Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (November 2019)
41 slides from Deutsche Bank's debt investor presentation, November 2019
Slide 1: Deutsche Bank Structured Covered Bond Programme
Deutsche Bank Treasury Markets Investor Meetings - November 2019 Deutsche Bank Structured Covered Bond Programme SALES & MARKETING MATERIAL This document is for institutional clients (professional clients / eligible counterparties) only and not for retail distribution.
Slide 2: Base Prospectus and Pre-Sale Reports
Base Prospectus and Pre-Sale Reports The Base Prospectus of Deutsche Bank Structured Covered Bond Programme was published on 25th June 2019 and is here available for download. Press releases and pre-sale reports on provisional ratings by Moody’s and DBRS can be found directly at rating agencies webs
Slide 3: Disclaimers
Disclaimers These written materials do not constitute an offer to sell securities, or a solicitation of an offer to buy securities, in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U
Slide 4: Key Investment Highlights
Key Investment Highlights - Structured Covered Bond Programme as new strategic funding platform Deutsche Bank - Aa1 / AA (Moody’s / DBRS) rated conditional pass-through notes(1) Structured Covered Bond Programme - Dual recourse: Deutsche Bank AG as issuer and a SPV as guarantor owning the cover pool
Slide 5: Agenda
Agenda A Deutsche Bank Structured Covered Bonds 4 Overview & Issuance Strategy 4 Programme Structure 9 Cover Pool Assets 14 B German Retail Mortgages 20 Mortgage Business in Deutsche Bank 20 German Mortgage Market 28 C Next Steps 33 D Appendix 36 Deutsche Bank 4 Treasury Markets
Slide 6: 2019 issuance plan
2019 issuance plan € bn Issuance plan Contractual maturity profile(1) TLTRO II Covered Bonds Senior Structured / Preferred Senior Non-Preferred Tier 2 40 23 23 22 24 20 15-20 2 4 3 up to 5 4 2 10-12 12 4 13 8 10 30 2-3 2 15 4 1 4 18 3 1 2-3 16 9 8 4 6 6 8 1 4 2018 2019 2019 YTD(2) 2020+ Plan 2018 20
Slide 7: Overview of DB Group's Covered Bond Platforms
Overview of DB Group’s Covered Bond Platforms As of Q3 2019 Other platforms with active collateral Active platforms management DB AG Structured DB Privat- und DB AG Mortgage DB SAE Cédulas Covered Bond (SCB) Firmenkundenbank AG Pfandbrief DB SpA OBG (Aa1 by Moody’s) (provisional Aa1 / AA by (former
Slide 8: Strategic Use of German Mortgage Collateral
Strategic Use of German Mortgage Collateral DB Group (GY only), amounts in € bn Outstanding(1) Total: ~ 154 DB Pfandbrief: € 13.2bn Growth; sources: PFK assets, new eligible volume PFK Pfandbrief: € 9.1bn No future issuance; legacy ex- 13.2(2) Postbank Pfandbriefe 9.1(2) Retained securitization: € 2
Slide 9: Deutsche Bank Structured Covered Bonds Programme Overview
Deutsche Bank Structured Covered Bonds Programme Overview Product Structured Covered Bond Strengths of the programme Programme Size € 35bn Contractual framework incl. binding Est. Issuance p.a. € 2-3bn over-collateralisation (OC) Structure Dual recourse against the Cover pool owned by German SPV
Slide 10: Agenda
Agenda A Deutsche Bank Structured Covered Bonds 4 Overview & Issuance Strategy 4 Programme Structure 9 Cover Pool Assets 14 B German Retail Mortgages 20 Mortgage Business in Deutsche Bank 20 German Mortgage Market 28 C Next Steps 33 D Appendix 36 Deutsche Bank 9 Treasury Markets
Slide 11: Programme structure (1/4): Deutsche Bank SCB vs Pfandbrief
Programme structure (1/4) Deutsche Bank SCB vs Pfandbrief (PF) DB Mortgage SCB(1) DB Mortgage Pfandbrief(1) Credit quality of Cover Pool compared to PF - Contractual framework - Governed by - Selected from the same retail mortgage book of Governance / governed by German law German Pfandbrief law the
Slide 12: Programme Structure (2/4): Legal structure
Programme Structure (2/4) Legal structure Under the contractual framework of Deutsche Bank Structured Covered Bond Programme … Guarantee Claim 1. … Deutsche Bank AG issues Structured Note holder Trustee Covered Bonds (SCB) 2 2. … the SCB are secured by a guarantee issued Trust Agreement by the guara
Slide 13: Programme Structure (3/4): Cover Ratio test
Programme Structure (3/4) Cover Ratio test A contractual committed and binding cover ratio Test, provides that … II. Nominal Cover ratio B 115% Coverage + Stress Coverage (NC) I. … the Cover Value (CV) exceeds the Outstanding Cover ratio A 105% Programme Amount multiplied by the Cover Ratio A. I. Co
Slide 14: Programme Structure (4/4): Trust Agreement
Programme Structure (4/4) Trust Agreement - Any asset forming part of the cover pool is subject to a Trust Agreement of the SPV with an independent and experienced Trustee who acts for the benefit of the secured creditors, i.e. the Noteholders. - The Trustee holds the cover pool assets for the benef
Slide 15: Agenda
Agenda A Deutsche Bank Structured Covered Bonds 4 Overview & Issuance Strategy 4 Programme Structure 9 Cover Pool Assets 14 B German Retail Mortgages 20 Mortgage Business in Deutsche Bank 20 German Mortgage Market 28 C Next Steps 33 D Appendix 36 Deutsche Bank 14 Treasury Markets
Slide 16: Cover Pool Composition
Cover Pool Composition Concentration limits – Initially only German retail Nominal cover pool size ~ € 2bn Current Retail Loans Max. 20% of nominal value of cover pool assets, i.e. ~ € 0.5bn ~ € 0.3bn > € 500k nominal Retail loans secured by Utilized ~ € 0.2bn Max. 15% of the cover pool, i.e. ~ € 0.
Slide 17: Cover Pool Composition: Key statistics
Cover Pool Composition Key statistics as of 8th October 2019 Total cover pool (initial cover pool) Total nominal size € 2.02bn Min. committed nominal OC 15% thereof retail mortgages € 2.02bn Ø LTLV 69.8% thereof residential ~ € 1.85bn Ø Seasoning 7.3yrs thereof commercial ~ € 0.17bn Ø Time to maturi
Slide 18: Cover Pool Composition: Stratifications
Cover Pool Composition Stratifications as of 8th October 2019 Asset maturity profile Seasoning 600 € mn 536 500 € mn 381 377 400 346 236 300 221 205 189 163 160 156 141 150 145 200 148 146 134 87 100 63 23 31 1 0 1 2 3 4 5 6-10 11-15 16-20 20+ 1 2 3 4 5 6 7 8 9 10 11 12 12+ Residual maturity in year
Slide 19: Cover Pool Composition: Investor reporting
Cover Pool Composition Investor reporting Reporting Frequency Quarterly Reporting Period Calendar quarter Reporting Date Latest 10th business day after quarter end Reporting Medium Upload to Investor Relation section of db.com website (www.db.com/ir) - Outstanding nominal amount of all loan receivab
Slide 20: Scope of Loan Type
Scope of Loan Type Inclusion of CRE exposure possible - The European Commercial Real Estate Group (“CRE Europe”) was established in 2001 and provides debt capital across the entire risk spectrum, including: - Stable asset financing for syndication, securitisation, or balance sheet lending - Transiti
Slide 21: Agenda
Agenda A Deutsche Bank Structured Covered Bonds 4 Overview & Issuance Strategy 4 Programme Structure 9 Cover Pool Assets 14 B German Retail Mortgages 20 Mortgage Business in Deutsche Bank 20 German Mortgage Market 28 C Next Steps 33 D Appendix 36 Deutsche Bank 20 Treasury Markets
Slide 22: Originators within DB Group
Originators within DB Group Inclusion into SCB cover pool German Retail Mortgages European Mortgages Retail Residential Mortgages Retail Commercial Mortgages CRE Mortgages Current cover pool term inclusion Potential near Now part of BHW term inclusion Potential mid German retail mortgage business of
Slide 23: German Retail Mortgage Business: Deutsche Bank brand
German Retail Mortgage Business Deutsche Bank brand Our products Sales channels for new business 2018 (1) - Annuity or bullet loan DB Branches - Up to 30 years fixed interest and up to 15% DB Mobile Sales Force 40 years maturity Intermediaries Fixed interest - Usually monthly payment 34% DVAG rate m
Slide 24: German Retail Mortgage Business: DB-Bauspar
German Retail Mortgage Business DB-Bauspar(1) Our products Sales channels new business(2,3) - Pre-financing of home loan saving DB Branches contract DB Mobile Sales Force - Bullet loans & parallel payments in 26% Intermediaries Non collective savings contracts (redemption substitute) 36% loans - Up
Slide 25: German Retail Mortgage Portfolio Development
German Retail Mortgage Portfolio Development Deutsche Bank brand and DB-Bauspar(1) Outstanding (lhs) DPD 30+ (rhs) DPD 90+ (rhs) CLP Ratio (rhs) in € bn 70 1.4% 1.2% 60 1.0% 50 0.8% 40 0.6% 30 0.4% 0.2% 20 0.0% 10 -0.2% 0 -0.4% Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Jun 13 Jun 14 Jun 15 Ju
Slide 26: German retail mortgage portfolio consists of 97% residential properties
German retail mortgage portfolio consists of 97% residential properties and is well diversified Deutsche Bank brand Property types(1) Property types residential(1) Single family house Commercial Semi-detached house Residential Apartment house Owner occupied flat Lot (residential) 1% 3% 39% 45% 9% 97
Slide 27: New business of German retail mortgage portfolio
New business of German retail mortgage portfolio has a high share of owner occupied business Ø Volume over last 12 months by product type (1,2) Ø Number over last 12 months by product type(1,2) 207.8 1,340.0 In € mn 119.8 83.6 616.0 78.3 487.0 333.0 Branch-Letting Branch-Owner Interm-Letting Interm-
Slide 28: Origination and Underwriting Process
Origination and Underwriting Process Origination - Majority of the loans underlying were originated by DB Privat-und Firmenkundenbank (686 branches across Germany) - With the remainder being originated by Deutsche Bank AG and DB-Bauspar(1) Underwriting Processes - Underwriting criteria are set out i
Slide 29: Agenda
Agenda A Deutsche Bank Structured Covered Bonds 4 Overview & Issuance Strategy 4 Programme Structure 9 Cover Pool Assets 14 B German Retail Mortgages 20 Mortgage Business in Deutsche Bank 20 German Mortgage Market 28 C Next Steps 33 D Appendix 36 Deutsche Bank 28 Treasury Markets
Slide 30: German housing price development and DB property valuation mechanism
German housing price development and DB property valuation mechanism (lending value) Real estate market as a whole Indexed: 2010 = 100 Price growth slowing down - A stable labour market and low interest rates are driving 160.0 up housing market prices while supply continues to lag 145.0 behind deman
Slide 31: Demand still outpaces supply
Demand still outpaces supply Construction: Seasonal volatility 1991-2018 Completions Building completions but upward trend intact No. of dwellings in '000 2015 = 100 No. of aparments in thousands p.a. 150 700 145 140 600 600 135 130 500 125 120 400 115 400 110 300 105 200 100 95 100 200 15 16 17 18
Slide 32: Germany did not use released cost of borrowing for excessive additional debt
Germany did not use released cost of borrowing for excessive additional debt Debt of households in Germany, Standard indicators to evaluate residential Annual Average1 property prices in Germany* 80 As a percentage of GDP Indexed: 2010 = 100, log scale Total debt2 65 120 50 35 of which Loans for hou
Slide 33: Long term refinancing ensures borrowers ability to pay
Long term refinancing ensures borrowers ability to pay Fixed interest periods for loans to households in Home ownership affordable, due to low interest Germany for house purchase* left y-axis: 2005=100 In % 200 90 … of over 10 years 75 150 60 … over 5 years and up to 10 years 100 45 50 30 … over 1 y
Slide 34: Agenda
Agenda A Deutsche Bank Structured Covered Bonds 4 Overview & Issuance Strategy 4 Programme Structure 9 Cover Pool Assets 14 B German Retail Mortgages 20 Mortgage Business in Deutsche Bank 20 German Mortgage Market 28 C Next Steps 33 D Appendix 36 Deutsche Bank 33 Treasury Markets
Slide 35: Next Steps
Next Steps Fixed Income Launch and Roadshow Investor Call book building1) 4th – Nov / 4th Nov Timeline 8th Nov Dec - Condense investor feedback - Prepare inaugural transaction - Regular issuances in public and private placement format envisaged (1) Subject to market conditions Deutsche Bank 34 Treas
Slide 36: Offered Notes: Summary of Key Terms
Offered Notes Summary of Key Terms Programme Structured Covered Bond Programme Issuer Deutsche Bank AG, Frankfurt am Main Guarantor SCB Alpspitze UG (haftungsbeschränkt) Currency [Euro] Principal Amount [●] Coupon Type [fixed] [floating] Tenor (Maturity Date) [●] years (date) Provisional Rating Aa1
Slide 37: Agenda
Agenda A Deutsche Bank Structured Covered Bonds 4 Overview & Issuance Strategy 4 Programme Structure 9 Cover Pool Assets 14 B German Retail Mortgages 20 Mortgage Business in Deutsche Bank 20 German Mortgage Market 28 C Next Steps 33 D Appendix 36 Deutsche Bank 36 Treasury Markets
Slide 38: German Economy
German Economy Growth driver of GDP Germany: Labour market right y-axis: in m % yoy, percentage points left y-axis: in % 4 45 14 43 12 2 41 10 0 39 8 37 6 -2 35 4 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 92 96 00 04 08 12 16 Net Export Domestic Economy Real GDP Sources: Federal Statistical
Slide 39: Current Ratings
Current Ratings Moody‘s Investors S&P Global Fitch Ratings DBRS Services Ratings Counterparty obligations (e.g. Deposits / Structured Notes / A3 BBB+(1) BBB+ A (high) Derivatives / Swaps / Trade Finance obligations/ LOC‘s) Senior Preferred(2) A3 BBB+ BBB+ A (low) Long- term unse- cured Non-preferred
Slide 40: Overview Rating Triggers
Overview Rating Triggers Counterparty Moody’s DBRS criteria Consequence required Rating Trigger Trigger rating Rating Category Category (loss of) (loss of) 1. Account The maximum of the Replacement / Guarantee Bank (i) Issuer, Senior- preferred or Deposit Deposits Baa2 BBB (high) rating and 2. Issue
Slide 41: Imprint
Imprint Deutsche Bank AG is authorised under German Banking Law (competent authority: European Central Bank) and, in the United Kingdom, by the Prudential Regulation Authority. It is subject to supervision by the European Central Bank and by BaFin, Germany’s Federal Financial Supervisory Authority,
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