Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — Debt Investor Presentation (September 2024)
60 slides from Kempen European High Dividend Fund N.V. N's debt investor presentation, September 2024
Slide 1: Soft Bullet Covered Bond investor presentation
ee September 2024 Soft Bullet Covered bond investor presentation
Slide 2: Table of Contents
Table of Contents Executive summary 3 Van Lanschot Kempen at a glance 4 2024 half-year results 10 Van Lanschot Kempen’s diversified funding profile 24 and solid capital buffers Mortgage loan portfolio 30 Soft Bullet Covered Bond Programme 34 Annexes Annex I Sustainability 43 Annex II Dutch housing m
Slide 3: Executive summary - Soft Bullet Covered Bond Programme
Executive summary - Soft Bullet Covered Bond Programme Issuer Van Lanschot Kempen N.V. Van Lanschot Kempen N.V. Programme size €5.0bn • Credit rating of BBB+/A- (S&P/Fitch) Format Soft Bullet (SB) AAA rated Soft Bullet Covered Bond Programme Extension Period Maximum of 12 months • Established in Mar
Slide 4: Van Lanschot Kempen: independent, well-capitalised wealth manager
Van Lanschot Kempen: independent, well-capitalised wealth manager Who we are – We are an independent, well-capitalised wealth manager with a banking licence – We have a strong specialist position in our chosen markets, combining private banking, investment management and investment banking – # of st
Slide 5: Growing further together
Growing further together Be a leading wealth manager in Western Europe, with a solid foundation in the Netherlands and Belgium Further capitalise on the momentum in Private Banking Netherlands, and unlock additional growth engines Reap the significant potential for growth in Private Banking Belgium,
Slide 6: All our segments are well positioned with clear USPs
All our segments are well positioned with clear USPs Private Clients Investment Investment • Foundation of our business Management Clients Banking Clients • Differentiating with our personal approach and • In-house investment • Specialist investment distinctive investment solutions engine banking ca
Slide 7: Solid performance on all key financials
Solid performance on all key financials H1 2024 H1 2023 YE 2023 Net result €74.5m €51.8m €125.2m Underlying net result €78.4m €54.7m €130.5m CET1 ratio (Basel III) 18.8% 21.6% 19.6% Cost/income ratio 69.0% 74.5% 71.6% RoCET1 17.0% 11.4% 14.2% Total capital ratio 24.3% 27.4% 25.3% Client assets 156.8
Slide 8: Delivering on our 2027 financial targets
Delivering on our 2027 financial targets Average annual AuM growth (€bn) Cost/income ratio Common Equity Tier 1 ratio (Basel III) Target 10% 2027 target 67–70% 2027 target 17.5% Basel IV fully loaded +21% 18.8% CAGR 85.7% 24.3% 23.7% 68.9% 73.1% 71.6% 69.0% 20.6% *** +8% 19.6% 18.5% 2020 2021 2022 2
Slide 9: Delivering on our sustainability and social targets
Delivering on our sustainability and social targets H1 2024 results Discretionary AuM Average annual reduction Annual weighted average carbon intensity 18% vs 2019 7% reduction (2019 baseline) Own organisation 1.47 tonnes CO2 per FTE, Annual average carbon intensity per FTE down 39% vs 2019, down 8%
Slide 10: 2024 half-year results
ee 2024 half-year results
Slide 11: We continued our strong momentum in H1 2024
We continued our strong momentum in H1 2024 • Strong growth in AuM to €139.3 billion, a 9.4% increase vs 2023 • Net result of €74.5 million, a 44% increase vs H1 2023 • All client segments contributed to the net result • Robust momentum in the Netherlands, especially with entrepreneurial clients • S
Slide 12: Key financial highlights H1 2024
Key financial highlights H1 2024 Net result Operating expenses AuM net inflow CET 1 ratio (Basel III) €74.5m (+44%) €248.2m (+6%) €5.7bn 18.8% (2023: 19.6%) Commission income Cost/income ratio Total AuM CET 1 ratio (Basel IV)* €251.5m (+23%) 69.0% (H1 2023: 74.5%) €139.3bn (+9%) 18.5% Interest incom
Slide 13: All our client segments performed well
All our client segments performed well and contributed positively to our financial targets Private Clients Netherlands Investment Management Clients • Momentum continuing • Reorganisation starting to pay off • Net AuM inflow of €1.8bn • Net AuM inflow of €2.8bn • €71.6m operating profit before tax •
Slide 14: Net result rises to €74.5m on the back of strong commission income
Net result rises to €74.5m on the back of strong commission income Key drivers of net result (€m) -15.7 11.9 -13.0 -3.6 4.1 -1.6 -7.2 47.8 83.8 83.8 82.7 79.1 79.1 81.7 74.5 74.5 51.8 51.8 H1 2023 Commission Interest income Other income Operating Impairments Non-strategic Special and Tax H1 2024 inc
Slide 15: Overview of net result H1 2024
Overview of net result H1 2024 €m H1 2024 H1 2023 % change Commission income 251.5 203.7 23% - Of which securities commissions 227.4 186.5 22% - Of which other commissions 24.1 17.2 40% Interest income 92.2 107.9 -15% Income from securities and associates 6.9 5.8 18% Result on financial transactions
Slide 16: Private Clients Netherlands: high inflow and strong result
Private Clients Netherlands: high inflow and strong result AuM (€bn) 2.9 AuM breakdown (%) 1.8 Other 11% 41.6 Bonds 26% Equities 36.8 36.8 38.6 63% 31/12/2023 Net AuM inflow Market performance 30/06/2024 • Net AuM inflow of €1.8bn: 77% non-discretionary, 23% discretionary; including strong inflow in
Slide 17: Private Clients Belgium: high inflow and strong result
Private Clients Belgium: high inflow and strong result AuM (€bn) 0.7 AuM breakdown (%) 0.9 1.1 Other 5% Bonds 20% 13.0 13.7 Equities 12.1 11.0 11.0 76% 31/12/2023 Net AuM inflow Market performance Acquisition (Accuro) 30/06/2024 • Gaining market share in the attractive Belgian private banking market
Slide 18: Investment Management Clients: capitalising on restructuring
Investment Management Clients: capitalising on restructuring and scalable operating model AuM (€bn) 0.4 -0.2 2.6 1.8 AuM breakdown (%) Other 21% 29% Equities 79.5 79.5 79.9 79.7 82.3 84.1 50% Bonds 31/12/2023 Net investment Net alternative Net fiduciary Market 30/06/2024 strategies investment manage
Slide 19: Investment Banking Clients: profitability returning
Investment Banking Clients: profitability returning as momentum builds Commission income (€m) Operating profit before tax (€m) 10.3 8.4 8.4 31.7 29.0 26.3 24.3 24.0 3.0 1.3 0.4 19.6 17.0 -4.8 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023 H2 2023 H1 2
Slide 20: Stable margins at all segments
Stable margins at all segments Annualised recurring fees* (€m) Stable margins • Private Clients Netherlands 55bps 468 415 (2023: 60bps) 360 380 330 340 • Evi van Lanschot 37bps (2023: 52bps) 307 • Private Clients Netherlands excl. Evi van Lanschot 58bps (2023: 60bps) • Private Clients Belgium 81bps
Slide 21: First half of 2024 shows resilient interest income
First half of 2024 shows resilient interest income Interest income (€m)* Interest margin (12-month moving average) 1.24% 1.18% 1.11% 108 1.01% 93 89 92 0.98% 76 78 70 0.88% 0.92% H1 2021 H2 2021 H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 • Interes
Slide 22: Higher other income driven by better results at various components
Higher other income driven by better results at various components Other income (€m) Income Income Book value Book value Book value H1 2024 H1 2023 H1 2024 YE 2023 H1 2023 Van Lanschot Kempen Participaties 2.1 2.3 36.4 35.0 43.8 Bolster Investments Coöperatief UA 2.8 2.2 79.1 76.3 69.3 Co-investment
Slide 23: Operating expenses: focus on scalable growth
Operating expenses: focus on scalable growth Operating expenses (€m) Internal FTEs 3.5 10 23 9.6 244.8 248.2 1,844 1,904 1,904 1,914 1,937 235.2 235.2 H1 2023 Staff costs Other H1 2024 30/06/2023 31/12/2023 Accuro Other 30/06/2024 • Income from operating activities increased by 14% and operating exp
Slide 24: Diversified funding profile and solid capital buffers
Van Lanschot Kempen’s diversified funding profile and solid capital buffers
Slide 25: Solid profile is reflected in its creditworthiness
Van Lanschot Kempen’s solid profile is reflected in its creditworthiness Standard & Poor’s Fitch • Long-term credit rating of issuer: BBB+ • Long-term credit rating of issuer: A- • Outlook long-term credit rating: Stable • Outlook long-term credit rating: Stable • Short-term credit rating of issuer:
Slide 26: Balance sheet shows strong capital and funding position
Balance sheet shows strong capital and funding position Balance sheet 30 June 2024 Significant capital buffer € bn, balance sheet total = €16.4bn • Total equity and AT1 of €1.3bn 0.3 Due to banks • CET 1 ratio 18.5%* Cash and cash equivalents 2.0 and balances at banks • Leverage ratio 5.8% Low-risk
Slide 27: Van Lanschot Kempen has various funding programmes
Van Lanschot Kempen has various funding programmes Secured programmes Unsecured programmes • Public soft bullet covered bond programme used for Debt Issuance Programme / MTN wholesale funding purposes • €5.0 billion programme • Backed by residential mortgage loan portfolio, fully • Used for wholesal
Slide 28: Funding mix and redemption profile
Funding mix and redemption profile Funding mix 30 June 2024 Redemption profile* (100% = €16.4 billion) €m 800 3%2% 8% Client savings and deposits 600 13% Debt securities Equity 400 Other funding Interbank funding 200 74% 0 07/24 - 2025 2026 2027 2028 2029 ≥2030 12/24 Senior unsecured Covered bond Ti
Slide 29: Track record of issuing secured and unsecured debt instruments
Track record of issuing secured and unsecured debt instruments • Funding position based on a stable level of bond issuance, our presence in wholesale markets and accordingly experienced with secured funding related (reporting) tasks • The Soft Bullet Covered Bond Programme will be used for future pu
Slide 30: Mortgage loan portfolio
Mortgage loan portfolio
Slide 31: Offering mortgages to private banking clients
Offering mortgages to private banking clients • We are a specialist wealth manager offering multiple services to our clients: investment allocation, estate planning and financing – and we also offer mortgages to our private banking clients • Our private bankers can offer personalised service thanks
Slide 32: Stable loan portfolio
Stable loan portfolio Loan Loan % change Impaired Provision Impaired Coverage €m portfolio portfolio loans ratio ratio 30/06/2024 31/12/2023 30/06/2024 30/06/2024 30/06/2024 30/06/2024 30/06/2024 Mortgages 6,251 6,368 -2% 36 2 0.6% 6% Other loans 2,291 2,182 5% 93 28 4.1% 30% Loan portfolio 8,541 8,
Slide 33: Additions to loan loss provisions
Additions to loan loss provisions Additions to loan loss provisions (€m) -9 bps* 18 bps* 8 bps* • Loan loss provisions relative to average risk-weighted assets worked out at 8 basis points 3.9 • Reflecting the high quality of the loan portfolio, mainly consisting of Dutch 1.7 residential mortgages -
Slide 34: Soft Bullet Covered Bond Programme
Soft Bullet Covered Bond Programme
Slide 35: Summary & key features
Summary & key features Summary Key features Issuer Van Lanschot Kempen NV Structure Registered programme with DNB Strong programme tests (asset cover test & Programme size €5.0 bn amortisation test) Format Soft Bullet (SB) No interest rate swap counterparties* Extension Period Maximum of 12 months E
Slide 36: Transaction structure
Transaction structure Subordinated Loan Swap provider* Provider Servicing Swap (Sub-) Servicer agreement Agreements CBC Account Bank Administrator Van Lanschot Kempen Security Trustee Administration SB Covered Bond Company B.V. Parallel Debt agreement and Pledge of Receivables Asset Monitor and Inte
Slide 37: Key parties & transaction structure
Key parties & transaction structure Key Programme Parties Key pool characteristics as of June 2024 Originator Van Lanschot Kempen Net principal balance €2,029,684,111 Transferor Van Lanschot Kempen Construction deposits €1,477,188 Issuer Van Lanschot Kempen Fixed rate 97.67% Servicer Van Lanschot Ke
Slide 38: Cover pool characteristics as of June 2024
Cover pool characteristics as of June 2024 Current loan balance per borrower € thousand Geographical distribution as % of outstanding amount 25% 22% 23% 20% Noord-Holland 32.83% 20% 16% Zuid-Holland 21.28% 15% 10% 9% Utrecht 14.35% 7% 5% 3% Noord-Brabant 14.21% 0% Gelderland 8.31% <=250 <=500 <=750
Slide 39: Cover pool characteristics as of June 2024
Cover pool characteristics as of June 2024 Remaining interest rate fixed period (in years) Seasoning (in years) 25% 23% 60% 51% 50% 20% 40% 15% 13% 11% 11% 30% 23% 9% 8% 9% 10% 20% 6% 14% 5% 5% 8% 5% 10% 3% 2% 1% 0% 0% 0% <1 <2 <3 <4 <5 <6 <7 <8 <9 <10 <20 0-5 5-10 10-15 15-20 20-25 25-30 >30 Intere
Slide 40: Soft Bullet mechanism
Soft Bullet mechanism Going-concern Soft Bullet Mechanics • The covered bonds (CBs) are bullet securities due on the specified maturity date and the Issuer makes the coupon and principal payments to the No Issuer Event of Default Bullet Maturity investors • The Asset Cover Test (ACT) ensures that th
Slide 41: Comparison - Dutch covered bond programmes
Comparison - Dutch covered bond programmes Main highlights* Issuer Rating (S/M/F) BBB+/NR/A- A/A1/A A-/NR/A BBB+/NR/NR A+/A1/AA- BBB/NR/BBB A/NR/NR A+/Aa2/A+ A/A2/A- 1.) AAA/NR/NR 1. AAA/Aaa/AAA 1. AAA/NR/NR Programme Rating (S/M/F) AAA/NR/NR NR/Aaa/AAA AAA/NR/NR 2. AAA/NR/AAA AAA/NR/NR NR/Aaa/NR NR
Slide 42: Van Lanschot Kempen investor reporting
Van Lanschot Kempen investor reporting • Van Lanschot Kempen is a member of the Dutch Association of Covered Bond issuers (DACB). The objective of the DACB is to continuously improve the quality of the Dutch covered bond product offering (see also www.dacb.nl) • The Soft Bullet Covered Bond Programm
Slide 43: Annex I | Sustainability
ee Annex I | Sustainability
Slide 44: Progress on our KPIs
Progress on our KPIs Capital KPI Target H1 2024 2023 1 CET1 ratio Basel IV fully loaded 17.5% 18.5% 19.6%1 2 Financial capital 2 Return on equity (CET1) >18% 17.0% 14.2% 3 Cost/income ratio 67-70% 69.0% 71.6% Manufactured capital 4 Performance managed propositions vs their benchmark last 3
Slide 45: High scores on external ESG ratings
High scores on external ESG ratings Governance: 1 B- rating Lower governance risk = 1 On a scale of A+ to D- Higher governance risk = 10 ISS ESG Corporate Rating 6th place in league table of AA rating 491 entrants On a scale of AAA to CCC on resilience to ESG risks 11st place in a league table 4 and
Slide 46: Annex II | Dutch Housing Market
Annex II | Dutch Housing Market
Slide 47: House price development
House price development House Prices Index Prices of existing homes continued to rise in recent months, due to rising % wages and a lack of new construction. Meanwhile, the price spike from 2020 = 100 25% July 2022 has been surpassed 150 20% 15% The cooling down of the housing market and the subsequ
Slide 48: Dutch mortgage lending standards
Dutch mortgage lending standards Evolution of Dutch mortgage lending standards 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ▪ Limited tax ▪ Highest tax ▪ Highest tax rate ▪ Highest tax rate ▪ Highest tax rate ▪ Easing of deduction of rate reduces reduced to: 43% reduced to: 40% r
Slide 49: Economy in the Netherlands
Economy in the Netherlands Gross Domestic Product (GDP) – Y-o-Y change The Dutch economy contracted by 0.1 percent in the first quarter of 7% 2024. For 2024 an economic growth of 0.4 percent is expected, while for 2025 a growth of 1.3 percent is expected 5% 3% Economic growth is expected to be drive
Slide 50: Inflation, wage growth and house price increase
Inflation, wage growth and house price increase Q2 2023 – Q2 2024 - house price increase per region There are substantial regional differences in the income needed by homebuyers to purchase the average owner-occupied home. With 20.0% less than one-and-a-half times the modal income, this is impossibl
Slide 51: Mortgage origination volumes & mortgage rates
Mortgage origination volumes & mortgage rates Cumulative mortgage origination volumes (in €bn) Capital market interest rates are expected to remain 150 148 relatively stable in the coming years, although uncertainty is Billions 137 125 131 high. The growth rate of the economy also plays a role. 100
Slide 52: Annex III | Product offering and underwriting
Annex III | Product offering and underwriting
Slide 53: Product offering
Product offering Private banking services to wealthy individuals and to individuals starting to build their wealth • Advice on financial planning and wealth management is provided • The focus is on delivering relevant advice and high-quality service • Mortgage loans are offered to our target group c
Slide 54: Underwriting (1/2)
Underwriting (1/2) Dutch Code of Conduct Governance Our mortgage underwriting criteria have been continuously updated to align with the Dutch Code of Conduct, national law and prevailing market practices. The following criteria represent our current standards: Maximum loan to value • Market values u
Slide 55: Underwriting (2/2)
Underwriting (2/2) • Various fraud checks are carried out (BKR, SFH, VIS, EVA, employer’s certificate)* Fraud & insurance • Continuous contact between banker and client requirements • Mandatory hazard insurance based on reconstruction value • Mandatory property valuation by independent appraiser • F
Slide 56: Arrears management and reducing credit risk
Arrears management and reducing credit risk Arrears management • Mortgage loans are considered in arrear if one or more payments have been missed by the client • After approximately two weeks a reminder is sent by the service provider (Stater). Every month another letter is sent, for as long as the
Slide 57: Restructuring approach
Restructuring approach • All arrears of over 30 days are monitored by the Prevention Team. They focus on analysing the situation of the client in order to find a permanent solution, rather than just acting on signals. Within 60 days it must be clear whether a problem can be easily Prevention solved,
Slide 58: Contact
Contact Ralf van Betteraij Trang Nguyen Head of Funding Management Funding Specialist T +31 20 348 97 13 T +31 20 348 97 14 r.vanbetteraij@vanlanschotkempen.com trang.nguyen@vanlanschotkempen.com
Slide 59: Important Notice (1/2)
Important Notice (1/2) FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS TO PERSONS OTHER THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")). NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN
Slide 60: Important Notice (2/2)
Important Notice (2/2) The financial data in the Presentation have not been audited or reviewed, unless specifically stated otherwise. Small differences in tables may be the result of rounding. Each Relevant Persons expressly disclaims any and all liability for any representations, warranties or und
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