Deutsche Hypothekenbank AG

BANKING
AUGUST 7, 2015
Deutsche Hypothekenbank AG
COMPANY PROFILE
Hanover, Germany
Company Overview
Table of Contents:
COMPANY OVERVIEW
FINANCIAL HIGHLIGHTS
(AS REPORTED)
BUSINESS ACTIVITIES
DISTRIBUTION CAPACITY
OWNERSHIP AND
OWNERSHIP STRUCTURE
COMPANY MANAGEMENT
COMPANY HISTORY
PEER GROUP
RELATED WEBSITES AND
INFORMATION SOURCES
MOODY’S RELATED RESEARCH
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4
5
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Although Deutsche Hypo mainly operates in Germany, it also conducts business activities in the
UK, France, the Benelux countries 2 and Poland. It provides a range of banking products and
services mainly related to real estate finance, along with capital market activities that include the
bank’s reduced public-sector finance array and refinancing through the issuance of Pfandbriefe.
Established in 1872, Deutsche Hypo is one of Germany’s oldest mortgage lenders. After the
Pfandbrief Act was passed in 2005, the bank became a Pfandbrief bank as defined by the act.
Analyst Contacts:
FRANKFURT
Deutsche Hypothekenbank AG (Deutsche Hypo) is a German Pfandbrief bank as defined by the
Pfandbrief Act 2005. 1 Since 2008, the bank has been a wholly owned subsidiary of Norddeutsche
Landesbank Girozentrale (NORD/LB), a commercial bank in northern Germany, and acts as
NORD/LB’s centre of competence for the commercial real estate (CRE) finance business. As of 31
December 2014, Deutsche Hypo reported an unconsolidated asset base of €30.1 billion.
+49.69.70730.700
Source: Company Reports (annual report Dec 2014, debt issuance prospectus Oct 2011), Company data, Moody’s
research
Bernhard Held, CFA
+49.69.70730.973
Assistant Vice President - Analyst
[email protected]
Carola Schuler
+49.69.70730.766
Managing Director
[email protected]
This report, exclusively provided to you by
Moody’s, presents a convenient summary of
as reported, publicly available information.
The information is not adjusted for Moody’s
analytic purposes. For Moody’s Ratings,
Opinion and Analytics on this company,
please [Click here]. To access the latest
Moody’s Credit Opinion on this company,
please [Click here].
1
2
“Pfandbrief Bank” is the term applied by the Pfandbrief Act 2005 to banks authorised to issue Pfandbriefe, which
are debt securities covered by specific assets such as mortgages on property or loans to local authorities.
The Benelux countries are Belgium, the Netherlands, and Luxembourg
BANKING
Financial Highlights (as Reported)
Note: The financials presented below are those reported by the entity and are not adjusted for Moody’s analytic
purposes. For Moody’s generated ratios on Deutsche Hypothekenbank AG, please see <Deutsche
Hypothekenbank AG page on moodys.com>.
EXHIBIT 1
Latest Full-Year Results
Deutsche Hypothekenbank AG
(in € Million)
31-Dec-14
31-Dec-13
31-Dec-12
% Change
14/13
% Change
13/12
Total Assets
30,055
31,275
34,578
(3.90)
(9.55)
Total Shareholders’ Equity
913
913
913
–
–
Total Capital Ratio (%)
17.1
15.0
14.0
210 bps
100 bps
32
55
29
(42.65)
90.66
Net Income Before Taxes and Profit and Loss
Transfer
Notes: Unconsolidated financials are considered; Since 2013 Deutsche Hypo has a Profit and Loss transfer agreement with NORD/LB
Source: Company Reports (annual report Dec 2014 and Dec 2013), Moody’s research
Business Activities
Deutsche Hypo is a Pfandbrief bank as defined by the German Pfandbrief Act 2005. The bank provides a
range of products and services mainly related to real estate finance and, to a reduced extent, public-sector
loans. It acts as the competence centre for CRE within the NORD/LB group. In 2013, NORD/LB completed
the transfer of its CRE assets to Deutsche Hypo. The bank is also engaged in capital market activities, and
refinances itself through the issuance of Pfandbriefe. In addition, it provides consultancy services for project
development and syndicate finance.
The bank’s core business areas are Commercial Real Estate Finance and Capital Market Business; while it
captures consolidation and transition items as well as Deutsche Hypo’s equity investments in the Other
Business area. In the financial year ended 31 December 2014, the dominant contributor to the bank’s net
interest income was the Commercial Real Estate Finance area.
Commercial Real Estate Finance: This area, which in 2014 accounted for 81.1% of the bank’s net interest
income, includes mortgage lending services, and real estate consultancy comprising commercial financing
for professional real estate customers, as well as financing of residential construction for investment
purposes. Through this segment, the bank also offers project, leasing, portfolio and acquisition finance,
structuring, syndication, underwriting, guarantees and derivatives.
Capital Market Business: This area includes the bank’s public finance business, as well as its government
lending and refinancing businesses. This segment also takes into account the effect of transformation
contributions and the bank’s management as a whole. In 2014, this area accounted for 9.8% of the bank’s
net interest income.
This publication does not announce
a credit rating action. For any
credit ratings referenced in this
publication, please see the ratings
tab on the issuer/entity page on
www.moodys.com for the most
updated credit rating action
information and rating history.
2
AUGUST 7, 2015
Source: Company Reports (annual report Dec 2014, Dec 2012 and Dec 2009, debt issuance prospectus Oct 2012), Company data,
Moody’s research
COMPANY PROFILE: DEUTSCHE HYPOTHEKENBANK AG
BANKING
EXHIBIT 2
Business Area
(% of Net Interest Income, unconsolidated, for 2014)
Other Business
9.1%
Capital Market Business
9.8%
Commercial Real Estate
Finance
81.2%
Source: Company Report (annual report Dec 2014, Pg: 35)
EXHIBIT 3
Profit/(Loss) Before Tax and Profit and Loss Transfer per Business Area
(unconsolidated, in € Million)
2012
2013
2014
120
95
90
60
75
60
30
5
0
1
(11)
-30
(36)
-60
(20)
(53)
-90
Commercial Real Estate Finance
Capital Market Business
Other Business
Source: Company Reports (annual report Dec 2014, Pg: 35 and Dec 2013, Pg: 42)
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AUGUST 7, 2015
COMPANY PROFILE: DEUTSCHE HYPOTHEKENBANK AG
BANKING
EXHIBIT 4
Public Sector Covered Bond Collateral Pool by Country and Borrower
(in %, as of 31 March 2015)
Supranational
Sovereign
Region/Federal State
Municipality
Others
60%
50%
40%
30%
20%
10%
0%
Germany
Italy
Austria
Other
Source: Company data, Moody’s research
EXHIBIT 5
Real Estate Finance Portfolio, Composition by Property Type
(unconsolidated, in € Million)
2012
2013
2014
4,771
5,000
4,018
4,000
3,981
4,243
4,359
4,643
3,000
2,458
2,000
1,936
1,547
1,372
1,853
1,543
1,000
0
Residential
Retail
Office
Other Properties
Source: Company Report (annual report Dec 2014, Pg: 34)
Distribution Capacity
Deutsche Hypo distributes its products and services mainly in Germany, while it also operates
internationally in the UK, France, the Benelux countries and Poland. As of 31 December 2014, the bank
conducted its business through a network of four domestic locations – one each in Frankfurt, Hamburg,
Hannover, and Munich – and four foreign locations – in Amsterdam, London, Warsaw and Paris. While the
foreign office in Warsaw was opened in 2014, the bank closed its domestic office in Nuremberg for strategic
reasons.
As of 31 December 2014, Deutsche Hypo reported a real estate finance portfolio of €12.4 billion, distributed
geographically as follows:
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AUGUST 7, 2015
COMPANY PROFILE: DEUTSCHE HYPOTHEKENBANK AG
BANKING
EXHIBIT 6
Real Estate Finance Portfolio by Country
(unconsolidated, in € Million)
2012
2013
2014
9,000
7,500
7,591 7,811
7,429
6,000
4,500
3,000
1,928
1,048 1,057 1,393
1,500
1,561 1,391
1,214
763
955
881
841
861
0
Germany
Benelux
UK
France
Other
Source: Company Reports (annual report Dec 2014, Pg: 33 & 34 and Dec 2013, Pg: 40)
EXHIBIT 7
Subsidiaries and Holdings Structure of NORD/LB
NORD/LB
54.83%
Bremer Landesbank
100%
Deutsche Hypo
100%
Braunschweigische
Landessparkasse
100%
NORD/LB
Luxembourg S.A.
Covered Bond Bank
NORD/LB
Asset Management
100%
NORD/LB
Vermögensmanagement
Luxembourg
Source: www.nordlb.de
Ownership and Ownership Structure
Deutsche Hypo is a wholly owned subsidiary of NORD/LB.
In May 2013, Deutsche Hypo and NORD/LB concluded a domination and profit-and-loss transfer
agreement, with Deutsche Hypo as the controlled company. Under the agreement, NORD/LB is entitled to
receive Deutsche Hypo's annual profits, but must also absorb any balance-sheet losses, at least over the
next five years. Under Section 303 of the German Stock Corporation Act, NORD/LB has to provide security
for Deutsche Hypo’s creditors at the end of the profit-and-loss transfer agreement.
Source: Company Reports (annual report Dec 2014, Dec 2013 and Dec 2007, investor presentation Dec 2014)
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AUGUST 7, 2015
COMPANY PROFILE: DEUTSCHE HYPOTHEKENBANK AG
BANKING
Company Management
Board of Managing
Directors
Current Title
Responsibilities
Andreas Pohl
Deutsche Hypo: Speaker
of the Board of Managing
Directors
International and Domestic Property Finance, Real Estate Structured
Finance and International Property Finance, Market Analysis, Treasury,
Communications and Board Staff, Corporate Development,
International Acquisition and London Branch
Andreas Rehfus
Deutsche Hypo: Member
of the Board of Managing
Directors
Accounting, Controlling, Credit Risk Controlling, Credit Risk
Management, Treasury Operations, Special Credit Management, Credit
Department and Property Valuation, Audit Officer, Human Resources
and Legal, Organisation and IT
As of 31 Dec 2014
Supervisory Board
Affiliation
Committees*
Dr. Gunter Dunkel
Deutsche Hypo: Chairman of the Supervisory Board;
NORD/LB: Chairman of the Board of Managing Directors
Lending and Risk Committee,
Audit Committee, Appointments
Committee (C), Remuneration
Committee (C)
Eckhard Forst
Deutsche Hypo: Vice Chairman of the Supervisory Board;
NORD/LB: Member of the Board of Managing Directors
Lending and Risk Committee,
Audit Committee (C),
Appointments Committee,
Remuneration Committee
Thomas S. Bürkle
Deutsche Hypo: Member of the Supervisory Board;
NORD/LB: Member of the Board of Managing Directors
Lending and Risk Committee (C),
Audit Committee (SM),
Appointments Committee,
Remuneration Committee
Thomas Krüger
Deutsche Hypo: Member of the Supervisory Board;
VGH Versicherungen: Member of the Board of Managing
Directors
Lending and Risk Committee (SM),
Audit Committee
Dirk Metzner
Deutsche Hypo: Member of the Supervisory Board and
Employee Representative
Remuneration Committee
Andrea Behre
Deutsche Hypo: Member of the Supervisory Board and
Employee Representative
N/A
* As of 1 Jan 2015
As of 22 July 2015
(C) = Committee chair, (SM) = Substitute member
Source: Company Report (annual report Dec 2014)
Company History
Established in 1872 by Berlin-based businessmen and bankers, Deutsche Hypo is one of Germany’s oldest
Pfandbrief banks.
During 1999 and 2000, the Dutch financial services company ING Group acquired a majority stake in BHFBank AG (renaming it ING BHF-Bank), which at the time owned a majority stake in Deutsche Hypo. In
2004, ING Group sold most of its German banking unit, including ING BHF-Bank, to Sal. Oppenheim, but
retained an 83.753% stake in Deutsche Hypo.
After the Pfandbrief Act became law in 2005, the bank became a Pfandbrief bank as defined by the act.
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AUGUST 7, 2015
COMPANY PROFILE: DEUTSCHE HYPOTHEKENBANK AG
BANKING
In 2006, ING Group sold its 83.753% stake in Deutsche Hypo to the German banks BHF-Bank AG (25.001%
stake) and M.M.Warburg & CO Gruppe KGaA (25.001%), and private investors Peter Döhle Schiffahrts-KG
(25.001%) and Josef H. Boquoi Familienstiftung (8.750% stake).
In January 2008, NORD/LB acquired a majority stake in Deutsche Hypo through a public offer to its
previous owners, and subsequently increased its stake to 100%. In October 2008, NORD/LB injected equity
capital of €180 million into Deutsche Hypo. This capital infusion was allocated to the bank’s capital reserve.
Source: Company Reports (annual report Dec 2010 and Dec 2007, debt issuance prospectus Oct 2011 and Dec 2008, NORD/LB
annual report Dec 2009), Company data, Moody’s research, www.ing.com, www.nordlb.de
Peer Group
»
Aareal Bank AG
»
Berlin Hyp AG
»
DG Hyp
»
Landesbank Hessen-Thüringen
»
Muenchener Hypothekenbank eG
Related Websites and Information Sources
For additional information, please see:
»
The company’s website: www.deutsche-hypo.de
»
The parent’s website: www.nordlb.de
»
The regulator’s website: www.bundesbank.de
MOODY’S has provided links or references to third party World Wide Websites or URLs ("Links or References") solely for your
convenience in locating related information and services. The websites reached through these Links or References have not
necessarily been reviewed by MOODY’S, and are maintained by a third party over which MOODY’S exercises no control.
Accordingly, MOODY’S expressly disclaims any responsibility or liability for the content, the accuracy of the information, and/or
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a Link or Reference does not imply an endorsement of any third party, any website, or the products or services provided by any
third party.
Moody’s Related Research
Credit Opinion:
»
Deutsche Hypothekenbank AG
Banking System Outlook:
»
Germany, November 2014 (177587)
Rating Action:
»
Moody's concludes reviews on 9 German public-sector banks' ratings; takes action on another 6 banks'
ratings
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of
this report and that more recent reports may be available. All research may not be available to all clients.
7
AUGUST 7, 2015
COMPANY PROFILE: DEUTSCHE HYPOTHEKENBANK AG
BANKING
Report Number: 183508
Authors
Christina Gerner
Bernhard Held, CFA
Editor
Karen Wong
Senior Production Associate
Marimuthu M
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AUGUST 7, 2015
COMPANY PROFILE: DEUTSCHE HYPOTHEKENBANK AG