Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — FY2013 Earnings Presentation
40 slides from Deutsche Pfandbriefbank's earnings presentation, Mar 10, 2014
Slide 1: Preliminary Unaudited Results 2013
Preliminary Unaudited Results 2013: Key financial targets exceeded and strategic priorities successfully reached Manuela Better, CEO Alexander von Uslar, CFO Preliminary Unaudited Results 2013, 10th March 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: Highlights 2013
Highlights 2013 Financials Key financial targets exceeded and strategic priorities successfully reached New Business Pre-tax profit of EUR 165 mn up 33% y-o-y (2012: EUR 124 mn) and well above initial Earnings full-year target of EUR >100 mn, also benefiting from one-off effects (target raised to EU
Slide 4: Income Statement (IFRS): Pre-tax profit
Income Statement (IFRS) Financials Pre-tax profit of EUR 165 mn up 33% y-o-y and well above initial full-year target of EUR >100 mn, also benefiting from one-off effects Pre-tax profit EUR millions New Business +33% Key drivers 2013: 165 Operating revenues slightly up, driven by the 124 following ef
Slide 5: Income/Expenses from Lending Business
Income Statement (IFRS) Financials Income/expenses from lending business driven by increased profitability of the portfolio and low level of loan-loss provisions Income/Expenses from Lending Business EUR millions New Business 2012 2013 Key drivers 2013: Net interest and similar 296 319 New business
Slide 6: Income/Expenses from Further Business Activities
Income Statement (IFRS) Financials Income/expenses from further business activities dominated by FMS-WM servicing related effects Income/Expenses from Further Business Activities EUR millions New Business 2012 2013 Key drivers 2013: Balance of other operating 131 100 EUR 46 mn lower fee income from
Slide 7: Income/Expenses from Financial Instruments
Income Statement (IFRS) Financials Income/expenses from financial instruments driven by one-off effects Income/Expenses from Financial Instruments EUR millions New Business 2012 2013 Key drivers 2013: Net trading income 10 -51 EUR 55 mn negative one-off effect from change to Overnight Index Swaps (O
Slide 8: Balance Sheet (IFRS): Total Assets
Balance Sheet (IFRS) Financials FMS-WM related effects almost completely managed down Total Assets EUR billions New Business -23% Key drivers 2013: 97 Hardly any FMS-WM related assets remaining 75 74 on pbb’s balance sheet – Only EUR 18 mn back-to-back derivatives left (12/12: EUR 1.0 bn) Funding –
Slide 9: Capitalisation
Capitalisation Financials Capitalisation further strengthened – Tier I ratio (Basel II, pro-forma) at 20.3%, full-year profit 2013 not yet included RWA/Tier I ratio The regulatory capital ratios stated are calculated on an EUR billions (SolvV, German GAAP/HGB) New Business unaudited pro-forma basis.
Slide 10: Capitalisation: Basel III simulation
Capitalisation [UPDATED] Financials Basel III: Simulation of capital ratios – update based on final annual results 2013 Basel III: Capital 31/12/13 (transitional Basel III rules)4 Basel III: RWA EUR billions (IFRS, fully IRBA)1,2,3 EUR billions (IFRS, fully IRBA)2,3 New Business 31/12/13 (fully phas
Slide 11: New Business
New Business Financials Origination power proven with total new business volume up 46% to EUR 8.2 bn at attractive risk-return profile Total New Business EUR billions (Commitments, incl. extensions >1 yr) New Business +46% REF 2012 2013 Total volume € 4.9 bn € 7.0 bn 8.2 New commitments € 2.9 bn € 5
Slide 12: Real Estate Finance new business by region and property type
New Business Financials Real Estate Finance (REF): New business focus on Germany and other selective European countries New Business: Regions Total Portfolio: Regions 2013: EUR millions (Commitments, incl. extensions >1 yr) EUR billions (EaD)2 New Business 2012 2013 Germany 3,679 (53%) Germany 12.1
Slide 13: Public Investment Finance new business
New Business Financials Public Investment Finance (PIF): New business focus on France, Germany and Nordic countries New Business: Regions New Business: Counterparty Types 2013: EUR millions (Commitments, incl. extensions >1 yr) 2013: EUR millions (Commitments, incl. extensions >1 yr) New Business Go
Slide 14: Funding: New long-term funding
Funding Financials Strong new long-term funding of EUR 7.7 bn with six public benchmark transactions – EUR 4 bn LTRO fully repaid New Long-term Funding1 EUR billions New Business 8 2012 +18% 7 2013 6 Unsecured X.X Avg. maturity (yrs) 7.7 6.5 5 4 4.2 4.5 Funding 3.2 3 2.3 2 Pfandbriefe 1 7.5 6.9 4.5
Slide 15: Funding: Deposit business pbbdirekt
Funding Financials Deposit business launched in March 2013 – online-platform ‘pbbdirekt.com’ well accepted by the market with deposits of over EUR 1 bn by March 2014 Retail deposit platform pbb direkt launched New Business in Mar 2013, offering overnight and term deposits Six months, one, two, three
Slide 16: Funding: Cover pools over-collateralisation
Funding Financials Over-collateralisation remains on comfortable level in both cover pools Mortgage Cover Pool: Total Cover Funds Public Sector Cover Pool: Total Cover Funds EUR billions (Nominal) EUR billions (Nominal) New Business 42.0% 39.5% 13.9% 12.6% 12.1% 31.1% 32.7 3.5 27.1 26.5 20.2 20.9 3.
Slide 17: Total Portfolio
Portfolio Financials Total portfolio down, primarily reflecting the planned run-down of the non-strategic Public Budget Finance portfolio Total Portfolio EUR billions (EaD)1 New Business -11% Key drivers 2013: 75.3 66.7 66.9 Lending portfolio (REF+PSF+VP): 12.4 0.3 0.2 6.7 0.1 11.4 – Run-down of the
Slide 18: Real Estate Finance portfolio
Portfolio Financials Real Estate Finance (REF): Stable and well diversified portfolio structure REF: Exposure by Regions and Property Types Other1 31/12/2013: EUR 22.5 bn (EaD) New Business Hotel/Leisure 12.1 Mixed use Warehouse/Logistics Residential Retail/Shopping 3.5 Office 2.1 1.8 1.4 0.5 0.3 Fu
Slide 19: Public Sector Finance portfolio
Portfolio Financials Public Sector Finance (PSF): Planned run-down of the non-strategic Public Budget Finance portfolio PSF: Exposure by Regions and Counterparty Types Corporates & Other2 31/12/2013: EUR 32.9 bn (EaD)1 New Business Financial Institutions 12.0 Public Sector Entities3 Local Authoritie
Slide 20: Total problem loans
Portfolio Financials Total problem loans reduced – hardly any workout loans Total Problem Loans1 EUR billions (EaD) New Business 31% Key drivers 2013: 19% Number of individual problem loans down to 81 (12/12: 88) 1,090 11 940 Coverage ratio lower as loans with high 6 Funding coverage decreased and n
Slide 21: Outlook: Focus on core business activities
Outlook Financials Focus on core business activities REPRIVATISATION INITIATIVES New Business pbb target model Termination FMS-WM servicing Track record/ Funding Equity story Separation pbb/DEPFA Portfolio pbb established in the markets and profitable Restructuring/Realignment Outlook Stabilisation
Slide 22: Outlook: New business and portfolio
Outlook Financials Further increase of new business results in growing strategic portfolios New Business New business 2012 2013 2014e Key drivers EUR billions (Commitments) Continuing positive trend in property invest- New business 5.6 8.2 ments and demand from the public sector for (incl. extension
Slide 23: Outlook: Income statement
Outlook Financials Increasing revenues from loan business and reduction of operating cost base New Business Income Statement 2012 2013 2014e Key drivers EUR millions (IFRS) Higher-margin strategic REF and PIF business Net interest and commission income 319 328 >370 to replace low-margin Public Budge
Slide 24: Key take-aways
Key take-aways Financials New Business Efficient organisational set-up – FMS-WM servicing terminated and processes streamlined pbb well established in the lending and funding markets – client focus and funding base further strengthened Funding Portfolio in line with strategy – strict underwriting di
Slide 25: Appendix
Appendix Preliminary Unaudited Results 2013, 10th March 2014
Slide 26: Income Statement (IFRS)
Financials Financials Income Statement (IFRS) Income/Expenses EUR millions New Business FY 2010 FY 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 Operating revenues 652 526 103 120 130 114 467 101 113 155 113 482 Net interest and similar 600 371 76 74 72 74 296
Slide 27: REF new business by regions and property types
New Business Financials Real Estate Finance (REF): New business well diversified by regions and property types New Business: Regions and Property Types 2013: EUR millions (Commitments, incl. extensions >1 yr) New Business 3,679 (53%) Other 25 (<1%) Hotel/Leisure 288 (4%) Funding Mixed Use 405 (6%) W
Slide 28: PIF new business by regions and counterparty types
New Business Financials Public Investment Finance (PIF): New business focus on France, Germany and Nordic countries New Business: Regions and Counterparty Types 2013: EUR millions (Commitments, incl. extensions >1 yr) New Business 631 (52%) Sovereign guaranteed 177 (14%) Local authorities 456 (37%)
Slide 29: Public Benchmark Issuances since 2012
Funding Financials Public Benchmark Issuances since 2012 Type WKN Launch Date Maturity Date Size Spread1 Coupon Issue/Reoffer Price New Business Mortgage Pfandbrief A1K0RS 10.01.2012 18.01.2016 EUR 500 mn +75bp 2.250% 99.970% Mortgage Pfandbrief (1. Tap)2 A1EWJU 22.02.2012 06.10.2016 EUR 100 mn +57b
Slide 30: Cover Pools: termination of limping sub-participation
Cover Pools Financials Termination of FMS-WM’s ‘limping’ sub-participation in August as a further step in the disentanglement from FMS-WM Transfer of assets to FMS-WM as of 1 Oct 2010 Termination of FMS-WM’s ‘limping’ sub-participation New Business Transfer of EUR ~42 bn non-strategic assets and ris
Slide 31: Total Portfolio by Regions
Portfolio Financials Total Portfolio Total Portfolio by Regions EUR billions (EaD)1 New Business 36.7 31/12/2012 / Total: EUR 75.3 bn1 32.8 31/12/2013 / Total: EUR 66.9 bn Funding 7.6 6.3 5.9 5.3 4.6 4.9 3.9 4.2 3.8 3.7 3.3 3.1 2.2 1.6 1.8 1.7 1.6 1.4 1.1 0.3 1.1 1.0 0.7 0.4 0.5 0.5 0.1 <0.1 <0.1 <0
Slide 32: REF portfolio by regions
Portfolio Financials Real Estate Finance (REF) REF: Portfolio by Regions EUR billions (EaD) New Business 12.1 12.1 31/12/2012 / Total: EUR 23.7 bn 31/12/2013 / Total: EUR 22.5 bn Funding 3.4 3.5 2.2 1.8 2.2 2.1 1.6 1.4 0.6 0.5 0.5 0.4 0.3 0.3 0.2 0.2 0.2 0.1 0.1 <0.1 <0.1 <0.1 Germany UK France CEE
Slide 33: REF portfolio by property types
Portfolio Financials Real Estate Finance (REF) REF: Portfolio by Property Types1 EUR billions (EaD) New Business 8.5 31/12/2012 / Total: EUR 23.7 bn 7.0 31/12/2013 / Total: EUR 22.5 bn 6.1 6.2 5.0 4.9 Funding 1.7 1.8 1.0 1.0 1.1 1.2 0.3 0.4 Office Retail/ Residential Warehouse/ Mixed use Hotel/ Othe
Slide 34: REF portfolio by loan types
Portfolio Financials Real Estate Finance (REF) REF: Portfolio by Loan Types EUR billions (EaD) New Business 22.3 20.6 31/12/2012 / Total: EUR 23.7 bn 31/12/2013 / Total: EUR 22.5 bn Funding 0.6 1.2 0.7 0.4 <0.1 0.2 Investment loans Development loans Customer derivatives Other Portfolio 31/12/2012 31
Slide 35: REF portfolio by EL classes
Portfolio Financials Real Estate Finance (REF) REF: Portfolio by EL Classes EUR billions (EaD) New Business 5.0 4.9 31/12/2012 / Total: EUR 23.7 bn 31/12/2013 / Total: EUR 22.5 bn 3.9 3.4 3.5 3.4 EL class S&P rating scale 1-5 AAA to A- 6-8 BBB+ to BBB- 2.5 2.6 9-11 BB+ to BB- 2.0 2.0 12-14 B+ to B-
Slide 36: PSF portfolio by regions
Portfolio Financials Public Sector Finance (PSF) PSF: Portfolio by Regions EUR billions (EaD)1 New Business 13.8 31/12/2012 / Total: EUR 38.9 bn 12.0 31/12/2013 / Total: EUR 32.9 bn 5.9 5.7 5.0 Funding 4.1 3.7 2.9 3.1 2.9 1.6 1.4 1.6 1.5 1.4 1.1 0.5 0.5 0.5 0.2 0.5 0.2 0.4 0.3 0.2 0.2 0.1 0.2 <0.1 <
Slide 37: PSF portfolio by counterparty types
Portfolio Financials Public Sector Finance (PSF) PSF: Portfolio by Counterparty Types EUR billions (EaD)1 New Business 10.9 10.4 31/12/2012 / Total: EUR 38.9 bn 31/12/2013 / Total: EUR 32.9 bn 8.4 8.1 8.3 8.2 6.6 5.0 Funding 3.1 2.9 Local Authorities Sovereign Public Sector Entities2 Financial Insti
Slide 38: PSF portfolio by PD classes
Portfolio Financials Public Sector Finance (PSF) PSF: Portfolio by PD Classes EUR billions (EaD)1 New Business 28.0 31/12/2012 / Total: EUR 38.9 bn 22.5 31/12/2013 / Total: EUR 32.9 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- Funding 23-27 CCC+ to CCC
Slide 39: Total problem loans
Portfolio Financials Total problem loans Total Problem Loans1 EUR billions (EaD) New Business 88 100% Italy 81 18% 23% Japan 1,090 Hungary 11 940 33% 18% 6 Austria Benelux 35% Spain Funding 1,079 934 Sweden 49% UK 24% Germany 12/12 12/13 12/12 12/13 Portfolio No. of individual cases Workout loans2 R
Slide 40: 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
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