91,341 mortgage Mover mortgages increased amounted to a level of €23.6bn segment (refinancing and second applications in 2023 Q1 (YoY significantly in 2023 Q1 to 49% (YoY -40%) in 2023 Q1
Slide 28: Policy developments Dutch mortgage market
Policy developments Dutch mortgage market Policies aimed at reducing risk and improving accessibility for first time buyers Introduction Desktop Implementation of automatic Introduction LTV 106% for Valuations Aegon LTV migration Temporary stricter underwriting sustainability measures Extended const
Slide 29: Dutch housing price development
Dutch housing price development Housing prices have shown a decrease in recent MoM figures and are expected to further decrease in 2023. House price index development (FY 2022) Regional house price development (YoY) 220 Belgium France Spain The Netherlands Denmark Germany -1.3% GR 200 -1.7% FR 0.8%
Slide 30: Dutch housing market
Dutch housing market Changing household composition requires more supply Dutch household composition Dutch house supply Newly built properties and permits 8.5 100% 8.5 60% 120 120 Millions Millions Thousands 8.0 80% 8.0 100 100 80 80 7.5 60% 7.5 55% 60 60 7.0 40% 7.0 40 40 6.5 20% 6.5 20 20 6.0 0% 6
Slide 31: ESG Aegon Hypotheken
ESG Aegon Hypotheken What do we offer our clients and advisors? Loan-To-Value Loan-To-Income Services 1. Clients can borrow up to 106% LTMV for 1. Solely for Energy Saving Measures: a 1. HomeQgo tooling energy saving measures after construction. maximum of € 9K will not be taken into a. Tool where c
Slide 32: ESG Aegon Hypotheken
ESG Aegon Hypotheken Proactive campaigns and nudges Clients Advisors 1. Insights in energy label in ‘Mijn Aegon’ environment 1. Special campaigns together with advisors to 2. Proactive e-mail campaigns segmented by energy activate the base about sustainability label 2. Extra content/marketing materi
Slide 33: ESG Aegon Hypotheken
ESG Aegon Hypotheken Impression of the tools1 1. https://www.aegon.nl/particulier/hypotheek/je-huis-verduurzamen 33
Slide 34: SBCB Programme
SBCB Programme Aegon Bank N.V. 34
Slide 35: Soft Bullet Covered Bond (SBCB) Programme
Soft Bullet Covered Bond (SBCB) Programme Programme summary Key benefits Issuer Aegon Bank N.V. (Aegon Bank) • Highly rated issuer: Aegon Bank N.V. ‘A-’ (S&P) Programme size EUR 5 billion • Obligation for Aegon Bank N.V. to redeem the Cover Pool EUR 580 million1 Dual recourse bond at expected maturi
Slide 36: Highlights Soft Bullet Covered Bond Programme
Highlights Soft Bullet Covered Bond Programme Key Programme Parties Transaction Structure Aegon Hypotheken / Aegon Leven / Aegon Originators Bank Swap Transferor Aegon Bank Custodian provider*1 Issuer Aegon Bank Servicing Swap Servicer Account Servicer Aegon Hypotheken agreement Agreements Bank Admi
Slide 37: Soft Bullet mechanism
Soft Bullet mechanism Event Diagram Event of Default • The Asset Cover Test (ACT) will be replaced by the Amortisation Test • If on the Maturity Date of the SB CB an Issuer Event of Default takes place Issuer Event of No and the CBC has insufficient funds to redeem the Covered Bonds (CBs) this Bulle
Slide 38: Asset Cover Test
Asset Cover Test Asset Monitoring Agreement Adjusted Aggregate Asset Amount = A + B + C + D - Z • Adjusted Aggregate Asset Amount1 >= outstanding Covered Bonds • The calculation of ‘A’ includes: • First Regulatory Current Balance Amount >= 105% of outstanding - 96.7% asset percentage Covered Bonds (
Slide 39: Comparison to other Dutch Covered Bond programmes
Comparison to other Dutch Covered Bond programmes Van Lanschot ABN AMRO Achmea Aegon Kempen (VLK) ING NIBC NN Bank Rabobank de Volksbank ABN AMRO Bank VLK Wealth Nationale-Nederlanden Coöperatieve Issuer1 Achmea Bank N.V. Aegon Bank N.V. Management N.V. ING Bank N.V. NIBC Bank N.V. Bank N.V. Raboban
Slide 40: For questions and information relating to the Programme
For questions and information relating to the Aegon Bank Soft Bullet Covered Bond Programme please contact: Menno van Boven Jeroen Dekkers Lein-Pieter Cevaal Head of ALM Senior Structurer VP Capital Market Solutions Aegon Bank N.V. Aegon Nederland N.V. Aegon N.V. T: +31 6 830 530 74 T: +31 6 8298 03
Slide 41: Notes
Notes xson