The specialist in international transport finance. DVB Bank Group Client Presentation

Transcription

1 The specialist in international transport finance DVB Bank Group Client Presentation Frankfurt/Main, August 2018

2 Disclaimer This presentation has been prepared by DVB Bank Group. This presentation does not contain or constitute an offer, or the solicitation of an offer, to buy or subscribe for securities to any person. This document is not a prospectus. The presentation is a short summary description of certain aspects in respect of DVB Bank Group. It may not contain all relevant information in respect of the topics covered. This presentation is therefore not a sufficient basis for any investment decision in respect of any securities of DVB Bank Group. This presentation contains forward-looking statements which include statements about our beliefs and expectations as well as the assumptions underlying them. Such statements speak only as of the day they are made since they are based on plans, estimates and projections currently available to the management of DVB Bank Group. Forward-looking statements contain risks and uncertainties, and it cannot be guaranteed that they will turn out to be correct in light of future events or developments. Information and opinions contained in this presentation have been compiled or arrived from sources believed by DVB Bank Group to be reliable. Any statements about DVB Bank Group s market position are based on DVB Bank Group s own estimates, unless explicitly stated otherwise herein. Although the information shown herein has been taken from sources which are believed to be reliable or is based on DVB Bank Group s own estimates, no warranty or representation is made as to the correctness, completeness and accuracy of the information or the assessments made on its basis. DVB Bank Group accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation. Client Presentation August 2018 Disclaimer Page 2

3 Contents 01/ DVB Business model 5 Competitive strengths 02/ DVB Business divisions and services 11 Lending volume 13 Shipping Finance 24 Aviation Finance 35 Land Transport Finance 44 Financial Institutions and Syndications 47 DVB Corporate Finance 53 Investment Management 04/ DVB About us 64 Structure 67 Board of Managing Directors 71 Supervisory Board 72 Staff 05/ DVB Further information 74 DVB worldwide 76 Imprint 77 Photo credits 03/ DVB Financials and outlook 58 Financial figures 60 Macroeconomic environment and outlook Page 3

4 01/ DVB Business model 5 Competitive strengths

5 DVB s business model (1) Structured Asset Lending Shipping Finance Aviation Finance Asset Management Client Account Risk Distribution & Loan Participations Land Transport Finance Corporate Finance Solutions Private Equity Sourcing & Investments Asset & Market Research Client Presentation August 2018 Competitive strengths Page 5

6 DVB s business model (2) Business divisions Business areas Products Clients/Co-investors Core regions Shipping Finance / Tankers / Dry bulk carriers / Container vessels / Car carriers / Container boxes In all Transport Finance divisions: / Structured Asset Lending / Small to large public and private companies (shipowners, shipping companies, trading houses and charterers) / Europe / The Americas / Asia Aviation Finance / Passenger aircraft / Freighter aircraft / Aircraft engines / Risk Distribution & Loan Participations / Corporate Finance Solutions / Private Equity Sourcing & Investments / Airlines / Operating lessors / Logistic companies / Europe / North & South America / Asia / Middle East/Africa / Asset & Market Research Land Transport Finance / Rail-based (freight cars, locomotives, passenger train sets) / Rail-related (container chassis) Aviation Finance solely: / Advisory Services / Equipment lessors / Railway companies / Shippers or industrial clients with own rail equipment fleets / Europe / North America / Australia / Aviation Asset Management Investment Management Investment & asset management: / Aviation Investment Management (AIM) / Private Equity Sourcing & Investments / Institutional investors (insurance companies, pension funds, hedge funds, private equity firms) / Rail car/intermodal owners / Global coverage Client Presentation August 2018 Competitive strengths Page 6

7 DVB s competitive strengths Business model focused and international in scope Business policy conservative Organisation transparent structures and swift decision-making Human resources qualified and experienced Services intensive, industry-specific client service Asset & Market Research extensive and award-winning Credit portfolio diversified by multiple criteria and categories Refinancing granular and maturity-matched Own funds sound capital base Client Presentation August 2018 Competitive strengths Page 7

8 DVB s SWOT analysis Strengths Weaknesses Opportunities Threats / Focused business model and a global presence in key transport markets / Conservative business policy / Transparent structures and swift decisions / Qualified and experienced staff / Extensive and award-winning market and asset expertise / Intensive, industry-specific client service / Diversified credit portfolio / Granular and matched-maturity funding / Sound capital base / Higher liquidity costs, compared to most competitors / Relatively high sector exposure / Global presence requires high staff resources / No material client deposits / Exposure to the euro/us dollar exchange rate, with an impact on growth and results / Dependence on geopolitical developments / Realisation of margins in line with risks taken / Building new client relationships / Broaden the product portfolio and enhance cross-selling / Expanding the advisory and other services offered to clients, banks, and investors / Boosting our position as specialist in international transport finance / Reduced offer of traditional ship financing / High level of early repayments, which have a negative impact on the net interest margin / Rising number of insolvencies, especially on the shipping and offshore markets / Significant decline in transport asset values, in various market segments / Rising threat of recession, on a global scale / Distortions on the global financial markets / Indebtedness of certain industrial nations and emerging economies / Rise of the US dollar against the euro / Further increasing regulatory requirements / Development of commodity prices, in particular oil prices / Rising liquidity costs, due to weaker integration into DZ BANK Group S W O T Client Presentation August 2018 Competitive strengths Page 8

9 Instruments for sustainably dealing with credit risks Intensive research and close client contact Close monitoring of compliance with all lending agreements Early Warning List Closely Monitored List Watch List Default List / Forecasting future market developments and asset values forms the basis of our portfolio strategy and individual deal decisions / Increased visit frequency depending on risk situation / e.g. specific covenants in the Shipping Finance contracts, like value maintenance clauses / Identification of potentially higher risks in case the market environment continues to deteriorate by quarterly portfolio stress tests / Basis: changing asset values (specific haircuts) and counterparties creditworthiness (increase of probability of default) / Early detection of increased risks of potential problem exposures / Close monitoring of transactions that have to be restructured and/or of transactions with a potential or already existing need to recognise allowance for credit losses / In general, all transactions are placed on the Default List if risks have materialised, and the deal has been classified as defaulted (Default Rating). Client Presentation August 2018 Competitive strengths Page 9

10 02/ DVB Business divisions and services 11 Lending volume 13 Shipping Finance 24 Aviation Finance 35 Land Transport Finance 44 Financial Institutions and Syndications 47 DVB Corporate Finance 53 Investment Management

11 Customer lending volume bn US$ bn 30 Jun Dec 2017 % 30 Jun Dec 2017 % Shipping Finance Aviation Finance Land Transport Finance Investment Management Core business NCA portfolio Total By business division 22.5% NCA portfolio 1 By region 2.7% Offshore 3.3% Middle East & Africa 4.4% South America 0.4% Australia & New Zealand 77.5% Core business thereof: 39.3% Shipping Finance 29.5% Aviation Finance 7.6% Land Transport Finance 1.1% Investment Management 15.8% Asia 22.9% North America 50.6% Europe 1 During the course of restructuring its business divisions, a process initiated in 2017, the Bank decided to run down certain parts of its portfolios over the course of the next years. This NCA portfolio comprises non-performing loans, as well as assets from the Transport Finance and Investment Management activities which are no longer in line with DVB's strategy. Client Presentation August 2018 Lending volume Seite 11

12 Portfolio collateralisation Loan-to-value ratio relation between drawn loans and the market value of the assets financed % Shipping Finance Aviation Finance Land Transport Finance Client Presentation August 2018 Lending volume Page 12

13 Shipping Finance In-depth expertise Page 13

14 Shipping Finance In-depth expertise Our mission statement: To create sustainable risk-adjusted income through providing bespoke financial solutions to our diversified client base, leveraging our unique global position in the shipping industry / Our dedicated approach and our commitment to the shipping industry bring us closer to our clients. / Our Shipping Finance portfolio is diversified across sectors and geographic regions. / Our target assets include, amongst others, tankers (crude oil, gas, chemical, product), dry bulk vessels, container vessels and container boxes. / We analyse and continuously track the vessels financed from the yard to the scrapyard. / Our risk management and research are ingrained in the process and involved throughout the life cycle of a loan. Client Presentation August 2018 Shipping Finance Page 14

15 Shipping Finance portfolio (30 Jun 2018: 7.2 bn) Total lending volume by vessel type Total lending volume by country risk 3.2% Car carriers 5.5% Container boxes 1.4% Others 2.1% Middle East & Africa 3.1% Offshore 1.9% South and Central America & Caribbean 10.0% Container carriers 54.8% Tankers thereof: 16.5% Crude oil tankers 14.5% Product tankers 14.2% Gas tankers 9.6% Chemical tankers 15.3% Asia & Australia 53.9% Europe 25.1% Bulk carriers 23.7% North America Client Presentation August 2018 Shipping Finance Seite 15

16 Shipping Finance Deal of the year 2017 CMA CGM CMA CGM S.A. (CMA CGM) is the third-largest container liner group globally with approximately 2.5 million TEU capacity and approximately 12% market share. It has been privately owned since its founding in Marseille in With the first transaction dating back to 1998, the company is a long-term client of DVB. Despite the challenging conditions in the container market, CMA CGM proved its resilience and has been playing a leading role in the consolidation of the industry. In 2016, we closed our first bilateral JOLCO transaction for CMA CGM, financing a fleet of container boxes. The competitiveness and efficiency shown during that transaction has been highly valued by the company and resulted in them approaching us for this new JOLCO opportunity regarding a portfolio of new dry container boxes, which closed in May The JOLCO was structured and arranged by DVB, whereby we were not only a senior term loan provider, but a lease and equity arranger as well, thanks to the structured leasing expertise developed within our Shipping Finance Asia team. Together with the Tokyo colleagues, the team was able to source the equity to be raised by a Japanese equity house. By sourcing the equity for this transaction as well as providing the senior debt financing, we were able to offer a 100% finance solution to a longstanding client of the Bank and a key player in the industry. Client Presentation August 2018 Shipping Finance Page 16

17 Shipping Finance Transaction highlights 2017 TORM Solvang AMA Capital Partners/ Värde Partners / Financing of nine Medium Range (MR) product tankers for one of the top players in the international product tanker market. / DVB was part of the lender group of four international shipping banks which participated on a fully equal basis. / This large and well-structured deal received special market visibility due to TORM s special position in the market. / Refinancing of four 17,000 cbm LPG/E carriers built in 2007/2008 and post-delivery financing of two 21,000 cbm LPG/E with 2019 delivery for this shipping company leading in transportation of LPG, petrochemical gases and ammonia. / DVB was asked to join in on this facility with a final stake of 25%. / Providing financing to the joint venture between Värde, a Minneapolis based alternative asset manager, and AMA Capital Partners, an experienced maritime advisor, for five eco-design container vessels (two 1,700 TEU and three 2,500 TEU). / The transaction was structured as a 50:50 club deal. The vessels are commercially and technically managed by Reederei Nord. Client Presentation August 2018 Shipping Finance Page 17

18 Shipping Finance Some important deals 2017 AMA Capital Partners and Värde Partners Senior Secured Term Loan Facility 2 x 1,700 TEU 3 x 2,500 TEU containerships US$48 million Co-Arranger & Facility Agent Canada Steamship Lines Refinancing 4 x self-unloading dry bulk vessels US$20 million Bilateral Pacific International Lines Senior Secured Term Loan Facility for Japanese Operating Lease (JOLCO) 2,000 TEU container vessel US$15 million Bilateral Samos Steamship Refinancing 1 x 2008 Very Large Crude Carrier US$30 million Bilateral Tankerska plovidba Senior Secured Term Loan Facility Refinancing of 2 x Suezmax tankers and 2 x Aframax tankers Financing of 2 x newbuild Aframax tankers US$130 million Co-Arranger TORM Fleet financing 9 x Medium Range tankers US$130 million Co-Arranger CMA CGM Japanese Operating Lease with Call Option (JOLCO) Fleet of container boxes JOLCO Arranger Iolcos Hellenic Maritime Fleet refinancing US$37 million Bilateral Solvang Senior Secured Term Loan Facility 4 x 2007/2008 built 17,000 cbm LPG carriers 2 x 21,000 cbm LPG newbuilds US$158 million Mandated Lead Arranger Winning International Group Senior Secured Term Loan Facility 1 x 2014 built Capesize bulker US$18 million Bilateral Client Presentation August 2018 Shipping Finance Page 18

19 Shipping Finance Accolades 2016 / Bank Debt West; Deal of the Year 2015 Marine Money Shipping / Export Credit Agency West; Deal of the Year 2015 Marine Money Shipping 2013 / Editor s Choice Award Navigator Gas Marine Money / Editor s Choice Award Sovcomflot Marine Money / Contribution to Ship Financier Marine Money / Bank Debt Deal of the Year 2012 Marine Money Offshore / Editor s Choice Award 2012 Norskan Offshore Marine Money Offshore / The Ship Finance Award Seatrade Asia 2012 / Shipping Financier of the Year Greek Shipping Awards (Lloyd s List) / Leasing (East) Deal of the Year 2011 Marine Money / Securizations Deal of the Year 2011 Marine Money Client Presentation August 2018 Shipping Finance Page 19

20 Shipping Finance Accolades 2011 / Editor s Choice of the Year West Marine Money / Editor s Choice of the Year Shipping Research Marine Money / Leasing Deal of the Year East Marine Money / Project Finance Deal of the Year Marine Money / Export Credit Deal of the Year West Marine Money 2010 / Asia Ship Finance Award 2010 Seatrade Asia / Shipping Debt Deal of the Year South America Jane s Transport Finance / Shipping Leasing Deal of the Year Jane s Transport Finance 2009 / Shipping Deal of the Year North America Jane s Transport Finance / Award for Contribution to Ship Finance 2008 Marine Money Client Presentation August 2018 Shipping Finance Page 20

21 Shipping Finance Accolades 2008 / Best Shipping Finance Research Lloyd s Shipping Economist 2007 / Shipping Debt Deal of the Year Europe Jane s Transport Finance 2006 / Restructuring Deal of the Year 2006 Marine Money / Best Shipping Finance Research Lloyd s Shipping Economist / Ship Finance Personality for Dagfinn Lunde Lloyd s Shipping Economist / M&A Deal of the Year 2005 Marine Money 2005 / Best Shipping Finance Research Lloyd s List Economist Client Presentation August 2018 Shipping Finance Page 21

22 Shipping Finance Accolades 2004 / Best Shipping Finance Research Lloyd s Shipping Economist / Shipping Equity Deal of the Year Jane s Transport Finance / Most Innovative Shipping Finance Deal Lloyd s Shipping Economist / Best Ship Financier Lloyd s List Maritime Asia 2002 / Most Professional Overall Finance Service to Shipping Lloyd s Shipping Economist 2001 / Best Overall Knowledge of the Tanker Sector Lloyd s Shipping Economist 2000 / Most Innovative Ship Finance Institution Worldwide Lloyd s Shipping Economist 1999 / Best Ship Financier Lloyd s List Maritime Asia Client Presentation August 2018 Shipping Finance Page 22

23 Shipping markets Outlook 2018 / The positive macroeconomic environment is benefitting trade in most shipping sectors. The dry bulk and container shipping market fundamentals are expected to continue to improve in However, earnings and values have already improved steeply and we do not expect any major additional improvement for these sectors. The crude and product tanker markets are suffering from negative short-term factors and are likely to improve slowly later this year. / The threat of an increase in protectionist trade policies is growing. The impact has so far been limited with positive trade growth registered in the first half of Further developments need to be monitored. / Excess capacity in the existing fleets will continue to represent a challenge for most shipping sectors. The difficult environment in most shipping and offshore sectors is putting pressure on shipyards which continue to propose attractive prices. Nonetheless, ordering activity was slow during the first half of 2018, which favours a rebalancing of supply and demand. Further ordering may be a major risk to continued recovery. / Major regulatory changes are on the way. However, although the Ballast Water Treatment was due to become effective in September 2017, the International Maritime Organization has granted a two-year extension. As this new regulation translates into additional investments, it was expected to accelerate the phasing out of older units (especially larger ones for which ballast water treatment installations are most expensive). The extension will postpone the phasing out of these units Client Presentation August 2018 Shipping Finance Page 23

24 Aviation Finance Integrated platform solutions Page 24

25 Aviation Finance Integrated platform solutions (1) Our mission statement: As a hybrid institution, we provide our customers with the most efficient blend of capital and services at any period in time and at any point along the industry cycle. / We feature a unique platform of Aviation Finance services and products employing industry-skilled individuals. / We continually develop our asset-based lending practice to profitably expand our business. / We are willing to assume residual value risks based on in-depth research and market/asset knowledge. / We take a proactive approach to maintaining and growing our portfolio. / We like to ensure that our distinctive features are fully recognised and valued. Client Presentation August 2018 Aviation Finance Page 25

26 Aviation Finance Integrated platform solutions (2) Structured Asset Financing Aviation Asset Management Aviation Financial Consultancy Aviation Investment Management Asset Research Information & Strategic Marketing 2017 Client Presentation August 2018 Aviation Finance Page 26

27 Aviation Finance portfolio (30 Jun 2018: 5.4 bn) Total lending volume by aircraft type 3.5% Regional jets thereof: 3.3% Embraer 0.2% Bombardier 5.3% Freighters thereof: 5.3% Boeing 1.8% Turboprops thereof: 1.4% ATR 0.4% Bombardier Total lending volume by country risk 2.0% Offshore 3.6% South & Central America 8.5% Middle East & Africa 51.8% Narrowbody pax thereof: 29.5% Airbus 22.3% Boeing 23.7% Asia & Australia 36.4% Europe 37.6% Widebody pax thereof: 24.9% Boeing 12.7% Airbus 25.8% North America Client Presentation August 2018 Aviation Finance Seite 27

28 Aviation Finance Deal of the year 2017 Sora Airlease In July 2017, DVB, in its capacity as Lead Arranger and Sole Underwriter, closed a limited recourse term loan financing a portfolio of 17 aircraft with Sora Airlease (Sora). Sora is a newly-established joint venture between Merx Aviation and Orix Aviation, two wellestablished and close clients of DVB. The well-diversified portfolio of mid-life assets, which included stellar lessee names such as Southwest Airlines, British Airways and Alaska Airlines, formed a seed portfolio for the new joint venture and offered the opportunity to build a platform with the flexibility to grow and explore multiple exit opportunities. The portfolio s size and mid-life average age represented challenges for some competing banks. By utilising the resources and expertise of the wider DVB Aviation platform, including DVB s Aviation Asset Management, Aviation Credit and Aviation Research teams, DVB was able to analyse, structure and risk adjust the financing of the portfolio. Furthermore, the execution capabilities of DVB were an added attraction for Sora which was looking to meet a tight closing timetable. As part of DVB s goals to provide complete structured financing solutions to our aviation clients, DVB first closed the transaction with Sora and subsequently brought in new lenders to the joint venture, providing financing access to Sora as it continues to grow its fleet to new lenders in Asia, Europe and the USA. Client Presentation August 2018 Aviation Finance Page 28

29 Aviation Finance Transaction highlights 2017 Air Canada Ping An Leasing Haitong UT Leasing / DVB arranged the senior debt of a JOLCO financing (Japanese Operating Lease with Call Option) for the delivery of a Boeing to Air Canada. / The debt was underwritten by DVB Transport Finance Ltd in Tokyo, and DVB brought in another institution as senior lender, which further diversified the airline s funding base. / In addition, DVB is Agent, Security Trustee and Account Bank in this transaction. / Lead Arranger for two short-term loan facilities for two new A aircraft on lease to Vietnam Airlines, marking our first transactions with the Chinese lessor. / Our execution capabilities within a short timeframe proved crucial for the successful delivery of the first aircraft to the operator, whilst the ability to bring three additional partner banks into the two respective facilities further value-add to the client s financing needs. / Lead Arranger for a full recourse portfolio financing facility for four Airbus narrowbody aircraft on lease to Volaris and Philippine Airlines. / Our experience in providing such portfolio financing solutions enabled the client to successfully acquire the aircraft assets from the seller. / This marks our first cooperation with Haitong UT Leasing, with DVB being one of the first international financiers for the budding leasing company. Client Presentation August 2018 Aviation Finance Page 29

30 Aviation Finance Some important deals 2017 Alaska Airlines/Horizon Air Aircraft remarketing 9 x B737 Q400 turboprop aircraft Remarketing Agent DVB's Aviation Asset Management 44 commercial aircraft sold/leased, 126 aircraft under lease management in 2017 Orix Aviation/Merx Aviation Limited Recourse Financing Portfolio of 17 aircraft Debt Arranger & Underwriter Apollo Aviation Group Limited Recourse Warehouse Financing Large portfolio of aircraft Lender DVB's Aviation Investment Management Investment Advisor to equity funds owning 121 commercial aircraft 1 engine 2 airline equity investments Ping An Leasing Senior Debt Financing 1 x A on lease to Vietnam Airlines Agent & Arranger Avianca Full Recourse Financing 2 x A x A Agent & Arranger Goshawk PDP Financing 3 x B Agent & Arranger SunExpress Full Recourse Financing 2 x B Agent & Arranger DAE Capital PDP Financing 15 x A Co-Arranger & Security Agent Client Presentation August 2018 Aviation Finance Page 30

31 Aviation Finance Accolades 2018 / Bank Loan Deal of the Year Airfinance Journal / Operating Lease Deal of the Year Airfinance Journal / Used Aircraft Deal of the Year Airfinance Journal / Export Credit Deal of the Year Airfinance Journal 2017 / Asia-Pacific Bank of the Year Airline Economics / Aircraft Securisation Deal of the Year US Global Transport Finance / Aircraft Finance Portfolio Acquisition Global Transport Finance 2016 / Europe Deal of the Year Airfinance Journal / Used Aircraft Deal of the Year Airfinance Journal 2015 / Commercial Loan Deal of the Year Airfinance Journal Client Presentation August 2018 Aviation Finance Page 31

32 Aviation Finance Accolades 2013 / Used Aircraft Deal of the Year 2012 Airfinance Journal 2012 / Sale/Leaseback Deal of the Year 2011 Airfinance Journal / Predelivery Payment Deal of the Year 2011 Airfinance Journal / North America Deal of the Year 2011 Airfinance Journal 2010 / Regional Jet Deal of the Year Airfinance Journal / Aviation Research House of the Year Jane s Transport Finance 2009 / Aircraft Debt Deal of the Year North America Jane s Transport Finance / Aircraft Debt Deal of the Year South America Jane s Transport Finance Client Presentation August 2018 Aviation Finance Page 32

33 Aviation Finance Accolades 2008 / Aircraft Debt Deal of the Year Asia Jane s Transport Finance / Aircraft Debt Deal of the Year Middle East Jane s Transport Finance / Aircraft Capital Markets Award Jane s Transport Finance / PDP Deal of the Year Airfinance Journal / Cargo Finance Deal of the Year Airfinance Journal / Africa Deal of the Year Airfinance Journal 2007 / Aircraft Debt Deal of the Year Africa Jane s Transport Finance 2005 / Long Term Aircraft Finance Deal of the Year Middle East Jane s Transport Finance 2002 / Aircraft Debt Deal of the Year Europe Jane s Transport Finance Client Presentation August 2018 Aviation Finance Page 33

34 Aviation markets Outlook 2018 / Demand for passenger transport remains robust as global air traffic grew 6.8% for the first five months of 2018 (year-on-year). Airfreight growth decreased somewhat (to 5.3%), as the inventory re-stocking cycle came to an end and trade tensions increased. Passenger yields improved by just over 3% in 2017, a trend projected to continue in Fuel and labour cost are likely to rise for airlines. / Global airline net profits far more than doubled between 2014 and 2015, and remained at high levels in 2016/2017. Although preliminary Q figures indicate an increased industry profit, a slight drop is projected for the full year (ca. US$ 34 billion). Fuel cost are expected to increase from 21% to 24% of airline expenses, despite ever improving fuel efficiency of the global jet fleet. Labour cost are likely to rise 2.2% per available tonne kilometre. All in all, there are no industry-specific reasons indicating a downturn in demand but unexpected economic headwinds, political instability or terrorism could undermine consumer confidence in international (air) travel. / After the 2013/2014 peak in jet orders (ca. 3,500 p.a.), orders dropped by ca. 39 % in 2015/2016 but recovered to just over 2,500 in As of mid-2018, new aircraft order levels are close to 2017 levels at the same point in time; however, the Farnborough Air Show, a major sales event, could bring a few surprises. While no major new programme launches are expected, Airbus has recently taken over the ex-bombardier CSeries programme, which could result in several (re-)launch orders. Overall, the backlog for commercial jets remains strong. With restricted new delivery volumes in the mainstream single-aisle market (engine supply bottleneck), airlines are eager to even deploy older used equipment to maintain their schedules. The grounding of several Rolls Royce powered Boeing 787 s due to engine problems has revived short-term demand for older twin-aisle jets as replacement interim lift. / Modern single-aisle aircraft values remain firm but certain regional aircraft types and select larger twin-aisle jets are showing clear weakness. Values of aircraft on lease contracts are very strong as investors compete with each other for opportunities to expand their portfolios. In general, there is ample commercial financing available for new and increasingly also for used aircraft, especially if sold with a lease attached. At current fuel cost levels, both the older generation and the new technology aircraft remain competitive. There is no reason to expect a sharp downturn in the short term for modern single-aisles such as the Airbus A320/321 and the Boeing 737, but despite short-term pick-up in 2018 demand, there are concerns about the values of select twin-aisles such as the Airbus A330 as well as the Boeing 777. Client Presentation August 2018 Aviation Finance Page 34

35 Land Transport Finance Consistent client franchise Page 35

36 Land Transport Finance Consistent client franchise We have a clear mission statement: We highly value our client relationships. The goal is to increase our client franchise as the leading rail asset financing partner in our core regions. Based on our / understanding of the market, / focus, / capacity to execute transactions, and / flexibility, we offer added value by / advising on intelligent asset finance solutions, and / taking appropriate risk positions that capitalise on the cyclical nature of the underlying sectors. Client Presentation August 2018 Land Transport Finance Page 36

37 Land Transport Finance portfolio (30 Jun 2018: 1.4 bn) Total lending volume by asset type 6.4% Rail-related thereof: 6.4% Container chassis Total lending volume by country risk 3.2% Australia 40.8% North America 56.0% Europe 93.6% Rail-based thereof: 66.2% Freight cars 16.6% Locomotives 9.7% Regional passenger train sets 1.1% Passenger coaches Client Presentation August 2018 Land Transport Finance Seite 37

38 Land Transport Finance Deal of the year 2017 VTG VTG AG, founded in 1951 and headquartered in Hamburg, is the largest rail car lessor in Europe managing over 80,000 rail cars globally. The company is listed at the Frankfurt Stock Exchange and part of MDAX. Our relationship with VTG has historically been strong and we entered into many on- and off-balance sheet financings over the last 25 years. Besides its European rail car fleet, VTG is also an active player in the North American rail car market. VTG Rail Inc., a 100% subsidiary of VTG, owns a mid-sized fleet of around 5,250 railcars operating in the US, Canada and Mexico. In addition, the company has 1,000 cars on order to be delivered until mid The fleet consists mainly of covered hoppers and tank cars on lease to a diversified group of lessees. Mid 2017, VTG approached its main relationship banks to provide a standalone facility to finance its entire fleet operating in North America. We were eventually mandated as Joint Mandated Lead Arranger to arrange a senior secured term financing as key member of a club deal alongside two other banks. The main drivers for our mandate were our strong track record in closing complex transactions with VTG Europe as well as our long-standing experience and track record in the North American rail market. Especially the latter was important for the client and led in an excellent transatlantic co-operation between our New York and Frankfurt teams to a smooth closing of the transaction. Client Presentation August 2018 Land Transport Finance Page 38

39 Land Transport Finance Transaction highlights 2017 National Steel Car Trip Rail Master Funding Bentheimer Eisenbahn / Arranger and Sole Lender in a revolving senior secured warehouse loan with an accordion feature for a North American railcar manufacturer. / The funds are used to finance a diversified fleet of brand-new railcars for the cross-border rail market. / The financing can be syndicated. / Arranger and sole provider of a liquidity facility for a Master Funding LLC in the US to more efficiently support a railcar asset-backed securities of a fleet of more than 17,500 railcars being operated in North America. / The transaction followed a string of earlier transactions that the Bank created with own innovative ideas, and also allowed taking a sole Co-Manager role on a respective bond financing / Financing for a core client in local public rail transport, provided jointly with syndication partner Grafschafter Volksbank as part of a meta financing deal. / The senior secured loan based on an operating lease is used for the construction and long-term financing of five new Alstom Lint41 DMUs which will be running under a long-term franchise agreement. / As part of the transaction, DVB also assumed the residual value risks from this very proven equipment, which are based on a standard platform. Client Presentation August 2018 Land Transport Finance Page 39

40 Land Transport Finance Some important deals 2017 ARS Altmann Senior Secured Term Loan Fleet of 277 open car carriers Arranger & Co-Lender Netinera (Die Laenderbahn) Operating Lease Financing Fleet of 4 x E-locos and 7 x double-deck coaches Arranger & Co-Lender Bentheimer Eisenbahn Operating Lease 5 x Lint41 Arranger & Co-Lender VTG Senior Secured Term Loan Fleet of 6,167 freight cars US$172 million Arranger & Underwriter Enkay Leasing Lease Co. Initial Warehousing National Steel Car produced rail cars US$75 million Arranger & Sole Lender Client Presentation August 2018 Land Transport Finance Page 40

41 Land Transport Finance Accolades 2018 Rail Finance Deal of the Year Europe Global Transport Finance 2017 / Rail Capital Markets Deal of the Year Americas Global Transport Finance / Rail Finance Deal of the Year Americas Global Transport Finance / Best International Transport Finance Provider Germany Transport News 2015 / Rail Finance Deal of the Year Europe Global Transport Finance 2014 / Rail Finance Innovator of the Year Global Transport Finance / Rail Finance Deal of the Year Europe Global Transport Finance 2012 / Rail Finance Innovator of the Year Global Transport Finance 2011 / Rail Finance Innovator of the Year Jane s Transport Finance Client Presentation August 2018 Land Transport Finance Page 41

42 Land Transport Finance Accolades 2010 / European Rail Deal of the Year Jane s Transport Finance 2009 / Americas Rail Deal of the Year Jane s Transport Finance 2008 / Rail Finance House of the Year Jane s Transport Finance / US Rail Deal of the Year Jane s Transport Finance 2007 / Rail Finance House of the Year Jane s Transport Finance / US Rail Deal of the Year Jane s Transport Finance 2006 / European Rail Deal of the Year Jane s Transport Finance 2005 / Road Finance Innovator Jane s Transport Finance Client Presentation August 2018 Land Transport Finance Page 42

43 Land transport markets Outlook 2018 / Demand perspectives for rail freight transport are positive for Europe, North America and Australia. Transport price, lease rate and utilisation rate increases can be expected. The outlook for the European rail passenger market is positive as well. / In its reference scenario, the European Commission expects an annual 1.6% increase of European logistics and freight transport activity between 2010 and SCI Verkehr forecasts a 1.4% rail freight performance (tonne-km) growth p.a. in Europe, 1% growth p.a. for new locomotives and new freight cars as well as 4% p.a. for new urban rail equipment worldwide between 2016 and / The US Department of Transportation s Bureau of Transportation Statistics and Federal Highway Administration projected a compound annual growth rate of +0.8% in rail freight for the period Moody s projects a 1.25% to 2.0% rail freight carload volume growth scenario for North America in FTR Intel forecasts a rail freight growth of 2.7% in However, a threat of a full-blown trade dispute is looming, especially between the United States and China. / Coal markets are still depressed in the US (tighter emission regulations) and the United Kingdom (doubling of the carbon tax and closure of some coal-powered stations), subdued in Australia (lower growth in demand from Asia, but the China-Australia Free Trade Agreement lifts many import duties), but still doing fine in continental Europe (more import due to mine closures and retreat from nuclear energy in Germany). President Trump s emphasis on the reliance on coal could stimulate the important coal sector in the US short-term. / Intermodal transport is likely to be positive. The International Union for Road-Rail Combined Transport (UIRR) has a slightly positive business outlook for Stephens Inc. expects an increase of 5.4% in 2018 intermodal volumes in the US. / Locomotive and freight car demand is weak in Australia and the US, since current fleets must be better utilised first. In Europe, demand is for electric locomotives and freight cars significantly growing. Asset prices are stable or increasing outside energy sectors (coal, oil and sand). / Leasing companies continue to gain market share in Europe and also in the freight car sector in North America / The lack of train drivers gives railroad companies firm headwinds in Europe and the US. However, a lack of truck drivers, almost fully utilised trucking capacity and stricter hours-of-service recording rules for truckers will provide tailwinds in the US. Client Presentation August 2018 Land Transport Finance Page 43

44 Financial Institutions and Syndications Our skills and expertise as an arranger and syndicator mean that our clients can rely on DVB to place their financing requirements. We support DVB s three Transport Finance divisions in raising non-public mezzanine and market debt globally. The key drivers of our strategy are: / We coordinate existing and establish new relationships with global financial institutions (including institutional investors). / We develop and maintain a good understanding of each financial institution s risk appetite and requirements. / We ensure close cooperation with DVB s global transport finance network, research and advisory teams. / We provide competitive pricing structures based on up-to-date information, access to global networks and ad-hoc analysis. / We empower effective management of the syndication process and provide a personalised bespoke approach towards financial institution partners. / We understand the wider economic conditions and how they affect transportation financing. / We offer shipping ECA (primarily maritime) arranging and coordination. / We coordinate secondary loan purchasing. Client Presentation August 2018 Financial Institutions and Syndications Page 44

45 Financial Institutions and Syndications portfolio (30 Jun 2018: mn) Total sell-down volume by business division 7.7% Land Transport Finance 75.4% Aviation Finance 16.9% Shipping Finance Client Presentation August 2018 Financial Institutions and Syndications Page 45

46 Financial Institutions and Syndications Outlook 2018 / Macroeconomic themes expected to affect the transportation market in 2018 include the near-conclusion of Basel IV reforms which sets a clearer course for banks to adjust internal risk policies, rising US interest rates coupled with ECB tapering of its quantitative easing programme (thereby diminishing the ability to access cheap money ) and the continuation of China s international acquisitions. Uncertainty caused by the above factors among others is pressuring long-term costs of liquidity and is expected to contribute to shorter loan tenors being preferred across all industries. / Buoyed by robust passenger and cargo demand, the market expects the global aviation industry to continue its strong performance in More innovative financing structures may be inspired to accommodate aviation clients changing demands in the wake of IFRS 16, a greater scrutiny on tax avoidance, and financiers with a new-found interest in the industry. A greater inflow of capital into the industry will likely intensify competition in an already heated market. Nonetheless, the flow of more structured and bespoke types of deals remains steady, making specialised banks like DVB still competitive. The desire to exploit opportunistic deals as well as to effectively utilise the balance sheet (noting increased capital costs) is therefore expected to remain a priority for financial institutions. / The trend amongst financial institutions to exit/scale down maritime portfolios is likely to continue in 2018 as banks deem these to be non-core investments with an expectation for a more regionalised focus for some. For remaining established lenders, capacity is expected to remain restricted to core clients, or focus upon credit quality and vessel employment. Consolidation will also likely continue as companies seek ways to reduce costs, or the opportunity arises for stronger shipping companies to acquire weaker competitors. / For rail, activity is still expected to remain focused in North America and Europe with a limited number of opportunities. As with 2017, liquidity is likely to increase for rail projects including from the Asia/Pacific region where financial institutions are gaining interest for this asset class. In 2018, appetite is expected to continue for diversified railcar fleets, younger equipment, leasing companies with strong financial track records, and publicly-owned entities Client Presentation August 2018 Financial Institutions and Syndications Page 46

47 DVB Corporate Finance Our mission is to increase non-capital binding revenue, enhance cross-sell of DVB products and services, and contribute to the sustainable top- and bottom-line growth of the DVB franchise. / As a bank-wide resource, DVB Corporate Finance (DVBCF) renders strategic and financial advisory services to our corporate clients. / By leveraging our specialised transportation focus, in-depth corporate finance experience, and DVB s asset-based lending, we create tailor-made financial solutions for our clients. / Our traditional activities include mergers and acquisitions (M&A), advisory services, and private and public placements of debt and equity. The debt capital markets and structured asset finance/asset-backed securities (ABS) presence are a natural extension of DVB s core loan business. / Our Private Placement Group maintains a close dialogue with a variety of global financial and strategic investors to support DVBCF s business initiatives. / Utilising our strong network of corporate clients and lending relationships, we develop strategic dialogues with our clients to deliver integrated financial solutions. Client Presentation August 2018 DVB Corporate Finance Page 47

48 DVB Corporate Finance portfolio (30 Jun 2018) Revenue by business division 3.7% Shipping Finance Revenue by products 24.0% Advisory and Mergers & Acquisitions 48.5% Aviation Finance 47.8% Land Transport Finance 76.0% Capital Markets Client Presentation August 2018 DVB Corporate Finance Page 48

49 DVB Corporate Finance Deal of the year 2017 Empresa Pública Flota Petrolera Ecuatoriana DVBCF acted as Exclusive Financial Advisor and Sole Placement Agent in raising alternative capital on behalf of Empresa Pública Flota Petrolera Ecuatoriana (EP Flopec), the state-owned shipping company of Ecuador. DVBCF has maintained a close strategic dialogue with EP Flopec under a diverse mandate since April 2016 to provide a variety of strategic and corporate finance services, including a sale-and-lease-back of crude oil tanker assets. Founded in 1972, EP Flopec is one of Ecuador s most prominent public companies and a critical conduit for the South American OPEC-member nation s crude oil exports. The company has a long-standing presence in global tanker markets as a highly-respected shipowner and operator of several market-leading tanker pools, including the Panamax International pool. Furthermore, our Shipping Finance Americas team also enjoys a long-standing relationship with EP Flopec. As exclusive advisor, DVBCF assisted the company in sourcing and analysing a variety of strategic alternatives to raise capital and expand its business on optimal terms. DVBCF provided a full suite of corporate finance services, including corporate valuation, assessment of alternatives, financial structuring and modelling, and a global roadshow for institutional investors. In June 2017, DVBCF closed the sale-and-lease-back transaction involving three crude oil tankers. Post-transaction close, DVBCF has continued its engagement with EP Flopec, assisting the company in evaluating a variety of new commercial prospects with strategic capital and operating partners, as well as coordinating with the Ecuadorian government on other national energyrelated projects. Client Presentation August 2018 DVB Corporate Finance Page 49

50 DVB Corporate Finance Transaction highlights 2017 GasLog Greenship Eton Park / Co-manager in issuance of 8.875% Senior Unsecured Notes due 2024 by an international owner and operator of LNG carriers. / DVBCF s role was a direct result of ongoing strategic dialogue to address GasLog s financial and growth objectives plus joint marketing efforts with Arctic Securities to assess various debt capital markets including US institutional high yield and Scandinavian bond markets. / The transaction was GasLog s debut in the US debt capital markets as its first SEC-documented bond, with investors spanning US, Europe, and Scandinavia. / Financial Advisor to Singapore-based dry bulk owner and operator seeking to dispose of vessels and reduce its global leverage. / DVBCF introduced potential buyers and provided strategic advice throughout the entire sell-side process, including preparation of marketing materials and roadshows. / Sales of 14 vessels to Eagle Bulk Shipping and JP Morgan Asset Management were the successful result. / Co-Arranger and Advisor to Eton Park on the sale of its 70% interest in a joint venture established in 2014 for the purpose of owning and leasing a portfolio of narrowbody airframes to select airline operators. / This important transaction reflected DVB s comprehensive expertise in aviation, efficiency in execution, and strong network of institutional and strategic investors. / It showcased strong cooperation with AIM and AAM and allowed DVBCF to build upon its solid reputation as an experienced and leading advisor in aviation. Client Presentation August 2018 DVB Corporate Finance Page 50

51 DVB Corporate Finance Some important deals 2017 Eton Park M&A Sell-side Advisory 18 x Airframe Joint Venture Joint Arranger & Placement Agent Trip Rail Master Funding Railcar ABS Offering 17,587 railcars US$238 million Co-Manager & Liquidity Facility Structuring Agent GasLog 8.875% Senior Unsecured Notes LNG carriers US$250 million Co-Manager Client Presentation August 2018 DVB Corporate Finance Page 51

52 DVB Corporate Finance Outlook 2018 / Global M&A activity remains strong in 2018 despite a variety of economic and geopolitical factors including trade tensions between the US and its largest trading partners (China, EU), Brexit uncertainty, and threats from North Korea and the Middle East. Driven by a revived global economy led by investment recovery in advanced economies and continued growth in emerging Asia, we expect companies to benefit from strong capital markets, as well as larger cash positions to execute on strategically imperative transactions. In transportation, we are likely to see a steady flow of activity as companies take advantage of improved market conditions and continue to raise capital to execute strategic transactions. / The debt capital market is expected to continue its recovery and return confidence to investors and borrowers throughout the remainder of 2018, broadly including the transportation sector. We expect an upturn in institutional aviation deal volume, driven by asset growth and consolidation. In addition to tapping liquid debt market products such as corporate bonds, transportation borrowers will continue to explore bilateral direct funding with alternative investors both in investment grade and sub-investment grade categories. / The first half of 2018 saw a continuation of strong issuance volume in asset-backed securities backed by aircraft, railcars, and containers. Highlights include several inaugural issuers stepping into the market and others returning after a multi-year hiatus, with credit spreads achieving record tight levels as supply/demand fundamentals remained favourable. Although on pace to set a post-crisis record in terms of issuance, downside risks remain as the rising rate environment, looming trade wars, and other geopolitical risks could eventually weigh on the market and slow momentum through the second half of the year. / With the economy on improved footing, supported by low interest rates, low inflation, and improving corporate profits across sectors, the equity capital markets outlook is positive for the second half of Transportation sector market access is expected to remain solid, driven by global trade growth, subsiding supply and demand imbalances, sector consolidation, and a generally 2018 bullish investor risk appetite, particularly in the hard-asset sectors. Client Presentation August 2018 DVB Corporate Finance Page 52

53 Investment Management / We are active as an investment consultant and asset manager for investment vehicles in the international transport sector. / We assume an investment management function on behalf of institutional clients but where DVB aligns its interest with institutional clients with a material yet minority equity risk participation. / Our Aviation Investment Management (AIM) team manages the Deucalion aircraft and aviation investments as well as the intermodal and rail transport investments. / Investors profit from DVB s asset know-how and strong market penetration. Client Presentation August 2018 Investment Management Page 53

54 Investment Management Investment volume (30 Jun 2018) Breakdown of the investment volume 74.7% AIM 25.3% SIM AIM: thereof: 71.4% Aviation 2.0% Stephenson Capital 1.3% Container AIM by asset type mn SIM shipping portfolio by asset type mn 1.2% Other 17.7% Disassembly thereof: 15.3% Widebody 2.3% Engines 0.1% Narrowbody 59.9% Passenger narrowbody 14.0% Other investments 4.4% Containerships 5.0% Car carriers 11.3% Bulk carriers 53.8% Tankers thereof: 19.0% LPG tanker 18.0% Chemical tankers 6.2% Crude oil tankers 5.6% LNG tankers 5.0% Product tankers 21.2% Passenger widebody 11.5% Offshore vessels Client Presentation August 2018 Investment Management Page 54

55 Investment Management (AIM) Outlook 2018 / For 2018, AIM expects the aviation market to remain stable as operators will likely benefit from a less volatile fuel price environment, relatively low interest rates, reasonable access to liquidity and a high level of new aircraft deliveries. However, there will be challenges in certain regions where yields will be stressed by increased capacity and currency concerns. While the industry is at a high-level plateau in the cycle, there is no signal of a downturn in the leasing sector as the still very significant flow of capital into the market should help buoy asset prices. / Investor appetite for the funds will not likely lessen in 2018, as DVB s knowledge of the industry, the strength of its Aviation platform, and its asset-based approach provide the funds with a truly unique asset-focused platform to take advantage of the current market conditions with a well-informed and researched view of the future. / Investments in the intermodal segment are likely to continue their strong performance, whilst an increased focus on the less volatile rail segment is expected to enhance the overall risk profile of the investment portfolio Client Presentation August 2018 Investment Management Page 55

56 Investment Management (SIM) Outlook 2018 / New business investment management activities in the shipping and offshore sectors were discontinued in 2017; henceforth, there will be no new investments and the portfolio will rundown over time. / In 2017, performance of the SIM portfolio was affected by weak market conditions in both the shipping and offshore segments. Oversupply is still a challenge, however a gradual recovery is becoming visible in most sectors. Performance of the SIM portfolio is expected to improve accordingly. / SIM is comfortable with the current level of impairments. Its main focus is to find exit opportunities and reduce the portfolio further in the next years Client Presentation August 2018 Investment Management Page 56

57 03/ DVB Financials and outlook 58 Financial figures 60 Macroeconomic environment and outlook

58 Preliminary remarks All statements made regarding net worth, financial position & results relate to DVB Bank Group. All amounts are disclosed in euro and on the basis of IFRS/IAS if not stated otherwise. Unless indicated otherwise, all financial data apply to 30 June 2018 and have been reviewed by auditors. Client Presentation August 2018 Financial figures Page 58

59 At a glance Income statement IFRS mn 1 Jan Jun Jan Jun 2017 Net interest income Loss allowance Net interest income after loss allowance Net fee and commission income Results from investments in companies accounted for using the equity method Net other operating income/expenses Total income (before IFRS 9/IAS 39) General administrative expenses Consolidated net loss before IFRS 9/IAS 39 and taxes Net result from financial instruments in accordance with IFRS 9/IAS Consolidated net loss before taxes Consolidated net loss (after taxes) % 1 Diverging from the 2017 interim consolidated financial statements, general administrative expenses were reclassified and now comprise: staff expenses, non-staff expenses, depreciation, amortisation, impairment and write-ups as well as expenses for the bank levy and the BVR Deposit Guarantee Scheme Client Presentation August 2018 Financial figures Page 59

60 Macroeconomic environment (1) Global growth is projected to reach 3.9% in 2018, in line with the forecast of the International Monetary Fund (IMF) earlier this year, but the expansion is becoming less even, and risks to the outlook are mounting. As the global cyclical upswing approaches its two-year mark, the pace of expansion in some economies appears to have peaked and growth has become less synchronised across countries. The recently announced and anticipated tariff increases by the US and following reactions by trading partners have increased the likelihood of escalating and sustained trade actions. These could derail the recovery and depress medium-term growth prospects, both through their direct impact on resource allocation and productivity and by raising uncertainty and taking a toll on investment. According to the IMF, further economic growth could be burdened by the following risk factors: abrupt shifts in global financial conditions; trade tensions and waning support for global economic integration; political uncertainty caused by significant changes in policy objectives; geopolitical risks and domestic strife (in the Middle East and sub-saharan Africa); and humanitarian costs of extreme weather events and other natural disasters. Source: IMF, July 2018 Client Presentation August 2018 Macroeconomic environment and outlook Page 60

61 Macroeconomic environment (2) The following developments are evident in the world: / In the US, near-term momentum in the economy is expected to strengthen temporarily in line with the previous forecast. Substantial fiscal stimulus together with already-robust private final demand will lift output further above potential and lower the unemployment rate below levels last registered 50 years ago, creating additional inflationary pressures. Imports are set to pick up with stronger domestic demand, increasing the current account deficit and widening excess global imbalances. / Growth is expected to moderate gradually in China, as regulatory tightening of the financial sector takes hold and external demand softens. Chinese authorities are taking steps to slow credit growth, but uncoordinated financial and local government regulatory action could have unintended consequences that trigger disorderly repricing of financial assets, increase rollover risks, and lead to stronger-than-forecast negative effects on activity. / Growth in the euro zone is projected to slow gradually, while growth rates for some of the economies have been revised down, especially for Germany and France, and in Italy, where wider sovereign spreads and tighter financial conditions in the wake of recent political uncertainty are expected to weigh on domestic demand. / Global oil prices increased 16% between February 2018 and early June 2018, to over US$70 per barrel. This development reflects supply shortfalls so that in June, the OPEC and non-opec oil producers agreed to raise oil production by about 1 million barrels per day from current levels. Market expectations suggest that declining capacity in Venezuela and US sanctions on Iran may pose difficulties to deliver the agreed upon production increase consistently. Source: IMF, July 2018 Client Presentation August 2018 Macroeconomic environment and outlook Page 61

62 Outlook for 2018 We are supporting our owner DZ BANK AG in developing and implementing strategic options for DVB. Against this background, we outline our corporate objectives as follows: / We plan to sustain the positive business development in each of our Aviation Finance and Land Transport Finance industry segments, and to further strengthen the earnings power of these businesses. Likewise, we endeavour to further stabilise operating earnings in Shipping Finance after risk costs. / We expect above-average loss allowance for Offshore Finance exposures, which are no longer in line with DVB's strategy and thus form part of the NCA portfolio, given the persistently difficult market conditions. Accordingly, risk management in this area will continue to command particular attention, as well as active restructuring measures. We anticipate a moderate development in all other segments (including Shipping Finance), and expect no substantial development of loss allowance during the second half of / We will continue to focus on structural changes in the global transport sector, and on their impact on the respective sub-markets. Whilst aviation and land transport markets are largely shaped by high excess liquidity, together with substantial margin pressure and strong competition, adequate margins are achievable in the shipping finance business. / We will continue to analyse strategic options for our business divisions in great detail, and will concentrate on the best possible prospects for the future in close coordination with our owner. In this way, we want to secure the positive operative earnings development, after risk costs regained during the first half of the year for the Bank's three core Transport Finance business divisions. We are cautiously optimistic that we will succeed in generating results for 2018 that will satisfy our stakeholders based on selective and appropriate new business, and continued forward-looking risk management. Client Presentation August 2018 Macroeconomic environment and outlook Page 62

63 04/ DVB About us 64 Structure 67 Board of Managing Directors 71 Supervisory Board 72 Staff

64 Belongs to Germany s second-largest banking group Cooperative Banks/ Retail Banking Corporate Banking Capital Markets Verbund Transaction Banking Client Presentation August 2018 Structure Page 64

65 Full member of the BVR Deposit Guarantee Scheme Members 972 cooperative banks, 1 central institution and special cooperative network institutes Tasks of the Institution Protection Preventing or remedying impending or existing economic difficulties at institutions affiliated with the BVR-ISG and BVR-SE protection schemes Monitoring By Federal Financial Supervisory Authority (BaFin) Institution Protection Comprehensive institution protection for all members, no bankruptcy among members since 1934 Deposit Protection Comprehensive protection for customer deposits held by non-banks, including bearer bonds and certificates issued by the cooperative banks (indirectly via BVR-SE). Direct deposit protection via BVR-ISG GmbH up to 100,000 per person per institute. Responsible body National Association of German Cooperative Banks (BVR) The control and profit/loss transfer agreement between DVB Bank SE and DZ BANK AG became effective retrospectively as at 1 January Client Presentation August 2018 Structure Page 65

66 Current shareholder base 22 June July August August August 2017 / Squeeze-out resolution of the AGM / Expiration of the period for filing an action of avoidance / Registration into the Commercial Register / Delisting at the Frankfurt Stock Exchange General Standard / Payment of the cash compensation per share to minority shareholders % Client Presentation August 2018 Structure Page 66

67 Responsibilities of DVB s Board of Managing Directors as of 1 August 2018 Ralf Bedranowsky CEO and Chairman of the Board of Managing Directors Group Audit Group Compliance Office Group Corporate Communications Group Corporate Development Group Finance Group Human Resources Group Legal Information Technology ITF International Transport Finance Suisse AG LogPay Financial Services GmbH Group Controlling David Goring-Thomas Member of the Board of Managing Directors Group Treasury Transaction and Loan Services Aviation Finance Aviation Financial Consultancy Financial Institutions and Syndications Investment Management Land Transport Finance Shipping Finance DVB Capital Markets LLC DVB Transport Finance Ltd DVB Corporate Finance Christian Hagemeyer Member of the Board of Managing Directors Aviation Credit Aviation Research Credit and Asset Solution Group/Shipping Investment Management Group Risk Management Land Transport Credit Land Transport Research Shipping Credit Shipping Research Product/service areas Client areas in business divisions Client areas at affiliates Client Presentation August 2018 Board of Managing Directors Page 67

68 Members of the Board of Managing Directors Ralf Bedranowsky CEO and Chairman of the Board of Managing Directors, Bank director Responsibilities Product/service areas Group Audit Group Compliance Office Group Controlling Group Corporate Communications Group Corporate Development Group Finance Group Human Resources Group Legal Information Technology Client areas in affiliates ITF International Transport Finance Suisse AG LogPay Financial Services GmbH Offices held Chairman of the Supervisory Board DVB Bank America N.V., Willemstad, Curaçao Chairman of the Board of Directors DVB Holding (US) Inc., New York, USA DVB Group Merchant Bank (Asia) Ltd, Singapore ITF International Transport Finance Suisse AG, Zurich, Switzerland Member of the Board of Directors DVB Capital Markets LLC, New York, USA Curriculum Vitae Since July DVB Bank SE, CEO and Chairman of the Board of Managing Directors DVB Bank SE, Member of the Board of Managing Directors Deutsche Bank AG, Global Head Deutsche Shipping, global responsibility for the business development and coverage of the shipping clients in ship financing and investment banking Landesbank Hessen Thüringen, Member of the Board of Managing Directors Deutsche Bank AG, from 2001 to 2004 Member of the Regional Management Board for Northern and Eastern Germany and Deputy Chairman of the Supervisory Board of Schiffshypothekenbank zu Lübeck AG Client Presentation August 2018 Board of Managing Directors Page 68

69 Members of the Board of Managing Directors David Goring-Thomas Member of the Board of Managing Directors, Bank director Responsibilities Product/service areas Group Treasury Transaction and Loan Services Client areas in business divisions Aviation Finance Aviation Financial Consultancy DVB Corporate Finance Financial Institutions and Syndications Investment Management Land Transport Finance Shipping Finance Client areas in affiliates DVB Capital Markets LLC DVB Transport Finance Ltd Offices held Chairman of the Board of Directors DVB Transport Finance Ltd, London, United Kingdom Member of the Board of Directors DVB Capital Markets LLC, New York, USA Curriculum Vitae Since December DVB Bank SE, Member of the Board of Managing Directors DVB Bank SE London Branch, Deputy General Manager of London Branch, Managing Director and Global Head of Aviation Finance The Long-Term Credit Bank of Japan Ltd, London Branch, Deputy General Manager and Head of Aviation Finance Europe, Middle East & Africa LTCB Merchant Bank (Singapore) Ltd/The Long-Term Credit Bank of Japan Ltd, Singapore Branch, Senior Vice President, Head of Aviation Finance Asia The Long-Term Credit Bank of Japan Ltd, London Branch, Manager/Senior Manager, Aviation Group Swiss Bank Corporation, London, Merchant Banking, Assistant Manager/Manager in the Aviation Finance Group, and Manager Corporate Finance National Westminster Bank, International Banking Division, London, Graduate Trainee, Account Officer in Transportation (Aerospace) and Assistance Manager (Personnel) University of Manchester, B.A. Economics Honours Client Presentation August 2018 Board of Managing Directors Page 69

70 Members of the Board of Managing Directors Christian Hagemeyer Member of the Board of Managing Directors, Bank director Responsibilities Product/service areas Aviation Credit Aviation Research Credit and Asset Solution Group/Shipping Investment Management Group Risk Management Land Transport Credit Land Transport Research Shipping Credit Shipping Research Offices held None Curriculum Vitae Since January DVB Bank SE, Member of the Board of Managing Directors Landesbank Hessen Thüringen, Head of Credit Risk Management Deutsche Bank AG, Senior Credit Officer Deutsche Bank AG, Head of Credit Large Caps Deutsche Bank de Bary N.V., Group Head Risk Management Commodity Trade Finance Deutsche Bank de Bary N.V., Relationship Manager Commodity Trade Finance Deutsche Bank de Bary N.V., Relationship Manager German Desk Deutsche Bank AG, Traineeship University of Hamburg, M.A. Business Administration Client Presentation August 2018 Board of Managing Directors Page 70

71 DVB s Supervisory Board Members Wolfgang Köhler Chairman Shareholder representative Anders Ingebrigtsen Shareholder representative Adnan Mohammed Employee representative Frank Westhoff Deputy Chairman Shareholder representative Dr Peter Jansen Shareholder representative Bert van Leeuwen Employee representative Ulrike Donath Shareholder representative Michael Speth Shareholder representative Martin Wolfert Employee representative As of August 2018 Client Presentation August 2018 Supervisory Board Page 71

72 Nationalities in DVB (30 Jun 2018) 593 active employees DVB Bank Group 298 active employees Transport Finance/Investment Management 13.8% 29 other nationalities 44.2% German 17.8% 21 other nationalities 22.2% British 2.2% Norwegian 3.5% US-American 3.9% Greek 6.6% Singaporean 4.0% Norwegian 4.7% US-American 6.7% Greek 18.1% German 11.0% Dutch 14.8% British 10.1% Singaporean 16.4% Dutch Client Presentation August 2018 Staff Page 72

73 05/ DVB Further information 74 DVB worldwide 76 Imprint 77 Photo credits

74 DVB worldwide Head office Frankfurt/Main DVB Bank SE Platz der Republik Frankfurt/Main Germany Phone Fax Europe Amsterdam DVB Bank SE Amsterdam Branch WTC Schipol, Tower F, 6 th Floor Schiphol Boulevard BH Schiphol, The Netherlands Phone Fax Athens DVB Bank SE Athens Branch 3, Moraitini Street & 1, Palea Leof. Posidonos, Bldg. K4 Delta Paleo Faliro Athens, Greece Phone Fax London DVB Bank SE London Branch Park House, 6 th Floor Finsbury Circus London EC2M 7EB, United Kingdom Phone Fax Oslo DVB Bank SE Nordic Branch Haakon VII's gate Oslo, Norway Phone Fax Hamburg DVB Bank SE Hamburg Office Ballindamm Hamburg, Germany Phone Fax Client Presentation August 2018 DVB worldwide Page 74

75 DVB worldwide North and South America Curaçao DVB Bank America N.V. Gaitoweg 35 Willemstad, Curaçao Phone Fax New York DVB Bank SE Representative Office New York 100 Park Avenue Suite 1301 New York, NY 10017, USA Phone Fax DVB Capital Markets LLC 100 Park Avenue Suite 1301 New York, NY 10017, USA Phone Fax Asia Singapore DVB Bank SE Singapore Branch 77 Robinson Road #30-02 Singapore Phone Fax DVB Group Merchant Bank (Asia) Ltd 77 Robinson Road #30-02 Singapore Phone Fax Tokyo DVB Transport Finance Ltd Tokyo Branch Ark Hills Sengokuyama Mori Tower 26F (2609) 9-10, Roppongi 1-chome, Minato-ku Tokyo , Japan Phone Fax Client Presentation August 2018 DVB worldwide Page 75

76 Imprint For further information please visit After scanning this QR with your smartphone, you will have direct access to our website. Responsible for the content of this presentation and contact: Elisabeth Winter Head of Group Corporate Communications Managing Director Phone: DVB Bank SE Platz der Republik Frankfurt/Main, Germany info@dvbbank.com, Client Presentation August 2018 Imprint Page 76