Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot — Debt Investor Presentation (March 2016)
58 slides from Kempen European High Dividend Fund N.V. N's debt investor presentation, March 2016
Slide 1: Van Lanschot Conditional Pass-Through Covered Bond Programme
Van Lanschot Conditional Pass- Through Covered Bond Programme March 2016 More information: corporate.vanlanschot.nl
Slide 2: Disclaimer
Disclaimer This presentation (“Presentation”) is provided for information purposes only and does not constitute, or form part of, any offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of, or any solicitation of any offer to underwrite, subscribe for or otherwise acquir
Slide 3: Executive summary – Covered Bond Programme
Executive summary Executive summary – Covered Bond Programme Robust Programme Structure Favourable Regulatory Treatment Dutch Law based, registration with Dutch Central Bank UCITS compliant AAA / AAA rated by S&P and Fitch CRR Article 129 compliant Significant de-linkage from rating of the I
Slide 4: Van Lanschot at a glance
Van Lanschot at a glance Van Lanschot’s profile Solid performance on all key financials • One strategy: pure-play, independent wealth manager focusing on 2015 2014 preservation and creation of wealth for our clients • Net profit € 42.8m € 108.7m • Underlying result € 60.1m € 54.2m • Two leading bran
Slide 5: Highlights 2015
Highlights 2015 Continued growth in AUM Growth in commission income € 50.2 billion (+14%) Return of net inflow at Underlying net result Private Banking € 60.1 million (+11%) Major progress in balance sheet Good progress with strategy restructuring, with targets met 2 years Dividend up 12.5% to € 0.4
Slide 6: 1. Van Lanschot
1. Van Lanschot 5
Slide 7: Transforming from small universal bank to specialised wealth manager
Van Lanschot Transforming from small “universal” bank to specialised wealth manager Why wealth management? Building on our distinctive strengths Supported by demographics and economic fundamentals We can build on our inherent strengths in There is room for a high-quality, high-service, private and i
Slide 8: Van Lanschot builds on the experience of its three core activities
Van Lanschot Van Lanschot builds on the experience of its three core activities Private Banking Asset Management Merchant Banking • Private Bank for entrepreneurs, family • Specialised European investment • Specialist services in brokerage, mergers businesses and high net-worth individuals managemen
Slide 9: Van Lanschot's solid profile is reflected in its creditworthiness
Van Lanschot Van Lanschot’s solid profile is reflected in its creditworthiness Fitch Standard & Poor’s • Long-term credit rating: BBB+ • Long-term credit rating: BBB+ • Outlook long-term credit rating: Stable • Outlook long-term credit rating: Stable • Short-term credit rating: F2 • Short-term credi
Slide 10: Highlights 2015
Van Lanschot Highlights 2015 Net inflow in discretionary management and increase of commission income Private • Trend reversal: € 0.3 billion net inflow (vs. € 0.7 billion net outflow in ‘14) driven by traditional Private Banking and Evi van Banking Lanschot • € 17.4 billion of assets under manageme
Slide 11: Balance sheet with strong capital and funding position
Van Lanschot Balance sheet with strong capital and funding position Significant capital buffer • Total equity of € 1.3 billion Cash and balances Due to banks • Common Equity Tier I ratio (phase-in) 16.3% with banks • Leverage ratio (fully loaded) 6.1% Investment portfolio High liquidity buffers • LC
Slide 12: Van Lanschot has various funding programmes
Van Lanschot Van Lanschot has various funding programmes Unsecured programmes Debt Issuance Programme / MTN Non-MTN / Specials 1 • • € 5.0 billion programme Used for public wholesale funding (senior unsecured and • Private placements 1 • Euro and non-euro issues on stand-alone documentation subordin
Slide 13: Successful presence in wholesale markets
Van Lanschot Successful presence in wholesale markets • Strong funding position based on a stable level of bond issuance and a regular presence in wholesale markets • Successful in raising funds in wholesale markets every year since 2010 Senior unsecured, Floored Floater, Senior unsecured, Senior un
Slide 14: Well diversified funding profile
Van Lanschot Well diversified funding profile • Largely ‘self funded’ with a funding ratio of 94.1% at 31 December 2015 • As a wealth manager, majority of funding consists of customer savings and deposits • Funding mix is complemented by wholesale funding • Comfortable funding diversification across
Slide 15: 2. Covered Bond Programme
2. Covered Bond Programme 14
Slide 16: Programme Highlights (1/2)
Covered Bond Programme Programme Highlights (1/2) Conditional Pass-Trough Covered Bond Programme Characteristics Programme Size EUR 5 billion Currency Euro Ratings AAA / AAA (Fitch / S&P) Format Conditional Pass-Through Contractually committed 15% Extension Period Max. 32 years minimum OC Applicable
Slide 17: Programme Highlights (2/2)
Covered Bond Programme Programme Highlights (2/2) Key Benefits Dual Recourse Obligation for Van Lanschot to redeem the Stable Rating Significant de-linkage from issuer bond at expected maturity date rating: a downgrade of the issuer Recourse to CBC in case of default of Van rating does not dir
Slide 18: Conditional Pass-Through Mechanism (1/2)
Covered Bond Programme Conditional Pass-Through Mechanism (1/2) Conditional Pass-Through Covered Bond: Features Event diagram Going-Concern • Under going-concern conditions, the Covered Bonds are bullet securities, i.e. Van Lanschot pays the coupon and principal payments Issuer Event of Bullet Matur
Slide 19: Conditional Pass-Through Mechanism (2/2)
Covered Bond Programme Conditional Pass-Through Mechanism (2/2) Repayment Profile • In case a Covered Bond becomes Pass- Through the maturity date of that bond is extended by 32 years from the Hard bullet Maturity Date Extension period Soft bullet • The CBC will attempt to sell a (Max. 1 year) rando
Slide 20: Van Lanschot CPTCB Structure
Covered Bond Programme Van Lanschot CPTCB Structure* • A pool of Dutch prime residential mortgages is transferred to the CBC and subsequently pledged to the Security Trustee. Hence, the Cover Monitor ACT / Amortisation Pledge of Pool is segregated in the CBC receivables Test Asset CBC Monitor Securi
Slide 21: Overview of CPTCB Structures
Covered Bond Programme Overview of CPTCB Structures Conditional Pass-Through Covered Bond Programmes Van Lanschot NIBC Bank Aegon Bank Unicredit (OBG2) Country Netherlands Netherlands Netherlands Italy Legislative Yes Yes Yes Yes Issuer ratings BBB+/NR/BBB+ BBB-/Baa1/BBB- A-/NR/A+ BBB+/Baa1/BBB- (Fi
Slide 22: Van Lanschot Investor Reporting
Covered Bond Programme Van Lanschot Investor Reporting Investor Reporting for Covered Bonds • Van Lanschot 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.da
Slide 23: 3. Mortgage portfolio
3. Mortgage portfolio 22
Slide 24: Strong portfolio with consistently low losses
Mortgage portfolio Strong portfolio with consistently low losses Loan book per 31-12-2015* • Mortgages are an anchor product of 100 % = € 10.2 billion Van Lanschot • High quality portfolio of mortgage 10% loans to wealthy private clients in the Netherlands and Belgium 8% Private Banking - Mortgages
Slide 25: Healthy seasoned and geographically well distributed portfolio
Mortgage portfolio Healthy seasoned and geographically well distributed portfolio Mortgage origination vs house price developments 120 • 68% of the total mortgages exposure (€ million) Index: 2010=100 100 relates to contracts older than eight 683 years, and therefore are less affected 80 570 by hous
Slide 26: LTVs indicate stabilisation of house prices
Mortgage portfolio LTV’s indicate stabilisation of house prices Mortgage size (€ million) Exposure Number of borrowers 10.000 • Van Lanschot’s target client base has 2.227 8.000 naturally led to a mortgage portfolio 2.060 with a relatively high average balance 6.000 of € 440,000 4.000 • All mortgage
Slide 27: Proportion of redemption type mortgages increases
Mortgage portfolio Proportion of redemption type mortgages increases • The proportion of interest only mortgage loans is trending down as a result of industry-led measures, clients’ focus on deleveraging and Repayment types in new mortgage production amended tax legislation • Mortgage loans with a r
Slide 28: Annex I – Cover pool
Annex I – Cover pool 27
Slide 29: Pool characteristics (I/III)
Cover Pool Pool characteristics (I/III) Key pool characteristics as of 1 March 2016 Key eligibility criteria Principal balance € 1,271,235,970 • Each mortgage is either a Life Mortgage Loan, Investment Mortgage Loan, Linear Mortgage Loan, Annuity Mortgage Loan, Interest-only Mortgage Loan, Insurance
Slide 30: Pool characteristics (II/III)
Cover Pool Pool characteristics (II/III) Current Loan to Original Market Value Geographical Distribution 25% 30% 25% 20% 20% 15% 15% 10% 10% 05% 5% 0% % <10 <20 <30 <40 <50 <60 <70 <80 <10 <100 >=100 Current Loan Balance Originator (€1,000) 1,24% 35% 30% 25% 20% Van Lanschot 15% CenE* 10% 5% 98,76%
Slide 31: Pool characteristics (III/III)
Cover Pool Pool characteristics (III/III) Product type Seasoning (in years) 2% 1% 50% 3% 6% Interest Only 40% 12% Life 30% Investment 20% Annuity 10% Lineair 76% Savings 0% <5 <10 <15 <20 <25 <30 >=30 Interest Rate Time to Interest Reset Date (%) 40% 30% 30% 20% 20% 10% 10% 0% 0% 1.5 -2 2-2.5 2.5-3
Slide 32: Annex II – Van Lanschot Mortgages
Annex II – Van Lanschot Mortgages 31
Slide 33: Van Lanschot: product offering
Van Lanschot Mortgages Van Lanschot: product offering Van Lanschot offers private banking services to wealthy individuals and to individuals starting to build up wealth • Advice on financial planning and wealth management • Focus on tailor-made advice and a high quality service level • Mortgage loan
Slide 34: Van Lanschot: underwriting (I/II)
Van Lanschot Mortgages Van Lanschot: underwriting (I/II) Dutch Code of Conduct leading Governance • Mortgage underwriting criteria within Van Lanschot have evolved over time in line with the Dutch Code of Conduct, National Law and general market practice. The criteria below are those currently appli
Slide 35: Van Lanschot: underwriting (II/II)
Van Lanschot Mortgages Van Lanschot: underwriting (II/II) • Various fraud checks done (BKR, SFH, VIS, EVA, employer’s certificate)* Fraud & • Continuous contact between banker and client Insurance • Mandatory hazard insurance based on reconstruction value Requirements • Life insurance compulsory abo
Slide 36: Servicing during the life cycle of a mortgage loan
Van Lanschot Mortgages Servicing during the life cycle of a mortgage loan Application Offering Acceptance by client Registration • Acceptance • Processing in credit system • Acceptance processing in • Registration of collateral • Production of mortgage offer credit system in credit system (and possi
Slide 37: Van Lanschot: arrears management
Van Lanschot Mortgages Van Lanschot: arrears management Arrears management / Timeline • Mortgage loans are considered in arrears if current account is overdrawn for more than one day and for an amount in excess of € 250 • All accounts which are overdrawn are monitored by a central desk at Service Ce
Slide 38: Van Lanschot: restructuring approach
Van Lanschot Mortgages Van Lanschot: restructuring approach Team Prevention & Early:. • All accounts of Personal Banking clients which are overdrawn for more than one day and for an amount in excess of € 250 are monitored by the team Early. They focus on analyzing the situation of the client in orde
Slide 39: Annex III – Covered Bond Programme
Annex III – Covered Bond Programme 38
Slide 40: Minimum Overcollateralisation
Covered Bond Programme Minimum Overcollateralisation Contractually committed • The nominal value of the cover assets excluding any defaulted receivables must always be at least minimum OC of 15% equal to 115% of the outstanding bonds under the program • The Asset Cover Test will account for all risk
Slide 41: Pass-Through Mechanism
Covered Bond Pass-Through Programme Default of Van Lanschot No Repayment of the CB at the Maturity Date Mechanism Yes CBC needs to pay Covered Bond holders Every month Amortisation All series of CB will Every 6 months CBC will try to sell the Test (AT) become Pass-Through mortgage portfolio to redee
Slide 42: Priority of payments
Covered Bond Programme Priority of payments Available Funds (a) Fees due and payable to Security Trustee (b) Taxes to any tax authority accrued and unpaid (c) Pro rata amounts due and payable to Paying Agents and Calculation Agent (d) Pro rata and pari passu, amounts due and payable to Servicer, Adm
Slide 43: Programme comparison
Covered Bond Programme Programme comparison Van Lanschot Aegon NIBC ABN AMRO ING SNS F. Van Lanschot Bankiers Issuer Aegon Bank N.V. NIBC Bank N.V. ABN AMRO Bank N.V. ING Bank N.V. SNS Bank N.V. N.V. Aegon Conditional Pass- NIBC Conditional Pass- Van Lanschot Covered Bond ABN AMRO Covered Bond ING C
Slide 44: Annex IV – Dutch economy and housing market
Annex IV – Dutch economy and housing market 43
Slide 45: Dutch economy
Dutch economy and housing market Dutch economy • Economic growth has returned to the Netherlands after several years of recession and stagnation. The increase in economic activity is occurring across the economy as a whole. Exports remain the Dutch economy’s main growth driver, alongside private con
Slide 46: House price developments
Dutch economy and housing market House price developments • The Dutch housing market experienced a gradual increase in house prices in 2014 (+0.9%) which was followed by a stronger increase in 2015 (+2.8%). Seasonally adjusted house prices in the fourth quarter of 2015 rose by 1.1% compared to the t
Slide 47: Transaction and supply developments
Dutch economy and housing market Transaction and supply developments • During the fourth quarter of 2015 52,435 existing owner-occupied homes changed ownership, which is the highest number of sales in a quarter since 2007. In 2015 178,000 houses changed ownership compared to 153,000 in 2014, a rise
Slide 48: Dutch residential mortgage market
Dutch economy and housing market Dutch residential mortgage market • Total outstanding mortgage debt in the Netherlands in the third quarter of 2015 rose by EUR 2.5 bn compared to the previous quarter reaching a level of EUR 638 bn. Mortgage debt is expected to remain stable in the fourth quarter of
Slide 49: Mortgage foreclosures and losses
Dutch economy and housing market Mortgage foreclosures and losses • After a few years of increasing number of mortgages that have fallen into arrears, we have seen a decrease of arrears in the Netherlands in 2015 (with 60 days+ arrears below 0.8%) • The Netherlands continues to perform well in terms
Slide 50: Annex V – Van Lanschot
Annex V – Van Lanschot 49
Slide 51: Key figures 2015 annual results
Van Lanschot Key figures 2015 annual results € million 2015 2014 2015 vs. 2014 Commission income 265.6 240.3 11% Interest income 202.8 213.7 -5% Other income 52.2 93.0 -44% Income from operating activities 520.6 547.0 -5% Operating expenses -387.4 -381.7 2% One-off gains / losses -30.4 60.3 Gross re
Slide 52: Listed on the Amsterdam stock exchange and included in the AScX Index
Van Lanschot Listed on the Amsterdam stock exchange and included in the AScX Index (March 2016) Overview of principal shareholders Share price development Source: company information, Bloomberg Van Lanschot Conditional Pass-Through Covered Bond Programme 51
Slide 53: Experienced and balanced management
Van Lanschot Experienced and balanced management Highly experienced Executive Board Karl Guha (1964) Constant Korthout (1962) Arjan Huisman (1971) Chairman of the Board CFO/CRO COO Background: Background: Background: CRO at UniCredit Banking Group Group CFO at Robeco Group Partner Boston Consulting
Slide 54: Van Lanschot's rich history reaches back over 275 years
Van Lanschot Van Lanschot’s rich history reaches back over 275 years 21st of April 1784 2014 First security note Introduction Vermogensregie 1991 2004 Foundation Van Acquisition CenE Bankiers Lanschot Belgium 1982 Van Lanschot 2015 2007 Switzerland Sale of portfolio non- Acquisition 2013 performing
Slide 55: Annex VI – Contact information
Annex VI – Contact information 54
Slide 56: Contact information
Contact information Contact information Willem van Oosten Wendy Winkelhuijzen Treasurer Manager Investor Relations w.vanoosten@vanlanschot.com w.winkelhuijzen@vanlanschot.com T +31 20 348 97 01 T +31 20 354 45 90 Ralf van Betteraij Ingrid Rombouts Head of Term Funding Term Funding r.vanbetteraij@van
Slide 57: Annex VII – Glossary
• ABS Asset Backed Securities • ACT Asset Cover Test • AT Amortisation Test • BKR Bureau Krediet Registratie (Credit Registration Office) • CBC Covered Bond Company • CBPP3 Covered Bond Purchase Programme 3 • CLTIFV Current Loan to Indexed Foreclosure Value • CLTIMV Current Loan to Indexed Market Va
Slide 58: Annex VII – Glossary
• HNWIs High Net Worth Individuals • LCR Liquidity Coverage Ratio • LT Long Term • LTFV Loan to Foreclosure Value • LTV Loan To Value • MTN Medium Term Notes • NHG Nederlandse Hypotheek Garantie (National guarantee system for the Mortgage Market) • Nibud Nationaal Instituut voor budgetvoorlichting (
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