Frequently asked questions about the merger of DG HYP and WL BANK. Information on DZ HYP

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1 Frequently asked questions about the merger of DG HYP and WL BANK Information on DZ HYP The merger of DG HYP and WL BANK into DZ HYP became legally effective (retroactive effect from 1 January 2018) with the Commercial Register entries on 27 July DZ HYP is a leading provider of real estate finance in Germany as well as a centre of competence for public-sector clients within the Cooperative Financial Network. Furthermore, DZ HYP is a major issuer of Pfandbriefe in Germany. What business areas is DZ HYP active in? DZ HYP is servicing Commercial Real Estate Investors, the Housing Sector, Public-Sector Clients, and Retail Customers/Private Investors. The Bank is offering a comprehensive, solution-focused range of products and services to partners and clients. Where is DZ HYP located? The Head Offices of DZ HYP's predecessor organisations, Hamburg and Münster, remain unchanged. In addition, the Bank's 13 regional sales offices (Regional Centres and Regional Offices) ensure nationwide coverage, with expert contacts in all business segments. What transaction structure was chosen for the merger? The WL BANK as the assigning company was merged into DG HYP as the acquiring company, which became the successor of all rights and duties of WL Bank, which ceased to exist. Shareholders of WL BANK received shares in DG HYP as consideration. As a result of the merger, DG HYP was renamed DZ HYP AG ("DZ HYP"). Who are DZ HYP's owners? DZ BANK Deutsche Zentral-Genossenschaftsbank AG, Frankfurt/Main, holds approximately 96.37% of DZ HYP's share capital. Further shareholders are the Stiftung Westfälische Landschaft (1.85%) and Cooperative primary banks (1.78%). DZ HYP is a member of the DZ BANK Group. DZ BANK AG is a stock corporation (Aktiengesellschaft) organised under German law and the parent company of the DZ BANK Group. 1

2 What are DZ HYP's identification or register numbers? DZ HYP has assumed and will maintain DG HYP's Legal Entity Identifier (LEI) identifier and the Commercial Register number (HRB 5604). In addition, the Bank holds a second Commercial Register number from Münster (HRB 17424). Key identification numbers are provided in the Legal Details section of the Bank's website What kinds of protection does DZ BANK provide to DZ HYP? At the end of 2001, with effect from 1 January 2001, DG HYP signed an agreement with DZ BANK AG with a term of at least five years. The subject matter of this agreement is the transfer of DG HYP s net profit to DZ BANK AG. In return, DZ BANK AG has to compensate any net loss of DG HYP. With effect from 14 June 2017, the profit and loss transfer agreement was modified and will be continued as a control and profit and loss transfer agreement. DG HYP has used the so-called waiver option provided under section 2a of the German Banking Act (Kreditwesengesetz KWG; old version) with effect from the reporting date of 31 December According to section 2a (1), (2) and (5) of the KWG (as amended) in conjunction with section 6 (1) and (5) as well as section 7 of the EU Capital Requirements Regulation (CRR), the provisions of parts 2-5, as well as parts 7 and 8 of the CRR, do not need to be applied by DG HYP on an individual basis, but are covered at DZ BANK Group level instead. With effect from 31 December 2012, DZ BANK AG has issued a letter of comfort (Patronatserklärung) in respect of DG HYP. Except in the event of political risk, DZ BANK AG has undertaken to ensure in total for the consolidated entity DG HYP that DG HYP is able to meet its contractual obligations. These agreements and declarations continue to be valid following the merger into DZ HYP AG. What are DZ HYP's issuer credit ratings? Affirming the stable ratings of its two predecessors, rating agencies Standard & Poor's (S&P) and Fitch Ratings also assigned a rating of "AA-" to DZ HYP. Current rating reports for DZ HYP are available in the Investor Relations section on our website (under "Ratings"). What deposit guarantee schemes are in place for DZ HYP? DZ HYP is a member of the National Association of German Cooperative Banks (BVR) and its BVR protection schemes. All members benefit from comprehensive institutional protection. When will the merged Bank publish its first consolidated financial reports? 2

3 The half-yearly report as of 30 June 2018 will already be issued by the merged institution; it is expected to be published in September Will there be a roadshow for investors in DZ HYP? DZ HYP will meet investors on a non-deal-related roadshow in several German cities (Hamburg, Munich, Frankfurt, Dusseldorf/Cologne, and Stuttgart) beginning in September. Additional events abroad will follow. Funding What is DZ HYP's funding strategy? DZ HYP is a major issuer of Pfandbriefe (German covered bonds) in Germany. As a frequent issuer within DZ BANK Group, DZ HYP primarily places Pfandbrief issues both Mortgage Pfandbriefe and Public-Sector Pfandbriefe at the capital market, both via private placements and liquid benchmark and sub-benchmark issues. DZ HYP's focus will be on maintaining and developing the broad investor base of its predecessor institutions. What is the composition of DZ HYP's cover pools? Prior to the merger, WL BANK and DG HYP each maintained separate cover pools for Mortgage Pfandbriefe and Public Sector Pfandbriefe. These cover pools were merged upon the merger taking effect. As a result, DZ HYP now maintains a Mortgage Pfandbrief cover pool and a Public Sector Pfandbrief cover pool. For more details concerning the composition of the cover pools, please refer to the investor presentation, which is available for download. When will DZ HYP publish details concerning its cover pools in accordance with section 28 of the German Pfandbrief Act? In line with the regular disclosure cycle, the first set of consolidated information on cover pools, in accordance with section 28 of the German Pfandbrief Act (Pfandbriefgesetz "PfandBG") will be compiled as at 30 September 2018, and will be published in October. You will then find this information on DZ HYP's website. When will DZ HYP publish its first Harmonised Transparency Template? 3

4 Just like the publications in accordance with section 28 of the PfandBG, the Harmonised Transparency Template will be published in October. What are the ratings of DZ HYP's Pfandbrief issues? Both DZ HYP's Mortgage Pfandbriefe and Public-Sector Pfandbriefe continue to have a "AAA" rating by Standard & Poor's. Technical details for investors What will happen to outstanding Pfandbriefe and senior bonds issued by DG HYP and WL BANK following the merger? All outstanding Pfandbriefe and senior bonds will continue to exist, without any changes. Following the merger, these securities have become DZ HYP issues. Will there be any change to the listings of outstanding bonds? No, all bonds will continue to be listed on the exchanges they were admitted to, without changes. Where will new issues be listed? New issues will be listed at the Hamburg and Dusseldorf Stock Exchanges. Will there be any changes for investors in registered securities (promissory note loans and registered Pfandbriefe)? There will be no changes for investors in registered securities; certificates for existing registered securities will not be replaced. Will there be any changes for investors in bearer securities? WM Data Service will automatically adjust the issuer details for these securities to show DZ HYP, with a suffix indicating the original issuer. The German Securities ID (WKN) and ISIN will remain unchanged. What documentation will new DZ HYP issues be based on? DZ HYP will use a Debt Issuance Programme (DIP) as the contractual basis for all new issues. This documentation is based on DG HYP s DIP, which has been amended to refer to DZ HYP, 4

5 through a contractual supplement. WL BANK's DIP has been discontinued effective 27 July 2018: no taps will thus be possible for bonds issued under WL BANK's DIP. 5

6 Your contacts Treasury Head of Treasury Patrick Ernst Asset/Liability Management Sascha Aldag Risk Management Britta Speckmann Strategic Funding/Fixed Income Investor Relations Nicole John Back Office (Marktfolge) Securities Bernd Mattern