INVESTOR UPDATE MAY 2017

Transcription

1 INVESTOR UPDATE MAY 2017

2 EXECUTIVE SUMMARY NWB Bank - Nederlandse Waterschapsbank Bank for the Dutch public sector established in 1954 Ratings: S&P AAA/Stable/A-1+ Moody s Aaa/Stable/P-1 100% owned by Dutch State and local authorities Almost all credit exposure to Dutch government Never a default on a loan Currency neutral management policy Supervision by ECB Solidity confirmed by stress test by ECB % BIS risk weighting Level 1 High Quality Liquid Asset On QE buying list of ECB Long term funding requirement 2017 EUR 10 bln 2

3 ECONOMIC DATA NETHERLANDS Government Debt (% of GDP) Netherlands Germany Euro Area (18) Government Debt Germany (% of GDP) UK Euro Area (18) Spain France Italy Greece France Greece Source: Eurostat Oct The Netherlands: Economic Indicators Year on Year % GDP Growth Inflation (CPI) Unemployment Source: CPB - Netherlands Bureau of Economic Policy Analysis 3

4 10 YEAR GOVERNMENT BOND YIELDS EUROPE DEU NIE FRA ITA SPA 0 1-Jan-10 1-Jan-11 1-Jan-12 1-Jan-13 1-Jan-14 1-Jan-15 1-Jan-16 1-Jan

5 OWNERSHIP STRUCTURE Ownership structure Memorandum and Articles of Association state that only the Dutch State and other public legal entities can be shareholders of NWB Bank Water Authorities are decentralised public authorities Similar legal status to municipalities Responsible for the flood control, water quality, water quantity and treatment of urban wastewater Receive on average 5% of their revenues from the government and the rest from taxes they are allowed to levy The mandate of the Water Authorities is 2% laid down by law in the Waterschapswet ( 17% Water Authorities Dutch State Provinces 81% 5

6 THE NETHERLANDS FLOOD RISK AREA 6

7 ESTABLISHMENT OF WATER AUTHORITIES Constitution of the Kingdom of the Netherlands (24 Aug 1815) Chapter 7. Provinces, municipalities, water authorities and other public bodies. Section 133: To the extent that the law does not provide otherwise, the establishment and dissolution of water authorities, the regulation of their duties and organisation, and the composition of their administrative organs will be governed by provincial by-law in accordance with rules set by law. The regulatory and other powers of the administrative organs of water authorities and public access to their meetings will be regulated by law. Supervision of these administrative organs by provincial and other bodies will be regulated by law. Any decisions passed by these administrative organs may be nullified only if they conflict with the law or the public interest. A Water authority is a government institution with regulatory power, based on the Constitution. Where the Government is a centralized authority, the water authorities are decentralized authorities (like provinces and municipalities). The water authorities independently levy taxes directly from the Netherlands citizens. 7

8 WATER AUTHORITY BOND FROM 1648 Yale to Be Paid Interest on Dutch Water Authority Bond From 1648 (Bloomberg) -- Some perpetual bonds are more eternal than others. Yale University will receive euros ($153) in interest on a perpetual bond issued in 1648 from Dutch water authority de Stichtse Rijnlanden. The 1,000 guilder-bond ($509), which is written on goatskin, is among five of the world s oldest bonds that still pay interest, according to Clarion Wegerif, a spokeswoman for the water authority. 8

9 CLIENTS: THE DUTCH PUBLIC SECTOR All clients (except Other): AAA implicit rating Government risk Zero-risk weighting 11% 3% 14% 7% 65% Social Housing Healthcare Municipalities Water Authorities Other 9

10 NWB Bank Housing corporations Guarantee Fund WSW Central Govt. Municipalities SOCIAL RENTAL HOUSING GUARANTEE SETUP 1 st layer security 2 nd layer security 3 rd layer security loans 50% 50% WA (Housing Ass. Authority) 10

11 HOUSING IN THE NETHERLANDS Privately owned 4.2 mln (56%) Rental housing 3.3 mln (44%) Guaranteed by WSW 2.3 mln (31%) Total housing inventory in The Netherlands 7.5 mln Van der Schaar, WBO, WoON 11

12 HOUSING MARKETS COMPARED 12

13 TOTAL LENDING OF NWB BANK 50,000 40,000 30,000 20,000 10, Nominal values, > 1 year remaining 13

14 LONG TERM DEBT PUBLIC SECTOR NETHERLANDS / MARKET SHARE NWB 14

15 KEY FIGURES Balance Sheet Total (EUR bln) Net Profit (EUR mln) Shareholders Equity (EUR mln)* 1,507 1,399 1,303 1,256 1,226 Tier 1-ratio* 61% 80% 73% 101% 111% Cost / Interest Income ratio 9% 10% 14% 17% 13% Leverage ratio 2.3% 2.1% 1.8% 1.7% 1.6% Liquidity Coverage Ratio (LCR) Net Stable Funding Ratio (NSFR) * Tier 1-equity 1,824 mln **CET 1-ratio 50.5% (minimum 7%) 15

16 FINANCIAL PERFORMANCE & CAPITALISATION BASEL III Leverage Ratio: capital requirements effective 2018: min. 3% (Pillar I) Very punitive for banks with heavy bias towards low risk assets: Capital ratio NWB Bank 2016: 2.3% >> undercapitalised BIS Solvency ratio 2016: 61% (required: 7%) >> overcapitalised Policy adjustment for promotional banks expected LCR: % NSFR: % (implementation in 2018) 16

17 CET 1 ratio (in %) STRESS TEST RESULT AUGUST 2016 ECB/EBA CET1 ratio (end 2015) and outcome adverse scenario (end 2018) 80% 60% Comparison Dutch banks 40% 20% 0% -20% -40% -60% ING Bank Rabobank ABN Amro BNG NWB Bank End 2015 End 2018 Result (%) Stress test carried out by ECB, similar to the 2016 EBA EUwide stress test Outcome confirms financial robustness NWB Bank 17

18 CAPITAL MARKET ACTIVITIES FUNDING STRATEGY Benchmark transactions Debt Issuance Program EUR 60 bln In EUR and USD In benchmark maturities and size Eurobond (Reg S) format and 144A Public transactions - EMTN, Kangaroo, Kauri, Formosa In various currencies AUD, CAD, CHF, GBP, JPY, NOK, SEK Plain vanilla Private placements - EMTN, loan format, SSD, NSV On reverse inquiry, customized, listing option Flexible as to currency, maturity and structure Green Bonds Annual issuance of a Waterbond Planned issuance of Social Bonds 18

19 CAPITAL MARKET ACTIVITIES RULES AND REGULATIONS High Quality Liquid Assets ( HQLA ) definition for the LCR European Union: Level 1 Switzerland: Level 2a US: Level 2a (guidelines are subject to individual investor interpretation) Euro denominated bonds NWB Bank eligible under Public Sector Purchase Programme ( PSPP ) Bank Recovery and Resolution Directive ( BRRD) / Single Resolution Mechanism ( SRM ) In case of NWB Bank, BRRD/SRM does not restrict the ability of the Dutch State to support Dutch State acts as a shareholder, as such this is considered as private solution Repo eligible with: European Central Bank, Federal Reserve of New York and Swiss National Bank 19

20 CAPITAL MARKET ACTIVITIES DEBT DISTRIBUTION NWB BANK Currency 1% 4% 2% Geography 4% 3% 4% 7% 37% 45% EUR USD AUD CHF GBP JPY 20% 21% 52% Europe Asia Americas MEA Australia OTH Investor type 13% 22% 40% Central banks Bank Treasury Asset Managers Insurance / Pension 25% 20

21 CAPITAL MARKET ACTIVITIES Total Debt Maturity Profile 12,000 10,000 8,000 6,000 Other CHF GBP USD EUR 4,000 2, ,000 21

22 OUTSTANDING BENCHMARKS IN EUR Size (M) Start Coupon Maturity EUR 1, % January 2019 EUR 1, % August 2019 EUR 1, % July 2020 EUR 1, % January 2021 EUR 1, % February 2021 EUR 1, % March 2022 EUR 2, % October 2022 EUR 1, % October 2023 EUR 1, ,000% September 2025 EUR 1, ,625% January

23 OUTSTANDING BENCHMARKS IN USD Size (M) Start Coupon Maturity USD 1, % September 2017 USD 1, % January 2018 USD 1, % July 2018 USD 1, % March 2019 USD 1, % September 2019 USD 1, % March 2020 USD 1, % March 2022 USD 1, % April 2022 USD 1, % March

24 MONEY MARKET ACTIVITIES Euro Commercial Paper Program EUR 25 bln Dealers BoAML, Citi, UBS, Barclays, ING Minimum ticket USD 10 mln equivalent Currency decomposition ECP 7% 5% 21% 67% EUR USD GBP Other USCP Decomposition by maturity 5% 23% USCP 3m fixed USCP 4m fixed USCP 12m fixed US Commercial Paper Program USD 10 bln Dealers Citi, JPM, BoAML Minimum ticket USD 10 mln 72% 24

25 GREEN BONDS NWB BANK Waterbonds Use of proceeds is lending to the water authorities Green Bond Principles are leading 2 nd Opinion by Cicero Water authorities activities: Mitigation of climate change (waterway management) Adaptation to climate change (a.o. flood protection) Biodiversity projects (water related) Ratings: oekom: NWB Bank classified as Prime. Rating is C+. imug: NWB lies in Top 3 of all rated issuers Sustainalytics Annual issuance: 2014: EUR % June : EUR % September : USD % March : SEK % January : SEK % April

26 TAKE AWAY NWB BANK Funding vehicle for the Dutch public sector AAA/Aaa by S&P / Moody s Credit risk similar to Dutch government 100% owned by Dutch government Almost all lendings government risk Assets 0% risk-weighted and implied AAA Good one-sided liquidity, always a bid in the market Bonds are HQLA and on PSPP buy list ECB Tier 1 ratio around 60% 26

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28 VALUE CHAIN (1) 28

29 VALUE CHAIN (2) 29

30 INTERNATIONAL ENGAGEMENT & KNOWLEDGE SHARING Dutch Water Authorities Dutch Water Authorities want to share its expertise on regional water management with the world. By joining forces the Dutch regional water authorities strive to be of better service to the people and organisations that need it the most, bolster international business, and create mutual benefit from international cooperation. The NWB foundation is funding projects to address: Integrated water resources management (planning, scheduling, management and maintenance) Decentralized governance (institutionalization, financing, regulations) Drinking water and sanitation Wastewater treatment Water quality Flood Urban water management. Examples: Wastewater Management Egypt: Water Authority Aa en Maas work with Egyptian water operators in two areas, Fayoum and Baheira, to improve the wastewater treatment. Remote Sensing Zuid-Afrika: Water Authority Groot Salland share knowledge on water management in connection with River Bassin through Satellite supervisory, a system which has been used for a long time in The Netherlands. Water Sanitation Ethiopia: Water Authority Hollandse Delta and Water Authority Hunze en Aa s together with Dutch partners improve the water supply in Adama. in collaboration with Ethiopian local authorities, systems are installed, stakeholders trained and monitoring systems implemented. 30

31 GREEN BOND FRAMEWORK Mitigation Projects Energy reduction and biogas production Reuse of nutrients and other substances Transport and treatment of wastewater Adaptation Projects Flood protection infrastructure Irrigation and drainage, pumping stations Biodiversity Projects (Re)design of watercourses and wetlands for water storage and discharge Sanitation and dredging of waterbeds Improving water quality 31

32 PROJECT EXAMPLES Dikes The polder Krimpenerwaard lies below sea level. Dike enforcement is a continuous process. Biodiversity Structure of the ecological network, including watercourses and wetlands 32

33 PROJECT EXAMPLES Wastewater treatment New technologies in treatment of wastewater at the lowest possible cost to society. (The Netherlands is, joined by Austria and Germany, one the three EU members that fully comply with the EU Urban Waste Water Treatment Directive) Drainage: Pumping stations Drainage has a long history in The Netherlands this UNESCO heritage pumping station is from 1920 and is the only steam pumping station in the World this will not be a project but newer technologies might. 33

34 CICERO 2ND OPINION NWB s green bond framework and the governing laws of the regional Water Boards provide a holistic and sound framework for climate-friendly investments. The Water Boards integrate a range of environmental impacts in their project plans, and perform environmental impact assessments on all large projects. The green bond framework lists eligible projects that are generally supportive of the dual objective of promoting a transition to low-carbon and climate-resilient growth, and improving biodiversity. NWB provides regular and transparent reports to investors and the public. 34

35 OTHER DUTCH WATER INNOVATIONS Flood protection Delta Works ( ) is a massive chain of flood protection structures that were constructed after the occurrence of the North Sea flood of Aim: prevent North Sea floods. Delta program for the rivers ( ), followed by the Room for the River Programme is to give the river more room to be able to manage higher water levels. At more than 30 locations, measures will be taken that give the river space to flood safely green engineering. To be completed by approx Second National Delta Programme ( ) is in preparation, dealing with flood protection, freshwater supply, spatial adaptations, urban design. Environment, nature, agriculture and recreation. Parliament decisions in 2014/15. Example of combining functions: water storage and car parking Other storage applications involve multifunctional car parks. Under the entrance to the Museumpark, an underground water storage is being constructed for sewage, with an extra capacity of 10,000 m 3. 35

36 CONTACT DETAILS NWB Bank Tom MEUWISSEN Tel: General Manager Treasury Bouke DEN HOED Tel: Treasury department Erica DELIS Tel: Treasury department Mark van DOORN Tel: Treasury department 36

37 DISCLAIMER THE SLIDES USED IN THIS PRESENTATION HAVE BEEN PREPARED EXCLUSIVELY TO SUPPORT RELATED ORAL DISCUSSIONS. THE INFORMATION INCLUDED IN THIS PRESENTATION IS BEING MADE AVAILABLE TO YOU FOR INFORMATION PURPOSES ONLY. This presentation is based on information provided by Nederlandse Waterschapsbank N.V. (the Company ) and other publicly available information as indicated herein. The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities which the Company may issue in the United States or any other jurisdiction (the Securities ) nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Any decision to invest in or acquire Securities must be based wholly on the information contained in an offering document or prospectus (the Offering Document ) issued or to be issued by the Company in connection with any such offer and not on the contents hereof and this presentation should not be considered as a recommendation by the Company that any recipient of this presentation should subscribe for or purchase any Securities in any jurisdiction in which such offer, sale or invitation is not authorized or to any person to whom it is unlawful to make such an offer, sale or invitation. This presentation does not contain all relevant information relating to the Company or its Securities, particularly with respect to the risks and special considerations involved with an investment in the Securities of the Company, and is qualified in its entirety by reference to the detailed information which will appear in the Offering Document. No Securities have been or will be registered under the U.S. Securities Act of 1933, as amended (the Securities Act ). Accordingly, any Securities will only be issued in the United States pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. Statements in this presentation that are not historical facts are forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of Forward-looking statements are based on intent, belief or current expectations of future events of the Company's management and are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the actual results of the Company may vary materially from those expressed in or implied by the forward-looking statements. Given these risks and uncertainties, you are cautioned not to place substantial reliance on forward-looking statements, which are made only as of the date of this presentation. For a discussion of some of the important factors that could cause the Company s results to differ from those expressed in or implied by the forward-looking statements, please be referred to the Offering Document that will be delivered in connection with any Securities offering. The Company disclaims any obligation to update, or to announce publicly any revision to, any of the forward-looking statements contained in this presentation. 37