NORD/LB Group results as at 30 September November 2017

Transcription

1 NORD/LB Group results as at 30 September November 207

2 Targets for 207 will be achieved. Common Equity Tier I ratio >,0 % Capital ratio significantly strengthened through active management (e.g. disciplined RWAand balance sheet management). Common Equity Tier ratio at.5 per cent per 30 Sep 207, significantly above regulatory requirements (8.3 per cent) Return to profit zone Consolidated profit before taxes with 326m as at 30 Sep 207 well above previous years figures ( -624m). NORD/LB on track to show profit again in 207 Reduction shipping portfolio Reduction of shipping portfolio achieved faster than expected; with an exposure of approx. 3bn, the original goal of the portfolio reduction to 2-4bn will already be reached by the end of 207 Integration BLB and transformation One Bank Full merger accomplished as planned by Sep 207. Transformation programme One Bank successfully started to reduce further costs and to identify new and future earnings targets. 2

3 NORD/LB with positive nine-month figures. Income statement (in m) Jan 30 Sep 207 Jan Change 30 Sep 206 in % Net interest income,065, Loan loss provisions (llps) 683,65-59 Net commission income Profit/loss from financial instruments at fair value incl. hedge accounting Profit/loss from financial assets Profit/loss from investments accounted for using the equity method > >00 Administrative expenses Other operating profit/loss >00 Earnings before reorganisation and taxes >00 Reorganisation expenses 49 9 >00 Earnings before taxes >00 Income taxes Net interest income: Decrease due to persistently low interest rates and declining assets on average (esp. shipping) Loan loss provisions: Especially from the shipping portfolio, unremarkable in all other segments Net commission income: Decreased loan acquisition fees, increased guarantee premiums, special effects in 206 Profit/loss from financial instruments at fair value incl. hedge accounting: Decrease in trading profits due to increased EUR interest-rate level and tightening of EUR/USD basis spread Profits from sale of financial assets classified as Available-for-Sale Profit/loss from investments accounted for using the equity method: Previous year disproportionately burdened by impairments, sales profits occur this year Administrative expenses: Higher costs for data processing (IT Roadmap) und slightly increased staff expenses; incl. 7m for the security reserve for Landesbank and EZB levy Other operating profit/loss: Profits from promissory notes and repurchases of own issues, contribution for Single Resolution Fund 53m p.a. Reorganisation expenses for full takeover of Bremer Landesbank Consolidated profit >00 3

4 Total assets further reduced. Balance sheet (in m) 30 Sep Dec 206 Change in % Total assets 65,220 74,797-5 Loans and advances to banks 28,045 2, Loans and advances to customers 97,643 05,640-8 Financial assets 27,836 3,574-2 Liabilities to banks 44,886 49,24-9 Liabilities to customers 56,920 57,30 - Reduction of total assets as scheduled (i.e. reduction of the shipping portfolio and financial assets) Loans and advances to banks: Increase especially due to short-term loans and advances from money market transactions to German banks Loans and advances to customers: With 59 per cent still largest balance sheet item. Decrease of receivables from public-sector promissory notes, strategic reduction of the shipping portfolio Financial assets: Reduction through maturities and repayments Liabilities to banks: Funding needs declined due to reduced assets, especially decrease of liabilities from money market transactions Liabilities to customers: Fewer money market transactions Equity capital (balance sheet): Strengthened by retained earnings Equity capital (balance sheet) 6,398 6,

5 High quality of total portfolio: 78 per cent in the highest category. NPL ratio in % 3.7% 4.2% 4.7% 5.5% 5.4% Total exposure in bn default (=NPL) very high risk high risk increased risk reasonable/satisfactory good/satisfactory very good to good Total differences are rounding differences 2 Figures were adjusted, see Interim Report as at 30 Jun 205, page 28 and Interim Report as at 30 Sep ² ² 30 Sep 207 5

6 Capital ratios strengthened through active balance sheet management. Capital ratios (transitional) CET Total capital 6.7% 6.3% 6.% 6.9% 3.2% 0.7% 3.%.3%.5%.5% 3 Dec 4 3 Dec 5 3 Dec 6 30 Jun 7 30 Sep 7 SREP ratios required as at 30 Sep 207 CET: 8.33 per cent Buffer to CET-ratio (Trans.): 3.2 percentage points Total capital:.83 per cent Buffer to total capital ratio (Trans.): 5. percentage points Capital ratios (fully loaded) CET:.2 per cent Buffer to SREP-CET-requirements: 2.9 percentage points Total capital: 6.6 per cent Buffer to SREP-requirements: 4.8 percentage points Risk-weighted assets (RWA) Leverage ratio LCR in bn % 4.3% 3.7% 3.5% 3.4% 97% 0% 0% 88% 86% 3 Dec 4 3 Dec 5 3 Dec 6 30 Jun 7 30 Sep 7 3 Dec 4 3 Dec 5 3 Dec 6 30 Jun 7 30 Sep 7 3 Dec 4 3 Dec 5 3 Dec 6 30 Jun 7 30 Sep 7 Successfully closed securitisations strengthen the bank s capital ratios, further placements to come, e.g. Northvest Capital ratios are at target range between 2 per cent and significantly above the regulatory requirements 6

7 Our solid and diversified business model proved its strength against market distortions. in m as at 30 Sep 207 Private and Commercial Customers Corporate Customers Markets Energy and Infrastructure Customers Ship Customers Aircraft Customers Real Estate Banking Customers Portfolio share 8.9% 29.6% 8.3% 6.5% 4.6% 0.3%.8% Operative earnings Earnings share 2 9.9% 54.% 38.% 29.9% -39.5% 7.3% 28.5% Loan loss provisions Earnings before taxes Positive development of bank s core business continues Only 5 per cent of the bank s portfolio are allotted to shipping approx. 85 per cent of the portfolio is profitable! A diversified portfolio of business segments with only marginal correlation is a key factor of business model s stability Risk-weighted assets without Group Management/Others, Reconciliations (83 per cent) 2 Earnings before taxes without Group Management/Others, Reconciliations ( 40m out of total of 375m) 7

8 Positive development in segment results. Loan loss provisions still affected by ship financing. Private & Commercial Customers Corporate Customers Markets Energy & Infrastructure Customers Ship Customers Aircraft Customers Real Estate Banking Customers Group Controlling/ Others NORD/LB Group Operative earnings,2 Loan loss provisions Earnings before taxes,3 in m in m Sep Sep ,056,036 in m Sep Sep ,590, Sep Sep Operative earnings of the segments compensate the negative impact from loan loss provisions Ship Customers: Loan loss provisions still on high level ( 656m), significantly below previous year s level EBT rose strongly to 375m (30 Sep 206: -64m) Minor differences might occur in the reproduction of mathematical operations ² Earnings before provisions, reorganisation and taxes ³ Before reorganisation 8

9 no. of vessels no. of vessels NORD/LB Group results as at 30 Sep 207 Industry outlook ships: Continued recovery of demand with positive effects on charter rates. Delivery schedule Demolitions Shifting effects expected for 208 delivered Improved market environment leads to a decrease of ship breakings Bloomberg Shipping Indices Performance Q6 H6 9M6 206 Q7 2Q7 3Q7 Container Index -8% -4% -20% -24% -3% -7% 4% Bulker Index -3% -43% -34% -23% 6% -7% % Tanker Index -0% -7% -20% -20% -4% -22% -24% Lay-ups reached year-low in Q3 207 Subscripted to Jan 206 Capital markets include the developments on shipping markets already in its prices Container- und bulker segments are driven by developments in Q3 207 Negative development in crude oil tankers market 9

10 Ship financing. Diversified portfolio. By type of ships as at 30 Sep 207 MPP Heavy Lift; 8% MPP General Cargo; 9% LPG/LNG tankers; 3% Cruise ships / ferries ; 2% Gas-/Prod.- tankers; 8% Corporates; 9% Crude oil tankers; 3% Offshore; 5% Chemical tankers; 4% Other ships; 3% Container ships - >5000 TEU 4% Exposure at default: 3.3bn Bulk Carrier - 0,000-40,000 tdw; 5% Bulk Carrier - 40,000-60,000 tdw; 4% Bulk Carrier - 60,000-00,000 tdw; 3% Bulk Carrier - > 00,000 tdw; 4% Container ships >900 TEU 4% Container ships TEU 5% Containerships TEU 5% Container ships TEU 5% Container ships TEU 7% m 30 Sep Sep 206 Earnings Expenses Operative earnings Loan loss provisions 656,590 Earnings before taxes ,372 Operative earnings fell by 85m. This is due to the reduction of the shipping portfolio: Since 30 Sep 206 the portfolio fell by 3.7bn Selective new business In the segments cruises, ferries and special tonnage (e.g. cement and asphalt carrier) Transformation Business strategy development through further segmentation and geographic diversification as well as by the expansion of the product range ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 0

11 Successful transformation and reduction of ship financings. NORD/LB Group planned exposure reduction in bn EaD shipping loans Dec 206 EaD shipping loans June 207 Focused reduction of ship loans Redemptions 2 EaD shipping loans Sep 207 Non-commercial shipping Already negotiated reductions of loans Reduction by 3.5bn in the first nine months of 207 (represents 80 shipping loans), reduction by.3bn (5 shipping loans) in the third quarter Scheduled reduction of financings in weaker segments of MPPs and container ships Reduction is achieved by: decrease in balloon financing, extraordinary repayments and outplacements Target exposure is 2-4bn by end 208. Reached the goal! ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 2 Incl. USD development (approx. 0.4bn)

12 Shipping portfolio. Shipping portfolio by rating NPL-ship financings (exposure) bn Rating class 6-8 as at 30 Sep bn 6.8m Rating class -5 Rating class -0 Crude oil tankers; 24m; 0% Corporates;,34m; 2% m 9. Product tankers 609m; 7% LNG/LPG tankers; 64m; 2% Chemical tankers; 320m; 4% MPP general cargo; 835m; 9% Container; 3,39; 34% Dez Sep 207 MPP heavy lift ; 9m; 0% Off shore; 35m; 4% Others; 207m; 2% Bulker;.4m; 6% Compared to 3 Dec 206 new allocations to the NPL portfolio of 2.2bn, whereas 2.5bn NPLs were reduced in the same time period The chart may include minor differences that occur in the reproduction of mathematical operations 2

13 Shipping portfolio by types. in m Containers Tankers Bulkers MPP Others Total Total 3,964 2,37 2,073 2,265 2,63 3,286 Performing portfolio 825, ,80 Non-Performing portfolio 3,39,8,4,746,692 9,06 Non-Performing ratio 79% 47% 68% 77% 65% 69% Market value, ,062 Cash flow ,74 Single loan loss provisions, ,209 3,869 Cover ratio 2 87% 85% 8% 82% 99% 87% The chart may include minor differences that occur in the reproduction of mathematical operations 2 Single loan loss provisions and market value acc. to non-performing portfolio 3

14 Ship Customers. Portfolio reduction continues. Ship exposure NPL portfolio in bn in bn Jun 7 30 Sep 7 Number of ships Ships in m Jun 7 30 Sep 7 Loan loss provisions for shipping (balance sheet),698,544,48,363,235,83, ,208 2,243 42,822 2, ,369 4,47 5 4,0 3, , Jun 7 30 Sep Jun 7 30 Sep 7 Single loan loss provisions portfolio loan loss provisions Due to roundings, slight differences may occur 4

15 Our goals. Business model Group structure Operating model Focus on core business segments, portfolio reduction in Shipping Customers segment Simplification of the Group structure, just as started with full integration of Bremer Landesbank Enhancing the operating model and significant improving of the bank s efficiency Sound capital base CET ca. 2 per cent Higher efficiency Cost-income ratio < 50 per cent Cost reduction (incl. synergies of BLB merger) m until the end of 2020 Sustainable earnings Revenue level at roughly 2bn Cost synergies Target of BLB merger up to 80m Administrative expenses Target level < bn ¹ Bremer Landesbank 5

16 Our challenges 208. Strengthening of capital ratios All regulatory requirements will be fully fulfilled! Strengthening of capital ratios has top priority since regulatory requirements will increase further Transformation The bank strives to become more profitable! Systematic execution of the transformation program One Bank which includes cost-reduction targets of m by the end of 2020 through synergies Shipping portfolio Continuation of consequent and successful portfolio reduction with increased focus on the reduction resp. management of the NPLs Regulatory requirements Fulfillment of new regulatory requirements like IFRS 9 or Basel IV plus successful completion of EU-wide stress test in 208 6

17 Contact. NORD/LB Norddeutsche Landesbank Girozentrale Investor Relations Georgsplatz 3059 Hanover, Germany Gabriele Bödeker (Head of Investor Relations) Tel.: Thomas Breit thomas.breit@nordlb.de Tel.: Marcel Mock, CIIA, CEFA marcel.mock@nordlb.de Tel.: Svenja Pohlmann svenja.pohlmann@nordlb.de Tel.: Bitte hier Ihr Foto einfügen 7

18 Disclaimer. This presentation and the information contained herein, as well as any additional documents and explanations (together the material ), are issued by NORDDEUTSCHE LANDESBANK GIROZENTRALE ( NORD/LB ). This presentation contains certain forward-looking statements and forecasts reflecting NORD/LB management s current views with respect to certain future events. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without, limitation, those regarding NORD/LB s future financial position and results of operations, strategy, plans, objectives, goals and targets and future developments in the markets where NORD/LB participates or is seeking to participate. The NORD/LB Group s ability to achieve its projected results is dependent on many factors which are outside management s control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain key assumptions. The following important factors could cause the Group s actual results to differ materially from those projected or implied in any forward-looking statements: the impact of regulatory decisions and changes in the regulatory environment; the impact of political and economic developments in Germany and other countries in which the Group operates; the impact of fluctuations in currency exchange and interest rates; and the Group s ability to achieve the expected return on the investments and capital expenditures it has made in Germany and in foreign countries. The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements as a prediction of actual results. All forwardlooking statements included herein are based on information available to NORD/LB as of the date hereof. NORD/LB undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to NORD/LB or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The material is provided to you for informational purposes only, and NORD/LB is not soliciting any action based upon it. The material is not intended as, shall not be construed as and does not constitute, an offer or solicitation for the purchase or sale of any security or other financial instrument or financial service of NORD/LB or of any other entity. Any offer of securities, other financial instruments or financial services would be made pursuant to offering materials to which prospective investors would be referred. Any information contained in the material does not purport to be complete and is subject to the same qualifications and assumptions, and should be considered by investors only in light of the same warnings, lack of assurances and representations and other precautionary matters, as disclosed in the definitive offering materials. The information herein supersedes any prior versions hereof and will be deemed to be superseded by any subsequent versions, including any offering materials. NORD/LB is not obliged to update or periodically review the material. All information in the material is expressed as at the date indicated in the material and is subject to changes at any time without the necessity of prior notice or other publication of such changes to be given. The material is intended for the information of NORD/LB s institutional clients only. The information contained in the material should not be relied on by any person. 8

19 Disclaimer. In the United Kingdom this communication is being issued only to, and is directed only at, intermediate customers and market counterparties for the purposes of the Financial Services Authority s Rules ("relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. To the extent that this communication can be interpreted as relating to any investment or investment activity then such investment or activity is available only to relevant persons and will be engaged in only with relevant persons. Viewing the following material involves no obligation or commitment of any kind by any person. Viewers of he following material are not to construe information contained in it as a recommendation that an investment is a suitable investment or that any recipient should take any action, such as making or selling an investment, or that any recipient should refrain from taking any action. Prior to making an investment decision, investors should conduct such investigations as they consider necessary to verify information contained in the relevant offering materials and to determine whether the relevant investment is appropriate and suitable for them. In addition, investors should consult their own legal, accounting and tax advisers in order to determine the consequences of such investment and to make an independent evaluation of such investment. Opinions expressed in the material are NORD/LB s present opinions only. The material is based upon information that NORD/LB considers reliable, but NORD/LB does not represent, guarantee, or warrant, expressly or implicitly, that the material or any part of it is valid, accurate or complete (or that any assumptions, data or projections underlying any estimates or projections contained in the material are valid, accurate or complete), or suitable for any particular purpose, and it should not be relied upon as such. NORD/LB accepts no liability or responsibility to any person with respect to, or arising directly or indirectly out of the contents of or any omissions from the material or any other written or oral communication transmitted to the recipient by NORD/LB. Neither the material nor any part thereof may be reproduced, distributed, passed on, or otherwise divulged directly or indirectly by the party that receives it, to any other person without the prior written consent of NORD/LB. The distribution of the material in certain jurisdictions may be restricted by law and persons into whose possession the material comes are required by NORD/LB to inform themselves about, and to observe, any such restrictions. This presentation does not constitute an offer to sell or the solicitation of an offer to purchase or subscribe for any securities of NORD/LB in the United States. No part of this presentation should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities of NORD/LB. Any offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from NORD/LB and will contain detailed information about NORD/LB, its management and its financial statements. None of NORD/LB s securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 993, as amended, or pursuant to an exemption from registration therefrom. By viewing the following material, the recipient acknowledges, and agrees to abide by, the aforementioned. 9