Wirtschaftsund Infrastrukturbank Hessen - Investor Presentation October 2018 - WIBank
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Wirtschafts- und Infrastrukturbank
Hessen
Investor Presentation October 2018
Agenda
1. WIBank at a Glance
2. The State of Hesse as a Guarantor
3. WIBank in Figures
4. Refinancing – “HESSENKASSE”
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 2
1. WIBank at a Glance Wirtschafts- und Infrastrukturbank Hessen (WIBank) Act as an independent in legally but dependent in economic and organisational entity, within Helaba. Is mandated with the monetary development business of the State of Hesse and is a development bank according to “Understanding II”, i.e. strict separation of the development banking business from the business of Helaba and thus compliant with the state aid guidelines of the EU. coverage of the following business units: Economic Development, Building and Housing, Infrastructure, Education and Employment © 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 3
1. WIBank at a Glance
Wirtschafts- und Infrastrukturbank Hessen (WIBank)
Has a direct statutory guarantee from the State of Hesse:
explicit, unconditional and irrevocable for all liabilities
payable upon first demand, thus a default of payment is excluded
resulting in a risk weight of 0 according to CRR (formerly “Solva zero
status”); including all of WIBank’s own issues:
no capital requirements
exempt from regulatory large exposure limits
LCR status level 1
gilt-edged security according to sec. 1807(1) no. 2 of German Civil Code
– BGB
Acts on the basis of competition neutrality and is exempt from tax on earnings.
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 41. WIBank at a Glance
Development Programmes of WIBank
Building and Education and
Economic Development Infrastructure
Housing Employment
Subsidy recipients
Local authorities and Companies,
Private housing and
SME Farming municipal associations
housing development
corporations
GuW-Hessen Start-ups Agricultural investments Affordable housing HESSENKASSE Qualification campaign
and Growth Home ownership Municipal Investment social inclusion
Guarantees and Structural market Rented property Programme of Hesse
investments improvements New construction Financing hospitals
Film promotion Modernisation Local authority funding /
Capital for Small Agricultural environment Energy efficiency capital spending on
Businesses (KfK) (building & renovation) projects for essential
JEREMIE – Fund for Small Agricultural land Urban development public services
Businesses development JESSICA – urban Broadband - high speed
Hesse Microloans development fund, State networks
Innovation loans Village regeneration and of Hesse Refinancing of banks for
Hesse-Mikro Crowd rural development Regional fund for aircraft investments in public
(DERE) noise mitigation interest projects
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale
51. Rating overview
Wirtschafts- und Infrastrukturbank Hessen
Has identical issuer ratings by Standard & Poor‘s1 (as of 8th October 2018) to the
State of Hesse:
o Long-term: “AA+”
o Short-term: “A-1+”
o The outlook is stable.
Has a sustainability rating by imug for bank bonds with an assessment of
“positive”.
Performs “above average”:
o of 126 national and international bank issuers
o of twelve assessed national and international development banks
o of six assessed national development banks
1 Source: S&P Research Update as of 8 October 2018
https://www.wibank.de/blob/wibank/314852/ff347f28b5c20e018d1fb123e87d5222/ratingbericht---standard-and-poor-s-data.pdf
2 Source: imug – consulting company with focus to social-economic innovations mbH – Hannover, as of 17th February 2014
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 61. Integration of WIBank in Helaba
Basis and Structure of WIBank
WIBank – and its Public Development and Infrastructure Business - represents
one of the three core business units within Helaba. WIBank is an integral part of the
established strategic business model (wholesale business, s-group business,
private customers and sme business) of Helaba. The annual financial statements of
WIBank are fully consolidated in the annual financial statements of Helaba.
Savings Banks Assoc. Westphalia-Lippe
Rhineland Savings Banks and Giro
Association Free State 100% state guarantee
Trustee for the Regional Savings Banks
State of
SGVHT of (Gewährträgerhaftung)
Guarantee Funds1) Hesse
Trustee for the Guarantee Fund of the Thuringia
Landesbanks2)
68.85% 19.0% 4.05% 8.1%
Helaba
1) FIDES Alpha GmbH, represented by the DSGV 2) FIDES Beta GmbH, represented by the DSGV
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 7Agenda 1. WIBank at a Glance 2. The State of Hesse as a Guarantor 3. WIBank in Figures 4. Refinancing – “HESSENKASSE” © 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 8
2. The State of Hesse as a Guarantor
Total spending in State of Hesse’s 2017 budget: EUR 36.5 bn – without net borrowing
High tax revenues: at EUR 3,679 per inhabitant in 2017, the tax power of the State of Hesse prior
to application of the financial equalisation system of the Federal Government and the Länder was
10% above the average of all German Länder.
Outstanding debt on capital markets: EUR 40.93 bn as of 31 December 2017 (according to
calendar year).
As of 2019 there are regularly redemptions planned
Per capita debt: at EUR 6,625 as of 31 December 2017, per capita debt in Hesse is equal to the
average of all German Länder.
budget revenues 2018e1 budget expenditures 2018e1
other revenues municipial
11% equalisation
federal
system
equalisation
14%
borrowings capital system other
11% expenditures 6% expenditures
5% 11%
grants from transfer personal
tax and tax third parties expenses expenditures
equivalent 12% 18% 26%
revenues interest
63% own revenues expenses
3% 3%
repayment of administrive
debt expenses
1 Source:: Fact Sheet of the Ministry of Finance - State of Hesse as of April 2018 11% 6%
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 92. The State of Hesse as a Guarantor
Selected Figures of the Guarnator
Hesse exhibits an above-average standard of living and its industries are
significantly intertwined in the global economy
Germany State of Hesse %
Land mass in km2 357,340 21,115 5.9%
Population in millions (June 2017) 82.7 6.2 7.5%
GDP in EUR bn (2017) 3,263 279 8.6%
GDP per capita (in EUR, 2017) 39,500 44,800 113.4%
GDP per employee (in EUR, 2017) 73,700 81,300 110.3%
Unemployment rate (in %, Ø Jan.-July 2018) 5.4 4.7 87.0%
Quellen: Statistische Landesämter, Bundesagentur für Arbeit, Helaba Volkswirtschaft/Research
with reference to the „Regionalfokus“ which was published as of 3th August 2018 by Helaba - Economy/Research
The economy of the State of Hesse is based on a sound, diversified structure
with a focus on the service sector.
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 102. The State of Hesse as an Issuer
The State of Hesse has achieved a balanced budget in 2018
gross capital 2018: EUR 3.94 bn
The exact timing of fund raising depends on the liquidity and budgetary situation as well as
conditions on capital markets at that time.
Principal debt currency is EUR.
Interesting yield pick-up vs. Bunds; diversified benchmark curve
As of: 17/08/2018
0
Bund KfW Hessen
-10
in Bp vs. Mid-Swap
-20
-30
-40
-50
-60
-70
17.10.2019
04.07.2019
14.10.2019
01.06.2020
10.03.2020
04.07.2021
04.07.2020
22.09.2020
12.04.2021
28.04.2022
04.07.2021
23.08.2021
10.12.2021
15.08.2023
04.07.2022
04.07.2022
20.01.2023
10.03.2023
15.08.2023
04.10.2024
10.06.2024
15.08.2024
15.01.2025
10.12.2024
10.06.2025
15.08.2025
09.03.2026
06.07.2026
15.08.2026
15.09.2027
07.04.2027
04.07.2027
07.01.2028
04.07.2028
02.08.2028
15.08.2028
04.01.2030
04.01.2031
07.01.2028
04.07.2034
23.04.2030
04.08.2036
15.06.2037
04.01.2037
04.07.2039
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 11Agenda 1. WIBank at a Glance 2. The State of Hesse as a Guarantor 3. WIBank in Figures 4. Refinancing – “HESSENKASSE” © 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 12
3. WIBank in Figures
Balance Sheet (pursuant to German Commercial Code – HGB1
Position 30.06.2018 31.12.2017 31.12.2016
Loans and advances to banks 8,878.8 7,085.8 7,010.0
Loans and advances to customers 9,576.7 9,664.3 9,578.5
Bonds and other fixed-income securities 25.4 25.5 20.6
Equity participations 0.3 0.3 0.4
Interests in associated companies 0.1 0.1 0.1
Trust assets 832.1 841.0 790.8
Intangible Assets 0.0 0.0 0.0
Property 0.8 0.8 0.8
Other Assets 0.4 0.5 0.4
Prepaid Expenses of Issues and Loans 13.9 8.4 11.0
Total assets 19,328.5 17,626.7 17,412.6
Liabilities to banks 11,804.5 11,707.2 11,668.0
Liabilities to customers 1,734.5 901.8 825.7
Securitised liabilities 2,874.2 2,098.0 2,052.8
Trust liabilities 832.1 841.0 790.8
Other liabilities 7.8 3.7 2.7
Rechnungsabgrenzungsposten 19.4 21.3 25.7
Rückstellungen 89.1 86.8 82.7
Present values of the pools of segregated assets/special funds 1,920.0 1,920.0 1,920.0
Funds for general banking risks 0.3 0.3 0.3
Equity 46.6 46.6 43.9
Total liabilities 19,328.5 17,626.7 17,412.6
Contingent liabilitties 17.5 7.4 1.1
Irrevocable loan commitments 2,343.6 1,338.8 1,068.9
1 Rounding differences may occur.
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 133. WIBank in Figures
Profit and Loss (pursuant to German Commercial Code – HGB1
Position 30.06.2018 31.12.2017 31.12.2016
Net interest income 26.0 51.6 49.1
Income from affiliated companies 0.6 0.5 0.6
Net commission income 18.8 39.8 38.5
Other net operating income 0.2 0.9 7.7
General administrative expense 34.3 65.6 61.2
Depreciation and amortization of intangible assets and property,
plant and equipment 0.1 0.1 0.1
Other net operating expense 4.7 7.1 2.5
Write-downs of and allowances on loans and advances and certain
securities as well as transfers to loan loss provisions 0.1 6.2 11.7
Income from the reversal of write-downs of and allowances on loans and
advances a. certain securities a. from the reversal of loan loss provisions 0.2 0.0 0.0
Result from ordinary operations 6.6 13.8 20.4
Extraordinary result 0.0 0.0 -1.1
Taxes 0.1 0.1 0.1
Net income 6.5 13.7 19.2
1 Rounding differences may occur.
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 143. WIBank in Figures
Quality of the Loan Portfolio
Loan portfolio by counterparty risk, total volume EUR 18.4 bn1 as of 30 June 2018:
The largest portion of the loan portfolio is at no immediate risk of default
according to CRR Regulation. Total risk weighted assets3 amount to EUR 1.2
bn.
All counterparty risks have been assumed by Helaba (against
remuneration).
Loans from a special
fund Loans at risk of
(revolving fund, risk default
is (risk assignment
borne by Helaba) 10%
4%
Loans not at
immediate risk of
default
according to CRR
86%
1 Total lending volume excluding payment obligations, trust assets and other assets .
2 Definition: Risk Weighted Assets are specified in the rules of the Baseler comittee
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 153. WIBank in Figures
Promotional Loan Business
Net balance sheet Number of
Year New business (EUR)
total (EUR) employees
30.06.2018 19.3 1.7 422
2017 17.6 2.1 419
2016 17.4 2.0 406
1.600
Amounts in EUR bn
1.362
1.400
1.281
1.200 1.156
1.000
30.06.2018
800
2017
600
408 2016
400 322 319
260
141 167
200 123 105 89 69 44
22
0
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 16Agenda 1. WIBank at a Glance 2. The State of Hesse as a Guarantor 3. WIBank in Figures 4. Refinancing – “HESSENKASSE” © 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 17
4. Refinancing – “HESSENKASSE”
Refinancing Structure
Liabilities to banks 1) / customers and securitised liabilities amounting to EUR 16.4
bn as of 30 June 2018:
Institutional
and other Kreditanstalt
Refinancing counterparties: Investors für
39%
National: Wiederaufbau
(KfW)
30%
o Kreditanstalt für Wiederaufbau (KfW),
notably from development programmes
o Landwirtschaftliche Rentenbank,
for investments in rural areas
o NRW.Bank
International – other development
institutions: Landesbank
o Council of Europe Development Bank – CEB Hessen-
Thüringen
o European Investment Bank – EIB Girozentrale 1)
4%
Other Landwirt-
Development schaftliche
Banks NRW.Bank Rentenbank
5% 11% 11%
1) excludes intragroup transactions to neutralise interest rate risks of approx. EUR 3.47 bn.
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 184. Refinancing – “HESSENKASSE”
Special Fund “HESSENKASSE”
On 4 July 2017, Hesse's Minister of Finance Thomas Schäfer and the Minister of the Interior Peter
Beuth presented the programme to relieve Hessian municipalities of debt from cash advances.
Regional conferences of both Ministers followed in Marburg, Gießen, Kassel, Darmstadt, Dietzenbach,
Taunusstein and Fulda.
Unique nationwide programme to press the “reset button” for many municipalities
Hessian municipalities have amassed a cash advance portfolio of around EUR 5 bn.
Full repayment of the participating municipalities’ cash advance debt is foreseen from September
2018.
Participation by municipalities in the programme is voluntary. In future, cash advances will only be
permissible to cover the short-term liquidity needs of municipalities. The introduction of the
mandatory approval of budgets by municipal supervisory authorities, with the key requirement of a
balanced profit/loss and financial budget, is aimed at ensuring adherence to this condition.
In addition, the State of Hesse offers a programme to promote investment, with a volume of around
EUR 620m, to benefit financially or structurally weak municipalities that manage their resources
economically and do not benefit from debt relief from HESSENKASSE (financed out of the state
budget).
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 194. Refinancing – “HESSENKASSE”
Income and Expenditure of “HESSENKASSE”
INCOME
INCOME
Districts, cities and
State of Hesse
municipalities pay a
pays an annual
maximum annual
amount about
amount of
EUR 145m to
Ø EUR 72m p.a into
HESSENKASSE
HESSENKASSE (EUR
for a 30-year HESSENKASSE makes 25 per capita) for a 30-
period interest and principal year period
repayments on the repaid
cash advances
Refinancing on the money and
capital markets, in particular for
difference (time and volume) bet-
ween income and repayment of
cash advances
Intention to establish direct liability by the State of Hesse for the “HESSENKASSE” special fund
WIBank has a 100% debt claim against the “HESSENKASSE” special fund
Source: Presentation from the Ministry of Finance and the Ministry of Interior and Sport of State of Hesse
“Das Investitionsprogramm der Hessenkasse” as of 24.10.2017
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 204. Refinancing – “HESSENKASSE”
Funding with focus on “HESSENKASSE”
WIBank will raise long-term funds on the capital markets to cover the liquidity profile of
HESSENKASSE
o Increasing refinancing needs from 2018
o Debt funding primarily in mid- and long-term maturities (maximum 30 years)
o WIBank will be more active within capital markets from 2018
Maintenance of WIBank’s funding principles
o Continuing in maturity-matched funding of new business
o Aim of further expanding investor base and funding curve
o Plan to issue benchmarks and private placements – particularly in longer maturity
segment
o Issuing currency will be EUR only
o Close coordination between WIBank and State of Hesse with respect to issuance
activities
o Coordination of funding activities within capital markets with Helaba’s treasury
department
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 21Your Contact Persons for any questions and enquiries:
Head of Funding (Helaba)
Martin Gipp
Tel: +49 (0)69 9132-1181
E-Mail: Martin.Gipp@helaba.de
Head of Treasury (WIBank)
Philipp Kaufmann
Tel: +49 (0)69 9132-4487
E-Mail: Philipp.Kaufmann@wibank.de
Managing Director (WIBank) Wirtschafts- und
Dr. Michael Reckhard Infrastrukturbank Hessen
Tel: +49 (0)69 9132-4086 Neue Mainzer Straße 52-58
E-Mail: Michael.Reckhard@wibank.de 60311 Frankfurt am Main
https://www.wibank.de/wibank/investorrelation
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 22Disclaimer
This presentation and the information contained herein was prepared by “Wirtschafts- und Infrastrukturbank Hessen“ (“WIBank“)
for information purposes only and uses indicative, non-binding market data and prices.
This presentation is intended exclusively for professionals and eligible counterparties which are located outside of the United
States of America.
This presentation does not constitute investment advice and should not be used as a substitute for your own analysis. The
information and any opinions contained herein are valid as of the date of this publication and are subject to change without
notice. Any transactions undertaken are entirely at the risk of the user.
The compilation of this material is based upon information and processes, which WIBank believes are appropriate and
adequate. Whilst every effort has been taken to ensure the accuracy of the material, no guarantee is given nor liability assumed
for the information contained herein. Past performance, simulations and forecasts are not reliable indicators of future
performance.
User actions based upon the implemented development strategy are not risk free. Unexpected interest rate and/or price
fluctuations may, depending on the timing and extent, lead to significant economic disadvantages for the user.
Due to the personal circumstances of each client, these notes cannot replace tax advice in individual cases. Potential buyers of
financial instruments should consult their legal and tax advisors as to the taxation consequences of purchasing, holding and
selling of such instruments. The tax treatment may be subject to future changes.
WIBank does not offer consulting or advisory services relating to taxation, accounting and legal issues. Investors should consult
their own, independent advisors before entering into any transactions.
This presentation and its contents may not be distributed in any form without the express, prior, and written permission of
WIBank.
© Wirtschafts- und Infrastrukturbank HessenStatutory and Refinancing Guarantee
“For all liabilities of the Wirtschafts- und
Infrastrukturbank Hessen, the State of Hesse
is liable as guarantor without limitation, to the
extent that the satisfaction of the creditors from
the assets of the Wirtschafts- und
Infrastrukturbank Hessen is not possible
(statutory guarantee).”
“The State is directly liable for the loans raised
by the Wirtschafts- und Infrastrukturbank Hessen
as well as for the bonds issued by the Wirtschafts-
und Infrastrukturbank Hessen ….”
(refinancing guarantee)
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 24Statutory Guarantee of the State of Hesse
“The state liability is payable upon first demand.
Thus, a timeliness of payment is warranted.“
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 25Risk weight of 0 according to CRR
There is no difference between the payment
obligations of WIBank and the State of Hesse.
The requirements of article 116 section 4 CRR for
the assessment of receivables from WIBank, which
are covered by the statutory guarantee and thus have
equal risk status as the State of Hesse, are
considered to be fulfilled.
© 2018 Wirtschafts- und Infrastrukturbank Hessen, rechtlich unselbstständige Anstalt in der Landesbank Hessen-Thüringen Girozentrale 26You can also read
