Aegon Ltd. · EURONEXT:AGN
Aegon — Aegon Bank — Debt Investor Presentation (March 2017)
47 slides from Aegon's debt investor presentation, March 2017
Slide 1: Aegon Bank N.V. Conditional Pass-Through Covered Bond Programme
Aegon Bank N.V. Conditional Pass-Through Covered Bond Programme Investor presentation March 2017 Helping people achieve a lifetime of financial security
Slide 2: Disclaimer
Disclaimer 2 Disclaimer This presentation was prepared by Aegon Bank N.V. (“Aegon Bank” or the “Company”). Although the information in this presentation has been obtained from sources which the Company believes to be reliable, the Company does not represent or warrant its accuracy or completeness, a
Slide 3: Content
Content 3 Content 01 Introduction 04 The Dutch Housing and Mortgage market 07 Contact information Slides 4-11 Slides 26-32 Slides 46 02 Aegon Bank N.V. At a glance 05 Aegon Bank N.V. Conditional Pass-Through Covered Bond Programme Slides 12-22 Slides 33-43 03 Aegon Bank N.V. Mortgage Loan Portfolio
Slide 4: Introduction
Introduction 4 Introduction
Slide 5: Executive Summary
Introduction 5 Executive Summary Aegon Bank N.V.’s profile Mortgage portfolio • Aegon Bank N.V is strategically important to Aegon N.V. • Aegon NL has a high quality and low risk mortgage lending business • The activities of Aegon Bank N.V. show sound financials and the operations are - Predominantl
Slide 6: Aegon at a glance
Introduction 6 Aegon at a glance Focus History Employees Life insurance, pensions & Our roots date back to the Over 29,000 employees asset management for first half of the 19th century (December 31, 2016) 30 million customers 32% 7% Europe AAM 1% Asia Earnings Investments 60% Americas Underlying ear
Slide 7: Aegon Netherlands N.V. (Aegon NL)
Introduction 7 Aegon Netherlands N.V. (“Aegon NL”) • Aegon NL is wholly owned by Aegon N.V. and a core member of the Aegon group Underlying earnings before tax • Aegon NL offers a wide range of financial products and services to its clients, including pensions, insurance (life and non-life), mortgag
Slide 8: Successful Dutch mortgage loan operation
Introduction 8 Successful Dutch mortgage loan operation Mortgage debt outstanding Mortgage lending market share in the Netherlands Source: Dutch Central Bank (FY 2016); Source: Land Registry (Kadaster) EUR bn Totale mortgage debt outstanding (LHS) EUR bn ABNAMRO 21,9% 800 70 RABO 17,6% Thousands Tho
Slide 9: Diversified funding supports strong mortgage origination capabilities
Introduction 9 Diversified funding supports strong mortgage origination capabilities Competitive advantages Nominal mortgage amounts per June 2016 Comments (in EUR bn) • Strong position with Independent Financial Advisors • Mostly short interest rate reset periods • Straight through processing Bank
Slide 10: Ratings reflective of strong capitalization and prudent risk management
Introduction 10 Ratings reflective of strong capitalization and prudent risk management* Aegon N.V. Issuer Credit ratings Ratings Long-term Short-term Standard & Poor’s A-, Negative A-2 Moody’s A3, Negative P-2 Fitch A-, Stable F2 Aegon Insurance Financial Strength ratings Ratings Aegon USA Aegon NL
Slide 11: Comparison to other Dutch Covered Bond programmes
Introduction 11 Comparison to other Dutch Covered Bond programmes Issuer Van Lanschot NIBC Aegon Bank ABN ING Bank5 SNS Size programme EUR 5bn EUR 5bn EUR 5bn EUR 40bn EUR 10bn EUR 15bn Conditional Conditional Conditional Type programme Hard bullet/Soft bullet Soft bullet Soft bullet Pass-Through Pa
Slide 12: Aegon Bank N.V. at a glance
Aegon Bank N.V. at a glance 12 Aegon Bank N.V. at a glance
Slide 13: Aegon Bank N.V. and Aegon Nederland
Aegon Bank N.V. at a glance 13 Aegon Bank N.V. and Aegon Nederland Aegon NL is committed to Aegon Bank Aegon Bank N.V. is a core asset of Aegon NL: Aegon NL continues to demonstrate its commitment to developing Aegon Bank NV’s ► Aegon Bank N.V. is Aegon NL’s entity for potential: offering savings an
Slide 14: Aegon Bank N.V. two brands, one bank
Aegon Bank N.V. at a glance 14 Aegon Bank N.V. two brands, one bank Aegon Bank and Knab both support different strategic objectives Aegon Bank N.V. General Is an online retail internet bank Is a new, disruptive online banking initiative for retail and small business clients Role in Aegon Develops th
Slide 15: Knab delivered considerable growth during the last year
15 Knab delivered considerable growth Aegon Bank N.V. at a glance during the last year Number of customers From January 1st 2014 until June 30, 2016 120000 100000 80000 60000 40000 20000 0
Slide 16: Executing strategic plan: 2011-2014
Aegon Bank N.V. at a glance 16 Executing strategic plan: 2011-2014 Focus on customer Introduction Mortgage loans Consumer loans satisfaction online sale Successful Discontinuation of on Aegon Bank on Aegon Bank and continuous Execution Only financial turn non-core activities balance sheet balance sh
Slide 17: Continuing strategic developments: 2015-2016 YTD
Aegon Bank N.V. at a glance 17 Continuing strategic developments: 2015-2016 YTD First loans First loans EUR 750 mln Agreement signed Expanded strategic originated for originated for 5yr CPT with UK consumer Crowdfunding partnerschip with Aegon by Aegon by Covered Bond lending platform platform Germa
Slide 18: Aegon Bank is key in execution of Aegon NL's strategy
18 Aegon Bank N.V. is key in the execution Aegon Bank N.V. at a glance of Aegon NL’s income & living strategy Key conclusions Key transitions Aegon Bank NV (Dutch board/Aegon Bank) • Shift from spread business to fee business and improve • In the Dutch wealth accumulation market a retail customer fo
Slide 19: Aegon Bank N.V. in a snapshot
Aegon Bank N.V. at a glance 19 Aegon Bank N.V. in a snapshot CET1 LCR NSFR Balance sheet (EUR billion) 126% 130% 17.6% 243% 16.3% 109% 11.6 13.6% 193% 10.4 9.0 137% 2014 2015 H1 2016 2014 2015 H1 2016 2014 2015 H1 2016 2014 2015 H1 2016 Ratings Long-term Short-term Standard & Poor’s A+, Negative A-1
Slide 20: Conservative risk profile and strong risk management
Aegon Bank N.V. at a glance 20 Conservative risk profile and strong risk management ► Solid BIS ratio in place to ensure sufficient capitalisation Prudent ► Equity funding to increase – anticipated growth matched by retained earnings and client participations capitalisation ► Leverage ratio targeted
Slide 21: Aegon Bank N.V. Balance Sheet
Aegon Bank N.V. at a glance 21 Aegon Bank N.V. Balance Sheet Composition of assets Balance Sheet as of H1 2016 Mortgage loans are an important asset class on (EUR billion) the balance sheet. They offer attractive risk- adjusted- returns Consumer loans currently represent around 5% of total asset
Slide 22: Aegon Bank N.V. Profit & Loss Account
Aegon Bank N.V. at a glance 22 Aegon Bank N.V. Profit & Loss Account ► Interest margin is improving as a result of an Continued Profit & Loss Account increasing balance sheet, lower savings rates improvement and the addition of mortgages and consumer Amounts EUR H1 2016* 2015 2014 in income loans mi
Slide 23: Aegon Bank N.V.'s mortgage loan portfolio
Aegon Bank N.V.’s mortgage loan portfolio 23 Aegon Bank N.V.’s mortgage loan portfolio
Slide 24: Performance of Aegon Bank N.V.'s mortgage loan portfolio
Performance of Aegon Bank N.V.’s Aegon Bank N.V.’s mortgage loan portfolio 24 mortgage loan portfolio Recovery & Losses • Mortgage loans are originated through Aegon Hypotheken B.V. and distributed over various Aegon entities including Aegon Bank N.V. • Approximately 63% of the mortgage loans is NHG
Slide 25: Overview of Aegon Bank N.V.'s conservative mortgage loan portfolio
Overview of Aegon Bank N.V.’s Aegon Bank N.V.’s mortgage loan portfolio 25 conservative mortgage loan portfolio Current Loan to Indexed Market Value (H1 2016) Loan-to-income (H1 2016) 70% 30% 60% 25% 50% 20% 40% 15% 30% 10% 20% 5% 10% 0% 0,5 - 1,0 1,0 - 1,5 1,5 - 2,0 2,0 - 2,5 2,5 - 3,0 3,0 - 3,5 3,
Slide 26: The Dutch Mortgage and Housing Market
The Dutch Mortgage and Housing Market 26 The Dutch Mortgage and Housing Market
Slide 27: Key characteristics of the Dutch residential mortgage market
The Dutch Mortgage and Housing Market 27 Key characteristics of the Dutch residential mortgage market • Predominantly prime, owner occupied Products • Virtually no buy-to-let, non-conforming and sub-prime • Mainly fixed rate mortgage loans • Mortgage loans are provided predominantly on the basis of
Slide 28: Recent policy developments impacting the Dutch housing market
The Dutch Mortgage and Housing Market 28 Recent policy developments impacting the Dutch housing market Legal maturity date IO Outstanding IO loans loans max. 30 years Penalty-free prepayment Specific offers for flex Aegon specific Introduction of Bank can be refinanced to a Interest Rate Averaging u
Slide 29: The Dutch housing market: supply and demand
The Dutch Mortgage and Housing Market 29 The Dutch housing market: supply and demand Supply dynamics Building permits and newly built homes Source: CBS, Ministry of Housing, VROM, ABF Research Source: CBS • Supply in the Dutch housing market is relatively inelastic Annual new house requirement accor
Slide 30: NHG mortgage loan guarantee
The Dutch Mortgage and Housing Market 30 NHG mortgage loan guarantee NHG • NHG (Nationale Hypotheek Garantie) refers to the public mortgage loan insurance scheme supporting home ownership in the Netherlands • WEW (Stichting Waarborgfonds Eigen Woningen) is the foundation responsible for granting NHG
Slide 31: NHG Statistics
The Dutch Mortgage and Housing Market 31 NHG Statistics NHG Mortgage lending market share key lenders NHG statistics Source: NHG Annual Report 2015 Source: NHG Annual Report 2015 20% • Aegon has originated 14% (15% in 2014) of the total number of NHG 2015 2014 guaranteed mortgage loans in 2015. 15%
Slide 32: Summary - Conditional Pass-Through Covered Bond Programme
The Dutch Mortgage and Housing Market 32 Summary - Aegon Bank N.V. Conditional Pass-Through Covered Bond Programme • Aegon Bank N.V. is key in the execution of Aegon’s Strategy • The activities of Aegon Bank N.V. show sound financials and the operations are strongly tied into Aegon N.V. • Aegon NL i
Slide 33: Aegon Bank N.V. Conditional Pass-Through Covered Bond Programme
Aegon Bank N.V. CPTCB Programme 33 Aegon Bank N.V. Conditional Pass-Through Covered Bond Programme
Slide 34: Summary
Aegon Bank N.V. CPTCB Programme 34 Summary Key features of the Covered Bond Programme Key benefits Issuer Aegon Bank N.V. Dual recourse: Highly rated issuer: Aegon Bank A+/A- (S&P/Fitch) Programme size EUR 5 bn Obligation for Aegon Bank to redeem the bond at expected Currency Euro maturity dat
Slide 35: Programme highlights
Aegon Bank N.V. CPTCB Programme 35 Programme highlights Key Programme Parties Transaction Structure Aegon Bank / Aegon Hypotheken / Aegon Originators: Leven Transferor: Aegon Bank Swap Custodian provider* Issuer: Aegon Bank (Sub-) Servicing Swap Account Aegon Bank / Aegon Hypotheken / Aegon Servicer
Slide 36: Conditional Pass-Through vs Hard and Soft Bullet Covered Bonds
Aegon Bank N.V. CPTCB Programme 36 Conditional Pass-Through vs Hard and Soft Bullet Covered Bonds • The Conditional Pass-Through structure ensures an orderly wind-down of the Cover Pool and avoids the risk of a fire sale • The Covered Bonds are bullet obligations of the issuer. Ahead of issuer defau
Slide 37: Four Potential Scenarios – CPTCB Programme
Four Potential Scenarios – Aegon Bank N.V. CPTCB Programme 37 Conditional Pass-Through Covered Bonds CPTCB A - CPTCB B - CPTCB Bank default To illustrate the CPT Outstanding Outstanding mechanism this slide shows CB repayments for various Bond I Bond I scenarios. Here we assume a programme with
Slide 38: Four Potential Scenarios – Conventional Covered Bonds
Four Potential Scenarios – Aegon Bank N.V. CPTCB Programme 38 Conventional Covered Bonds CPTCB A - conventional CB B - conventional CB Bank default Conventional CB (hard bullets) Outstanding Outstanding and CPTCB are very similar, only under severe stress the Bond I Bond I work-out scenario diff
Slide 39: Key Triggers in a Conditional Pass-Through Covered Bond
Aegon Bank N.V. CPTCB Programme 39 Key Triggers in a Conditional Pass-Through Covered Bond Normal Issuer meets all interest and principal payment Expenses paid by Issuer performance obligations in respect of the Covered Bonds No asset cashflows through CBC An Assignment Notification Event takes
Slide 40: Key Triggers in a Conditional Pass-Through Covered Bond
Aegon Bank N.V. CPTCB Programme 40 Key Triggers in a Conditional Pass-Through Covered Bond The CBC receives all cashflows in relation to the Cover Pool Non-payment by the Issuer of an interest or principal The CBC is responsible for all payments related to the Covered Bonds Issuer payment due on
Slide 41: Priority of Payments
Aegon Bank N.V. CPTCB Programme 41 Priority of Payments CBC Priority of Payments Post CBC Acceleration Priority of Payments 1 Security Trustee (excl. Parallel Debt) 1 Security Trustee (excl. Parallel Debt) 2 Tax authority 2 Paying agent, Registrar and Calculation agent expenses 3 Paying ag
Slide 42: Asset Cover Test
Aegon Bank N.V. CPTCB Programme 42 Asset Cover Test 1 2 Adjusted aggregate asset amount* >= Minimum OC level outstanding Covered Bonds Adjusted aggregate asset amount = A+B+C–Z The Net Outstanding Principal Amount of all Mortgage Receivables The calculation of ‘A’ includes: - Any Defaulted Receiva
Slide 43: Amortisation Test
Aegon Bank N.V. CPTCB Programme 43 Amortisation Test 1 2 Amortisation Test Aggregate Asset Amount* >= Minimum OC level outstanding Covered Bonds Adjusted aggregate asset amount = A+B+C–Z The Net Outstanding Principal Amount of all Mortgage Receivables The calculation of ‘A’ includes: - Any Default
Slide 44: Appendix: Cover Pool characteristics
Appendix: Cover Pool characteristics 44 Appendix: Cover Pool characteristics
Slide 45: Cover Pool characteristics
Appendix: Cover Pool characteristics 45 Cover Pool characteristics Key characteristics as at December 31, 2016 Key eligibility criteria Principal balance (EUR) 1.811.720.029,35 Each mortgage loan is either an Interest-only Mortgage Loan, Linear Mortgage Loan, Annuity Mortgage Loan, Investment Mort
Slide 46: For questions and information relating to the Programme
For questions and information relating to Aegon Bank N.V.’s Conditional Pass-Through Covered Bond Programme please contact: Peter Kuijpers Tom Hoefakker Head of Capital Management Aegon Bank N.V. Vice President Corporate Treasury T: +31 70 344 8335 T: +31 70 344 4997 E: PKuijpers@aegon.nl E: Tom.Hoe
Slide 47: Thank you!
Thank you! 47 Thank you! Aegonplein 50, 2591 TV the Hague Telephone: +31 (0)70 344 3210 Postbus 202 2501 CE the Hague The Netherlands