NORD/LB Group Presentation

NORD/LB Group Presentation
September 2016
1
Agenda.
NORD/LB at a glance
3
Financials
10
Segments
23
Outlook
38
Appendix
41
2
NORD/LB at a glance
Established commercial bank in northern Germany.
Successful universal bank for over 250 years in the market
Among the top seven German banks
Market leader in Northern Germany in its business units private, commercial and corporate customers
Excellent knowledge in renewable energy and infrastructure projects
Over 30 years of experience in ship and aircraft finance
Represented in important financial centres worldwide
Member of the extended Guarantee Funds of landesbanks and savings banks
3
NORD/LB at a glance
Ownership structure and regional network.
Strong support from our owners¹
Headquarters and ownership region
Special Purpose Holding Association of
the Mecklenburg-Western Pomerania
Savings Banks
Saxony-Anhalt Savings
Banks Holding Association
3.7%
Hanover
5.3%
Brunswick
Lower Saxony
Savings Banks and Giro
Association
Magdeburg
26.4%
5.6%
State of Saxony-Anhalt
59.1%
State of Lower Saxony
¹ Total differences are rounding differences
4
NORD/LB at a glance
Domestic and international represented in important financial and trade centres.
New York
Hamburg
London
Bremen
Amsterdam
Schwerin
Brunswick
Magdeburg
Duesseldorf
Hanover
Luxembourg
Paris
Warsaw
Head offices
Hanover, Brunswick, Magdeburg
Branches worldwide
London, New York, Singapore,
Shanghai
German branches
Duesseldorf, Hamburg, Munich,
Schwerin, Stuttgart and approx. 100
branches of Braunschweigische
Landessparkasse
Subsidiaries and bank holdings
Bremer Landesbank, Deutsche
Hypothekenbank, NORD/LB Asset
Management, NORD/LB
Luxembourg Covered Bond Bank,
NORD/LB Vermögensmanagement
Luxembourg
Frankfurt
Nuremberg
Stuttgart
Munich
Shanghai
Singapore
Addresses and more details: https://www.nordlb.com/nordlb/about-us/locations-worldwide/
5
NORD/LB at a glance
Our business segments.
Corporate
Customers
Private and
Commercial
Customers
Private
customer
business
Private
Banking
Commercial
customer
business
Insurance
services for
private
customers in
cooperation
with public
insurances in
Lower Saxony
Corporate
customer
business
Agricultural
Banking
Finance with
public and
cooperative
housing
associations
Acquisition
finance
Syndication
business with
associated
savings banks
Energy and
Infrastructure
Customers
Markets
Business with
Institutional
customers
Savings banks/
financial
institutions
Public-sector
customers
Municipal
customer
business
Renewable
energy finance
Infrastructure
finance
Leasing
Export and
Trade finance
6
Aircraft
Customers
Ship Customers
Ship finance
Container
Vessels
Bulker
Tanker
Multi-Purpose
Offshore Oil &
Gas
Cruise/ Ferries
Aircraft finance
Narrowbodies
Widebodies
Freighters
Regional Jets
Turboprops
Helicopter
Spare Engines
Finance and
Operating
Lease
Real Estate
Banking
Customers
Commercial
real estate
finance
Social care
property
finance
NORD/LB at a glance
Our subsidiaries and holdings.
1
Private and Commercial Customers
Corporate Customers
Markets
Ship, Aircraft, Energy/Infrastructure, Real
Estate Banking
54,83%
100%2
3
100%2
100%
100%2
Asset Management
Private and corporate
customers North-west
Germany
Ship finance
Commercial real estate
finance
Private and commercial
customers
Loans
Financial Markets & Sales
Client Services & B2B
¹ For additional information about subsidiaries and affiliated companies please consult
https://www.nordlb.com/nordlb/about-us/investments/ or our Group Annual Reports 2015 page 257 ff
² NORD/LB ensures that the companies mentioned in the annual repot 2015 note (75) are able to meet their obligations
³ Incorporated under public law with partial legal capacity
7
Wealth management
Portfolio management
Fund management
Asset Management for
institutional clients
NORD/LB at a glance
Our ratings offer reliability for investors.
NORD/LB credit ratings
Long Term (senior unsecured) with outlook
Baa1, negative
A- / stabil / F1
A3, negative
-
P-2/P-2
-
Baseline Credit Assessment / Viability Rating
ba3
bb+
Tier 2
Ba2
-
Tier 1
B2(hyb) und Caa1(hyb)
-
Aaa / Aaa / A1
AAA stabil / - / -
Deposits with outlook
Short Term (Notes/Deposit)
Public-Sector / Mortgage / Aircraft Pfandbriefe
NORD/LB sustainability ratings
Uncovered
Bonds
Public-Sector
Pfandbriefe
Mortgage
Pfandbriefe
Aircraft
Pfandbriefe
Positive BB
Very Positive A
Positive BB
In total: C+
Investment status „Prime“
„Industry Leader“
Positive B
8
63 of 100 points
„Best-in-Class“
Agenda.
NORD/LB at a glance
3
Financials
10
Segments
23
Outlook
38
Appendix
41
9
Financials
NORD/LB face a challenging first half (1/2).
Consolidated loss increased significantly to €-406m: operating earnings remain stable
Net allocations to risk provisions of €1,003m (€210m)
Specific valuation allowances increased by €945m (€238m), general loan loss provisions nearly unchanged at €7m (€-9m). Provisions
mainly derive from the bank‘s shipping portfolio
Active management of reducing the shipping portfolio
Due to the negative sentiment in the shipping markets, the bank is going to further reduce its shipping lending business. In the midterm the portfolio should shrink to €12-14bn. As a first cornerstone, NORD/LB entered into an agreement to sell €1.3bn shipping loans
to investors with further sales to follow
Solid capital ratios
CET1 ratio is at 12.0 per cent and total capital ratio at 16.1 per cent. We significantly outperformed the required minimum ratios. The
ongoing strengthening of the capital ratios during recent years also had a positive impact on the results of the current stress test
Total assets nearly unchanged
Slight decrease by 1 per cent to €179.2bn. We are significantly below the EU target of €195bn at year-end 2016
(Previous year’s figures in brackets)
10
Financials
NORD/LB face a challenging first half (2/2).
1 Jan –
30 Jun 2016
1 Jan –
30 Jun 2015
929
1.000
1.003
210
Increase mainly due to specific valuation allowances for ships
Net commission income
117
111
Robust development
Profit/loss from financial instruments at fair value
incl. hedge accounting
277
95
Profit/loss from financial assets
71
26
Profit/loss from investments accounted for using the
equity method
-7
-59
Decrease in write-offs from companies at-equity
572
562
Staff expenses fell whereas service expenses for IT increased
Other operating profit/loss
-168
-80
Mainly due to the redemption of own issues and extraordinary
depreciations on shipping companies on the balance sheet
Earnings before reorganisation and taxes
-356
321
-8
-7
-364
314
42
24
-406
290
Income statement (in €m)
Net interest income
Loan loss provisions (llps)
Administrative expenses
Reorganisation expenses
Earnings before taxes
Income taxes
Consolidated profit
11
Moderate decrease due to low interest-rate levels and asset
reduction
Lower EUR interest-rate level resulted in an increase in trading
profits, compensating the inverse impact on the fair value option
Positive effects from lower impairments, reduced profit from the
sale of bonds
Net allocations to reorganisation expenses for severance
agreements previously agreed to
Financials
Income statement overview.
1 Jan –
30 Jun 2016
1 Jan –
30 Jun 2015
Net interest income
929
1.000
1,974
1,985
1,931
1,959
Loan loss provisions
1.003
210
698
735
846
598
Net commission income
117
111
234
185
163
168
Profit/loss from financial instruments at fair
value incl. hedge accounting
277
95
280
130
73
-122
Profit/loss from financial assets
71
26
72
-3
11
-5
Profit/loss from investments accounted for
using the equity method
-7
-59
8
-37
33
-14
572
562
1,114
1,125
1,167
1,158
Other operating profit/loss
-168
-80
-97
-75
49
-99
Earnings before reorganisation and taxes
-356
321
659
325
247
131
-8
-7
-6
-49
-107
-53
-364
314
653
276
140
78
42
24
135
71
-84
-4
-406
290
518
205
224
82
CIR
49,8%
52,7%
46.4%
51.4%
51.9%
61.2%
RoE
-8,9%
8,7%
8.7%
3.8%
1.8%
1.0%
Income statement (in €m)
Administrative expenses
Reorganisation expenses
Earnings before taxes
Income taxes
Consolidated profit
¹ Some previous year figures were adjusted, see Group Annual Reports 2013 and 2014, Note (2)
12
1 Jan –
31 Dec 2015
1 Jan –
31 Dec 2014
1 Jan –
31 Dec 2013¹
1 Jan –
31 Dec 2012¹
Financials
Shipping market prospects let provisions significantly rise.
Provisions for lending business
in €m
1.003
598
89
846
97
55
735
19
19
698
51
7
39
945
640
694
726
697
210
238
2012¹
-9
-19
-67
-131
2013¹
2014¹
2015¹
Net allocations to specific valuation allowances
1 Jan 30 Jun 2015¹
Net allocations to general loan loss provisions
1 Jan 30 Jun 2016¹
Other²
¹ Including proportion of Group Management / Others and Reconciliation
² Include: provisions, additions to receivables written off, direct write-offs of bad debts, premium payments for credit insurance, lump-sum specific loan loss provisions (see Annual
Report 2015, Note (21))
13
Financials
Total assets nearly unchanged.
Balance sheet (in €m)
30 Jun 2016
31 Dec 2015
Total assets
179,166
180,998
Total assets shrank slightly, EU requirements at year-end
2016 of €195bn already met
Loans and advances to customers
107,140
107,878
Still largest balance sheet item, decrease in loans to ship and
aircraft customers
Loans and advances to banks
21,137
21,194
Reduction of municipal loan portfolio
Financial assets
34,431
34,515
Slight reduction of afs financial assets
Customer deposits
57,188
60,597
Decrease especially from money market transactions and
savings deposits
7,762
8,513
Equity capital (balance sheet)
14
Reduction mainly based on consolidated results and
revaluation of pension plans
Financials
Balance sheet development at a glance.
Balance sheet (in €m)
30 Jun 2016
31 Dec 2015
31 Dec 2014
179,166
180,998
197,607
200,823
225,550
107,140
107,878
108,255
107,604
114,577
Loans and advances to banks
21,137
21,194
23,565
27,481
34,378
Financial assets
34,431
34,515
45,120
47,043
52,423
Customer deposits
57,188
60,597
57,966
54,859
55,951
Liabilities to banks
49,363
48,810
58,986
59,181
65,079
Total assets
Loans and advances to customers
¹ Some previous year figures were adjusted, see Annual Report 2014, Note (2)
15
31 Dec 2013¹
31 Dec 2012
Financials
Loans to customers ratio stable at high level.
Net interest and commission
income
Loans to customers
Total assets
in €bn
in €bn
in €m
225.6
114.6
107.6
108.3
107.9
107.1
2,127
200.8
2,094
2,170
2,208
197.6
181.0
179.2
2012
2013¹
2014
2015
30 Jun
2016
Loans to customers ratio
1,111
of total assets
53.6%
59.6%
59.8%
2015
30 Jun
2016
1,046
54.8%
50.8%
2012
2013¹
2014
2015
30 Jun
2016
2012
2013¹
2014
¹ Some previous year figures were adjusted, see Annual Reports 2013 and 2014, Note (2)
16
2012¹
2013
2014
2015
30 Jun
2015
30 Jun
2016
Financials
Security exposure: High quality and well diversified.
Exposure1 by industry
as at 30 Jun 2016
… by country1
€34.2bn
Other
8%
as at 30 Jun 2016
Northamerica
9%
Financing
institutes /
insurance
companies
47%
Public
administration
45%
€34.2bn
Other
5%
Germany
51%
Rest
Europe
8%
Euro-Countries
(excl. Germany)
27%
… by rating1
as at 30 Jun 2016
… by maturity1
€34.2bn
as at 30 Jun 2016
Default (= NPL)
Increased risk
1%
1%
Reasonable /
satisfactory
1%
Good /
satisfactory
3%
1
€34.2bn
< 1 year
16%
Very good to
good
94%
> 5 years
46%
1-5 years
38%
Exposure at default. The relevant balance sheet items are “Financial Assets” and “Financial Instruments at fair value through profit or loss”
17
Financials
High quality of total portfolio: 75 per cent in the highest category.
NPL ratio
2.7%
4.7%
4.2%
3.7%
4.8%
in %
232.3
Total
exposure1
14.3
in €bn
default (=NPL)
very high risk
high risk
increased risk
reasonable/satisfactory
good/satisfactory
very good to good
6.3
5.1
4.5
10.2
20.0
171.9
2012
1
2
212.7
7.8
4.5
3.3
9.0
11.6
211.0
17.8
9.9
15.4
158.7
160.9
2013
2014²
Total differences are rounding differences
Figures were adjusted, see Interim Report as at 30 June 2015, page 28
18
8.8
4.1
3.3
8.6
193.7
9.9
13.9
9.1
3.7
3.2
7.7
194.7
8.6
15.8
146.3
147.0
2015
30 Jun 2016
9.3
5.0
2.2
6.8
Financials
Funding structure.
Securitised liabilities1
as at 30 Jun 2016
Subordinated capital
as at 30 Jun 2016
Silent
participations
13%
Participatory
capital
2%
€36.2bn
Other
debt securities
40%
Money market
instruments
4%
Mortgage
Pfandbriefe
29%
Public sector
Pfandbriefe
27%
> 5 years
12%
< 1 year
12%
1 to < 5 years
76%
¹ Carrying amount
² Acc. to ITS
19
€3.8n
Subordinated
liabilities
85%
Financials
Capital ratio at solid level.
Important ratios and figures
31 Dec 2015
(CRR, transitional)
31 Dec 2015
(CRR, fully loaded)
30 Jun 2016
(CRR, transitional)
30 Jun 2016
(CRR, fully loaded)
Common equity tier 1 capital ratio
13.1%
12.2%
12.0%
11.2%
Total capital ratio
16.7%
16.7%
16.1%
15.6%
4.3%
-
4.1%
-
9.25%
(1 Jan 16)
-
9.75 %
(31 Dec 16)
-
100.7%
-
104.7%
-
€8,320m
-
€7,700m
-
Own funds
€10,647m
-
€10,353m
Total risk exposure amount (RWA)
€63.675m
-
€64,237m
Leverage Ratio
SREP ratio
Liquidity Coverage Ratio
Common equity tier 1 capital (CET1)
20
-
Financials
NORD/LB Group capital.
Regulatory capital
(in €m)1
Paid-up capital including premium
30 Jun 2016
31 Dec 2015
31 Dec 2014
Comments on selected items
(1) Deductible items (€735m) include primarily
the shortfall from the shipping portfolio.
Audited loan loss provisions have a
decreasing effect
4,930
4,930
4,960
Reserves
Eligible components of CET 1 capital at
subsidiaries
Other components of CET 1 capital
2,386
2,908
2,187
705
837
786
-111
36
85
- Deductible items (from CET 1 capital)
-735
-964
-2,199
525
573
1,710
-
-
-148
7,700
8,320
7,381
429
451
709
-142
-331
-857
-
-
148
287
120
–
Tier 1 Capital
7,987
8,440
7,381
D-SIB buffer as at 1 Jan 2019: 1 per cent
Paid-up instruments of Tier 2 capital
Eligible components of Tier 2 capital at
subsidiaries
- Deductible items (from Tier 2 capital)
2,657
2,616
2,788
205
270
387
-25
-25
-1
Monitoring of upcoming capital
requirements from Minimum Requirements
of Own Funds and Eligible Liabilities (MREL)
-471
-654
-1,432
2,367
2,207
1,742
10,353
10,647
9,123
Adjustments due to transition rules
Balancing item to prevent negative AT 1 capital
Common Equity Tier 1 capital (1)
Transitional adjustments due to grandfathered
AT1 Capital instruments
Adjustments due to transition rules
Balancing item to prevent negative AT 1 capital
Additional Tier 1 Capital (2)
Adjustments due to transition rules
Tier 2 Capital (3)
Own funds
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
21
(2) AT1 mainly containing our old-style
“Fürstenberg”-bonds, partly accounted for
in AT1; Eligibility is reduced by 10
percentage points every year
(3) Paid-up instruments of Tier 2 capital
comprise subordinated liabilities including
“Fürstenberg”-bonds; increased fair value
boosted that item
SREP ratio
− as at 1 Jan 2016: 9.25 per cent
− as at 31 Dec 2016: 9.75 per cent
Agenda.
NORD/LB at a glance
3
Financials
10
Segments
23
Outlook
38
Appendix
41
22
Segments
Our business segments in numbers.
in €m
as at 30 Jun 2016
Net income
Private and
Commercial
Customers
Corporate
Customers
Markets
Energy and
Infrastructure
Customers
Ship
Customers
Aircraft
Customers
Real
Estate
Banking
Customers
120
208
175
135
206
58
116
Expenses
92
72
67
48
57
13
32
Operative earnings
28
136
108
87
149
45
84
Loan loss provisions/
valuation
-2
87
0
0
954
-1
-4
Earnings before
taxes
30
49
108
87
-805
46
88
CIR
76.9%
34.8%
38.3%
35.7%
27.6%
21.6%
27.7%
RoRaC
15.2%
7.9%
47.0%
21.8%
-69.3%
20.9%
24.0%
23
Segments
Sound profit from business segments. Risk provisions for ships burdens.
Earnings before taxes¹
in €m
1 Jan – 30 Jun 2016
146
87
30
49
108
-420
160
-50
-805
136
-364
96
234
32
88
46
Private and
Commercial
Customers
Corporate
Customers
Markets
Energy and
Infrastructure
Customers
Ship
Customers
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
24
Aircraft
Customers
Real
Estate
Banking
Customers
Group
Management/
Others,
Reconciliations
NORD/LB
Group
Segments
Shipping loans remain primary driver for risk provisions.
Loan loss provisions by segments1 2
in €m
1 Jan – 30 Jun 2016
-1
-4
--31
954
0
1.003
0
87
-2
Private and
Commercial
Customers
Corporate
Customers
Markets
Energy and
Infrastructure
Customers
Ship
Customers
Aircraft
Customers
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
2 Since 1 January 2016 we show specific valuation allowances and general loan loss provisions per segment
25
Real
Estate
Banking
Customers
Group
Management/
Others,
Reconciliations
NORD/LB
Group
Segments
Well diversified business model.
Customer loans
as at 30 Jun 2016
Group
Manage-ment/
Others 12%
Total risk exposure amount by business units
€107.1bn
Private and
Commercial
Customers 6%
Group Management/
Others
14%
Corporate
Customers
22%
Real Estate
Banking
Customers
13%
€64.2bn
as at 30 Jun 2016
Corporate Customers
21%
Real Estate Banking
Customers
9%
Aircraft
Customers
7%
Aircraft
Customers 7%
Private and
Commercial
Customers 6%
Marktes
7%
Markets 12%
Ship
Customers
15%
Energy- and
Infrastructure
Customers
13%
Ship Customers
24%
26
Energy and
Infrastructure
Customers
12%
Segments
Private and Commercial Customers. Deeply rooted in the home region.
Exposure by industry1
as at 30 Jun 2016
Other service
industry 12%
€8.0bn
With nearly 100 branches well represented in the Brunswick
region for over 250 years
We offer customer-oriented consulting and selected
products and services for private and commercial customers
within the region of Braunschweigische Landessparkasse, in
Hanover, in Hamburg as well as throughout the business
region of the Bremer Landesbank
Other 10%
Manufacturing
industry 2%
Land, housing
18%
Private
household with
domestic staff
45%
NORD/LB, Braunschweigische Landessparkasse, Bremer
Landesbank and NORD/LB Vermögensmanagement
Luxembourg offer inheritance optimisation, trust
management, participation products and individual asset
management for private banking clients
Our related partners, Öffentliche Versicherung
Braunschweig, Versicherungsgruppe Hannover (insurance
companies), Landesbausparkasse (building society) and
Deka complete our services in these businesses
Public
administration,
defence, social
insurance 13%
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
27
Segments
Corporate customer business. Successful growth strategy.
Exposure by industry1
as at 30 Jun 2016
Successfully advanced our growth strategy of corporate
customer business Strengthened expertise in acquisition
finance business
€26.8bn
Market leader in agricultural banking in Germany
Manufacturing
industry
16%
Service
industries/other
34%
NORD/LB is one of the leading public housing lender in
Germany
SME: Traditional loan financing for corporate customers, also in
close cooperation with regional savings banks
Energy, water and
mining
14%
Financing
institutes/
insurance
companies
7%
Transport/
communications
7%
Construction
2%
Agriculture,
forestry and
fishing 8%
Trade,
maintenance and
repairs
12%
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
28
Corporate finance: Complex solutions for strategic positioning
and financing, change management, transaction- and
receivables management as well as corporate lending
structures
Segments
Markets. Frequent issuer of benchmarks.
Recent issues
2Q15
Public Sector PB1
4y, €500m
0.025%
3Q15
Public Sector PB1
4y, €500m
0.025% TAP
4Q15
Sen. Unsec,
3y, €1,000m
0.625%
1Q16
Sen. Unsec,
5y, €750m
1.000%
Lettres de Gage
7y, €500m
0.375%
Lettres de Gage
3y, €500m
0.125%
Mortgage PB1
7y, €500m
0.125%
Sen. Unsec
2y, €350m
3M Euribor+50bps
Mortgage PB1
6y, €500m
0.250%
2Q16
Mortgage PB1 2
7y, €750m
0.25%
Mortgage PB1
8y, €750m
0.25%
Issuer of Pfandbriefe (public-sector, mortgage, ship and aircraft), Lettres de Gage (covered bonds according to Luxemburg law), bearer
bonds, promissory notes, money market securities
Successful positioning as lead manager/arranger of bond issues, particularly covered bonds
Comprehensive , customized range of money and capital market products in private placement segment
International funding programmes:3
€25bn euro MTN Program, €10bn euro CP Program, €4bn euro French CD Program, $3bn US dollar CP Program
As at 30 Jun 2016 €33bn ECB eligible securities concerning NORD/LB Group, thereof €20.8bn for NORD/LB AöR
¹ PB = Pfandbrief according to German Pfandbrief Act
2 begeben am 15.2.16 (500 Mio €), aufgestockt am 15.7.16
3 NORD/LB AöR
29
Segments
Energy- and Infrastructure Customers. Focus on growth segments.
By industry1
as at 30 Jun 2016
Years of experience in renewable energy finance. Focus is on
wind and solar energy finance (mainly energy production).
Market leader in our European core markets Germany, France,
Ireland and UK. Expansion of customer base in North America
through diversified new business
Exposure at default: €18.7bn
Solar energy
8%
Gas / biogas
4%
Other energy
5%
Concentration on social infrastructure projects in the fields of
accommodation, education, blue light and waste/ water; Public
Finance Initiative (PFI) as well as project finance business
Wind onshore
42%
Supply and
disposal 5%
For over 25 years, Bremer Landesbank is one of the leading
lenders to leasing companies
Public Sector
4%
Financial Services
10%
Transportation
4%
Media and IT
2%
Manufacturing
industry
2%
Trade and Services
14%
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
30
Segments
Ship Customers. Progress in portfolio transformation and reduction.
By type of ships1
as at 30 Jun 2016
Financing of
Exposure at default: €17.9bn
− cargo and multipurpose vessels resp. offshore oil & gas
Other ships 4%
Crude oil tankers
Bulk Carrier 2%
Capesize 3%
Bulk Carrier Offshore 5%
Handymax 4%
Bulk Carrier MPP Heavy Lift 7%
Handysize 6%
MPP General
Bulk Carrier Cargo 8%
Panamax 5%
Container ships LPG/LNG tankers
Feeder 3%
3%
Container ships Cruise ships /
Feedermax 5%
ferries 2%
Containerships Handy 4%
Gas-/Prod.tankers 8%
Corporates 7%
Chemical tankers
4%
− Cruise and
− Ferries
For more than 45 years NORD/LB offers individual and tailormade solutions in the segment ship finance worldwide
Broad range of shipping finance: from structuring, interest-rate
and currency hedging by ECA-covered financing to alternative
finance like promissory loans and securitisations. In addition
we offer services like out-flagging of ships or M&A consultancy
Container ships Panamax 7%
Container ships Post-Panamax 7%
Container ships Sub-Panamax 6%
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
31
Segments
Systematic reduction of ships. Significant increase of loan loss provisions.
NPL portfolio and coverage ratio
Initial success in the transformation of the portfolio:
in €m
14,0
42.8%
39.0%
12,0
Number of ships
Net reduction by 29 ships in H1
40,0%
33.1%
10,0
7,7
7,0
7,0
8,0
50,0%
Selective new business
10 ships were financed in the segments cruises, ferries,
tanker and special tonnage at the expense of merchant
shipping
30,0%
6,0
20,0%
4,0
10,0%
2,0
0,0
0,0%
30 Jun 2015
2015
NPL portfolio
Loan loss provisions (llps)
Coverage of NPL portfolio (€7.7bn) at 42.8 per cent:
Single llps (€2.9bn and portfolio llps (€347m) sum up to
18.3 per cent as coverage for the total exposure (€17.9m)
30 Jun 2016
coverage ratio
Risk provisions in the shipping portfolio
Transformation
Business strategy develops by a further diversification in
segments and regions as well as by the expansion of the
product range
Amount in €m
3.280
2.714
347
345
2.318
Reduction
Further reduction by the sale of parts of the portfolio
(€1.3bn) and first asset distributions expected by the new
business unit Ship Asset Trading during this year
410
2.933
2.369
1.908
30.6.2015
Single loan loss provisions
2015
30.6.2016
portfolio loan loss provisions
32
Segments
Transformation and reduction of shipping portfolio successfully started.
NORD/LB Group – planned reduction of shipping portfolio¹
in €bn
1.5
0.4
1.3
14.0
2.0
19.0
17.9
12.0
EaD
shipping loans
Dec 2015
Redemptions
New business
EaD
shipping loans
Jun 2016
Securitisation
Shipping loans
considered for
divestiture
Target
portfolio
Dec 2018
Net reduction in the first half of already €1.1bn; new business (approx. €370m) nearly
compensated by development of the USD (ca. €400m)
Available loans
Scheduled decline in weak segments bulker and container ships (no new business)
Dynamic management of assets
depending on market conditions etc.
Reduction is achieved by: decrease of balloon financing, cancellation of commitments, extraordinary repayments, acceleration of
ship sales and syndication/outplacements
Agreement for outplacement of a part of the portfolio of roughly €1.3bn has just been signed
Additional ships will be sold, resp. ready for divestiture until year-end 2016
Target exposure is €12-14bn until end of 2018
¹ Incl. USD development
33
Segments
Industry outlook shipping: remain at low levels.
Feeder/Subpanamax
Panamax
Postpanamax
Containerships < 3K TEU
Containerships 3-5K TEU
Containerships > 5K TEU
Current market level:
Current market level:
Current market level:
Current market level:
Current market level:
low
low
medium
low
low
Expected
market development:
up to 12 mths / 12-36 mths
Expected
market development:
up to 12 mths / 12-36 mths
Expected
market development:
up to 12 mths / 12-36 mths
Expected
market development:
up to12 mths / 12-36 mths
Expected
market development:
up to12 mths / 12-36 mths
unchanged/ unchanged
unchanged/ unchanged
unchanged/ slight increase
unchanged / slight increase
unchanged / unchanged
Bulker
Multi-Purpose
Heavy Lift & General Cargo
Crude oil
tankers
Product
tankers
Other
tankers
Cruise ships
and ferries
Current market level:
Current market level:
Current market level:
Current market level:
Current market level:
Off shore
high
high
medium
increased
weak
Expected
market development:
up to 12 mths / 12-36 mths
Expected
market development:
up to12 mths / 12-36 mths
Expected
market development:
up to12 mths / 12-36 mths
Expected
market development:
up to12 mths / 12-36 mths
Expected
market development:
up to12 mths / 12-36 mths
slight decrease / decrease
slight decrease /slight decrease
unchanged / unchanged
unchanged / unchanged
decrease / slight decrease
Source: NORD/LB sector research based on charter rates and market values (new constructions and second hand) / as at April 2016
34
Segments
Aircraft customers. High-quality portfolio. Well diversified.
By type of aircraft and year of manufacture1
as at 30 Jun 2016
Aircraft portfolio with 570 aircraft and 17 spare engines is well
diversified. Considering only long-standing and fungible assets
Exposure at default: €7.1bn
Freighter
14%
Turboprop
3%
Exposure has very high collateralisation ratio (approx. 95 per
cent)
Regional Jets
7%
Average age of assets is at roughly 5 years
Narrowbodies
44%
Ultra Large
Aircraft
8%
Warehouse and operating lease structures
During the last 20 years established as a market leader in
aircraft finance: broad range of commercial and covered
financing of Widebody, Narrowbody, Regional Jets and
Helicopters
Widebodies
24%
Conservative risk approach in line with our financing principles
and high risk awareness
50%
41%
Focus on reliable and well-known partners
7%
Construction year
2005 and earlier
2%
Construction year
2006 - 2010
Construction year
2011 - 2015
New delivery since
2016
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
35
Segments
Real Estate Banking Customers. Focus on commercial real estate in Germany.
By country1
as at 30 Jun 2016
Deutsche Hypothekenbank is the competence centre for
commercial real estate (CRE) within NORD/LB Group
Exposure at default: €16.0bn
Tailored financial solutions and individual, high quality
customer consultation
Benelux
19%
Emphasis is on financing of office buildings, shopping malls,
hotels, logistics facilities and multi-story residential properties
in preferred urban centres with good tenant structure and
above average cash flow
Financing is focussed on Europe especially on Germany and
finance of commercial real estate in UK, France, Benelux and
Poland
Bremer Landesbank financed the first affordable housing
project in the 1980`s. Today, the bank is one of the leading
institutes to finance affordable housing projects nationwide
Successful strategic cooperation with pension funds as
financing partners for high-volume projects
UK 8%
USA 3%
France 6%
Germany
61%
Spain 1%
Other 2%
¹ The chart may include minor differences that occur in the reproduction of mathematical operations
36
Agenda.
NORD/LB at a glance
3
Financials
10
Segments
23
Outlook
38
Appendix
41
37
Outlook
2016: A bank on the move.
Challenges
2016
Challenges ahead are: Low interest rates, the development of the Euro countries, the situation in shipping
markets, the strength of the US Dollar, increasing competition, digitisation within the financial industry,
regulatory requirements as well as the situation at Bremer Landesbank
Diversity is our
strength
We are going to increase diversification in our market segments by active risk management in portfolios,
concentrating on core clients and engaging in selective new business. Thanks to our robust and diversified
business model, we are in the strong position to cope with the challenges deriving from the shipping
markets
Strengthening of
our conservative
risk policy
Our shipping portfolio will be reduced to €12-14bn in the years to come. An important step will already be
done in 2016. We expect an significant increase in loan loss provisions for the shipping business in fiscal
year 2016
Further
strengthening of
equity capital
We will comfortably fulfil all regulatory requirements. The continuous strengthening of capital ratios in
recent years had a positive impact on the recent stress test. Securitisations of loans as well as active
management of total risk exposure support this objective
Earnings
before taxes
Against this background we expect to show a negative year-end result 2016 for NORD/LB Group (IFRS) as
well as for NORD/LB as a single entity (German GAAP)
38
Outlook
Financial calendar.
Interim Report as at 30 September 2016
24 November 2016
Annual Report as at 31 December 2016
April 2017
39
Agenda.
NORD/LB at a glance
3
Financials
10
Segments
23
Outlook
38
Appendix
41
40
Appendix
Pfandbriefe (covered bonds): first class and secure collateral (1/2).
Public-Sector Pfandbrief (by debtor)2 3
Mortgage Pfandbrief (by building type)
€3.3bn1
as at 30 Jun 2016
Loans acc. to
§ 20 para. 2,
sec. 2 3%
Office buildings
17%
Commercial
buildings
6%
Apartment
buildings
42%
€18.2bn1
as at 30 Jun 2016
Countries
11%
Other
30%
Regional
authorities
30%
Industrial
buildings
7%
Condominiums
6%
Local
authorities
26%
One and two
family houses
22%
Weighted average life4:
of outstanding Pfandbriefs : 6.3 years
of the cover pool : 6.4 years
Weighted average life4:
of outstanding Pfandbriefs: 3.8 years
of the cover pool: 4.2 years
¹ Nominal value, NORD/LB AöR
³ 94 per cent in Germany
² Debtors incl. statutory overcollateralisation
4 Moody‘s Performance Overviews, May and June 2016
41
Appendix
Pfandbriefe (covered bonds): first class and secure collateral (2/2).
Ship Pfandbrief (by type)
Aircraft Pfandbrief (by type)
€199.2m1
as at 30 Jun 2016
Others
13%
€1.1bn1
as at 30 Jun 2016
Widebody
13%
Bulker
17%
Freighter
20%
Ultralarge
13%
Turboprop
4%
Containers
24%
Tankers
41%
Regional Jet
4%
MPP
5%
1
Nominal value, NORD/LB AöR
2
Narrowbody
46%
Weighted average life2:
of outstanding Pfandbriefs: 1.8 years
of the cover pool : 5.0 years
Moody‘s Performance Overview, July 2016
42
Appendix
Pfandbriefe at a glance.
Nominal values as at
30 Jun 2016
(in €m)
Public-Sector Pfandbriefe
Mortgage Pfandbriefe
Ship Pfandbriefe
Aircraft Pfandbriefe
Total outstanding
14,565.2
1,905.6
80.0
1,006.0
Total cover pool
18,185.8
3,384.3
205.2
1,380.3
Over-collateralisation
3,620.6
1,478.7
125.2
374.3
Over-collateralisation
in %
24.9%
77.6%
156.5%
37.2%
43
Appendix
Institutional protection and deposit guarantee schemes of NORD/LB.
Legal responsibility
Capital requirements
Basic protective measures to avoid bankruptcy
The Capital Requirements Regulation (CRR , “Kapitaladäquanzverordnung”) is a EU
regulation in banking containing requirements for capital adequacy under Basel III
Institutional Protection Scheme
of the Savings Banks Finance Group
Institutional Protection Scheme of the Savings Banks Finance Group was founded
in the 1970s
Since July 2015 the Institutional Protection Scheme is recognised as a deposit
guarantee scheme under Germany’s Deposit Guarantee Act (EinSiG)
13 guarantee funds: of the Landesbanken (1), of the regional savings banks (11) and of
the building associations (1)
German Act on the Recovery and
Resolution of Credit Institutions
Bail-in of shareholders and creditors
− Equity: Tier 1, AT 1, Tier 2, subordinated capital
− Liabilities: Senior unsecured and other (structured) liabilities
Excluded: i.a. deposits (under Deposit Guarantee Act: up to 100,000€/person), covered
bonds as well as money market instruments
European Scheme
The Single Resolution Mechanism (SRM) is augmented by the Single Resolution Fund
(SRF), which can provide the financial resources needed for resolution.
European deposit guarantee scheme: The German banking industry defeats the
proposed regulations of the EU commission
44
Appendix
Agreements with EU Commission fully on track.
In 2011/12 NORD/LB agreed to fulfil the following commitments concerning its capital-boosting programme approved by the EU
Commission
The fulfilment of the commitments is monitored by an independent trustee, giving information on the implementation status to the EU
Commission on a half-yearly basis. The trustee confirmed the scheduled implementation of the commitments in all reports.
Some commitments were only valid until 2014 or have already be fulfilled by NORD/LB (e.g. the sale of investments).
A cap for total assets and business volume in several segments as well as for the administrative costs and new acquisitions is still in
place until year-end 2016.
From today’s point of view all outstanding commitments will be fulfilled as planned until year-end 2016.
45
Appendix
Important links.
Declaration of Norddeutsche Landesbank Girozentrale on the German Corporate Governance Codex:
www.nordlb.com/legal-information/legal-notices/corporate-governance/
NORD/LB protection scheme
www.nordlb.com/legal-information/legal-notices/security-mechanisms/
Sustainability (report, ratings)
www.nordlb.com/nordlb/sustainability/
NORD/LB supervisory board
www.nordlb.com/nordlb/investor-relations/committees-and-executive-bodies/
NORD/LB Annual, Interim Reports and Disclosure Reports
www.nordlb.com/reports
46
Contact.
NORD/LB
Norddeutsche Landesbank Girozentrale
Investor Relations
Georgsplatz 1
30159 Hanover, Germany
[email protected]
www.nordlb.de/www.nordlb.com
Gabriele Bödeker (Head of Investor Relations)
[email protected]
Tel.: ++49 511 361-4338
Thomas Breit
[email protected]
Tel.: ++49 511 361-5382
Carsten Halbe
[email protected]
Tel.: ++49 511 361-4318
Marcel Mock
[email protected]
Tel.: ++49 511 361-8914
Bitte hier
Ihr Foto
einfügen
Svenja Pohlmann
[email protected]
Tel.: ++49 511 361-4683
47
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additional documents and explanations (together the “material“), are issued by
NORDDEUTSCHE LANDESBANK GIROZENTRALE (“NORD/LB”).
The foregoing factors should not be construed as exhaustive. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on
such forward-looking statements as a prediction of actual results. All forwardlooking statements included herein are based on information available to
NORD/LB as of the date hereof. NORD/LB undertakes no obligation to update
publicly or revise any forward-looking statement, whether as a result of new
information, future events or otherwise, except as may be required by
applicable law. All subsequent written and oral forward-looking statements
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in their entirety by these cautionary statements.
This presentation contains certain forward-looking statements and forecasts
reflecting NORD/LB management’s current views with respect to certain future
events. These forward-looking statements include, but are not limited to, all
statements other than statements of historical facts, including, without,
limitation, those regarding NORD/LB’s future financial position and results of
operations, strategy, plans, objectives, goals and targets and future
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participate. The NORD/LB Group’s ability to achieve its projected results is
dependent on many factors which are outside management’s control. Actual
results may differ materially from (and be more negative than) those projected
or implied in the forward-looking statements. Such forward-looking information
involves risks and uncertainties that could significantly affect expected results
and is based on certain key assumptions. The following important factors could
cause the Group’s actual results to differ materially from those projected or
implied in any forward-looking statements:
–
the impact of regulatory decisions and changes in the regulatory
environment;
–
the impact of political and economic developments in Germany
and other countries in which the Group operates;
–
the impact of fluctuations in currency exchange and interest
rates; and
–
the Group’s ability to achieve the expected return on the
investments and capital expenditures it has made in Germany
and in foreign countries.
The material is provided to you for informational purposes only, and NORD/LB is
not soliciting any action based upon it. The material is not intended as, shall not
be construed as and does not constitute, an offer or solicitation for the
purchase or sale of any security or other financial instrument or financial service
of NORD/LB or of any other entity. Any offer of securities, other financial
instruments or financial services would be made pursuant to offering materials
to which prospective investors would be referred. Any information contained in
the material does not purport to be complete and is subject to the same
qualifications and assumptions, and should be considered by investors only in
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the definitive offering materials. The
information herein supersedes any prior versions hereof and will be deemed to
be superseded by any subsequent versions, including any offering materials.
NORD/LB is not obliged to update or periodically review the material. All
information in the material is expressed as at the date indicated in the material
and is subject to changes at any time without the necessity of prior notice or
other publication of such changes to be given. The material is intended for the
information of NORD/LB´s institutional clients only. The information contained
in the material should not be relied on by any person.
48
Disclaimer.
Neither the material nor any part thereof may be reproduced, distributed,
passed on, or otherwise divulged directly or indirectly by the party that receives
it, to any other person without the prior written consent of NORD/LB.
In the United Kingdom this communication is being issued only to, and is
directed only at, intermediate customers and market counterparties for the
purposes of the Financial Services Authority’s Rules ("relevant persons"). This
communication must not be acted on or relied on by persons who are not
relevant persons. To the extent that this communication can be interpreted as
relating to any investment or investment activity then such investment or
activity is available only to relevant persons and will be engaged in only with
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The distribution of the material in certain jurisdictions may be restricted by law
and persons into whose possession the material comes are required by
NORD/LB to inform themselves about, and to observe, any such restrictions.
Viewing the following material involves no obligation or commitment of any
kind by any person. Viewers of he following material are not to construe
information contained in it as a recommendation that an investment is a
suitable investment or that any recipient should take any action, such as making
or selling an investment, or that any recipient should refrain from taking any
action. Prior to making an investment decision, investors should conduct such
investigations as they consider necessary to verify information contained in the
relevant offering materials and to determine whether the relevant investment
is appropriate and suitable for them. In addition, investors should consult their
own legal, accounting and tax advisers in order to determine the consequences
of such investment and to make an independent evaluation of such investment.
Opinions expressed in the material are NORD/LB´s present opinions only. The
material is based upon information that NORD/LB considers reliable, but
NORD/LB does not represent, guarantee, or warrant, expressly or implicitly,
that the material or any part of it is valid, accurate or complete (or that any
assumptions, data or projections underlying any estimates or projections
contained in the material are valid, accurate or complete), or suitable for any
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This presentation does not constitute an offer to sell or the solicitation of an
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By viewing the following material, the recipient acknowledges, and agrees to
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49