Investor presentation - May 2020 - pfandbrief.market
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Investor presentation May 2020
4.4 DKB at a
1990 million
FOUNDING YEAR
100% subsidiary
of BayernLB
CLIENTS
Local authorities, companies and
retail clients
glance
• Leading lender for green and
social infrastructure
EUR 84 EUR 70
billion billion
• Second largest
BALANCE SHEET TOTAL CLIENT LOANS
One of the top 20 banks in Germany Onlinebank in Germany
in Germany
• Industry Leader in
sustainability
EUR 951
4,148 million
EMPLOYEES NET INTEREST INCOME
Highlights 2019 Strengthening the position among the TOP 20 banks in Germany Business Results Strong growth in core business - EUR 3.6 billion Net interest income of EUR 951 million was slightly above increase in loans and advances to customers the previous year's figure (2018: EUR 945 million) Significant growth in total assets by more than Earnings with EUR 298m in line with previous year´s FY EUR 6 billion to EUR 84 billion profit Expansion of digital distribution channels in the Investments in digitization and growth as main cost drivers business customer segment Risk Ratios Further enhancement of asset quality Return on equity: 9.5% Significantly improved risk result Cost-Income-ratio: 56.7% NPL ratio at a historical low (0.8%) Equity ratio: 11.2% 3 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
DKB and the Corona-crisis
Interim status as of 31/03/2020
Germany Business development
Comprehensive package of measures by the No extraordinary developments in core activities at
German government and federal states to present
combat the economic consequences of corona Stable deposits and growing lending business
Public authorities and development banks as Support of borrowers with the help of promotional
financiers and guarantors for many aid
loans and other tools
programmes
!
Credit risk Market risk
DKB business focused in Germany
Equity exposure in the low three-digit million range
Consequences for borrowers cannot be fully
assessed yet Bond exposure almost exclusively in LCR-eligible
bonds of core European issuers
Task Force for monitoring and management of the
Corona crisis established
4 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Corona-impact due to DSGV-scenario analysis
As of 01/04/2020 (for corporate and individual clients only)
Loan Volume (EURbn) Corona impact scenario
30 German Savings Banks
Association (DSGV) has
published a scenario analysis
Housing regarding the impact of Covid-19
22,7
20 Based on economic sectors and
DSGV industry forecast
Local authorities & social
infrastructure Considers supply shortfalls, the
13,8 drop in demand and the
Environmental
technologies
government interventions
10
8,6
Impact index (6 = strong impact
Food & Individual clients
agriculture 2,7
of crisis, 1 = low)
Other corporates
3,7 Energy & supply
6,5
(incl. tourism) “Translation” of the impact index
1,4
into DKB client groups
0
0 1 2 3 4 5 6 Impact index
Source: DSGV and DKB
5 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Investor presentation
Agenda
1 DKB´s position in BayernLB group
2 Business model
3 Sustainability
4 Facts and figures
5 Funding
6 Contacts
6 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Investor presentation 1 DKB´s position in BayernLB group 7 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Ownership structure
Wholly-owned subsidiary of BayernLB
Free State of Bavaria Association of Bavarian Savings Banks
≈ 75 %
BayernLB Holding AG ≈ 25 %
Binding letter of comfort and
profit/loss transfer agreement
Real Estate &
Corporates & Markets
Savings Banks/Association
Specialized bank for the future issues Reliable and strong real estate Innovative Tech-Bank with
of the German economy financier industry know-how
Central Bank of the Bavarian savings
banks
8 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Realignment of Bayerische Landesbank
Focus, efficiency, growth
Transformation programme until 2024
Key note Investments
Specialisation in high-growth future fields Investment offensive at DKB
Sustainable banking and responsibility for society Expansion in real estate financing business
Investments in infrastructure and IT
Focus Costs
Concentration in business with corporate Significant cost reduction in BayernLB core bank
customers and in capital market business on Simplification and streamlining of IT
profitable and sustainable areas
Expansion of real estate business and structured
financing
Source: Excerpt from the presentation "Strategic realignment of BayernLB" (as of 19.12.2019)
9 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Current corporate concept of DKB
Sustainable growth
Client Market
Excellence in all touchpoints > 8m clients until end of 2023
Convincing customer experiences Corresponding growth in the
loan portfolio
Sustainability as USP
Organisation Processes
Crossfunctional organisation Scalability and acceleration of
structures the business
New type of cooperation and target Conversion of the current
culture process landscape
10 I Investor presentation I May 2020 I IFRS-data as of 31/12/20192 Investor presentation 2 Business model 11 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Business model
Lending business as the core of the bank - sustainable and low-risk
Second biggest
Online Bank in Infrastructure
Germany Retail clients 43.0 Financing of services for the
12.8
public welfare
Market leader
regarding
current
accounts
Biggest renewable
energy portfolio in
Projects usually with a
Germany Corporate municipal background
clients
Market leader in 13.5
agricultural Loan volume
business =
84% of total assets
12 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Business units
Focus on only a few business lines - low risk and sustainable
Business customers Retail clients
26 branches
across Online
Germany
Infrastructure Corporate clients approach
6.5bn 8.6bn 7.8bn
22.7bn
Energy & Environmental
supply technology
3.7bn Mortgage loans 2.3bn
13.8bn
Housing 2.7bn
Personal
1.4bn Food &
loans
agriculture
Local authorities & Individual
social Other clients and
infrastructure corporates other
13 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Retail clients
Growth and digitisation drivers 3.2m accounts
2.8m accounts
1.7m accounts
Digital (further) development and cooperation
with Fintechs as a long-term strategy
Market leader in current accounts
among the top3 online banks*
*Source: Annual reports, corporate press releases for 2019
14 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Growth strategy
Currently 4.4m clients, goal 8m customers
8m clients until 2023
9,0
Scalability of
8,0 Lending
7,0
business
6,0
5,0 DKB Broker
4,0
3,0 Expansion of
product range
2,0
DKB Cash
1,0
0,0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
15 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Digitization within DKB
Innovations across all customer segments
DKB Crowd
Own Fintech
Stake in municipal
funding platform
16 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Investor presentation 3 Sustainability 17 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Sustainability anchored in business model
Implemented regarding clients, products and processes
1996 2001 2004 2014 2016 2018
First wind Launch of the Account opening First green bond First social bond
Establishment of
turbine online bank. process becomes issued. issued.
DKB STIFTUNG.
financed. 100% digital.
1998 2002 2009 2015
First day-care
First public- Sustainability Industry
centre for children
private management Leader with
(Kita).
partnership embedded ISS-oekom for
project. 2000 2003 directly in the 2013 the first time. 2017 2019
First Board of DKB Bürger- New forms of Rated as
First
PV plant Management. sparen work through outstanding by
biogas
financed. scheme. “Projekt Arbeiten Focus Money.
plant.
4.0” project.
18 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Blue Sustainability
DKB‘s sustainability concept
Differentiation Blue sustainability
• Expansion of the
• Ecological + social
concept of sustainability
• Orientation towards
• Sustainable
people's needs
Development Goals
(SDGs) as a strategic • Positioning
foundation sustainability in the
mainstream
• Inclusive instead of
exclusive
19 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Sustainability@ DKB
Our four central goals for the future
Lead the most convincing sustainable product range
until 2023
among the TOP-20 banks
until 2030 EUR 80bn in sustainable financing
until 2030 Become carbon neutral in our office operations
until 2050 Meet the 2-degree-goal with all DKB products
(under Paris Climate Convention on Global Warming)
20 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Signpost sustainability
SDG-Mapping of the balance sheet
77.8%
77.8% of our customer
loans (EUR 54.1bn) have
a significant contribution
Source: DKB Annual Report 2019 (Data as of 31.12.19)
21 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Outstanding ratings for sustainable performance
Industry leader among commercial banks
Industry Leader in sustainability Best Green Bond Ratings worldwide
22 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Investor presentation 4 Facts and figures 23 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Overview Annual comparison* Key figures 2019 2018 2017 2016 2015 2014 Total assets 83.8bn 77.3bn 77.3bn 76.5bn 73.4bn 71.6bn Customer receivables 69.5bn 65.9bn 64.5bn 63.2bn 61.6bn 59.6bn Customer deposits 60.8bn 54.4bn 53.9bn 53.4bn 48.6bn 47.3bn Net interest income 951m 945m 935m 795m 790m 670m Profit after tax 298m 301m 263m 327m 225m 165m Cost income ratio (CIR) 56.7% 51.5% 50.8% 45.8 % 48.0 % 56.1 % Return on equity (ROE) 9.5% 10.2% 9.6% 12.4 % 9.6 % 6.1 % Equity ratio 11.2% 11.1% 10.5% 10.0 % 9.1 % 9.9 % * DKB Group in accordance with IFRS, in EUR 24 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Business performance
Successful new loan business and diversified liability structure
Loan volume (EURbn) Customer deposits (EURbn)
+3.6 69.5
64.5 +1.4 65.9 60.8
+6.4
0.2 0.1
0.2 53,9 +0.5 54.4
12.8 3.6
13.0 12.4 4,0
4.3
13.2 13.5
13.7
40.8
31.5 35.0
38.0 40.2 43.0
2.6 2.4 2.3
15.5 13.0 14.1
2017 2018 2019 2017 2018 2019
Infrastructure Corporates Retail Other Infrastructure Corporates Retail Other
Growth driver: Infrastructure segment, especially housing Rise of liabilities equivalent to asset growth, mainly driven
by retail unit
Private and corporate customer segments also show
growth Slight increase in deposit volumes in the corporate
customer segment
25 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Key Figures and ratios
Net interest income exceeding previous year level
Net interest income (EURm) Cost Income Ratio LCR
56.7%
50.8% 51.5%
951 31.12.2019 164%
945
935
30.06.2019 145%
2017 2018 2019 2017 2018 2019
Net profit after tax (EURm)
Tourismus Return on equity Leverage Ratio
9.6% 10.2% 9.5%
301 298 31.12.2019 3.71%
263
30.06.2019 3.88%
2017 2018 2019 2017 2018 2019
26 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Risk figures
Improved loan book quality, NPL-ratio at hostorical low
RWAs based on SA* (EURbn) Risk result (EURm) Equity ratios (SA*)
65.9 69.5 10.5% 11.1% 11.2%
64.5 9.3%
8.8% 9.4%
-127
-112
30.9 31.5 33.2
-56 8.6% 9.1% 9.1%
2017 2018 2019 2017 2018 2019 2017 2018 2019
Equity ratio
Loan book RWAs Core capital ratio (T1)
Common equity tier (CET1)
Loan book quality Non performing loans Capital measures
2.4% 0.8%
Investmentgrade (up to BBB-)
12.5% Strengthening of equity in 2019
Non-Investmentgrade (up to BB-)
0.9% 0.9% 0.8% through intra-group subordinated
84.4% Non-Investmentgrade (up to C) transaction
Non Performing Loans
2017 2018 2019
* Standardised approach (SA)
27 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Investor presentation 5 Funding 28 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Ratings of DKB
Stable credit and sustainability ratings
Public Mortgage Senior
Agency Type of rating
Pfandbriefe Pfandbriefe Unsecured
Moody‘s Covered Bond Rating Aaa Aaa
LT issuer rating A1
Junior Senior
Unsecured A2
(senior non-preferred)*
Adjusted BCA baa1
Outlook stable
ISS-ESG Sustainability rating - - B- (Prime)
imug Sustainability rating Very positive (A) Positive (BBB) Positive (BB)
* Updated rating as of 20/08/2018 due to new law in Germany introducing senior (non-) preferred liabilties
29 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Funding of DKB
Diversified refinancing options
Primary funding source, diversified 5% 1%
Customer deposits 11%
through all client segments
Development Pass-through and global loans
banks (e.g. from KFW, EIB, Rentenbank) 15% Liabilities** 68%
Since 2006 mainly via Pfandbriefe,
Capital markets 2016 and 2017 Green Bonds respectively,
funding Since 2018 Social Bonds, first Retail Social
Bond as well as first Blue Social Bond Customer deposits*
Development Banks
Capital market
Equity capital
Other
*Treasury perspective without registered bonds held by non-banks
** In relation to total assets
30 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Capital market funding
Focus on secured funding and sustainable bonds
Capital markets funding depends on deposit growth and maturities
Since 2006 focus on secured funding, around EUR 17bn total volume printed so far
Funding strategy Two Senior unsecured Green Bond benchmarks outstanding since 2016 (EUR 500m each)
Three Social Bond issues: First social covered bond (2018) and first Blue Social Bond
worldwide (2019) EUR 500m each and first Retail Social Bond (2019)
Placement volume (EURm) Maturity profile (EURm)
2.500 2.500
2.000 2.000
1.500 1.500
1.000 1.000
500 500
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Pfandbriefe Senior unsecured (Green Bond) Social Bond Pfandbriefe Social Bond Senior unsecured (Green Bond)
31 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Green Bond Programme
Green Bonds to refinance renewable energy project business
Renewable energy portfolio: EUR 10.8bn
10.000
8.000 2016 500 Mio. EUR, senior unsecured
6.000
4.000
2017 500 Mio. EUR, senior unsecured
2.000
0
2012 2013 2014 2015 2016 2017 2018
Wind Photovoltaics Biogas Green
Bonds
32 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Social Bond Programme
First Social Pfandbrief (covered bond) – also for retail clients
2018 EUR 500m, Social covered bond
Social 2019 EUR 500m, Blue Social Bond
infrastructure
2019 Retail Social covered bond
Social
Bonds
33 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Public pfandbrief cover pool
Overview
Federal
Republic of
Other Germany
2.4% 0.3% Federal
Cover assets Number Volume* States (GER)
7.6%
German federal government 18 21
German federal states 159 1.036
German cities and municipalities 5.716 7.766
Cities and 100% German assets
Other cover assets 42 197 municipalities
Total 5.935 9.020
(GER)
89.7% High granularity
* EURm (Ø-volume EUR 1.5m)
Rating over-collateralization
requirements significantly
Key figures* exceeded
Outstanding bond volume (EURm) 3.500
Collateral score stable on
Rating Moody's Aaa Private
Bearer low level
place-
bonds
Over-collateralization required by Moody‘s 1.0% ment
48%
52%
NPV over-collateralization 156.8%
Collateral score 2.7%
* As of December 2019
Source: Moody’s
34 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Public cover assets in comparison
By region*
Germany Greece Ireland Italy Portugal Spain Rest of Europe Others
Deutsche Kreditbank In line with our
Stadtsparkasse Hannover
Stadtsparkasse Düsseldorf business model
Sparkasse KölnBonn
M M Warburg
100% German
Landesbank Berlin cover assets
Kreissparkasse Köln
BayernLB
NordLB
LBBW
Helaba
DB Privat0 u. Firmenkundenbank
Unicredit Bank
Münchener Hyp
DSK Hyp
Berlin Hyp
Hamburg Commercial Bank
DZ Hyp
DekaBank
SaarLB
Aareal Bank
Deutsche Hypo
Commerzbank
Dt. Pfandbriefbank
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
* in % of the cover pool (without “further cover assets” according to para. 20 (2) No. 1 and 2 Pfandbrief Act and derivatives)
Source: BayernLB Research, as of 31/12/2019
35 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Mortgage pfandbrief cover pool
Overview
Thuringia 6%
Baden-Württemberg 4%
Cover assets Number Volume Schleswig Holstein 2% Bavaria 4%
Residential loans 39.220 2.146 Saxony-Anhalt 8%
Berlin 13%
Housing-industry investors 3.343 4.621 Saxony 11%
Brandenburg 12%
Other cover assets 8 310 Saarland 0%
Total 42.571 7.077 100% German assets
Rhineland-Palatinate 1%
Bremen 1%
Volumen in Mio. EUR Very high granularity
Northrhine-Westphalia
14% Hamburg 3%
Housing-industry investors
Lower Saxony 5% Hesse 7%
Meckenburg Western are mainly residential
Pomerania 9%
property companies
Key figures*
Rating over-collateralization
Outstanding bond volume (EURm) 4.409
Private requirements significantly
Place-
Rating Moody's Aaa
ment
Bearer exceeded
Bonds
Over-collateralization required by 51% 39%
9.5%
Moody‘s
NPV over-collateralization 57.7%
Collateral score 6.7%
* As of December 2019
Source: Moody’s
36 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Mortgage cover assets in comparison
By type of use*
Residential Commercial Others
Deutsche Kreditbank
Bausparkasse Schwäbisch Hall
Share of residential
PSD Bank Rhein Ruhr
PSD Bank Nürnberg
housing > 90%
INGDiBa
Commerzbank
SantanderConsumer Bank
Wüstenrot Bausparkasse
Münchener Hyp
DB Privat0 u. Firmenkundenbank
Stadtsparkasse Hannover
Kreissparkasse Köln
Deutsche Apotheker0 und Ärztebank
Sparkasse KölnBonn
Stadtsparkasse Düsseldorf
Hamburger Spk
Unicredit Bank
NordLB
Landesbank Berlin
DZ Hyp
LBBW
Berlin Hyp
DSK Hyp
Helaba
Deutsche Hypo
M M Warburg
Hamburg Commercial Bank
Dt. Pfandbriefbank
BayernLB
Aareal Bank
Natixis Pfandbriefbank
SaarLB
DekaBank
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
* in % of the cover pool (without “further cover assets” according to para. 20 (2) No. 1 and 2 Pfandbrief Act and derivatives)
Source: BayernLB Research, as of 31/12/2019
37 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019Investor presentation 6 Contacts 38 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
Personal
Uwe Jurkschat
Head of Funding and Investor Relations
Tel.: +49 (0)30 12030-2924
E-Mail: uwe.jurkschat@dkb.de
Anna Stawowy
Funding and Investor Relations
Tel.: +49 (0)30 12030-2910
E-Mail: anna.stawowy@dkb.de
www.dkb.de | Bloomberg DKRE
Folgen Sie uns
@DKB_deDisclaimer The information in this presentation constitutes neither an offer nor an invitation to subscribe to or purchase securities. It does not represent a recommendation to buy, sell or hold any securities. The information in this presentation is solely intended for informational purposes and does not serve as a basis for any kind of obligation, contractual or otherwise. The presentation may not be copied in whole or in part, distributed, forwarded or sent directly or indirectly by any means to a third party without prior written consent. Statements in this presentation represent solely the opinion of Deutsche Kreditbank AG. All the information contained in this presentation has been compiled with care. However, Deutsche Kreditbank AG does not expressly or silently guarantee the accuracy, completeness or suitability of the information in this presentation for any particular purpose. Deutsche Kreditbank AG assumes no direct or indirect liability from this presentation. Furthermore, investors should bear in mind that statements concerning past performance do not indicate or represent a guarantee of future performance or returns. Deutsche Kreditbank is under no obligation to update or regularly review the information in this presentation. This presentation may be subject to legal restrictions in some jurisdictions. All persons in possession of this presentation are explicitly advised to personally inquire about any restrictions that may apply and to comply with them. The information may not be used in foreign jurisdictions without permission. 40 I Investor presentation I May 2020 I IFRS-data as of 31/12/2019
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