Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Q3 2014 Earnings Presentation
37 slides from Deutsche Pfandbriefbank's earnings presentation, Nov 14, 2014
Slide 1: Results Q3/9M 2014 (unaudited)
Results Q3/9M 2014 (unaudited) PBT of EUR 127 mn after nine months (Q3: EUR 44 mn) well in line with full-year guidance of EUR >140 mn Analyst Call Munich/Unterschleissheim, 14th November 2014 Andreas Arndt, Co-CEO/CFO Results Q3/9M 2014 (unaudited), 14th November 2014
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: Key developments in Q3/14
Key developments in Q3/14 pbb well on track with pre-tax profit of EUR 44 mn in Q3 (Q2: EUR 45 mn; Q1: EUR 38 mn), reflecting an ongoing positive operating development and supported by one-off effects Income Continued positive trend in base line revenues from lending business and unchanged low level
Slide 4: European market environment
European market environment Increasing property values in most European countries lead to declining yields However, high demand for property investments continues Real estate markets − Historically low interest rates promote search for higher yielding assets − Yield gap vs. government bonds remains
Slide 5: HRE Group successfully passed AQR and stress test
HRE Group successfully passed AQR and stress test ► AQR and stress test confirm quality of the portfolio and are evidence of an adequate capitalisation, even under stressed assumptions ► The result has affirmed HRE’s conservative risk policy and provides a solid foundation for steps ahead, within th
Slide 6: Key figures 9M/14
Key figures 9M/14 9M/14 (EUR) Pre-tax profit up +4% y-o-y to EUR 127 mn (9M/13: EUR 122 mn) and thus well in line with full- PBT 127 mn year target of EUR >140 mn Income NII 303 mn − Net interest income strongly up by +25% (adjusted for prepayment fees and other one-offs) statement LLPs -1 mn − Loan
Slide 7: Income statement
Income statement Continued positive trend in base line revenues from lending business and significantly reduced operating cost base Pre-tax profit Key drivers 9M/14 vs. 9M/13: +4% EUR millions Continued positive trend in base line revenues from 122 127 lending business 62 43 45 44 LLPs remain on low
Slide 8: Income statement: Net interest income continues positive trend
Income statement Net interest income continues positive trend Income/expenses from lending business EUR millions 9M/13 9M/14 Key drivers 9M/14 vs. 9M/13: Net interest and similar 232 303 NII driven by higher-margin and growing income strategic portfolios thereof: prepayment fees + 18 35 One-off effe
Slide 9: Income statement: Operating cost base significantly reduced
Income statement Operating cost base significantly reduced (-22% y-o-y) due to strict cost containment and following the termination of the FMS-WM servicing by end of Sep 2013 Income/expenses from further business activities EUR millions 9M/13 9M/14 Key drivers 9M/14 vs. 9M/13: Net other operating 8
Slide 10: 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 9M/13 9M/14 Key drivers 9M/14 vs. 9M/13: Net trading income -53 -21 EUR -8 mn bCVA effect, mainly resulting from thereof: o
Slide 11: Capital: pbb with solid capital ratios under Basel III
Capital 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 is exempt from calculating the pbb with solid capital ratios under Basel III equity capital ratio and the core capital ra
Slide 12: New business
New business Strong new business in Q2 and Q3 brings total new business volume after nine months to EUR 7.0 bn (+26% y-o-y) Total new business PIF Total new business PIF EUR billions (Commitments, incl. extensions >1 yr) EUR billions (Commitments, incl. extensions >1 yr) REF REF +26% +26% 2.7 2.7 2.
Slide 13: Balance sheet
Balance sheet pbb operates conservative balance sheet management with overall matched ALM profile and strong liquidity position Balance sheet: 30/09/2014 (31/12/2013) EUR billions 76.1 (74.6) 76.1 (74.6) Other assets 0.7 (1.2) 1.1 (1.7) Other liabilities Hedging derivatives (pos. FV) 7.8 (6.2) 7.3 (
Slide 14: Funding: New long-term funding of EUR 5.6 bn
Funding New long-term funding of EUR 5.6 bn (-20%) reflects lower funding needs due to further optimisation of funding profile on the basis of a more than adequate liquidity position New long-term funding 9M/13 Key drivers 9M/14 vs. 9M/13: EUR billions1 9M/14 New long-term funding of EUR 2.5 bn in Q
Slide 15: Funding: Cover pools managed on comfortable OC levels
Funding Cover pools managed on comfortable OC levels, which provide the basis for upcoming issuances Top 5 Pfandbrief issuers Mortgage Pfandbriefe 30/09/14: EUR billions (Nominal outstanding)1 pbb is one of the most frequent issuers in the Public Sector Pfandbriefe German Pfandbrief market #1 Larges
Slide 16: Strategic portfolios growing
Portfolio Strategic portfolios growing 12/13 06/14 09/14 Total portfolio EUR billions (EaD, Basel III) Strategic Non-strategic Bank steering/ 69.4 65.5 65.4 portfolios portfolios ALM (run-down) +8% 22.2 23.5 23.9 +8% 25.0 24.9 24.9 13.8 8.4 8.7 9.1 8.4 7.6 REF PIF VPnew1 C&A1 Total1 PIF Strategic po
Slide 17: High portfolio quality and low share of problem loans
Portfolio High portfolio quality reflected in sound risk profile and low share of problem loans Total portfolio: Rating Non-investment grade2 REF portfolio: EL classes EL class 1-5 S&P scale AAA to A- 30/09/2014: EUR billions (EaD, Basel III)1 30/09/2014: EUR 23.9 billions (EaD, Basel III) 6-8 BBB+
Slide 18: Key take-aways
Key take-aways ► Development of sustainable earnings base on track ► Positive earnings trend from lending business ► Strategic core business growing, providing for increasing earnings ► Sound capitalisation covers further growth and regulatory challenges comfortably ► Successful new business activit
Slide 19: Appendix
Appendix Results Q3/9M 2014 (unaudited), 14th November 2014
Slide 20: Income statement
Income statement Income/Expenses EUR millions 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13 Q4/13 2013 Q1/14 Q2/14 Q3/14 9M/14 Operating income 652 526 467 101 113 155 369 113 482 89 114 112 315 Net interest and similar 600 371 296 79 74 79 232 87 319 89 106 108 303 income Net fee and commission -10 32 23
Slide 21: New business: Real Estate Finance (REF)
New business Real Estate Finance (REF) New business: Regions Portfolio: Regions 9M/2014: EUR 6,075 million (Commitments, incl. extensions >1 yr) EUR billions (EaD, Basel III) 12/13 09/14 Germany 2,815 (46%) Germany 12.1 54% 12.3 51% UK 788 (13%) UK 3.5 16% 4.0 17% CEE 575 (9%) CEE 2.1 9% 2.3 10% Fra
Slide 22: New business: Public Investment Finance (PIF)
New business Public Investment Finance (PIF) New business: Regions Portfolio: Regions 9M/2014: EUR 895 million (New commitments) EUR billions (EaD, Basel III) 12/13 09/14 Spain 42 (4%) Spain 2.1 25% 2.1 23% Germany 451 (50%) Germany 2.0 24% 2.5 27% France 301 (34%) France 1.7 20% 1.9 21% Italy 0 Ita
Slide 23: Funding: New long-term funding
Funding New long-term funding Public issues Private placements EUR billions1 EUR billions1 4.3 (6.3 yrs) 3.1 (9.2 yrs) 2.7 (5.7 yrs) 1.4 (3.7 yrs) 1.5 (6.6 yrs) 2.5 (4.6 yrs) 1.4 (6.1 yrs) 0.2 (3.3 yrs) 2.9 (7.6 yrs) 2.3 (4.7 yrs) 1.6 (11.7 yrs) 1.3 (5.3 yrs) 9M/13 9M/14 9M/13 9M/14 Unsecured (avg.
Slide 24: 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 25: Portfolio: Total portfolio
Portfolio Total portfolio Total portfolio: Regions EUR billions (EaD, Basel III)1 33.5 31/12/2013 / Total: EUR 69.4 bn 28.1 30/09/2014 / Total: EUR 65.4 bn 6.5 6.8 5.2 5.3 4.9 5.8 4.5 5.0 3.8 3.9 3.4 3.5 1.7 1.8 1.7 2.0 1.4 1.4 1.1 1.0 0.8 0.2 0.6 0.4 0.4 0.4 <0.1 0.0 <0.1 <0.1 Germany2 Austria Spai
Slide 26: Portfolio: Real Estate Finance (REF) regions
Portfolio Real Estate Finance (REF) REF portfolio: Regions EUR billions (EaD, Basel III) 12.1 12.3 31/12/2013 / Total: EUR 22.2 bn 30/09/2014 / Total: EUR 23.9 bn 4.0 3.5 2.1 2.3 2.5 1.8 1.4 1.5 0.5 0.4 0.3 0.3 0.2 0.3 0.1 0.1 0.1 0.2 <0.1 0.1 0.0 0.0 Germany UK CEE France Nordic Spain Benelux Switz
Slide 27: Portfolio: REF property types
Portfolio Real Estate Finance (REF) REF portfolio: Property types EUR billions (EaD, Basel III) 7.3 6.9 31/12/2013 / Total: EUR 22.2 bn 6.2 6.5 30/09/2014 / Total: EUR 23.9 bn 4.9 4.7 1.7 2.0 1.5 1.4 1.0 1.2 0.4 0.5 Office Retail/ Residential Warehouse/ Mixed use Hotel/ Other Shopping Logistics Leis
Slide 28: Portfolio: REF loan types
Portfolio Real Estate Finance (REF) REF portfolio: Loan types EUR billions (EaD, Basel III) 21.5 20.4 31/12/2013 / Total: EUR 22.2 bn 30/09/2014 / Total: EUR 23.9 bn 1.2 1.8 0.4 0.5 0.2 0.1 Investment loans Development loans Customer derivatives Other 31/12/2013 30/09/2014 Customer derivatives 2% Ot
Slide 29: Portfolio: REF EL classes
Portfolio Real Estate Finance (REF) REF portfolio: EL classes EUR billions (EaD, Basel III) 5.8 31/12/2013 / Total: EUR 22.2 bn 4.9 30/09/2014 / Total: EUR 23.9 bn EL class S&P rating scale 3.4 3.4 3.4 1-5 AAA to A- 3.3 6-8 BBB+ to BBB- 2.8 2.6 9-11 BB+ to BB- 2.5 12-14 B+ to B- 2.0 15-18 CCC+ and b
Slide 30: Portfolio: PIF regions
Portfolio Public Investment Finance (PIF) PIF portfolio: Regions EUR billions (EaD, Basel III) 2.5 31/12/2013 / Total: EUR 8.4 bn 2.1 2.1 2.0 30/09/2014 / Total: EUR 9.1 bn 1.9 1.7 1.6 1.6 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 Spain Germany France Italy Benelux Austria Nordic countries Other Europe 31/12/
Slide 31: Portfolio: PIF counterparty types
Portfolio Public Investment Finance (PIF) PIF portfolio: Counterparty types EUR billions (EaD, Basel III) 4.6 31/12/2013 / Total: EUR 8.4 bn 4.2 30/09/2014 / Total: EUR 9.1 bn 2.2 1.8 1.7 1.7 0.9 0.3 Local Authorities Public Sector Entities1 Corporates2 Sovereign 31/12/2013 30/09/2014 Sovereign Sove
Slide 32: Portfolio: PIF PD classes
Portfolio Public Investment Finance (PIF) PIF portfolio: PD classes EUR billions (EaD, Basel III) 5.3 31/12/2013 / Total: EUR 8.4 bn 4.6 30/09/2014 / Total: EUR 9.1 bn PD class S&P rating scale 3.5 3.4 1-7 AAA to A- 8-10 BBB+ to BBB- 11-13 BB+ to BB- 14-22 B+ to B- 23-27 CCC+ to CCC- 28-30 D 0.3 0.3
Slide 33: Value Portfolio new: Regions
Portfolio Value Portfolionew (VPnew) VPnew: Regions EUR billions (EaD, Basel III)1 10.1 9.4 31/12/2013 / Total: EUR 25.0 bn 30/09/2014 / Total: EUR 24.9 bn 6.0 6.3 1.8 1.8 1.6 1.7 1.6 1.5 1.4 1.4 1.1 1.1 0.8 0.9 0.3 0.3 0.2 0.2 0.1 0.1 <0.1 <0.1 <0.1 0.0 Germany Austria Spain Italy CEE Portugal Supr
Slide 34: Value Portfolio new: Counterparty types
Portfolio Value Portfolionew (VPnew) VPnew : Counterparty types EUR billions (EaD, Basel III)1 8.6 8.1 31/12/2013 / Total: EUR 25.0 bn 30/09/2014 / Total: EUR 24.9 bn 6.3 6.1 6.0 5.7 3.7 3.3 1.3 0.8 Sovereign Local Authorities Financial Institutions Public Sector Entities2 Corporates and other3 31/1
Slide 35: Value Portfolio new: PD classes
Portfolio Value Portfolionew (VPnew) VPnew : PD classes EUR billions (EaD, Basel III)1 18.1 17.1 31/12/2013 / Total: EUR 25.0 bn 30/09/2014 / Total: EUR 24.9 bn PD class S&P rating scale 1-7 AAA to A- 8-10 BBB+ to BBB- 11-13 BB+ to BB- 14-22 B+ to B- 23-27 CCC+ to CCC- 28-30 D 3.6 3.7 3.8 2.9 0.5 0.
Slide 36: Total problem loans
Portfolio Total problem loans Total problem loans: Segments No. of individual cases Total problem loans: Regions EUR millions (EaD, Basel III) EUR millions (EaD, Basel III) VPnew REF France 81 941 840 808 100% Japan 70 23% 25% Italy 62 27% Hungary 18% 16% 17% Austria -14% -4% 17% Benelux 941 24% 18%
Slide 37: 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
Deutsche Pfandbriefbank — Q3 2014 Earnings Presentation on 6ix