DNB Boligkreditt AS DNB Bank ASA

DNB Boligkreditt AS
DNB Bank ASA
February 2013
Contents
• DNB ASA ("DNB") – A brief overview
• The Norwegian Economy - Important for DNB
• Financial performance and capital
• Asset quality
• Funding
• Appendix :
•
•
•
•
Cover pool portfolio information
The Norwegian Mortgage Market
The Norwegian Covered Bond legislation
Financial performance and capital – additional slides
2
The backbone of the Norwegian financial system
DNB - Norway's leading financial services group
•
•
•
•
Approximately 30% market share of the retail market
Approximately 30% market share of the corporate market
The leading financial institution in the market for large Norwegian corporates
Norway's largest life insurance company
• Credit Ratings:
• Moody's: A1 (stable), S&P: A+ (stable), DBRS: AA (stable)
• Essential to the Norwegian payment system
• 34% owned by the Norwegian Government
3
The DNB Group
DNB ASA
DNB Bank ASA
A1 / A+ / AA
DNB Life and
Asset Management
(Senior/ short term issuance)

DNB Baltic &
Poland
DNB
Boligkreditt AS
(Covered Bonds)
4

100% owned by DNB Bank and
functionally an integrated part of the
parent
Mortgages originated within DNB Bank’s
distribution network in accordance with
the bank's credit policy
Norway is of vital importance to the Group
 More than 80 per cent of our lending stems from Norway
 More than 80 per cent of our income stems from Norway
 More than 80 per cent of our deposits stems from Norway
Only Norwegian residential mortgages in the Cover Pool backing
our Covered Bonds
5
The Norwegian Economy:
Of high importance to DNB
6
A rock-solid Norwegian economy
Annual budget deficit/surplus for 2012*
General government net financial liabilities
(As a percentage of nominal GDP 2011)
-180
-130
Percent
-80
-30
20
70
120
• Other countries’ budget deficit:
USA
Japan
Canada
Australia
-8.5%
-9.9 %
-3.5%
-2.8%
*Note: Budget surplus/deficit calculated as a percentage share of country
GDP; forecasts for 2012
Source: OECD Economic Outlook No. 92, December 2012
7
Source: OECD Economic Outlook No. 92, December 2012
The Norwegian economy is a steady performer
- strong growth and low volatility
Annual nominal GDP growth
1990-2010
5.8
4.6
3.7
3.8
Finland
Denmark
Sweden
8
Norway*
*Mainland GDP
Norway has consistently lower unemployment rates
Unemployment rate
(As a percentage of total workforce)
14.0%
Norway
Sweden
UK
Forecast
Euro Area
12.0%
10.0%
8.0%
6.0%
NORWAY
4.0%
2.0%
0.0%
2006
2007
Source: OECD Economic Outlook No. 92, Dec 2012
9
2008
2009
2010
2011
2012
F2013
F2014
Financial Targets, Performance and Capital
10
Financial targets towards 2015
•
Capitalisation: CET1 ratio (Basel III) at 12.0-12.5 per cent in 2015
•
Dividend: Long term dividend policy at 50 per cent
Temporary payout ratio 25-50 per cent 2012-2014
•
RoE: Above 12 per cent in 2015
Long term rating ambition is maintained:
• AA for DNB Bank ASA
• AAA for Boligkreditt AS
11
DNB delivers healthy profit
Pre-tax operating profit before write-downs
(NOK bn)
21.8
21.1
20.8
18.7
15.6
15.1
14.1
7.7
3.5
-0.3
2006
3.0
3.4
3.2
0.2
2007
2008
2009
2010
Pre-tax operating profit before writedowns
12
2011
Write-downs
2012
Business areas
Pre-tax operating profit after impairment
Full year 2012
(NOK million)
8 825
Full year 2011
7 594
7 214
6 734
5 375
4 160
1 578
758
130
(673)
Retail
Banking
Large Corporates and
International
13
DNB Markets
Insurance and
Asset Management
DNB Baltics
and Poland
12.07.2012
Key financial ratios
DNB ASA
2012
2011
2010 2009 2008 2007 2006 2005
Return on equity
11.2
11.4
13.6
10.6
12.4
22.0
19.5
18.8
Cost income
49.5
47.1
47.6
48.3
51.4
50.6
50.1
50.2
Comb. weighted total average spread
1.18
1.12
1.15
1.15
1.04
1.00
1.08
1.19
Write down ratio (%)
0.24
0.28
0.26
0.67
0.33
0.02 -0.03
0.02
Total tier 1 ratio *
Total capital
11.0
12.6
9.9
11.4
10.1
12.4
9.3
12.1
6.7
9.5
7.2
9.6
6.7
10.0
7.4
10.2
DNB Bank ASA (consolidated)
Total tier 1 ratio
Total capital
10.8
12.4
9.9
11.5
9.2
11.7
8.4
11.4
6.9
9.9
7.9
10.5
6.8
10.2
7.7
10.6
* Tier 1 ratio 12.4 % after full IRB implementation
14
Net non-performing and net doubtful commitments 1) 2)
Per cent
1.71
1.55
1.56
1.31
0.73
NOK billion
19.1
0.88
18.4
1.56
1.10
1.18
1.45
1.47
1.50
1.09
1.09
1.16
19.3
19.6
19.7
30 June
30 Sept.
31 Dec.
1.14
0.99
1.05
1.50
0.93
0.69
0.63
19.5
18.9
20.3
16.1
14.5
11.9
31 Dec.
31 Dec.
31 Dec.
2008
2009
2010
31 March
30 June
30 Sept.
31 Dec.
31 March
2011
2012
DNB Baltics and Poland/DnB NORD
1) Includes non-performing loans and guarantees and loans and guarantees subject to
individual impairment. Accumulated individual impairment is deducted.
2) Figures for DNB Baltics and Poland/DnB NORD prior to 31 December 2011
also include the former DnB NORD's portfolios in Denmark and Finland.
15
DNB Group excl. DNB Baltics and Poland/DnB NORD
As a percentage of net loans
As a percentage of net loans excl. DNB Baltics and Poland/DnB NORD
Write-downs in per cent of lending
Full year
Per cent
Full year
4Q12
3Q12
2Q12
1Q12
4Q11
2012
2011
average volumes (annual basis)
0.36
0.16
0.21
0.25
0.29
0.24
0.28
- DNB excl. DNB Baltics and Poland
0.37
0.15
0.19
0.24
0.23
0.23
0.19
- DNB Baltics and Poland
0.27
0.43
0.74
0.47
1.56
0.48
2.37
Total impairment in relation to
16
25.10.2012
Solid capital position
– and well positioned to comply with future Basel III requirements
CET1 ratios (per cent)
Key assumptions, Basel III transition
12.0-12.5
12.1
12.1
10.7
4Q12
2Q12
CET1 ratio Basel II,
transitional floor
Target 2015
CET1 ratio Basel II,
full IRB
17
CET1 ratio Basel III
•
Transitional floor removed
•
International Accounting
Standard 19 included
•
Credit Value Adjustment (CVA)
charge included
•
Increased CET1 deduction for
expected loss (EL) > loan-loss
provisions
•
Deduction method applied for
consolidation of insurance
Capital adequacy figures as at 31 December 2012
– comparison with Nordic peers
Per cent
16.4
15.9 1)
15.4
13.1
12.2
12.1
10.7
10.5
10.1
9.8
9.0
8.9
7.2
6.5
6.3
5.4
5.1
4.4
3.6
DNB
3.8
SEB
Equity tier 1/total assets "leverage ratio"
Swedbank
Equity tier 1/total lending
3.1
Handelsbanken
Equity tier 1 ratio transitional rules
Nordea
Equity tier 1 ratio Basel III/Full IRB
1) DNB's risk weights are conservatively estimated based on the Norwegian FSA's requirements. The adjusted capital adequacy figure is
estimated based on average observed risk weights for corresponding portfolios in Nordic Banks
18
07.02.2013
Asset Quality
19
Loan book exposure by sectors
EAD by segments as at 30 Sep 20121)2)
Shipping
6.7% (7.8%)
Real estate and contractors
12.6% (12.5%)
Logistics
1.2% (1.5%)
Oil, gas and offshore
6.3% (6.9%)
Energy
3.1% (3.1%)
Other corporate customers
4.6% (5.5%)
Private individuals
6.4% (5.8%)
Public sector
1.6% (1.6%)
Fishing, fish farming
and farming
2.4% (2.1%)
Trade
2.6% (2.6%)
Manufacturing
4.1% (4.9%)
Telecom and media
1.5% (1.7%)
Residential mortgages
45.0% (41.7%)
Services
1.9% (2.1%)
1) Distribution of exposure at default based on internal segmentation of customers, excluding net non-performing and net doubtful loans and
guarantees. Comparable figures as at 31 December 2011 in parentheses.
2) As from 30 June 2012 the internal segmentation of customers has been changed to give a better reflection of the Groups portfolio.
Figures for DNB Baltics and Poland are included and comparable figures have been restated.
20
Mortgage lending in DNB is based on cash flow
Approval of a loan is based on:
1. Willingness to repay the loan:
By means of scoring model based on historical behaviour
2. Capability of repaying the loan:
In calculating the capability or ability to repay, an adequate margin (currently
5.0%, increased from 4.0% from Jan 2012), accommodate the effects of a
possible increase in interest rates, is included in the model
3. Collateral:
Credit should thus not be approved solely on the basis of the proposed
collateral
All borrowers are subsequently classified monthly by behaviour scoring
DNB - Mortgage Loan payment characteristics :
• Standard payment method is monthly in arrears
• More than 95 % of the customers pays their mortgages by fixed
debit of their bank account
21
House price growth can be explained by fundamentals
Norwegian Real House Price Index, (1985=100)
600
“We must not forget that during the banking
crisis in the beginning of the 90s, many
households came into severe trouble.
Nonetheless, losses tied to households
were relatively low. By far the greatest
number of households will manage higher
debt liabilities.”
- Morten Baltzersen, Norwegian FSA
(Dagens Næringsliv, March 14, 2012)
500
400
300
200
100
0
house price index
CPI deflated
deflated with disposable income
Source: Statistics Norway, EFF, NEF, Finn.no, Econ Pöyry,
DNB Markets and Norwegian Central Bank
22
Rise in number of households1) and completed dwellings.
Annual Figures. 2002-20112)
45,000
40,000
35,000
30,000
25,000
Rise in households
20,000
Completed dwellings
15,000
10,000
5,000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1. half
1st
halvår
1) Estimated rise in number of households 2002-2004
2) Rise in number of households for first half of 2011 is based on population growth in this period
Sources: Statistics Norway and Norges Bank
23
Norwegian households are solid
- Prefer home ownership (>80 per cent)
Household assets and debt 2011
Household assets and debt
(NOK billion)
(NOK billion)
Source: Statistics Norway, EFF, NEF, Finn.no, Econ Pöyry, DNB Markets and Norwegian Central Bank
24
DNB Boligkreditt Covered Bonds
Rating: AAA / Aaa / AAA
Portfolio Characteristics
C over Pool Size
516,399,111,303
Number of Mortages in the C over Pool
Average Loan Balance
454,515
1,136,154
Over Collateralisation *
37.2 %
Weighted Average LTV Indexed
55.1 %
Weighted Average Seasoning
53 months
* eligible loan balance, nominal loans
Pool statistics as of 31 December 2012.
The pool cut date is coinciding with our financial quarterly reporting.
The cover pool consists of 100% Norwegian Residential Mortgages
- No substitution with assets of lower quality
25
Shipping, offshore and logistic portfolio
Exposure at default according to sector1)
Logistics
5% (6%)
Gas
13% (12%)
Offshore
24% (24%)
Other nonshipping
3% (2%)
Crude oil
tankers
9% (10%)
Other
shipping
3% (5%)
RoRo/PCC
3% (3%)
Chemical and
product
tankers
10% (9%)
Container
14% (14%)
Dry cargo
12% (12%)
Cruise
4% (3%)
1) Figures as at 30 Sep 2012. Percentages as at 31 Dec 2011 in parentheses.
26
The dominant part of the portfolio is within the low- and medium risk
segment
The total Division
The tanker segment
106
NOK billion
NOK billion
95
86
85
80
63
59
57 57
48
45 46
42
40
35
13
8
5
PD
0.01% -
PD
0.75% -
PD
2.0% -
5
5
5
5
3
4
PD
Net non-performing
and net doubtful loans
and guarantees
3
3
10
9
9
4
2
0.01% -
PD
The dry bulk segment
0.75% -
4
PD
4
5
5
1
2.0% -
1
0
0
0
Net non-performing
and net doubtful loans
and guarantees
The container segment
NOK billion
NOK billion
20
14
14
12 12
8
3
3
PD
3
3
0.01% -
8
4
2
6
6
7
10
8
7
3
3
3
4
3
4
7
7
9
9
9
9
8
9
5
3
0
PD
0.75% -
PD
2.0% -
Net non-performing
and net doubtful loans
and guarantees
PD
0.01% -
PD
0.75% -
PD
2.0% -
0
1
1
Based on DNB's risk classification system. The volume represents the expected outstanding amount in the event of default. PD = probability of default
27
0
Net non-performing
and net doubtful loans
and guarantees
Funding
28
DNB has significantly improved the long term funding
structure since the financial turmoil started in 2007
Share of stable long-term funding*
Average life of long term funding
(Senior debt and covered bonds)
5
120%
4,6
116%
115%
110%
4
105%
100%
3
95%
2.43
90%
2
85%
80%
1
75%
2003
2005
2007
2009
2011
2008
2009
2010
* Deposits from customers, subordinated debt, covered bonds and senior debt > 12 months residual maturity.
Internal target for stable long-term funding increased from 88% to 90% in 2009
29
2011
2012
Strong growth in deposits
Ratio of deposits to lending
Development in deposits
816
811
62.5
Percent
740
57.8
54.8
734
53.0
50.1
642
597
585
538
31 Dec.
2008
31 Dec.
2009
31 Dec.
2010
31 Dec.
2011
31 Dec.
2012
569
31 31 30 30 31 31 30 30 31 31 30 30 31 31 30 30 31 31 30 30 31
Dec. March June Sept. Dec. March June Sept. Dec. March June Sept. Dec. March June Sept. Dec. March June Sept. Dec.
2007
2008
2009
Deposits at end of period
Deposits adjusted for exchange rate movements
30
637
591
2010
2011
2012
Stable access to short term liquidity
USCP/ECP/CD/YCD
20,000
18,000
16,000
12,000
USCP
10,000
ECP/CD
YCD
8,000
6,000
4,000
2,000
31
sep-12
mai-12
jan-12
sep-11
mai-11
jan-11
sep-10
mai-10
jan-10
sep-09
mai-09
jan-09
sep-08
mai-08
jan-08
sep-07
mai-07
0
jan-07
USD mio
14,000
DNB is a well established international borrower
- with a strong focus on diversification of funding sources
• DNB Bank
•
•
•
EMTN program of
Samurai issue (JPY)
USD 144A program
•
•
•
USCP program of
Yankee CD program of
ECP/CD program of
EUR 45 billion
USD 10 billion
Established 2011
Established 2012
USD 18 billion
USD 12 billion
EUR 15 billion
• DNB Boligkreditt (Covered Bonds)
•
•
•
Covered Bond program of EUR 60 billion
Covered Bond program of USD 12 billion
Covered Bond program of AUD 4 billion
32
Established 2007
Established 2010
Established 2011
DNB – Benchmark issuances in 2012 & 2013
- Benchmark transactions in 7 different currencies
Covered
Euro
NOK
NOK
Euro
Euro
Euro
Euro
2.000 mill
2.000 mill
1.000 mill
2.000 mill
1.500 mill
1.000 mill
1.500 mill
5 year
6 year
7 year
10 year
7 year
10 year
5 year
Senior
Euro 1.000 mill
GBP 400 mill
JPY
65 bill
SEK 2.000 mill
USD 2.000 mill
CHF 150 mill
10
8
5
5
5
6
year
year
year
year
year
year
Lower tier 2
Euro
750 mill
33
10nc5
DNB
Issuance of long term debt
34
A well established International Covered Bond issuer
Tenor
Redeems
•
•
•
•
•
•
•
•
•
•
•
Euro 2 000 mn
Euro 2 000 mn
Euro 2 000 mn
Euro 1 500 mn
Euro 2 000 mn
Euro 1 500 mn
Euro 1 500 mn
Euro 1 500 mn
Euro 1 500 mn
Euro 2 000 mn
Euro 1 000 mn
5 years
5 years
5 years
7 years
5 years
7 years
5 years
7 years
10 years
10 years
10 years
2015
2016 - Jan
2016 - Oct
2017 - Jan
2017 - Apr
2017 - Aug
2018
2019
2021
2022 - Mar
2022 - Nov
•
•
USD 2 000 mn
USD 2 000 mn
5 years
5 years
2015
2016
•
AUD
5 years
2016
600 mn
Registered Covered Bonds:
•
2008: Euro 1 000 mn
•
2009: Euro 1 000 mn
•
2010: Euro 1 600 mn
•
2011: Euro 850 mn
•
2012: Euro 400 mn
•
2013: Euro 330 mn
25 issues
20 issues
43 issues
24 issues
11 issues
3 issues
CHF market:
•
CHF 2 175 mn
11 issues
35
Avg. mat:
Avg. mat:
Avg. mat:
Avg. mat:
Avg. mat:
Avg. mat:
11 years
13 years
14 years
12 years
13 years
12 years
Mat: 5 – 20 years
Summing up: “Look to Norway!”
36
Norway is of vital importance to DNB
•
•
•
•
DNB is 34% owned by the
Norwegian government
The Norwegian economy is
performing significantly better than
most others, including Scandinavia
More than 80 per cent of our income
stems from Norway
More than 80 per cent of our lending
stems from Norway
37
Long Term Funding Contacts
•
•
•
Thor Tellefsen, Senior Vice President, Head of Long Term Funding
Phone direct: + 47- 23 26 84 04
Mobile
+47 915 44 385
Fax number: + 47- 22 48 19 94
E-mail:
[email protected]
Trond Sannes Marthinsen, Vice President, Long Term Funding
Phone direct: + 47- 23 26 84 03
Mobil
+ 47 990 34 820
Fax number: + 47- 22 48 19 94
E-mail:
[email protected]
Kristine Øvrebø, Senior Vice President, Long Term Funding
Phone direct: + 47- 23 26 85 19
Mobil
+ 47 916 08 005
Fax number: + 47- 22 48 19 94
E-mail:
[email protected]
www.dnb.no
38
Appendix
Appendix A:
Cover pool portfolio information
39
Portfolio characteristics
Report date:
Report currency:
31.12.2012
NOK
1.1 Key characteristics
Total cover pool, nominal balance
Number of mortgages
Number of borrowers
Average loan balance
Outstanding covered bonds, nominal balance
Substitute assets (% of total cover pool)
WA indexed LTV (%)
WA seasoning (in months)*
WAL of cover pool (contractual maturity in
years)
WAL of outstanding covered bonds (contractual maturity in years)
516,399,111,303
454,515
372,960
1,136,154
373,699,605,475
0.0
55.1
53
13.6
6.0
* Seasoning indicates the number of months since collateral for the loan was established.
1.2 Overcollateralisation*
Cover pool size
Residential mortgages, eligible loan balance
Residential mortgages, non eligible loan balance
Substitue assets
Market value derivatives (net MtM)
Total cover pool (incl. non eligible loan balance)
Total cover pool, eligible loan balance
Nominal
Market value
512,627,397,707 514,748,330,502
3,771,713,596
3,771,713,596
0
0
5,408,840,441
516,399,111,303 523,928,884,538
512,627,397,707 520,157,170,943
Covered bonds outstanding
373,699,605,475 382,372,086,355
Overcollateralisation (incl. non eligible loan balance)
38.2 %
37.0 %
Overcollateralisation, eligible loan balance
37.2 %
36.0 %
* The nominal Overcollateralisation (OC) percentage may change from time to time and may be reduced in the future. However, DNB
Boligkreditt intends to uphold an OC percentage necessary to support a rating of the covered bonds in line with the company’s
ambition.
40
Maturity structure
1.3 Maturity structure cover pool
Contractual maturity (years)
≥0≤1
1≤2
2≤3
3≤5
5 ≤ 10
> 10
Loan balance
14,964,638,639
15,744,042,124
16,415,479,298
34,850,913,954
99,071,053,834
335,352,983,454
%
2.9 %
3.0 %
3.2 %
6.7 %
19.2 %
64.9 %
Total
516,399,111,303
100.0 %
1.4 Maturity structure covered bonds
Contractual maturity (years)
≥0≤1
1≤2
2≤3
3≤5
5 ≤ 10
> 10
Total
Loan balance
1,075,350,000
16,000,000,000
26,493,380,000
121,635,874,500
160,474,910,975
48,020,090,000
373,699,605,475
%
0.3 %
4.3 %
7.1 %
32.5 %
42.9 %
12.8 %
100.0 %
Expected maturity (years)
≥0≤1
1≤2
2≤3
3≤5
5 ≤ 10
> 10
Loan balance
17,075,350,000
22,500,000,000
42,953,530,000
164,946,224,500
100,683,362,975
25,541,138,000
%
4.6 %
6.0 %
11.5 %
44.1 %
26.9 %
6.8 %
Total
373,699,605,475
100.0 %
41
Property types, largest borrowers and occupancy types
2.1 Property types
Loan balance
%
WA LTV
Private ownership
Detached
275,319,810,279
53.3 %
55.6
Semi-detached
63,303,430,512
12.3 %
55.1
Apartment
87,931,284,164
17.0 %
55.7
Share in housing cooperative
Semi-detached
8,197,494,423
1.6 %
59.2
60,733,872,349
11.8 %
57.9
14,839,316,427
2.9 %
24.9
6,004,262,940
1.2 %
59.0
Other
69,640,208
0.0 %
24.1
Total
516,399,111,303
100.0 %
55.1
Apartment
Housing cooperative
Second home
2.2 Largest borrowers
Private individuals
5 largest (% of total mortgages)
0.04%
10 largest (% of total mortgages)
0.06%
Housing cooperatives
5 largest (% of total mortgages)
0.14%
10 largest (% of total mortgages)
0.23%
2.3 Occupancy type
Owner occupied
Housing cooperative
Second home
Buy-to-let
No data
Total
42
Loan balance
%
WA LTV
422,902,405,019
81.9 %
55.6
14,839,316,427
2.9 %
24.9
6,004,262,940
1.2 %
59.0
435,792,982
0.1 %
64.4
72,217,333,934
14.0 %
57.6
516,399,111,303
100.0 %
55.1
Composition of the residential mortgage cover pool
2.4 Repayment type
Loan balance
%
WA LTV
Amortization
308,220,372,286
59.7 %
52.1
Interest only*
208,178,739,017
40.3 %
59.5
Total
516,399,111,303
100.0 %
55.1
* No installments for a limited period of time.
2.5 Flexible loans
Drawn balance
132,645,972,541
Total limit on flexible loans
172,195,978,918
Percentage drawn of limit
77.0 %
WA LTV*
55.7
* The WA LTV is calculated based on limit.
2.6 LTV buckets
Indexed LTV
≥ 0 ≤ 40
106,253,513,991
20.6 %
40 ≤ 50
61,446,289,538
11.9 %
50 ≤ 60
93,791,459,730
18.2 %
60 ≤ 70
158,879,690,740
30.8 %
70 ≤ 75
71,406,648,541
13.8 %
75 ≤ 80
14,296,515,153
2.8 %
80 ≤ 85
4,195,570,688
0.8 %
85 ≤ 90
2,014,671,124
0.4 %
90 ≤ 95
1,207,866,218
0.2 %
95 ≤ 100
762,061,610
0.1 %
100 ≤ 105
499,219,556
0.1 %
105 ≤ 115
577,011,280
0.1 %
> 115
1,068,593,134
0.2 %
Total
516,399,111,303
100.0 %
43
Composition of the residential mortgage cover pool
2.7 Seasoning*
Loan balance
%
WA LTV
< 12 months
98,002,778,253
19.0 %
62.7
12 < 24 months
87,713,191,803
17.0 %
60.6
24 < 36 months
60,555,036,968
11.7 %
57.1
36 < 60 months
95,149,512,796
18.4 %
55.7
≥ 60 months
174,978,591,484
33.9 %
46.9
Total
516,399,111,303
100.0 %
55.1
* Seasoning indicates the number of months since collateral for the loan was established.
2.8 Interest rate type
Loan balance
%
WA LTV
446,011,475,795
86.4 %
55.0
Fixed rate with reset < 2 years
13,323,099,630
2.6 %
53.3
Fixed rate with reset ≥ 2 but < 5 years
43,288,943,502
8.4 %
56.6
Fixed rate with reset ≥ 5 years
13,775,592,375
2.7 %
54.3
516,399,111,303
100.0 %
55.1
Floating rate
Total
2.9 Loan performance
Loan balance
%
WA LTV
514,699,002,794
99.67%
55.0
Delinquent loans (arrears 31 to 90 days)
934,878,869
0.18%
59.7
Gross non performing loans (arrears 91 days +)
765,229,640
0.15%
62.4
516,399,111,303
100.00%
55.1
Performing loans
Total
44
Geographical distribution
2.10 Geographical distribution
Loan balance
95,289,885,601
9,010,753,761
33,719,106,928
7,793,856,325
12,127,113,339
40,082,895,662
8,476,960,506
12,667,935,653
7,318,991,560
19,008,803,157
108,993,137,74
0
33,044,156,272
33,183,993,081
2,037,834,026
19,295,563,641
13,314,989,577
13,181,792,207
9,068,129,297
38,783,212,970
516,399,111,30
3
Akershus
Aust-Agder
Buskerud
Finnmark
Hedmark
Hordaland
Møre og Romsdal
Nordland
Nord-Trøndelag
Oppland
Oslo
Østfold
Rogaland
Sogn og Fjordane
Sør-Trøndelag
Telemark
Troms
Vest-Agder
Vestfold
Total
45
Average
% WA LTV loan balance
18.5 %
52.7
1,267,793
1.7 %
58.7
1,051,553
6.5 %
54.3
1,056,992
1.5 %
62.5
987,314
2.3 %
57.0
929,993
7.8 %
57.1
1,209,028
1.6 %
58.1
1,072,354
2.5 %
57.3
881,370
1.4 %
59.5
1,025,787
3.7 %
58.3
839,649
21.1 %
6.4 %
6.4 %
0.4 %
3.7 %
2.6 %
2.6 %
1.8 %
7.5 %
52.3
56.9
56.0
62.6
56.6
59.0
55.5
59.2
54.5
1,312,870
920,424
1,393,817
924,607
1,245,518
923,434
1,178,524
1,227,081
986,198
100.0 %
55.1
1,136,154
Net non performing loans in DNB Boligkreditt AS
0.30%
0.20%
0.16%
0.15%
0.15%0.15%0.15%0.15%
0.14%
0.14%0.14%0.14%
0.13%0.13%
0.13%
0.10%0.10%0.10%
0.10%
0.06%
0.05%
0.03%
0.02%
0.01%
0.00%
90+ days Arrears
46
Future Updates On Cover Pool Developments
Information about the cover pool of DNB Boligkreditt may be accessed via
DNB Boligkreditt’s web page:
https://www.dnb.no/about-us/investor-relations/funding.html
Contacts DNB Boligkreditt AS:
- Håkon Røsand, Director, Rating & Investor information: [email protected] +47 906 16 892
- Øyvind Birkeland, CEO: [email protected] +47 950 59 700
- Helge Stray, Director, DNB Boligkreditt: [email protected] +47 952 39 675
Portfolio information will be updated when DNB quarterly results are released
47
Appendix
Appendix B:
The Norwegian Mortgage Market
48
The Norwegian Residential Mortgage Market
Nearly 80% of Norwegians own their home:
Few mortgages are buy-to-let.
Norway is primarily a floating interest rate market:
The large majority of mortgages originated by DNB are floating rate.
Rates on floating rate mortgages can be reset at any time and at the bank’s own
discretion, by giving debtors six weeks’ notice.
In Norway, all borrowing costs are deductible from taxable income at
the current rate of 28%:
Households are therefore better able to withstand an increase in interest rates.
Loans are normally underwritten with a term of 15-25 years:
Average size for new mortgages originated by DNB is approximately NOK
1,000,000 (EUR 125,000).
Source: Finance Norway - FNO
49
Appendix
Appendix C:
The Norwegian Covered Bond legislation
50
Norwegian covered bond framework
Overview
•
•
•
•
The Norwegian covered bond framework was fully enacted in June 2007:
Prior to adoption, close discussions were held with rating agencies in order to provide
investors with robust protection.
•
Covered bondholders have dual recourse:
To the issuing entity.
A preferential claim over a cover pool of eligible assets.
•
•
The NPV of the assets in the cover pool must at all times at least be higher than the NPV of
the outstanding covered bonds.
Covered bonds are issued by specialised credit institutions licensed and supervised by the
Norwegian Financial Supervisory Authority (NFSA):
The activities of the company are limited to acquiring eligible assets and financing
these predominantly by covered bonds.
•
•
Norwegian covered bonds qualify for 10% risk weighting in eligible European jurisdictions
and comply with the CRD of the EU:
Certain bonds cleared through appropriate clearing systems may be eligible as
collateral for liquidity loans in the ECB.
•
51
Norwegian covered bond framework (cont.)
•
Eligible assets:
•
•
•
•
•
•
•
•
Mortgage assets:
Residential property:
75% LTV
Commercial property:
60% LTV (By-laws of DnB NOR Boligkreditt
exclude this asset class)
Loans to municipalities, governments and other public sectors
•
•
Liquid substitution assets, maximum 20% of cover pool
Derivatives contracts
Should property prices fall, the part of the loan that exceeds the relevant LTVlimit is still included in the cover pool and protects the covered bondholders, but
is not taken into account when calculating the value of the pool. To maintain the
value of the cover pool, new loans with LTV up to 75% must be added.
The same principle applies to loans in default.
All property values shall be set by a competent and independent person.
ALM requirements:
•
Matching requirements to control interest rate, foreign exchange and liquidity
risk.
52
Norwegian covered bond framework (cont.)
•
•
Supervision by an Independent Inspector:
An Independent Inspector, appointed by the Norwegian FSA, monitors assets
and liabilities on a regular basis, and the compliance with certain requirements
laid down in the covered bond legislation. Suspected irregularities will be
reported to the NFSA. The company’s external auditor may be appointed.
•
Bankruptcy proceedings are laid down in a special framework:
Should the issuing company go bankrupt, assets in the cover pool and the
corresponding cash flows are separated from the bankruptcy estate.
•
•
•
•
Holders of covered bonds and derivative counterparties have a preferential claim
over the cover pool assets.
The estate manager must seek to ensure that contractual payments for covered
bonds and secured derivatives are made. To meet contractual payments, assets
may be sold or new covered bonds issued.
Should the cover pool be unable to make contractual payments and an imminent
change is unlikely, it will be wound down. The covered bonds/derivative
counterparts rank pari passu. Claims on covered bonds are made based on the
agreed future cash flow discounted at the market rate for comparable bonds in
the relevant currency.
53
Appendix
Appendix D:
Financial performance and capital –
additionally slides
54
Profit figures per quarter
Pre-tax operating profit before
impairment
Pre-tax operating profit before
impairment excl. basis swaps
(NOK million)
(NOK million)
6 806
6 689
5 265
5 660
5 588
5 611
5 831
1Q12
2Q12
3Q12
5 426
4 737
3 156
4Q11
1Q12
2Q12
3Q12
4Q12
4Q11
4Q12
Profit for the period
Profit for the period excl. basis swaps
(NOK million)
(NOK million)
4 580
4 089
3 810
3 507
3 511
3 804
3 915
2Q12
3Q12
3 641
2 599
1 760
4Q11
1Q12
2Q12
3Q12
4Q12
55
4Q11
1Q12
4Q12
07.02.2013
Income statement
Amounts in NOK million
Net interest income
Net commissions and fees, core business
Net financial items
Net other operating income, total
Total income
Total operating expenses before
impairment losses for goodwill
and intangible assets
Impairment losses for goodwill
and intangible assets
Pre-tax operating profit before
impairment
Net gains on fixed and intangible assets
Impairment of loans and guarantees
Pre-tax operating profit
Taxes
Profit from operations held for sale, after taxes
Profit for the period
56
1Q12
6 653
1 750
(143)
1 607
8 261
4Q11
6 792
1 632
3 967
5 599
12 392
Full year
2012
27 216
7 511
6 990
14 501
41 717
Full year
2011
25 252
7 436
9 317
16 754
42 006
5 149
5 105
5 206
20 660
19 792
85
0
0
380
287
380
5 265
20
521
4 763
1 256
0
3 507
6 689
37
685
6 041
1 553
92
4 580
3 156
7
784
2 378
618
0
1 760
4Q12
7 101
1 896
2 165
4 061
11 162
3Q12
6 828
1 852
1 776
3 628
10 456
2Q12
6 634
2 013
3 191
5 204
11 837
5 299
5 106
202
5 660
(65)
1 190
4 406
601
4
3 810
6 806
(1)
926
5 878
1 790
0
4 089
20 769
(1)
3 179
17 589
4 028
96
13 657
21 833
19
3 445
18 407
5 423
(5)
12 979
07.02.2013
Special items
Amounts in NOK million
Mark-to-market adjustments - basis swaps
Net mark-to-market adjustments - other items
Full year
2012
2011
4Q12
3Q12
235
(566)
95
79
76
176
272
426
246
202
85
0
0
380
287
380
128
(573)
2Q12
1 078
1Q12
(2 432)
4Q11
Full year
2 069
(1 687)
3 031
Impairment losses for goodwill and
intangible assets
Effect on pre-tax operating profit
before impairment
57
1 154
(2 256)
1 961
(1 548)
2 897
07.02.2013
Impairment of loans and guarantees
4Q12
Amounts in NOK million
Individual impairment:
Retail Banking
- Private customer divisions
- SME divisions
- DNB Finans 1)
Large Corporates and International
- Nordic Corporates Division
- International Corporates and
Institutions Division
- Shipping, Offshore and Logistics Division
- Energy Division
- Other units 2)
DNB excl. former DnB NORD
Former DnB NORD
- DNB Baltics and Poland
- Other units
Total individual impairment
Collective impairment:
DNB excl. DNB Baltics and Poland
DNB Baltics and Poland
Total collective impairment of loans
Impairment of loans and guarantees
3Q12
2Q12
1Q12
4Q11
Full year
2012
Full year
2011
7
317
78
38
96
68
7
80
123
59
160
90
78
233
29
111
653
358
186
411
370
27
(14)
(22)
(12)
144
(21)
406
(18)
315
92
70
886
12
293
0
60
554
144
142
0
5
478
4
195
0
87
582
29
143
1
1
657
142
943
92
221
2 500
402
160
(8)
(1)
1 926
62
0
949
115
0
670
132
0
609
106
0
688
237
126
1 020
415
0
2 915
1 103
188
3 217
268
(27)
241
1 190
(90)
(58)
(148)
521
108
(32)
76
685
138
(42)
96
784
424
(159)
265
3 179
82
146
227
3 445
(44)
(50)
(94)
926
1) Includes leasing, factoring and credit card and consumerfinancing.
2) Individual impairment of loans and guarantees in JSC DNB Bank, and loans and guarantees transferred from the former DnB NORD.
58
07.02.2013
Baltics – Stabilizing
Net lending
31 Dec 2012
% of total
loan book
Latvia
13 344
1.0%
Lithuania
18 914
1.5 %
Estonia
3 305
0.3 %
Poland
17 865
1.4 %
DNB Baltics and Poland
53 428
4.1 %
NOK million
59
Baltic countries are among the EU leaders according to GDP
growth rates
Real GDP growth
10
5
0
2008
2009
2010
2011
2012(f)
2013(f)
EU 27
Estonia
-5
Latvia
Lithuania
Poland
-10
-15
-20
Source: Eurostat (f) = forecast
60
DNB Bank PIIGS exposure
No sovereign exposure
Amounts in
NOK million
International
Government bond portfolio
debt DNB M arkets 1)
Corporate
portfolio
Other units
DNB
in the bank Livsforsikring
Total
DNB Group
Common
portfolio
of which
DNBinvestments in
Livsforsikring
T reasury bonds
Portugal
0
1 930
1
0
1 931
1
0
Ireland
0
2 225
164
0
2 389
470
0
Italy
0
2 063
877
0
2 940
1 324
1 149
Greece
0
0
0
0
0
1
0
Spain
0
8 126
1 854
0
9 980
3 486
1 728
Total PIIGS
0
14 344
2 896
0
17 239
5 281
2 877
61
Solid capital position
30 Dec 2012
Equity Tier 1 ratio
10.7 %
Tier 1 ratio
11.0 %
Total capital ratio
12.6 %
Equity ratio
(1)
5.1%
At full IRB implementation
Equity Tier 1 ratio
12.1%
Tier 1 ratio
12.4 %
Total capital ratio
14.1 %
1) Equity tier 1 relative to total assets
62
Balance sheets
DNB Group
DNB Bank ASA
31 Dec.
31 Dec.
31 Dec.
31 Dec.
2012
2011
2012
2011
Deposits with central banks
299
225
296
221
Due from credit institutions
37
29
209
193
1 298
1 279
714
712
Other assets
631
594
518
489
Total assets
2 265
2 126
1 737
1 615
Due to credit institutions
251
280
283
296
Deposits from customers
811
740
787
704
Short-term debt securities issued
244
228
244
228
Long-term debt securities issued
464
407
171
156
Other liabilities and provisions
366
354
146
133
Equity
128
118
105
98
2 265
2 126
1 737
1 615
Ratio of deposits to net loans (%)
62.5
57.8
110.3
98.9
Adjusted ratio of deposits to net loans (%) 1)
62.4
57.3
110.2
97.9
Total combined assets
2 473
2 395
1 737
1 615
Currency-adjusted loans to customers
1 318
731
822
798
Amounts in NOK billion
Loans to customers
Total liabilities and equity
Currency-adjusted deposits from customers
1) Excluding short-term money market deposits in DNB New York
63
07.02.2013
Disclaimer
•
•
•
•
•
This material has been prepared on the basis of the information provided by DNB Bank ASA (referred to as "DNB Bank") under the
Covered Bond program and public available sources. DNB ASA – the holding company of the DNB group is referred to as "DNB " in
this presentation.
This material does not constitute an offering circular in whole or part and you must read the actual offering circular related to the
Covered Bond program and the notes which may be issued from time to time thereunder as referred to in this material (respectively
the "Program" and the “Notes”) before making an investment decision. The offering circular for the Program is available from the
Arranger. You should consult the offering circular for more complete information about DNB and the Program.
This material is presented solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any
securities or related financial instruments and should not be treated as giving investment advice. It has no regard to the specific
investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or
implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be
regarded by recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this material are subject to
change without notice and DNB Bank is not under any obligation to update or keep current the information contained herein. In
addition, institutions mentioned in this material, their affiliates, agents, directors, partners and employees may make purchases
and/or sales of the Notes as principal or agent or may act as market maker or provide investment banking or other services in
respect of the Program or the Notes which may be issued from time to time thereunder. DNB, the Arranger and the Dealers and their
respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind
arising out of the use of all or any part of this material.
The Notes are not to be offered or sold in any jurisdiction in circumstances in which the distribution of this document or the Notes
would be prohibited in such jurisdiction. This document must not be acted on or relied on by persons who are not eligible to invest in
the Notes. Any investment or investment activity to which this communication relates is available only to persons eligible to invest in
the Notes and will be engaged in only with such persons.
Furthermore, you should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the
extent that you deem it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the
suitability of an investment in the Notes which may be offered from time to time under the Program) based upon your own judgment
and advice from such advisers as you deem necessary and not upon any view expressed in this presentation.
64