Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — 9M 2015 Earnings Presentation
58 slides from Deutsche Pfandbriefbank's earnings presentation, Nov 12, 2015
Slide 1: Analyst Conference Call Results Q3/9M 2015
Analyst Conference Call Results Q3/9M 2015 PBT of EUR 165 mn (+30% y-o-y) after nine months already in reach of initial full-year expectation of at least EUR 174 mn Andreas Arndt, Co-CEO/CFO Munich, 12 November 2015 Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015
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: Agenda
Agenda 1 Highlights Q3/9M 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 3
Slide 4: Highlights Q3/9M 2015
Highlights Q3/9M 2015 PBT of EUR 165 mn after nine months already in reach of initial full-year expectation of at least EUR 174 mn Pre-tax profit of EUR 53 mn in Q3/15 (+20% y-o-y) brings PBT for 9M/15 to EUR 165 mn (+30% y-o-y) − Net interest income up +7% y-o-y – in Q3/15, NII suffers from less po
Slide 5: Highlights Q3/9M 2015: business volume and income statement development
Highlights Q3/9M 2015 pbb well on track – however, NII development in Q3/15 influenced by high early extensions/ prepayments of higher margin loans Business volume development Income statement development New business 9M Net interest income 9M General and administrative expenses CIR EUR billions (Co
Slide 6: Agenda
Agenda 1 Highlights Q3/9M 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 6
Slide 7: Income statement: net interest and commission income
Income statement Net interest and commission income up +11% y-o-y – however, Q3/15 suffers from high early extensions/prepayments of higher margin loans Income from lending business EUR millions Key drivers 9M/15: Q3/14 Q3/15 9M/14 9M/15 NII positively driven y-o-y by a grown strategic portfolio sup
Slide 8: Income statement: result from financial instruments
Income statement Result from financial instruments primarily driven by derivative valuation and one-off effects Result from financial instruments EUR millions Key drivers 9M/15: Q3/14 Q3/15 9M/14 9M/15 NTI positively driven by Net trading income -3 - -21 7 − interest rate and FX related derivative v
Slide 9: Income statement: result from further business activities
Income statement Result from further business activities mainly driven by bank levy and one-off effects Result from further business activities EUR millions Key drivers 9M/15: Q3/14 Q3/15 9M/14 9M/15 IT services for DEPFA terminated by end of 2014 Net other operating -16 -12 15 -20 income/expenses E
Slide 10: Income statement: loan-loss provisions
Income statement Loan-loss provisions continue to benefit from portfolio-based releases – overall market environment remains favourable Loan-loss provisions: Income statement EUR millions Key drivers 9M/15: Q3/14 Q3/15 9M/14 9M/15 Net release of portfolio-based allowances (EUR 13 mn) more than compe
Slide 11: Income statement: operating cost base
Income statement Operating cost base significantly reduced due to strict cost containment General and administrative expenses EUR millions Key drivers 9M/15: Q3/14 Q3/15 9M/14 9M/15 Operating cost base significantly reduced by -20% y-o-y, mainly reflecting General admin. expenses -64 -52 -188 -150 −
Slide 12: Agenda
Agenda 1 Highlights Q3/9M 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 12
Slide 13: Real Estate Finance (REF)
Real Estate Finance (REF) PBT up y-o-y supported by one-off effects – NII suffers from high early extensions/ prepayments of higher margin loans in Q3/15 New business (incl. extensions >1 year) 2014 9M/15 New business: Regions/property types Volume (EUR bn, commitments) 9.0 7.9 9M/15: EUR 7.9 bn (co
Slide 14: Public Investment Finance (PIF)
Public Investment Finance (PIF) New business up +14% y-o-y – NII suffers from negative allocated one-offs in Q3/15 New business (incl. extensions >1 year) 2014 9M/15 New business: Regions/counterparty types Volume (EUR bn, commitments) 1.2 1.0 9M/15: EUR 1.0 billions (commitments) No. of deals 42 23
Slide 15: Value Portfolio (VP)
Value Portfolio (VP) Value Portfolio continues to run down in line with strategy Value Portfolio: Development Income statement (IFRS, EUR mn) 9M/14 9M/15 EUR billions (Financing volumes)1 Operating income 67 -6 -13% thereof: Net interest income 44 66 22.7 20.5 Loan-loss provisions 1 -6 19.7 Financin
Slide 16: Agenda
Agenda 1 Highlights Q3/9M 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 16
Slide 17: Portfolio: strategic portfolio up 7% ytd
Portfolio Strategic portfolio up +7% ytd, but slightly down in Q3/15 due to high prepayments Total portfolio 12/141 06/15 09/15 EUR billions (Financing volumes) Strategic Non-strategic portfolios portfolios (run-down) 51.1 51.3 50.2 +7% -13% 21.8 23.5 23.4 +8% 22.7 20.5 19.7 6.6 7.3 7.1 REF PIF VP T
Slide 18: Portfolio: sustained sound risk profile
Portfolio Sustained sound risk profile Total portfolio: Internal ratings (EL classes) Total problem loans EUR billions (EaD, Basel III)1 EUR millions (EaD, Basel III) 24.3 25.3 7.8 8.1 26.2 22.7 6.9 5.3 65.2 61.5 Coverage 30% 45% 36% 0% 0% 1% 1% 0% 0% 4% 4% ratio 10% 8% Share in 1.8% 1.4% 1.3% total
Slide 19: Agenda
Agenda 1 Highlights Q3/9M 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 19
Slide 20: Funding: reduced funding activities
Funding Strong prepayments and liquidity position allowed for reduced funding activities New long-term funding 9M/14 Pfandbriefe EUR billions1 9M/15 No benchmark issuance prior to IPO – focus on Ø Spread 25 5 29 12 88 82 optimisation and re-balancing of cover pools (bp/3mE) CBPP3 allowed for deferra
Slide 21: Funding: Pfandbrief ratings
Funding Focus on optimisation and re-balancing of cover pools – Pfandbrief ratings consolidated and Mortgage Pfandbrief rating strengthened Pfandbrief Ratings: as of 12 November 2015 S&P Moody’s Rating mandate with Moody’s continued – mandate Pfandbrief ratings with S&P terminated Public Sector Pfan
Slide 22: Funding: pbb direkt retail deposit base
Funding pbb direkt – retail deposit base continued to increase Retail deposits: Total volume No. of clients1 Key drivers 9M/15: EUR billions Overnight deposits Number of clients and total volume continued to Term deposits increase in Q3/15 − Clients: +4,400 (+23%) ytd ~23,200 ~21,300 − Volume: EUR +
Slide 23: Agenda
Agenda 1 Highlights Q3/9M 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 23
Slide 24: Capitalisation: strong Basel III capital ratios
Capitalisation pbb with strong capital ratios under Basel III, even without EUR 1 bn FMS silent participation Basel III: RWA Basel III: Capital ratios EUR billions (IFRS)2 % (IFRS) Transitional rules Fully loaded3,5,6 -11% 15.5 Mid-term in % 12/141,4 06/151 09/15 09/15 13.7 13.8 targets CET 1 21.7 2
Slide 25: Agenda
Agenda 1 Highlights Q3/9M 2015 2 Financials 3 Business units 4 Portfolio 5 Funding 6 Capitalisation 7 Key take-aways Appendix Contact details Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 25
Slide 26: Key take-aways
Key take-aways Full-year 2015 PBT expectation raised on a more favourable trend than initially expected – expectations for Q4/15 as follows: − Net interest and commission income on or above Q3/15 level − Continued low risk costs − Some further catch-up in operating costs, but still well below mid-te
Slide 27: Appendix
Appendix Results Q3/9M 2015 (IFRS, pbb Group, unaudited), 12 November 2015 27
Slide 28: Key figures pbb Group
Key figures pbb Group Income statement (EUR millions) 2012 2013 2014 2014 9M/15 (adjusted)1 Net interest income 296 319 421 421 324 Net fee and commission income 23 9 1 1 12 Net trading income 10 -51 -30 -27 7 Net income from financial investments 13 96 -77 32 -32 Net income from hedging relationshi
Slide 29: Key figures pbb Group Q3/15
Key figures pbb Group Q3/15 Income statement (EUR millions) REF PIF VP C&A pbb Group Q3/14 Q3/15 Q3/14 Q3/15 Q3/14 Q3/15 Q3/14 Q3/15 Q3/14 Q3/15 Net interest income 77 68 11 6 17 19 3 2 108 95 Net fee and commission income - 3 - - - - - - - 3 Net trading income -1 4 -1 -1 -1 -3 - - -3 - Net income f
Slide 30: Key figures pbb Group 9M/15
Key figures pbb Group 9M/15 Income statement (EUR millions) REF PIF VP C&A pbb Group 9M/14 9M/15 9M/14 9M/15 9M/14 9M/15 9M/14 9M/15 9M/14 9M/15 Net interest income 226 226 28 28 44 66 5 4 303 324 Net fee and commission income - 12 - - - - - - - 12 Net trading income -9 7 -3 - -9 - - - -21 7 Net inc
Slide 31: Key figures Real Estate Finance (REF)
Key figures Real Estate Finance (REF) Income statement (EUR millions) 2012 2013 Q1/14 Q2/14 Q3/14 9M/14 Q4/14 2014 Q1/15 Q2/15 Q3/15 9M/15 Net interest income 249 258 72 77 77 226 68 294 75 83 68 226 Net fee and commission income 25 10 - - - - 2 2 7 2 3 12 Net trading income 2 -21 -4 -4 -1 -9 -4 -13
Slide 32: Key figures Public Investment Finance (PIF)
Key figures Public Investment Finance (PIF) Income statement (EUR millions) 2012 2013 Q1/14 Q2/14 Q3/14 9M/14 Q4/14 2014 Q1/15 Q2/15 Q3/15 9M/15 Net interest income 17 24 7 10 11 28 12 40 8 14 6 28 Net fee and commission income -1 1 - - - - - - - - - - Net trading income 1 -6 -1 -1 -1 -3 -1 -4 1 - -
Slide 33: Key figures Value Portfolio (VP)
Key figures Value Portfolio (VP) Income statement (EUR millions) 2012 2013 Q1/14 Q2/14 Q3/14 9M/14 Q4/14 2014 2014 Q1/15 Q2/15 Q3/15 9M/15 (adjusted)1 Net interest income 24 30 9 18 17 44 35 79 79 28 19 19 66 Net fee and commission income -1 -1 - - - - -1 -1 -1 - - - - Net trading income 7 -24 -4 -4
Slide 34: Heta Asset Resolution AG (HETA)
Heta Asset Resolution AG (HETA) Total valuation adjustments of EUR 197.5 mn – pbb’s HETA exposure (nominal EUR 395 mn) valued at ~50% HETA adjustment P&L impact (EUR mn) pre Q4/14 Q4/14 Q1/15 Net income from (1.5) (109) (73) financial investments Total value Loan loss provisions (8) (6) adjustments
Slide 35: Balance sheet
Balance sheet Specialist lender with attractive German Pfandbrief as major funding instrument Balance sheet: 30/09/2015 (31/12/2014)1 IFRS, EUR billions 67.1 (74.9) 67.1 (74.9) Pos. FV of derivatives 7.1 (8.5) 6.7 (8.0) Neg. FV of derivatives 13.9 (13.8) Liabilities to other banks and customers Mone
Slide 36: Portfolio: Total portfolio
Portfolio Total portfolio Regions 31/12/2014 / Total: EUR 65.2 bn EUR billions (EaD, Basel III)1,2 30/09/2015 / Total: EUR 61.5 bn 27.3 25.2 7.2 7.0 6.1 6.4 5.2 4.7 4.9 5.1 3.3 2.5 2.2 1.7 2.0 1.7 1.4 1.4 1.2 1.6 2.1 1.8 0.8 0.6 0.5 0.4 0.4 0.7 0.6 0.6 Germany3 Austria France Spain UK Italy Poland S
Slide 37: Portfolio: Problem loans
Portfolio Problem loans Total problem loans VP (thereof: HETA) Regions EUR millions (EaD, Basel III) REF EUR million (EaD, Basel III) 60 51 1,143 -31% 1,143 46 No. of individual cases 2 156 Japan 314 888 888 2 133 Benelux 789 789 118 241 212 110 CEE 241 181 105 Spain 314 241 241 Nordics 827 645 548
Slide 38: Portfolio: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) Portfolio: Regions Portfolio: Property types 30/09/2015: EUR 25.3 bn (EaD, Basel III)1 30/09/2015: EUR 25.3 bn (EaD, Basel III)1 Austria 1% Portugal <1% Finland <1% Italy <1% Czech Republic 2% Other Europe 3% Hungary 1% Rest of World <1% Hotel/Leisure 4% Other 4%
Slide 39: Real Estate Finance (REF): regions
Portfolio Real Estate Finance (REF) Regions 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/09/2015 / Total: EUR 25.3 bn 12.5 12.1 4.9 4.2 2.7 2.7 1.4 1.4 1.2 1.5 0.8 0.8 0.4 0.3 0.4 0.4 0.3 0.6 0.3 0.2 0.2 0.3 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Germany UK France Poland Sweden Spain Hun
Slide 40: Real Estate Finance (REF): property types
Portfolio Real Estate Finance (REF) Property types 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/09/2015 / Total: EUR 25.3 bn 7.8 7.2 7.5 6.7 4.7 4.4 2.3 2.5 1.6 1.1 1.0 1.2 0.9 0.7 Office Retail/ Residential Warehouse/ Mixed use Hotel/ Other Shopping Logistics Leisure 31/12/2014
Slide 41: Real Estate Finance (REF): loan types
Portfolio Real Estate Finance (REF) Loan types 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/09/2015 / Total: EUR 25.3 bn 23.0 21.6 2.0 1.6 0.5 0.4 0.1 0.2 Investment loans Development loans Customer derivatives Other 31/12/2014 30/09/2015 Customer derivatives 2% Other <1% Custom
Slide 42: Real Estate Finance (REF): internal ratings
Portfolio Real Estate Finance (REF) Internal ratings (EL classes) 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III)1 30/09/2015 / Total: EUR 25.3 bn Investment grade Non-investment grade 5.7 5.9 4.5 3.6 3.5 3.7 3.4 3.0 2.9 1.9 1.6 1.2 1.3 1.2 0.8 0.8 0.8 0.8 0.5 0.4 0.2 <0.1 0.0 <0.1 0.0
Slide 43: Public Investment Finance (PIF) portfolio
Portfolio Public Investment Finance (PIF) Portfolio: Regions Portfolio: Borrower classification1 30/09/2015: EUR 8.1 bn (EaD, Basel III) 30/09/2015: EUR 8.1 bn (EaD, Basel III) UK <1% Supra <1% Sweden <1% Corporation Other Europe 4% Sovereign Finland 2% Supra Austria 3% Public Sector Enterprise <1%
Slide 44: Public Investment Finance (PIF): regions
Portfolio Public Investment Finance (PIF) Regions 31/12/2014 / Total: EUR 7.8 bn1 EUR billions (EaD, Basel III) 30/09/2015 / Total: EUR 8.1 bn 2.8 2.5 2.6 2.2 2.1 1.8 0.3 0.3 0.3 0.3 0.2 0.2 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Germany France Spain Austria Finland Supra UK Sweden Other Europe 31/12/20141 3
Slide 45: Public Investment Finance (PIF): borrower classification
Portfolio Public Investment Finance (PIF) Borrower classification1 31/12/2014 / Total: EUR 7.8 bn2 EUR billions (EaD, Basel III) 30/09/2015 / Total: EUR 8.1 bn 3.4 3.5 1.5 1.2 1.1 1.3 1.1 0.9 0.5 0.6 0.3 0.4 0.1 <0.1 Sovereign Sovereign (related) Regional Government Regional Public Sector Supra Corp
Slide 46: Public Investment Finance (PIF): internal ratings
Portfolio Public Investment Finance (PIF) Internal ratings (EL classes) 31/12/2014 / Total: EUR 7.8 bn1 EUR billions (EaD, Basel III) 30/09/2015 / Total: EUR 8.1 bn Investment grade Non-investment grade 4.5 4.7 1.7 1.4 1.0 0.9 0.4 0.3 0.3 0.3 0.2 0.2 <0.1 <0.1 <0.1 0.0 <0.1 <0.1 0.0 0.0 0.0 0.0 0.0
Slide 47: Value Portfolio (VP) portfolio
Portfolio Value Portfolio (VP) Portfolio: Regions Portfolio: Borrower classification2 30/09/2015: EUR 22.7 bn (EaD, Basel III)1 30/09/2015: EUR 22.7 bn (EaD, Basel III)1 Czech Republic <1% Finland <1% Hungary 1% Other Europe 2% Poland 1% Rest of World 1% Supra Corporation <1% France 3% Financial Ins
Slide 48: Value Portfolio (VP): regions
Portfolio Value Portfolio (VP) Regions 31/12/2014 / Total: EUR 26.2 bn2 EUR billions (EaD, Basel III)1 30/09/2015 / Total: EUR 22.7 bn 8.8 7.4 6.7 6.4 3.3 2.4 1.9 1.8 1.4 1.4 1.1 1.1 0.9 0.8 0.8 0.6 0.5 0.3 0.4 0.3 <0.1 <0.1 0.3 0.3 <0.1 <0.1 Germany Austria Italy Spain Portugal Supra France Poland
Slide 49: Value Portfolio (VP): borrower classification
Portfolio Value Portfolio (VP) Borrower classification1 31/12/2014 / Total: EUR 26.2 bn3 EUR billions (EaD, Basel III)2 30/09/2015 / Total: EUR 22.7 bn 9.8 8.1 7.4 6.2 3.5 3.0 1.7 1.7 1.7 1.6 1.0 0.9 1.1 1.1 0.0 <0.1 <0.1 <0.1 <0.1 <0.1 Sovereign Sovereign Regional Regional Public Sector Public Sect
Slide 50: Value Portfolio (VP): internal ratings
Portfolio Value Portfolio (VP) Internal ratings (EL classes) 31/12/2014 / Total: EUR 26.2 bn2 EUR billions (EaD, Basel III)1 30/09/2015 / Total: EUR 22.7 bn Investment grade Non-investment grade 17.6 15.4 3.1 2.9 1.6 1.1 1.1 1.0 <0.1 1.0 0.7 0.7 0.5 0.9 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.
Slide 51: Consolidation & Adjustments (C&A) portfolio
Portfolio Consolidation & Adjustments (C&A) Portfolio: Regions Portfolio: Borrower classification4 30/09/2015: EUR 5.3 bn (EaD, Basel III)1,2 30/09/2015: EUR 5.3 bn (EaD, Basel III)1,2 Austria <1% Other Europe 4% Sweden <1% Rest of World 6% Italy <1% Financial Institution France 20% Sovereign3 UK 29
Slide 52: Consolidation & Adjustments (C&A): regions
Portfolio Consolidation & Adjustments (C&A) Regions 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)1,2 30/09/2015 / Total: EUR 5.3 bn 3.5 3.0 0.9 0.8 0.8 0.6 0.7 0.4 0.3 0.3 0.3 0.2 0.3 <0.1 <0.1 <0.1 <0.1 0.0 0.0 <0.1 Germany3 Spain Supra UK France Italy Sweden Austria Other Europe Res
Slide 53: Consolidation & Adjustments (C&A): borrower classification
Portfolio Consolidation & Adjustments (C&A) Borrower classification1 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)2,3 30/09/2015 / Total: EUR 5.3 bn 1.8 1.7 1.5 1.5 1.4 1.1 0.8 0.8 0.6 0.4 0.4 0.2 <0.1 0.0 Sovereign4 Sovereign (related) Regional Government Public Sector Supra Financia
Slide 54: Consolidation & Adjustments (C&A): internal ratings
Portfolio Consolidation & Adjustments (C&A) Internal ratings (EL classes) 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)1,2 30/09/2015 / Total: EUR 5.3 bn Investment grade Non-investment grade 4.5 3.5 1.7 1.1 0.7 0.6 <0.1 0.0 <0.1 <0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.
Slide 55: Funding: Public benchmark issuances since 2013
Funding Public benchmark issuances since 2013 Type WKN Launch Date Matu1rity 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 (1
Slide 56: Ratings: Mandated ratings
Ratings Mandated ratings as of 12 November 2015 S&P1 DBRS Moody’s2 Pfandbrief ratings Public Sector Pfandbrief Aa1 Mortgage Pfandbrief Aa1 Bank ratings Long-term BBB BBB Outlook/Trend Negative Stable Short-term A-2 R-2 (high) Stand-alone rating3 bbb- BBB Disclaimer: The rating information published
Slide 57: Definition of borrower classifications
Definition of borrower classifications Borrower classification Definition Sovereign Direct and indirect obligations of Central Governments, Central Banks and National Debt Agencies Sovereign (related) Indirect obligations of Non Sovereigns with an explicit first call guarantee by a Sovereign Regiona
Slide 58: 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 — 9M 2015 Earnings Presentation on 6ix