Nn Group N.v. · EURONEXT:NN
Nn — Nationale-Nederlanden Bank — Debt Investor Presentation (May 2019)
36 slides from Nn's debt investor presentation, May 2019
Slide 1: Nationale-Nederlanden Bank Fixed Income presentation
Nationale-Nederlanden Bank Fixed Income presentation May 2019
Slide 2: Important Notice
IMPORTANT NOTICE NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S. AND NOT FOR DISTRIBUTION TO ANY PERSON WHICH IS NOT A QUALIFIED INVESTOR AS DEFINED IN DIRECTIVE 2003/71/EC, AS AMENDED. THE FOLLOWING INVESTOR PRESENTATION MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTH
Slide 3: Executive summary
Executive summary NN Bank1 at a glance Bank strategy Key numbers as at 31 Dec 2018 Funding diversification • Fifth Dutch retail bank (based on • To support retail customers to • Total assets of EUR 21.6bn; • Funding for two-thirds retail balance sheet size) secure their financial futures by resident
Slide 4: Strategy & business highlights
Strategy & business highlights 4
Slide 5: NN Bank profile
NN Bank profile • Fifth Dutch retail bank (based on balance sheet size) • Significant player in Dutch residential mortgage loan and retail savings markets • Established in 2011 • Built around long-standing Nationale-Nederlanden mortgage business (since 1963) • Distribution both direct (savings produ
Slide 6: Parent company: NN Group
Parent company: NN Group International footprint Overview of NN Group • International financial services company, active in 18 countries with a strong presence in a number of European countries and Japan • Offering innovative solutions and value-added products and services to retail, SME, large corp
Slide 7: Position of the bank within NN Group
Position of the bank within NN Group NN Bank adding value to NN Group in the Netherlands • Operating under the Nationale-Nederlanden brand since its start in 2011 • Sharing client base, distribution and marketing with other NN entities • Offering banking products complementary to Nationale-Nederland
Slide 8: Retail-focused business model
Retail-focused business model NN Bank is a significant financial service provider in the Dutch retail market • Core activities are providing retail customers with mortgage loans, savings and bank annuities, supplemented by retail investment and consumer loan products • National player, with coverage
Slide 9: Marketing campaigns
Marketing campaigns New construction mortgage loan On demand savings and fixed-term deposits Various financial solutions that are tailored to fit today’s life Senior citizens mortgage loan Pension savings (bank annuities) Source: NN Bank (www.nn.nl) 9
Slide 10: Mortgage loans: distribution and servicing
Mortgage loans: distribution and servicing Newly-originated mortgage loans1 distributed to several entities … Mortgage loans serviced for multiple entities … Economic ownership of new mortgage production in 2018 (EUR 6.1 bn) Mortgage portfolio at 31 December 2018 (EUR 47.1bn)2 NN Bank 7% NN Bank 5%
Slide 11: Mortgage loans: growth and trends
Mortgage loans: growth and trends NN Bank annual mortgage loan production (in EUR bn) NN Bank mortgage loan book (in EUR bn)1 6.1 18.0 18.2 1.1 1.1 5.0 0.7 4.0 12.5 4.5 3.8 1.1 4.6 5.3 13.0 11.4 12.4 3.6 2016 2017 2018 2016 2017 2018 NN Bank Delta Lloyd HQ 50 NN Bank Delta Lloyd HQ 50 Mortgage produ
Slide 12: Retail savings: two strong pillars
Retail savings: two strong pillars The savings market grew stronger in 2018 (+3.86%) than in 2017 (+0.87%), despite the fact that the interest rates for savings have been low for many years and consumer savings are undermined by taxes and rising inflation (CPI). The growth is mainly related to bank
Slide 13: Providing customers with efficient and excellent services
Providing customers with efficient and excellent services NN Bank’s strategic priorities for creating long-term value State-of-the-art savings and mortgage back-office systems: improvements in IT infrastructure • All NN-labelled mortgage loans migrated to new back-office system • All savings product
Slide 14: Balance sheet and capital position
Balance sheet and capital position 14
Slide 15: Balance sheet composition
Balance sheet composition Assets Balance sheet at 31 December 2018 • Mainly mortgage loans, small consumer loan portfolio and liquid EUR bn assets (HQLA) 21.6 21.6 • Mortgage portfolio consists of EUR 13.0bn NN-labelled mortgages, EUR 4.0bn Delta Lloyd mortgages and EUR 1.1bn Quion (HQ 50) mortgages
Slide 16: Capital and liquidity position
Capital and liquidity position Capital ratios (transitional CRD IV) Resilient position • Capital position exceeds regulatory requirements1. For both credit risk and operational risk, the Standardised Approach is used • Leverage ratio is above current Dutch Regulatory requirements 17.9% 16.3% • Growt
Slide 17: Capital position - historical development
Capital position - historical development1 Total capital ratio2 Risk weighted assets (EUR bn) Leverage ratio 16.9% 17.9% 5.7 5.5 15.9% 4.0% 4.1% 4.1% 1.6% 1.5% 4.4 1.6% 15.4% 16.3% 14.3% 2016 2017 2018 2016 2017 2018 2016 2017 2018 CET1 Tier 2 • Solid capital position • 2018 decrease in RWA due to i
Slide 18: Funding diversification
Funding diversification Total Equity & Liabilities Redemption profile1 31 December 2018 Equity EUR m Regular Savings 1,125 1,040 3%4% 5% Bank Annuities 14% 723 31% Bank Annuities (mortgage-linked) 530 520 504 7% Covered Bonds 270 Securitisations 98 48 6% - Senior Unsecured 30% Subordinated 2019 2020
Slide 19: Various funding programmes
Various funding programmes Debt Issuance Programme (EMTN1) CPT Covered Bond Programme • EUR 3.0bn programme • EUR 5.0bn programme • Wholesale funding (senior unsecured) • Conditional Pass-Through (CPT) structure • Public benchmark deals and private placements • Collateralised by prime Dutch resident
Slide 20: Full-year 2018 results
Full-year 2018 results 20
Slide 21: Profit and loss
Profit and loss Summary profit and loss account (Amounts in EUR m) 20161 20171 2018 Interest income 498 529 600 Interest expense (295) (307) (383)2 Interest result 203 223 217 Fee and commission income 48 48 86 Gains and losses on financial transactions and other income 41 14 15 Valuation results on
Slide 22: Moving to a more balanced composition of income
Moving to a more balanced composition of income Net Interest Margin1 Lower margins due to strong competition • Net Interest Margin (NIM) decreases due to continuing 1.5% 1.4% strong competition 1.60% 1.40% 1.0% 1.20% 1.00% • Decline is also attributable to the inclusion of the Delta 0.80% Lloyd port
Slide 23: Continued cost control
Continued cost control Cost/income ratio1 Strong focus on costs • NN Group has an expense reduction target of EUR 400m 58.0% 58.1% by 2020, of which NN Bank will contribute approximately 10% 56.0% • Expense reductions to be achieved by integrating processes and systems to maximise the synergy benefi
Slide 24: Appendix: NN Bank
Appendix: NN Bank 24
Slide 25: NN Bank Timeline
NN Bank Timeline Corporate history 2011 – NN Bank launched as a savings bank to take advantage of opportunities in the Dutch banking market and respond to the declining individual life insurance market 2013 – Growth accelerated via the acquisition of selected parts of ING Bank (WestlandUtrecht Bank)
Slide 26: Strong mortgage loan performance
Strong mortgage loan performance Trend to lower LTV and higher (p)repayments … ... to further support historically good performance numbers • LTV cap lowered by 1%-point p.a. from 105% in 2013 to 100% in 2018 Average loan-to-value has gradually decreased over time 84% 83% • Lower average LTV due to
Slide 27: IFRS 9
IFRS 9 Impact of new accounting principles Changed carrying amounts IAS 39 IFRS 9 • Part of the available-for-sale (Amounts in millions of EUR) carrying Reclassification Remeasurement carrying investments portfolio is split into an amount amount investment securities portfolio Financial assets class
Slide 28: Appendix: Dutch economy
Appendix: Dutch economy 28
Slide 29: Dutch economy
Dutch economy (Un)employment development Dutch GDP and consumption # of persons % Labour 1.5 x1000 force 10,000 9% 8% 1 8,000 7% 6% 6,000 5% 0.5 4% 4,000 3% 2,000 2% 1% 0 0 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Sep-10 Sep-11 S
Slide 30: Dutch housing market
Dutch housing market • Total new mortgage business was EUR 105.9bn in 2018, up EUR 5bn • The Dutch housing market showed scarcity and price increases (4.9%) on a year ago • In many regions in the Netherlands, housing prices rose substantially (an • As house prices increased, the average mortgage sum
Slide 31: Dutch housing market (cont'd)
Dutch housing market (cont’d) • December 2018 house prices rose by 8.7% year-on-year. The price level is now 3.8% above the pre-crisis peak, with the average purchase price at EUR 294,000 • House prices keep climbing higher on the back of current low level of interest rates and tightness in the mark
Slide 32: Mortgage market developments
Mortgage market developments Significant player in the Dutch (new production) mortgage market¹ … Stabilising mortgage rates 7.0% Rabobank (incl. Obvion) 20.2% 6.0% ABN AMRO (incl. Florius & Moneyou) 16.7% ING 14.0% 5.0% AEGON 7.6% 4.0% De Volksbank 7.0% 3.0% Nationale-Nederlanden 5.3% 2.0% MUNT 4.6%
Slide 33: Contact information
Contact information Kees van Kalveen Rolf-Pieter ter Horst NN Bank Treasury NN Bank Treasury T: +31 70 513 1334 T: +31 70 513 1332 M: +31 6 30070440 M: +31 6 21841550 E: kees.van.kalveen@nn.nl E: rolf-pieter.ter.horst@nn.nl Hendrik-Jan Luikinga Geraldine Bakker - Grier NN Bank Treasury Investor Rela
Slide 34: Disclaimer
Disclaimer This material has been prepared by Nationale-Nederlanden Bank N.V. (“NN This material should not be regarded by recipients as a substitute for the acting for the account or benefit of a U.S. person, in reliance on Regulation Bank” or the “Company”) for informational purposes only. This ma
Slide 35: Disclaimer
Disclaimer operate in the future. By their nature, forward-looking statements involve risks No licence or conveyance of any rights in any intellectual property owned and uncertainties because they relate to events and depend on circumstances by the Company is granted or implied by the recipient’s us
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