Conference Call HSH Nordbank, Interim Results as per 30 September Hamburg/Kiel, 9. December 2011

Transcription

1 Conference Call HSH Nordbank, Interim Results as per 30 September 2011 Hamburg/Kiel, 9. December 2011

2 Agenda 1. Group Results IFRS 9M Appendix Page 1

3 Highlights 9M 2011 Business Performance Positive Net Income before Restructuring EUR 839 m; Net Income before Taxes EUR 46 m One-off special payment of EUR 500 m included in 9M result Loan loss provisions hedged by second loss guarantee New business picked up considerably in Q3 Moody s reduced support-uplift Strategy and Organization EBA Stress Tests successfully completed; no further capital need SoFFin-guarantees and Second Loss Guarantee reduced as planned Transformation program started EU state aid proceedings approved Page 2

4 Final EU approval will entail downsizing and cost cutting No mandatory change in ownership required Total assets Core Bank 2014 Total assets Restructuring Unit 2014 Core Bank business (volumes as per year end 2014) Shipping Aviation Energy & Infrastructure Corporate Clients Real Estate Clients Private Banking & Savings Banks Dividend restrictions on equity shareholders Additional guarantee fee* One-off payment and capital increase 82bn 38bn 15bn 0 7bn 13bn 13bn 2bn yes 3.85 % 500mn * Applicable only on effective utilization of second loss guarantee Page 3

5 Key figures at a glance in m 9M M % Net interest and commission income 1,214 1,359-11% Loan loss provisions >100% Net income before restructuring >100% Net income before taxes >100% Total assets ( bn) 9/30/ /31/2010 % 151-9% Risk weighted assets ( bn) % Tier-1 capital (German Solvency Reg.) ( bn) % Tier-1 capital ratio 2 (in %) 17.9% 15.4% +2,5 PP Employees (FTE) 3,292 3,388-3% 1) adjusted; 2) incl. market risk positions; before adoption of financial statements Page 4

6 Net interest income follows reduced balance sheet Net interest income m Net commission income m 1,189 1,121-6 % % 9M M M M 2011 Reduction of net interest income reflects the decrease in total assets of 24 m (compared to 09/30/2010) Net interest income benefited from the revaluation of hybrid financial instruments (IAS 39. A8) Net commission income could not yet profit from increased new business Previous year benefited from loan restructurings Page 5

7 Valuation losses due to European debt crisis Net trading income m Net income from financial investments incl. investments held at-equity m % % 9M M 2011 Valuation losses (in particular Italy and Greece) Fair Value calculation of own liabilities had a negative impact Basis swaps and net income from foreign currency made a positive contribution 9M M 2011 Realized profits from reduction of risk positions and sale of participations (i.a. DekaBank) Charges due to provisioning of Greek govt. exposures ( -78 m) and from investments held at equity ( -56m) Page 6

8 Particularly due to the guarantee hedge effect, loan loss provisions in the amount of 394 m could be resolved Loan loss provisions m Sector Specialist Bank Regional Bank Other RU Group Hedge effect before of gtee.* guarantee effect Group Positive currency effects + 13 m ( -173 m previous year) Net increase in individual LLP -334 m substantially below last year( -543 m); net release of portfolio valuation allowances of 271 m in business units (esp. Shipping) Hedge effect through second loss guarantee in the amount of 444 m * The guarantee effect is accounted for in the consolidation columns of the Core Bank ( 35m) and the Restructuring Unit ( 409m) Page 7

9 Utilisation and charges for second loss guarantee Risk provisions exceed first loss piece m 3, , ,200 Charges for second loss guarantee (accumulated) m 1,512 Special payment Basic gtee. fee 500 Guaranteehedge FLP LLP accounted to FLP Realized losses 3,188 2, M 2011 Risk provisions exceed FLP of 3.2 bn Second loss guarantee ( 7 bn) covers risk provisions exceeding the FLP in the amount of 810 m Realized losses with 214 are still on a low stage /01/ /31/ /01/ /31/2010 1,012 04/01/ /30/2011 Since 04/01/ bn in guarantee fees were paid to the guarantors, of which 500 m is a one-off payment with regard to the EU-state aid settlement LLP = Loan Loss Provisions; FLP = First Loss Piece Page 8

10 Expenses are down except for extra EU payment Administrative expenses m 9M M Charges for public sector guarantees m 9M M Operating expenses* Reduction in diverse cost positions Personnel -7 % Number of employees reduced by 125 to 3,292 FTE * incl. depreciation on property, plant and equipment and amortization on intangible assets -393 SoFFin gtee bonds Second loss gtee Special Payment Reduction of the Second loss guarantee from 3 bn to 7 bn SoFFin guaranteed bonds matured (remaining outstanding 6 bn) >100 % Strong increase by on-off special payment in the amount of 500m Page 9

11 Total income by segment Total income 9M 2010 m 9M 2011 Total group income (-10%) decreases less than total assets (-14%) 628 1, ,123 1,007 Total income of RU decreases due to portfolio reduction (-15%) and impairments on Greek bonds in the amount of EUR -78 m (valuation at 39% of nominal) Core Bank RU Group Stable total income in the client segments (Sector Bank, Regional Bank) The sale of equity holdings (e.g. DEKABank) positively impacted the segment Others Consolidation Core Bank mainly impacted by valuation effects on DFV liabilities Sector Specialist Bank Regional Bank Other Consolidation Core Bank Page10

12 Balance sheet downsizing target nearly reached Downsizing of HSH s Balance Sheet Non-strategic assets and assets with no fit to Bank s new risk profile are in RU RWA and total asset reduction is progressing significantly faster than planned Run-down target for 2014 nearly reached Total Assets (in EUR bn) Core Bank (before 2009: Group) M/ RU (Mio. ) Nominal Bookvalue 30 Sep Valuation at 30 Sep Limited Exposure to PIIGS States Portugal % Irland Italien % Griechenland % Spanien % Summe 1,457 1,161 Seite 11

13 Solid Tier-1 Capital Ratio at 17.9% Total assets and RWA EUR bn Tier-1 Capital EUR bn Tier-1 capital ratio* in % Total assets RWA ** M M M 2011 EBA-Stress Tests successfully completed no new capital required to reach EBA threshold for stress environment Tier-1 ratio at 17.9% very competitive, offering a solid basis for upcoming regulatory changes Despite a 3 bn EUR reduction of the second loss gtee. tier-1 ratio improving strongly *incl. market risk positions; ** Tier-1 capital ratio excluding hybrid capital Page 12

14 Broadly diversified funding mix and stable refinancing in 2011 Funding relevant liabilities Long-term funding capital market EUR bn as at 11/30/2011 Repos 6 Development Banks 6 Covered Bonds 13 Deposits 24 EUR 114 bn* Equity 12 Sen. Unsec. 53 EUR bn YTD 2011 as at 11/30/2011 1,2 1,0 4,5 4,5 2,5 4,0 3,6 Covered Bonds Senior Unsecured ytd 2012 Plan Broadly diversified funding mix with high share of long term funding Covered bonds issued out of three different cover pools High share of customer deposits with adequate duration Funding basis barely impacted by rating downgrade * Difference to balance sheet size due to market value of derivatives, trading liabilities, reserves and other positions Lower funding needs consistent with balance sheet reduction Stable refinancing costs due to broad access to savings bank sector and high share of retail funding Institutionals tend to stay sidelined given uncertainty in volatile markets Page 13

15 Long term funding 2011 by investors and maturity Senior unsecured: EUR 4.3 bn ytd October 31, 2011 by investors Covered bonds: EUR 1.0 bn ytd October 31, 2011 by investors Retail 71% Savings banks 15% Institutional investors 14% Private placements institutional 36% Private placements savings banks 10% Public placements 54% by maturity by maturity 7 years 9% 1-3 years 42% 7 years 4% 1-3 years 32% 4-6 years 49% 4-6 years 64% Broad access to savings banks sector focus on retail funding via savings banks Well-balanced maturity mix Public issuance of EUR 500mn mortgage Pfandbrief as well as private placements (e.g. Shipping Pfandbrief and foreign currencies) Page 14

16 Outlook New business with clients of the Core Bank is picking up Maturing SOFFIN-guaranteed bonds 3 bn (Jan 2012) and 3bn (July 2012) do not trigger additional funding needs due to continuing downsizing Even if the implementation of CRD III will reduce the Core Capital Ratio, further reduction of the second loss guarantee is planned HSH s transformation program foresees substantial head count reduction until The necessary restructuring costs will be accounted for in the P&L This, together with the special payment of EUR 500 m in Q3, will most probably lead to a negative Net Income after Taxes (IFRS and German GAAP). This can possibly lead to further write down on the hybrid securities. Full write-up of the hybrid securities is planned for the business year Seite 15

17 Agenda 1. Group Results IFRS 9M Appendix Page 16

18 Income continued to improve Group income statement m 9M M 2010* % Net interest income 1,121 1,189-6 Net commission income Result from hedging Net trading income Net income from financial investments Net income from financial investments valued at equity Total income 1,007 1, Loan loss provisions >-100 Administrative expenses Other operating result Net income before restructuring >100 Result from restructuring 3-9 >100 Expenses for government guarantees >100 Net income before taxes >100 Income tax >100 Group net loss /30/ /31/2010 Total assets ( bn) * adjusted Page17

19 Result of Core Bank positive Income statement of Core Bank and Restructuring Unit m Core Bank 9M 2011 Restructuring Unit 9M 2011 Net interest income Net commission income Result from hedging 7 - Net trading income Net income from financial investments Total income Loan loss provisions Administrative expenses Other operating result 6 3 Net income before restructuring Result from restructuring 6-3 Expenses for government guarantees Net income before taxes Total assets ( bn) Page 18

20 Sectors Specialist Bank Result before restructuring further increased Major shipping sectors show mixed performance: container market experienced significantly lower charter rates; bulker market rates improved, but still challenging; weakening demand weighs on tanker market Market for renewable energy on renewed upswing, despite drastic cuts in state subsidies for solar energy; activity in project finance for wind energy remains on moderate level, offshore-sector major growth engine Selective and risk conscious - approach increasingly focuses on attractive new business Total income impacted by early stage stop on writing new business in aviation Segment results benefit from significantly improved loan loss reserves; major reversals of loan loss provisions on single name exposures in shipping m 9M 2011 Net interest and commission income 422 Net income from trading and from financial investments 18 Total income 440 Loan loss provisions 99 Result before restructuring 373 Segment assets ( bn) 30 9M * * Page19

21 Regional Bank Result before restructuring lower German economy gradually losing momentum Corporate clients benefited from improved turnover and orders; client deposits increased, market position could be asserted and new clients were won Strengthened marketing activities with real estate clients lad to growing number of new transactions, focus on residential, office and retail Demand for Private Banking products mainly on capital-preserving and short-term investments, additional mandates could be achieved Savings Banks business remains focused on placements of bonds to Savings Bank s clients and funding activities Lower reversals of portfolio loan loss provisions increase net loan loss provisions m 9M 2011 Net interest and commission income 335 Net income from trading and from financial investments 32 Total Income 367 Loan loss provisions -133 Result before restructuring 77 Segment assets ( bn) 21 9M * * Page 20

22 Restructuring Unit Portfolio reduction proceeds faster than planned Assets were further reduced by 9 bn to 54 bn Further downsizing of loan portfolio by 5 bn to 30 bn, in the business areas of Real Estate and Corporate Clients (LBOs) in particular Despite the challenging backdrop of the European sovereign debt crisis, the capital markets portfolio could be downsized by 4 bn to 24 bn since end-2010 Write-offs for Greek debt ( 78 m) as well as valuation losses for European sovereign debt led to negative total income Downsizing of loan portfolios impacted income positively Portfolio reduction proceeds with both scheduled repayments and active measures m (incl. consolidation RU) 9M 2011 Net interest and commission income 324 Net income from trading and from financial investments -386 Total income -44 Loan loss provisions 402 Result before restructuring 192 Segment assets ( bn) 55 9M * * Page21

23 Segment Reporting (IFRS) Seite 22

24 Disclaimer The information presented here is not an offer for sale within the United States of any security of HSH Nordbank AG. Securities of HSH Nordbank AG may not be offered or sold in the United States absent registration under U.S. securities laws or unless exempt from registration under such laws. Information and opinions contained herein have been compiled or arrived at from sources believed to be reliable, any statements about the Bank s market position are based on HSH Nordbank s own estimates, unless otherwise stated. HSH Nordbank AG makes no representation as to the accuracy or completeness of any of the information contained in these documents and accepts no liability for loss arising from the use of the information provided. This document is not to be relied upon as such or used in substitution for the exercise of independent judgment. Any opinions expressed herein reflect a judgment at the date of presentation and are subject to change without notice. Attendees at this presentation must be aware that the information provided may be dated and not current information. This document has been prepared separately from any proposed offering of any security and as such information in this document must not be relied upon as having been authorized or approved by the issuer of such security. The decision to purchase any security should be made only on the basis of the information memorandum made available at the time of the issue of such security. This presentation contains forward-looking statements. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that HSH Nordbank AG s actual financial condition, results of operations and cash flows, and the development of the industry and markets in which HSH Nordbank AG operates, may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. This information presented may not be passed on, or reproduced in whole or in part under any circumstances without express written consent from HSH Nordbank AG. HSH Nordbank AG is not responsible for the lawfulness of the acquisition of any security by a prospective investor or for compliance by that prospective purchaser with any law, regulation or policy applicable to it. A prospective investor may not rely on this presentation when making determinations in relation to these matters. Neither this presentation, any documentation provided herewith nor any presentation thereof may be sent or taken or transmitted into the United States or distributed, directly or indirectly, in the United States or to any U.S. person (within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended) except to a limited number of Qualified Institutional Buyers as defined in rule 144A under the U.S. Securities Act of 1933, as amended. This presentation may not be reproduced or distributed to any other person. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. This presentation does not constitute an offer to sell, or a solicitation of an offer to purchase, any security. Neither this presentation nor any copy hereof may be distributed in any jurisdiction where its distribution may be restricted by law. Persons who receive this report should make themselves aware of and adhere to any such restrictions. Page 23

25 Contact Günter Femers Head of Investor Relations / Rating Thomas Fischler Deputy Head Investor Relations / Rating Tel: +49 (0) Fax:+49 (0) guenter.femers@hsh-nordbank.com Tel: +49 (0) Fax:+49 (0) thomas.fischler@hsh-nordbank.com HSH Nordbank AG Gerhart-Hauptmann-Platz Hamburg HSH Nordbank AG Gerhart-Hauptmann-Platz Hamburg Page 24