Shipping Finance and Investment

Transcription

1 Shipping Finance and Investment 7 th Mare Forum Italy "Italy and the World - Quo Vadis?" Joep Gorgels ABN AMRO Bank Head of Transportation West-Europe Sorrento, Italy, 9 May 2011

2 Table of contents 1 Introduction 2 Bank debt some trends 3 Export Credit 4 High Yield Bonds 5 Private Equity and Islamic Funds 6 Conclusions 2

3 Traditional Money Supply versus New Money Supply Traditional EQUITY KG market in Germany Equity Markets in USA / Asia / Europe KS / CV market in Scandinavia / Holland Private equity (families) DEBT Banks (local & international) Bonds (USA, Norway, Asia) New EQUITY Commodity producers and traders Funds of all types Private and public equity Chinese /Islamic money/funds Leasing Venture Capital (opportunity/distressed funds) DEBT Chinese Banks / Funds Islamic funds Development Banks & Export Credit ( ECA s ) High yield bonds Convertible bonds 3

4 Traditional Sources of Capital for Shipping 36.2 % Bilateral Lending Internal equity finance Shipyard finance Government Other Markets currently show limited activity 40.2 % Syndicated loans Bank Loans have traditionally satisfied approx. 75% of external funding needs The number of active shipping banks has reduced and ticket levels have decreased. Banks have been busy with restructurings rather than new business. 2,5% Equity funds 2% Tax Lease investors 6 % KG / KS markets 5% Bond & Public Equity 8% Non ship mortgage loans Source: ABN AMRO As a result, a shortage of bank debt is currently constraining the shipping industry, an industry that is heavily dependent on the banking market. 4

5 The Ship Finance Cycle Current position in the cycle but with the unique difference that the financial crisis has limited the lending capacity of traditional shipping banks. Higher margins for counter cyclical lending Non-shipping banks leave the industry High returns in shipping Non-shipping banks enter the market Market Collapses Increased competition Excess supply of tonnage Cheap debt leads to accelerated borrowing Reduced margins 5

6 While debt from traditional sources decrease new money may be locked in from other sources Some of the main shipping banks struggling Reduced appetite Balance sheet constraints Government intervention Mergers high concentration in one segment KG / KS / CV market problematic Charter defaults Liquidity problems Covenant breaches High opex lower returns Family run companies Liquidity support needed in core business Struggling with non-core investments Private equity Available in funds or family capital Mostly interested in distressed assets Short investor horizon (3-5 yrs) and high return requirements (>25%) Public equity IPO window unsure due to uncertainties on supply side (order book) & demand side. Management track record & transparency crucial. Several successful follow-on issuances vessel acquisitions & strengthening of balance sheets (covenant breaches) Several companies in IPO preparation Bond Market Bonds market have been active since 2Q09 Mostly used as alternative funding source Price difference to loan market is increasing 6

7 Table of contents 1 Introduction 2 Bank debt some trends 3 Export Credit 4 High Yield Bonds 5 Private Equity and Islamic Funds 6 Conclusions 7

8 Volumes, number of deals and tenors are decreasing Volume Quarterly volume and number of deals Syndicated shipping deal volume decreased significantly from USD 6.4 billion in 4Q10 to USD 3.5 billion in 1Q11 In addition, the number of deals decreased from 28 (4Q10) to 17 (1Q11). This means that the average deal size in 1Q11 was slightly smaller than in 4Q10 The trend of increasing volumes during, has clearly taken a turn in the 1st quarter of 2011 However, if the volumes in 1Q11 are compared to 1Q10 there is only a modest decrease witnessed The volume of transactions decreased from USD 4.4 billion in 1Q10 to USD 3.5 billion in 1Q11 Volume (USD bln) 20 Volume (USD bln) No. of deals Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q Number of transactions Source: Dealogic 8

9 Volumes, number of deals and tenors are decreasing Tenors Syndicated shipping loans by tenor Tenors were relatively short during 1H10 but increased during the succeeding quarters. Since 3Q10 a clear trend of syndicated shipping loan tenors moving to 5-10 years is visible. This trend has continued during 4Q10. During 4Q10 tenors of 7 years and longer amounted for 70% of total volume whereas these tenors amounted for 63% during Q3 and only 33% during Q2 100% 80% 60% 40% 20% 0% Q10 2Q10 3Q10 4Q10 1Q11 > 10 yrs 8-10 yrs 7 yrs 6 yrs 5 yrs 4 yrs 0-3 yrs In 1Q11 the increasing trend was reversed and tenors appear to be shorter again. Source: Dealogic 9

10 ABN AMRO is a leading bank in the Shipping market Bookrunner In the Bookrunner league table ABN AMRO moved up to the third position both in terms of volume and number of transactions. This position underlines the leading role of ABN AMRO in the syndicated shipping market ABN AMRO acted as bookrunner for STX Pan Ocean, Siem Offshore, Star Reefers, Odfjell ASA and Ship Finance International. Please note that only asset based transactions are taken into account Bookrunner table syndicated shipping loans Pos. Bookrunner Deal Value ($) (m) No. %share 1 DnB NOR Bank ASA 4, Nordea Bank AB 2, ABN AMRO Bank Deutsche Bank State Bank of India Citi Mizuho Credit Agricole CIB ING Mitsubishi UFJ Financial Group Subtotal 10, Total 18, Source: Dealogic 10

11 ABN AMRO is a leading bank in the Shipping market Mandated Lead Arranger In the MLA league table ABN AMRO moved to the fifth position in terms of volume. In number of transactions ABN ARMO moved to the third position ABN AMRO was involved with several important transactions with a total participation of USD 805 million: STX Pan Ocean, Siem Offshore, Bluewater, Ray Car Carriers, UACC, Scorpio Tankers, Saga Tankers, Golden Ocean, Ship Finance International. Please note that only asset based transactions are taken into account MLA table syndicated shipping loans Pos. Mandated Lead Arranger Deal Value ($) (m) No. %share 1 DnB NOR Bank ASA 3, Nordea Bank AB 2, BNP Paribas 1, Credit Agricole CIB ABN AMRO Bank Natixis HSH Nordbank Citi SEB Svenska Handelsbanken AB Subtotal 12, Total 18, Source: Dealogic 11

12 Credit tightness since mid Trends in Ship Finance Many big players in ship finance have significantly reduced activity, taking out at least 50% of the lending capacity Refocus on existing core clients & quality names, core regions (national link) Smaller facilities Margins increased relative to pre-crisis levels Tighter covenants Declined appetite for LT debt; increased premium for LT funding relative to pre-crisis levels. However, currently tenors seem to be increasing. 8 year tenors are back in the market. Tendency for bilateral or club deals. Very few underwriting and syndication efforts. Financing shortfall is significant US$ Bn Assuming 70% Order book Delivery Est. Annual New Building Financing Need Annual Shortfall c. $13-30Bn 38.0 Est. Annual Lending Availability Source: Marine Money Despite orderbook cancellations and delivery postponement estimated at around 30%-40%, demand for external funding is very high due to high new building order book. There is a big gap with the expected capacity in the banking market. 12

13 Table of contents 1 Introduction 2 Bank debt some trends 3 Export Credit 4 High Yield Bonds 5 Private Equity and Islamic Funds 6 Conclusions 13

14 Market trends Export & Project Finance Asia North America Western Europe Extensive experience in multisource export finance, requiring cooperation with export credit agencies USD 31.2 bn (93 deals) -16% USD 54.3 bn (265 deals) -35% Asia USD 104 bn (160 deals) +57% South America USD 34.2 bn (67 deals) +15% Africa/Middle East USD 39.7 bn (65 deals) -28% *project finance deals in 2009 (source: deallogic) 14

15 K-sure in brief Korea Export Credit Agency 100% State owned: operating under the export insurance act Annual underwriting volume approved yearly by national assembly ( USD 165 bln) Capital USD 1.5 bln Government guarantees financial losses (fiscal back-up) Under authority of the Ministry of Knowledge Economy Ksure supports apr 32% of national exports (short and medium tern underwriting) Top five of ECA s and ECA of the year award by trade finance Member of Berne Union and OECD consensus K-sure shipping volumes in USD billion: Volumes exp. Medium & short term business: USD 4 billion Of which 2 bln shipping 2011 expected strong increase towards USD 4 bln for shipping alone 3,2 6,8 0,2 0,8 1,4 1,

16 Cover specifics Ksure will follow the arrangement on officially supported export credits (OECD) Max 80% contract but normally max 70% of loan to value Repayment terms: 12 years shipping, rigs depending on definition, normally max 10 years Semi annual installments Minimum premium benchmark does not apply for ship financing Max 95% cover Pre and post delivery financing but often post only preferred Floating and fixed interest rate cover Currency cover: USD, EUR, Yen Securities: in line with international standards e.g. mortgage on vessel, charter agreements, financial standing of borrower or guarantor, assignment of shipbuilding contract etc. 16

17 Sinosure in brief Chinese Export Credit Agency 10% State owned: operating under the State Council approval; established in 2001 Annual underwriting volume approved yearly by national assembly ( USD 165 bln) Capital USD 1 bln State Council guarantees sufficient funding (fiscal back-up) Under authority of the Ministry of Finance, oversees (risk) management Approval required from MoF for transactions above USD 30 mln (note: different approval processes for different instruments) Sinosure supports apr 19% of national exports (short and medium tern underwriting) Member of Berne Union; not member of OECD consensus but following guidelines Volumes 2009 exp. Medium & short term business: USD 8 billion Of which 2 bln shipping, large decrease compared to normal levels 2011 expected strong increase. 17

18 To sum up.. In conclusion we would like to highlight that: ECA backed finance facilities are a useful (and stable) diversification of the companies funding source The Korean and Chinese ECA s are very well excepted by the international banking community and full in line with OECD practices Korea has a strong interest to especially support the big Korean shipyards in specialised projects as off shore the industry and high tech vessels Both ECA s do rely on the expertise of the financial institutions involved when it concerns special sectors like off shore ABN AMRO can offer you: an extensive global track record in ECA backed financing entrances at all levels with the ECA s (K-sure, Sinosure, and other ECA s like US Exim, Hermes and GIEK) and the respective governments Substantial experience in Sinosure and K-sure covered loans a remarkable track record in offshore sector and shipping financing in general 18

19 Table of contents 1 Introduction 2 Bank debt some trends 3 Export Credit 4 High Yield Bonds 5 Private Equity and Islamic Funds 6 Conclusions 19

20 Shipping Companies Continue to Successfully Access the Bond Market Driven by favourable market conditions for both issuers and investors.. Issuance in the shipping sector between was driven by issuers: searching to diversify funding sources to fill the bank lending gap refinancing existing debt and increasing liquidity taking advantage of low all-in rates and locking in longer term funding.and by investors searching for yield.and funding consideration by shipping companies Create a more recession-resistant capital structure (via incurrence -based covenants vs. maintenance tests in loans) In many cases, create longest-tenor debt in capital structure and junior layer of debt (although recently many bonds were structured as secured, incl. secured by 1st priority liens) Diversify traditional investor base and create trading liquidity for subsequent benchmarking and repeat issuance Often minimize or avoid expensive equity issuance and dilution Historical upwards trend in issuance volume..issued by companies based granularly around the world Millions Shipping Proceeds ($MM eq) No Bonds Trend Shipping HY Bonds Deals Norway 5% Malaysia 3% India 3% Other 7% South Korea 20% Ireland 5% Singapore 5% Germany 6% China 16% Source: Bloomberg 0 Marshall Islands 7% Japan 7% Denmark 8% United States 8% 20

21 Historical Low Yields are a Key Driver for Increasing Bond Issuances Observations 10-yr US Treasury Yield vs. 10-yr German Bund Yield (%) Although government bond yields have risen significantly since October, levels are still well below pre crisis levels year US Treasury Yield % (Recent: 3.47%) 10 year German Bund Yield % (Recent: 3.35%) 3-year Average for 10-year Treasury Yield/German Bund Yield % (Recent: 3.35%) Both USD and Euro high yield levels have remained stable over the last six months confirming the attractiveness of bonds in this sector However, uncertain development of PIIGS governmental debt and rising inflation levels resulting in increasing overall interest levels could have a negative impact on the bond market High-Yield YTW (%) High-Yield STW (bps) 25.0 USD High Yield % (Recent: 6.98%) EUR High Yield % (Recent: 6.81%) 3-year Average for High Yield % (Recent: 10.97%) 3-year Average for USD/EUR BBB % (Recent: 5.63%) USD High Yield bps (Recent: 517 bps) EUR High Yield bps (Recent: 449 bps) 3-year Average for High Yield bps (Recent: 854 bps) Source: ADI, Bloomberg 21

22 A Selection of Recent Bond Issues by Shipping Companies Recent shipping high yield transactions both rated and unrated companies successfully issued bonds in 2011 Issue Date Issuer Name Description Currency Amount issued Coupon Maturity S&P's Moody's Fitch OCEAN RIG UDW OCRGNO 9 1/2 04/27/16 USD 500,000, % NR NR NR CMA CGM CMACG 8 1/2 04/15/17 USD 475,000, % B- B2 NR CMA CGM CMACG 8 7/8 04/15/19 EUR 325,000, % B- B2 NR NAVIOS SA LOGIST NAVSAL 9 1/4 04/15/19 USD 200,000, % B+ (P)B3 NR ALGOMA CENTRAL ALCCN 6 03/31/18 CAD 69,000,000 6 % NR NR NR HAVILA SHIPPING HAVINO 0 03/30/17 NOK 300,000, % NR NR NR IM SKAUGEN SE IMSKNO 0 03/15/13 NOK 350,000, % NR NR NR SOLSTAD SOLSTA 0 02/25/16 NOK 700,000, % NR NR NR ACL I CORP ACLI 10 5/8 02/15/16 USD 250,000, % CCC+ Caa1 NR SHIP FINANCE INT SFL 3 3/4 02/10/16 USD 125,000, % NR NR NR OLYMPIC SHIPPING OLSHNO 0 02/09/15 NOK 250,000, % NR NR NR NAVIOS MARITIME NM 8 1/8 02/15/19 USD 350,000, % B+ (P)B3 NR 22

23 Table of contents 1 Introduction 2 Bank debt some trends 3 Export Credit 4 High Yield Bonds 5 Private Equity and Islamic Funds 6 Conclusions 23

24 Principal Finance Shipping Maas Capital Investments Key characteristics Investments are clustered in Maas Capital Investments ( MCI ). MCI is a Dutch limited liability company, wholly owned by ABN AMRO Bank, active since late 1990s Target assets: main stream shipping assets with high liquidity Commercial team of 2, hosting in excess of 15 years industry experience. Analysis and values based on conventional industry economics rather than multiples Investment profiles Joint Ventures / Co-Investments Bridge facilities (pre-ipo) Mezzanine Facilities (with equity features) Investment Portfolio USD 250 million equity invested Investment Principles Modern- and liquid assets Only trusted and reputable partners / counterparts and key / strategic clients of ECT PF financial investor only Short- and long term alignment of interest between all parties involved is a prerequisite. Minimum USD 7.5 million max USD 40 million per transaction No majority stakes: targeted share 5% - 50% Investment Horizon: 3 7 years, however no forced exits in low market cycles. Exit strategy: self-liquidating (put-options), refinancing, trade sale or IPO Car Carriers 28% Container Vessels 9% Other Tankers 11% Crude Tankers 18% Dry Bulk 34% Investments concern a total of 35 ships of which 25 ships are covered by long term employment contracts. Open vessels are mostly employed on shorter term contracts in anticipation of improving charter rate environment. Remaining average tenor of employment contracts exceeds 4 years. 24

25 Islamic Funds QInvest and ABN AMRO Bank create first Sharia a Compliant Mezzanine Shipping Fund Initial size: circa USD 100 mln Target to provide mezzanine financing in deep sea vessels All main shipping sectors (dry bulk, wet bulk, containers, offshore supply) Deal size: USD mln Loan life of 5 years, balloon up to 90% Addition to Senior secured financing up to 85% leverage on second secured basis No pre-delivery finance Looking for cash coupon of c. 10%, in certain cases coupled with deferred payment On average, this takes blended cost of debt (incl. Libor) to 6-7% per vessel Preserves more expensive equity capital 25

26 Table of contents 1 Introduction 2 Bank debt some trends 3 Export Credit 4 High Yield Bonds 5 Private Equity and Islamic Funds 6 Conclusions 26

27 Conclusions Bank finance availability slowly increasing Shift in banking landscape some banks focused on risk management some are moving out of shipping, merging and/or reducing balance sheets Many banks still focus on Core Client, Core Region, Core Sectors Bank finance terms and conditions still unfavourable for ship owners New funds come from (new) banks, ECA s, Islamic funds, yard Seller s Credits, bond and equity market, commodity producers and traders, etc Public equity & high yield bond markets open up again, also for Shipping but only under specific circumstances ABN AMRO is open for new shipping business as it continues to expand its global network of offices for shipping finance. ABN AMRO introduced a Sharia Compliant Mezzanine Shipping Fund, increasing leverage for owners (bridging the funding gap). ABN AMRO has access to the Debt and Equity Capital Markets in the US through a co-operation with Sunrise Securities Corp. in New York ABN AMRO has a global dedicated Export Credit and Project Finance team working on various shipping and offshore projects ABN AMRO provides private equity in shipping and offshore sectors ABN AMRO will continue to find innovative solutions for Shipping Sector 27

28 ABN AMRO legal merger is formalised as of 1 July ABN AMRO and Fortis Bank Nederland have an excellent strategic fit Netherlands based with international presence Merchant Banking Sold to RBS Commercial Banking Private Banking Retail Banking Our international presence will provide full services to our domestic clients throughout the world The combined bank is present in 30 countries The new ABN AMRO The new ABN AMRO is a leading financial institution in its domestic market the Netherlands, with strong positions in domestic Retail, Private, Commercial and Merchant Banking, complemented with an international focus on activities in Private Banking, BCC (Brokerage, Clearing & Custody) and in ECT (Energy, Commodities & Transport) The new commercial & merchant banking business has the ambition to become the market leader in the Netherlands for large commercial clients Our goal is to become the first bank of choice for Dutch companies based on a longstanding relationship offering the full range of products and services with tailored solutions for complex issues New York Sao Paolo Mumbai Shanghai Hong Kong Singapore 28

29 Energy, Commodities & Transportation (ECT): Profile ECT offers high quality financial services to international companies that are active in the value chain of the ECT industries. Key Success Factors 200 professionals with long term ECT industry expertise Energy Commodities Transportation Principal Finance Global client network Long track record Expertise in Escrow & Settlement, Documentary Credits and Collateral management Embedded risk & portfolio management Oil & Gas Floating production systems Drilling Oilfield Services Infrastructure Agri: cotton, cocoa, coffee, sugar, grains Metals: steel, ores and base metals Energy: crude oil, oil products, gas Deep sea shipping industry Intermodal / Containers Aviation Direct ECT investment activities Portfolio of assets (ships, containers) in projects related to and companies active in these assets Strong support management Awards & Rankings 2nd place for Soft Commodities Finance (Trade & Forfaiting Review Awards, August 2009) Shipping Deal of the Year North America 2009 (Jane s Transport Finance) America s New York Sao Paulo EMEA Amsterdam Athens Dubai London Oslo Rotterdam Asia Hong Kong Shanghai Singapore (in set up) Top 3 global position in Floating Production Storage and Offloading systems Top 3 position worldwide as commodity bank Top 5 position in shipping syndicated loan markets 29

30 Selected credentials in Global Export & Project Finance transactions in /11 EUR Fiber to the Home Dutch Accommodation EUR Offshore gas pipeline Ministry of Finance DBFM Program for EUR 285 million DBFMO project CO2 pipeline: Bio ethanol EUR 4 billion of the Republic of Ghana up to 211 Project Finance EUR plant to greenhouse growers ECA covered facilities EUR Schools in Flanders Project Finance and commercial facility Mixed Credit Facility Mandated Lead Arranger MLA / Swap coordinator / Agent Bank / Account Bank MLA / Swap coordinator / Agent Bank / Account Bank Arranger Participant Arranger Project Finance Facilities USD EUR Sinosure covered Ministry of Finance PPP A15 Motorway Vader Piet Windmill Park ECA covered Export Credit export credit of the Republic of Kenya EUR 662 million ECA covered Project Finance US$ 111,000,000 EUR with Greenbank funding 3 x capesize vessels Mixed Credit Facility MLA, Hedging Bank, Technical Bank, GFA, Account Bank Sole Lender Greenbank Agent Mandated Lead Arranger Sole Lender Mandated Lead Arranger Mandated Lead Arranger Sole Lender in progress 2011 in progress 2011 Sinosure covered export credit US$ 136,000,000 3 x capesize vessels Mandated Lead Arranger/agent Sinosure covered export credit US$ 40,000,000 3x container vessels Signing 03/11 Ksure covered export credit US$ 928,000, x teu container vessels Mandated Lead Arranger Ksure covered export credit US$ 40,000,000 Product carrier Sole Lender USD US-Exim covered Credit Underwriter, Sole Mandated Lead Arranger, Sole Swap Provider 30

31 Selected credentials in Transportation financing transactions in Pre- and post delivery Corporate facility financing ECA facility financing ECA facility financing Warehouse Notes Warehouse Facility finance US$ 725,000,000 NOK 635 million NOK 2.52 billion US$50,000,000 30,000,000 US$ 84,000,000 million 12 x VLCC s, 6 x Suezmax s 1 large AHTS 6 x Large AHTS Container equipment Fleet of tank containers 3 Kamsarmax bulkers and 8 x OBO s MLA / Agent Bookrunner Sole Arranger / Agent Sole Bookrunner / Agent Arranger MLA / Underwriter Deal financing Senior Revolving Credit Secured Financing Pre- and post delivery Multi Currency Senior Secured Debt 5 chemical tankers Facility US$ 44,000,000 finance Senior Secured Debt US$ 133,700,000 US$125,000,000 Offshore Vessels US$ 45,000,000 JPY 4,000,000,000 2 x Car carries + 1 x Container equipment 2 x VLCC s 1 x Capesize Bulker Capesize Sole Bookrunner / Agent Mandated Lead Arranger Arranger MLA / Underwriter MLA / Agent MLA Senior Secured Debt US$ 32,000,000 Senior Secured Debt US$ 255,300,000 Senior Secured Debt EUR 30,000,0002 x Fleet of Senior Secured Debt US$ 42,900,000 Mezzanine Finance US$ 9,000,000 Senior Secured Debt US$ 58,000,000 1 x Capesize Bulker 11 x Prod./Chem. tankers Tank Containers 1 x 6,919teu Container Ship 1 x LR Tanker 2 x Capesize bulkers Advisor MLA / Swap Bank Arranger / Underwriter MLA / Agent / Swap Bank pipeline Arranger/Lender Pipeline MLA pipeline 31

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33 Profile A leading Dutch Bank with a solid platform for performance Strategy: Maintain sustainable relationships with Dutch clients, both as their primary bank in the Netherlands and for all their business abroad Capture a leading position in a limited number of global specialist market segments Offer products and services that provide maximum added-value to clients Improve long-term funding position and liquidity profile through diversification of funding sources and extension of maturity Leading Dutch bank in one of the more stable and core economies in Western Europe, serving 6.8m clients Strong positions in domestic Retail, Private, Commercial and Merchant Banking, complemented by an international focus in Private Banking, Clearing and Energy Commodities & Transportation (ECT) Significant scope for post-merger profitability improvements through delivery of significant cost synergies, moderate risk profile and pursuit of operational excellence A Leading Dutch Bank Business model underpinned by prudent risk management approach integrated in all lines of business High asset quality, high proportion of secured lending, adequately provisioned loan book and no exposures to US mortgage investment products and related CDO s Commitment to adequate capital base, with capacity to absorb integration costs Experienced management team with the credentials to deliver the integration and establish a funding profile commensurate with ABN AMRO s conservative business model ABN AMRO is the result of a legal merger between Fortis Bank Nederland and the Dutch activities of the former ABN AMRO Holding on 1 July ABN AMRO is owned by the Dutch State Straight-forward and clearly defined business model Strong and profitable underlying businesses Adequately capitalised Moderate risk profile Funding programs in place to diversify funding sources, investor base and lengthen maturity profile Integration is well on track 33 33

34 Profile Highlights at 31 December Key messages Reported net result for the period amounted to a loss of EUR 414m, impacted by separation and integration-related items Adjusted for these items (total of EUR 1,491m net) underlying net profit of EUR 1,077m increased strongly Increase in underlying net profit was driven by operating income up 10% year-on-year loan impairments decreased 47% year-on-year Underlying cost/income ratio improved 5% points to 70% First year of integration concluded successfully resulting in EUR 350m of integration benefits ABN AMRO continues to be adequately capitalised Key metrics 1 in EUR m FY FY 2009 Underlying Operating income 7,659 6,986 Underlying Operating expenses 5,335 5,239 Loan impairments 837 1,585 Underlying Net profit 1, Reported Net profit Underlying Cost/Income ratio 70% 75% YE YE 2009 Total Assets (in EUR bn) AuM (in EUR bn) FTEs 26,161 29,551 in EUR bn YE 30 Sep IFRS equity Tier 1 capital² Total capital² RWA Basel II Core tier 1 ratio² ³ 10.4% 10.1% Tier 1 ratio² 12.8% 12.6% Total Capital ratio² 16.6% 16.6% Ratings YE Rating agency Long term LT outlook Short term S&P A Stable A-1 Moody s Aa3 Stable P-1 Fitch Ratings A+ Stable F1+ DBRS A high Stable R-1 middle Notes: 1.Underlying figures are adjusted for an exceptional result on FCC, closing of EC Remedy and separation & integration costs (as defined hereafter) 2.Please note that the pro forma capital figures shown currently do not reflect the impact of the harmonisation of the determination of the RWA and the capital components 3.The Core Tier 1 ratio is defined as Tier 1 excluding all hybrid capital instruments divided by RWA 34 34

35 Contact details Joep Gorgels Head of Transportation West-Europe Energy, Commodities and Transportation Group Telephone: Mobile: joep.gorgels@nl.abnamro.com 35