Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — F. van Lanschot Bankiers — Debt Investor Presentation (February 2017)
59 slides from Kempen European High Dividend Fund N.V. N's debt investor presentation, February 2017
Slide 1: AB Pe ee pe ef
AB Pe ee pe ef eer ee ee
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
Executive summary Executive summary — Covered Bond Programme Robust Programme Structure Dutch Law based, registration with Dutch Central Bank AAA / AAA rated by S&P and Fitch Significant de-linkage from rating of the Issuer Contractually committed minimum OC of 15% True sale of the assets with live
Slide 4: Van Lanschot at a glance
Van Lanschot at a glance Van Lanschot’s profile Clear choice for wealth management targeting institutional and private clients Strong brand names, reliable reputation, rich history Mutually reinforcing core activities with their own distinct culture and positioning as niche players Straightforward g
Slide 5: Executive summary: Q3 trading update
Executive summary Q3 trading update Result in line * Commission income stable and interest income moving in line with the first two quarters of 2016 : 2 * Costs downin Q3, as the majority of regulatory costs are recognised in H1 with first two * Improving credit quality and run-off of Corporate Bank
Slide 6: 1. Van Lanschot
1. Van Lanschot
Slide 7: Van Lanschot's rich history reaches back over 75 years
Van Lanschot Van Lanschot’s rich history reaches back over 275 years 1737 [| 1991 1999 2004 2007 2015 2016 Cornelis van Lanschot ow or founds Van Lanschot @ y @ in ‘s-Hertogenbosch . . Strategy Foundation Van Acquisition Strategic review update Lanschot Belgium Cen Bankiers Introduction 2020 il CeE
Slide 8: Van Lanschot builds on the experience of its core activities
Van Lanschot As a wealth manager, Van Lanschot builds on the experience of its core activities tt | van tanschor * Including Evi ** As of 30 June 2016. AuM of Asset Management including €8.8 billion of AUM managed for Van Lanschot Private Banking i KEMPEN Asset Management Specialist European investm
Slide 9: Core activities have mutually reinforcing strengths
Van Lanschot Van Lanschot’s core activities have individual strengths which are mutually reinforcing Investment beliefs Asset allocation Manager selection Discretionary management Product development Asset Management Private Banking 4 oat Van Lanschot Structured products Order execution CLIENTS EMPL
Slide 10: Van Lanschot's solid profile is reflected in its creditworthiness
Van Lanschot Van Lanschot’s solid profile is reflected in its creditworthiness Fitch * Long-term credit rating: * Outlook long-term credit rating: * Short-term credit rating: * Latest pressrelease: * Latest report: “Yan Lanschot's capital ratios are solid and improving due to deleveraging... The ban
Slide 11: Summary of 2016 half-year results
Van Lanschot Summary of 2016 half-year results Stable result in challenging markets Capital position further strengthened Strategy 2020 started Underlying net result stable at €37.7 million (H1 2015: €37.7 million) * Net result amounts to €31.5 million (H1 2015: €37.7 million) * Commission income un
Slide 12: 2016 half-year results by segment
Van Lanschot 2016 half-year results by segment Private Banking Asset Management Merchant Banking Saag profit improvement, assets under management stable Underlying net result increases to €16.8 million (H1 2015: €4.5 million) on the back of substantially lower loan loss provisioning and cost reducti
Slide 13: Balance sheet shows strong capital and funding position
Van Lanschot Balance sheet shows strong capital and funding position Significant capital buffer Total equity of €1.3 billion Common Equity Tier | ratio (phase-in) 17.3%* Leverage ratio (fully loaded) 6.4% Low-risk assets Loan book shows a decrease of €0.2 billion to €10.5 billion (compared with 31 D
Slide 14: Van Lanschot has various funding programmes
Van Lanschot Van Lanschot has various funding programmes Unsecured programmes Debt Issuance Programme / Non-MTN / Specials * €5.0billion programme * Euro and non-euro issues on stand-alone documentation * Used for public wholesale funding (senior unsecured and * Private placements subordinated), and
Slide 15: 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, Seniorunsecured, Senior uns
Slide 16: Well diversified funding profile
Well diversified funding profile Largely ‘self-funded’ with a funding ratio of 94.0% at 30 June 2016 Van Lanschot As a wealth manager, majority of funding consists of customer savings and deposits Funding mix is complemented by wholesale funding Comfortable funding diversification across maturities
Slide 17: Next phase of wealth management strategy introduced in April 2016
Van Lanschot In April 2016, the next phase of our wealth management strategy was introduced Key themes for core activities: Private Banking * Enhance client experience through omni- channel servicing model * Foster AuM growth by enhancing front-line effectiveness Asset Management * Intensify distrib
Slide 18: 2. Covered Bond Programme
2. Covered Bond Programme
Slide 19: Programme Highlights (1/2)
Covered Bond Programme Programme Highlights (1/2) OnE) Con nal Pass-Trough Covered Bond Programme Charact S naa ana Fite a Condtional Pas Trough Contractually committed minimum OC “ Max seyears Applicable law Dutch Law EUR 100,000 F. Van Lanschot Bankiers N.V. (“Van Lanschot”) Van Lanschot Condition
Slide 20: Programme Highlights (2/2)
Programme Highlights (2/2) Covered Bond Programme Dual Recourse Industry Compliance v v VN NNN XM Key Benefits Obligation for Van Lanschot to redeem the bond at expected maturity date Recourse to CBC in case of default of Van Lanschot UCITS compliant CRR Article 129 compliant Expected to qualify as
Slide 21: Conditional Pass-Through Mechanism (1/2)
Covered Bond Programme Conditional Pass-Through Mechanism (1/2) Conditional Pass-Through Covered Bond: Features 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 exearean * The Asset Cover
Slide 22: Conditional Pass-Through Mechanism: cover pool and OC profile
• • • 80% 2.000 70% 60% 1.500 50% • EUR (millions) 40% 1.000 30% 20% 500 10% 0% 0 Current Post 6m 12m 18m 24m 30m 36m 42m 48m 54m 60m Issuance Cover pool (RHS) Outstanding Covered Bonds (RHS) OC (% LHS)
Slide 23: Van Lanschot CPTCB Structure
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 Poolis segregated in the CBC Van Lanschot’s obligation of payments to investors on the bonds is backed by an irrevocable guarantee of
Slide 24: Programme comparison
Covered Bond Programme Programme comparison SE Issuer F, Van Lanschot Bankiers Aegon Bank N.V. NIBC Bank N.V. ABN AMRO Bank N.V. ING Bank N.V. DeVolksbank N.V. NV. Guarantor Van Lanschot Conditional Aegon Conditional Pass- NIBC Conditional Pass- ABN AMRO Covered Bond ING Covered Bond Volks Covered B
Slide 25: Netherlands shows full compliance with EBA's best practices
Covered Bond Programme Netherlands shows full compliance with EBA’s ‘best practices’ * On 20 December 2016 the European Banking Authority (EBA) published a report which includes a review of the national regulatory covered bond frameworks in the EU and shows the adherence to the EBA “best practices”
Slide 26: Van Lanschot Investor Reporting
Covered Bond Programme Van Lanschot Investor Reporting Debt investors \en Lanham er lp poion and alae ending mic cen ertston segs and depots Issuance Programmes ‘Vo anche ance proanies Investor Repo ig for Covered Bonds + Van Lanschot is a member of the Dutch Association of Covered Bond issuers (DAC
Slide 27: 3. Mortgage portfolio
3. Mortgage portfolio 26
Slide 28: Strong portfolio with consistently low losses
Mortgage portfolio Strong portfolio with consistently low losses € million 30-6-2016 31-12-2015 % Change Private Banking Mortgages 5,940 5,980 -1% + — Stable mortgage book. New mortgage 5 business almost compensates for Other loans 2,393 2375 1% repayments and prepayments Private Banking 8,333 8,355
Slide 29: Healthy seasoned and geographically well distributed portfolio
68% of the total mortgages exposure relates to contracts older than eight years, and therefore are less affected by house price decline The mortgage portfolio is well distributed throughout The Netherlands The three regions with highest concentration rates are: * Gooi & Vechtstreek * The Hague & Was
Slide 30: LTVs indicate stabilisation of house prices
Mortgage portfolio LTV’s indicate stabilisation of house prices * Van Lanschot’s target client base has naturally led to a mortgage portfolio with a relatively high average balance of € 440,000 + Allmortgage loans are compliant with the Dutch Code of Conduct * 73.3% of the total exposure (by balance
Slide 31: 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 As per 31-12-15 * Mortgag
Slide 32: Annex I - Cover pool
Annex | - Cover pool 31
Slide 33: Pool characteristics (I/II)
Pool characteristics (I/II) Key pool characte: 's as of 1 February 2017 Principal balance €1,917,966,302 Value of savings amount* €8,283,716 Net principal balance €1,909,682,586 Construction deposits €12,858,628 Fixed rate 94.76% Floating rate 5.24% Number of loans 4,531 Number of loanparts 8,641 Av
Slide 34: Cover Pool
Cover Pool Current Loan to Original Market Value Geographical Distribution 25% 35% 20% 30% 25% ive 20% 10% 15% 10% 5% i 7 | fo om — | ~~ —— | = = S © f© © © OE PB OP HY oO € © L£ COEF sv © & & ry vy FS SK FP LS - < RS »* KS s® os s & & cS s Fe & & es & of SY & s Current Loan Balance we v (€1,000) 30
Slide 35: Pool characteristics (III/III)
Pool characteristics (III/III) Product type Annuity =Investment =InterestOnly Life =Lineair = Savings Interest Rate (%) 40% 35% 30% 25% 20% 15% 10% « | Ea.t oe BEER es 1-151.5-22-2.525-33-3.535-44-4545-55-5.55.5-66-6.565-7 Cover Pool Seasoning (in years) 50% 40% 30% 20% 10% i 0% Sl <5 <10 <15 <20 <2
Slide 36: Annex II - Van Lanschot Mortgages
Annex Il —- Van Lanschot Mortgages 35
Slide 37: Van Lanschot: product offering
Van Lanschot Mortgages Van Lanschot: product offering + Advice on financial planning and wealth management + Focus on tailor-made advice and a high quality service level + Mortgage loans offered to clients as part of a full-service financial solution concept. Preferable on the basis of advice but al
Slide 38: Van Lanschot: underwriting (I/II)
Van Lanschot Mortgages Van Lanschot: underwriting (I/II) Dutch Code of Conduct leading Governance on a ar er . * 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 cu
Slide 39: Van Lanschot: underwriting (II/II)
Van Lanschot Mortgages Van Lanschot: underwriting (II/II) + Various fraud checks done (BKR, SFH, VIS, EVA, employer’s certificate)* neue & + Continuous contact between banker and client neurance * Mandatory hazard insurance based on reconstruction value Requirements _. + Life insurance compulsory ab
Slide 40: Servicing during the life cycle of a mortgage loan
Servicing during the life cycle of a mortgage loan Application * Acceptance + Payment of loan to Notary Public through credit system Offering Processing in credit system Production of mortgage offer (and possible other credit offerings) Sending directly to client or banker Follow-up on progress Chan
Slide 41: 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 + Allaccounts which are overdrawn are monitored by a central desk at Service Cen
Slide 42: 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 seven days and for an amount in excess of € 250 are monitored by the team Early. They focus on analyzing the situation of the client in o
Slide 43: Annex III - Asset Cover Test
Annex II] - Asset Cover Test 42
Slide 44: Minimum Overcollateralisation
Covered Bond Programme Minimum Overcollateralisation Contractually committed minimum OC of 15% Adjusted Aggregate Asset Amount >= Outstanding Bonds The nominal value of the cover assets excluding any defaulted receivables must always be at least equal to 115% of the outstanding bonds under the progr
Slide 45: Annex IV - Dutch economy and housing market
Annex IV - Dutch economy and housing market 44
Slide 46: Dutch labour market, inflation and wage growth
• • • • ‐ • ‐ % % 9.200 9,0 4,0 8,0 3,5 8.800 # of persons (thousands) 7,0 3,0 8.400 6,0 2,5 5,0 8.000 2,0 4,0 1,5 7.600 3,0 2,0 1,0 7.200 1,0 0,5 6.800 0,0 0,0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 05 06 07 08 09 10 11 12 13 14 15 16 -0,5 Unemployment (r) Employment (l) Labour force (l) Inflati
Slide 47: Dutch economic growth and house price index
• ‐ ﴾ ﴿ • • % % % % 10,0 4,0 120 25 8,0 3,0 20 100 6,0 2,0 15 Year-on year change 4,0 80 2,0 1,0 10 Index 0,0 0,0 60 5 -2,0 -1,0 0 40 -4,0 -2,0 -5 -6,0 20 -8,0 -3,0 -10 -10,0 -4,0 0 -15 03 04 05 06 07 08 09 10 11 12 13 14 15 16 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Quarter-o
Slide 48: Dutch housing transactions
• • • • ‐ ‐ 70 250 250 x Quarterly transactions (x1000) 60 Annual transactions (x1000) 200 200 50 # Houses (x1000) 40 150 150 30 100 100 20 50 50 10 0 0 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 09 10 11 12 13 14 15 16 Quarterly transactions (l) Annual transactions (r) Forecas
Slide 49: Mortgage rate and total mortgage debt
• ‐ • • ﴾ ﴿ ﴾ ﴿ • % 700 7,0 Total mortgage debt (EUR bn) 6,0 Mortgage rate 650 5,0 4,0 600 3,0 2,0 550 1,0 500 0,0 06 07 08 09 10 11 12 13 14 15 16 03 04 05 06 07 08 09 10 11 12 13 14 15 16 < 1 year 1 - 5 year 5 - 10 year > 10 year
Slide 50: Transactions and proportion in arrears
• • • • 4,0% 3.000 3,0% 3,5% 2.500 2,5% Proportion in arrears 3,0% 2.000 2,0% Transactions 2,5% 2,0% 1.500 1,5% 1,5% 1.000 1,0% 1,0% 500 0,5% 0,5% 0,0% 0 0,0% 05 06 07 08 09 10 11 12 13 14 15 16 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 12-months-total (l) as a percentage of all tr
Slide 51: Annex V - Van Lanschot
Annex V - Van Lanschot 50
Slide 52: Key figures 2016 half-year results
Key figures 2016 half-year results € million Commission income Interest income Other income Income from operating activities Operating expenses Gross result Loan loss provisioning Other impairments Operating profit before tax of non-strategic investments Operating profit before one-off gains / losse
Slide 53: CET I ratio at 17.3% (16.9% fully loaded)
CET | ratio at 17.3 % (16.9% fully loaded) per 30 June 2016 Corporate bank run-off offers further upside potential (RWA H1 2016 = €1.6 bn) Impact Basel III tightening not known yet but RWA increase expected to be lower than decrease due to CB run-off Net profit (after one-off investment programme) w
Slide 54: Free float increased following the secondary placement in June 2016
Van Lanschot Van Lanschot’s free float has increased following the secondary placement in June 2016 Overview of principal shareholders Share price € 24 = APG = Wellington 22 ™ Rabobank 20 9,9% = LDDM Holding 18 = Reggeborgh Invest wa = FMR 16 @ Invesco / 9 14 9,8% m Henderson 9 June: secondary offer
Slide 55: Honorary Chairman of KBC Group Former CEO KBC Group Member board of directors Agfa-Gevaert
• Honorary Chairman of KBC Group • Former CEO of Monuta • Former CEO KBC Group • Former member Management Board Fortis Bank • Member board of directors Agfa-Gevaert and • Member of the supervisory board at Prorail Tigenix • Former CEO of ABN AMRO Private Banking Netherlands • Former CFO of Aegon and
Slide 56: Annex VI - Contact information
Annex VI — Contact information 55
Slide 57: Contact information
Contact information 0m F Willem van Oosten Treasurer w.vanoosten@vanlanschot.com Zz T +3120 348 97 01 Om | Ralf van Betteraij Head of Term Funding rvanbetteraij@vanlanschot.com at, T +3120 348 97 13 O Van Lanschot Wendy Winkelhuijzen Manager Investor Relations w.winkelhuijzen@vanlanschot.com T +31 2
Slide 58: Annex VII - Glossary
Annex VII - Glossary CLTIMV CLTOMV CLTOFV CPR CPT CPTCB CRD DACB DNB DSA ECB ECBC EVA Asset Backed Securities Asset Cover Test Amortisation Test Bureau Krediet Registratie (Credit Registration Covered Bond Company Covered Bond Purchase Programme 3 Current Loan to Indexed Foreclosure Value Current Lo
Slide 59: Annex VII - Glossary
Annex VII - Glossary LCR LT LTFV LTV MTN NHG Nibud NTT ole PCS PwC RMBS SFH UCITS VIS High Net Worth Individuals Liquidity Coverage Ratio Long Term Loan to Foreclosure Value Loan To Value Medium Term Notes Nederlandse Hypotheek Garantie (National guarantee system for the Mortgage Market) Nationaal I
F. van Lanschot Bankiers — Debt Investor Presentation (February 2017) on 6ix