HYPO NOE Investor Presentation Regionality, customer proximity & sustainability Clearly positive result despite high one-off amounts in the first half of 2017 Noticeably reduced administrative expenses due to efficiency improvements Already sound capital base further broadened Continued growth in deposits from customers E October 2017
Content Section Slide I. Group Business Strategy 3 II. Business Outlook for 2017 14 III. Financial Figures 15 IV. Funding 19 V. Contacts 26 Appendix Key Financial Statements and Further Details 27 Names used in this presentation: Bank: HYPO NOE Landesbank für Niederösterreich und Wien AG (abbreviation: HYPO NOE Landesbank) Group: HYPO NOE Gruppe 2
I. Group Business Strategy HYPO NOE at a Glance HYPO NOE Landesbank: more than 125 years of track record and expertise Regional market leader in Public Finance Local banking partner for retail customers in Lower Austria and Vienna Fully integrated service chain in the real estate business Focused on Austria, Germany and on a selective basis EU-countries in the neighbouring Danube region State of Lower Austria Vienna Strong ratings Issuer Rating: 'A/A-1' from Standard & Poor s with stable outlook Public Sector Covered Bonds: 'Aa1' from Moody s Mortgage Covered Bonds: 'Aa1' from Moody s Sustainability: 'C' from oekom research with status 'Prime' Committed and reliable shareholder: State of Lower Austria owns 100 % Leading issuer of Pfandbriefe in Austria 3
I. Group Business Strategy Recent Developments Merger of HYPO NOE Landesbank AG and HYPO NOE Gruppe Bank AG successfully completed The objective of the merger Reintegration of the retail and housing finance businesses of former 100% subsidiary HYPO NOE Landesbank AG Efficiency increases due to the organization s lower complexity and operational synergies - using the operational and strategic strengths of both banks The merger in retrospect Successful merger of HYPO NOE Gruppe Bank AG and HYPO NOE Landesbank AG on the weekend of 23 rd and 24 th of September 2017 on the basis of the formal decision of the Supervisory Board of HYPO NOE Gruppe Bank AG, adopted on May 17, 2017, and the following approval of the regulatory authorities As of September 23 rd, 2017, the merged bank will operate under the name: HYPO NOE Landesbank für Niederösterreich und Wien AG (abbr. HYPO NOE Landesbank) 4
I. Group Business Strategy Core Market: Competitive Economy Austria Positive GDP development 2016e + 1.6 % (EU19: 1.7 %) 2017f + 2.0 % (EU19: 1.9 %) GDP per capita 1 above average 2016e EUR 43,065 (EU19: EUR 36,178) 2017f EUR 47,234 (EU19: EUR 37,300) One of the lowest unemployment rates within the EU 2016e 6.0 % (EU19: 9.9 %) 2017f 5.5 % (EU19: 9.1 %) Public debt below EU average 2016e 84.6 % (EU19: 91.4 %) 2017f 82.6 % (EU19: 89.8 %) Level of corporate and household indebtedness substantially below Euro-zone average Attractive yield spreads relative to Germany Housing market: no oversized construction sector and low level of household indebtedness Lower Austria / Vienna 40 % of Austria s population live and work in Lower Austria and Vienna Region with highest population growth potential 2015-2075 41 % of Austrian GDP is generated in Lower Austria and Vienna Highest gross income from employment Lower Austria (# 1) EUR 33,118 Vienna (# 3) EUR 31,330 Highest purchase power per inhabitant Lower Austria (# 1) EUR 21,048 Vienna (# 3) EUR 20,870 Fiscal equalisation scheme secures strong and prudent framework for investors Privileged access to international financial markets through Federal Financing Agency (ÖBFA) 1 EIU, GDP per capita at purchase price parity; 08/2017 5
I. Group Business Strategy Strong and Stable Credit Ratings Issuer Type of Rating Standard & Poor s Moody s Issuer Credit Rating 'A/A-1' (stable) - Public Sector Covered Bond - 'Aa1' Mortage Covered Bond - 'Aa1' State of Lower Austria Issuer Credit Rating 'AA' (stable) 1 'Aa1' (stable) Republic of Austria Issuer Credit Rating 'AA+' (stable) 'Aa1' (stable) Issuer rating 'A/A-1' with stable outlook confirmed by Standard & Poor s in August 2016 Strong capital position, GRE status, strong link to and important role for the State of Lower Austria as reliable owner Public Sector Covered Bonds and Mortgage Covered Bonds both rated 'Aa1' by Moody s confirmed in October 2016 Credit strength of the issuer, credit quality of the assets, strength of the Austrian legal framework and OC level The over-collateralisation (OC) of the cover pools is as follows 2 : HYPO NOE s public sector covered bonds have an over-collateralisation (OC) of 36.0% with a minimum OC level of 20.5%, of which 0% is on a "committed" basis. HYPO NOE s mortgage covered bonds have an over-collateralisation (OC) of 35.0% with a minimum OC level of 12.5%, of which 0% is on a "committed" basis. In August 2017 Moody s upgraded the outlook for the Austrian banking system from stable to positive. 1 Unsolicited Rating 2 Last Moody s performance overview based on data as of March 31, 2017 6
I. Group Business Strategy Top Sustainability Ratings from oekom & rfu Sustainability ratings are an important evaluation with regards to corporate social responsibility performance and as such for a holistic and future-orientated corporate governance. Therefore, sustainability ratings become an increasingly important aspect of socially responsible investment decisions. The corporate social responsibility performance of HYPO NOE Landesbank is currently assessed by the sustainability rating agencies oekom research, imug and rfu. As part of a successful sustainability programme HYPO NOE was in 2015 awarded for the first time a 'C' rating with the status of 'Prime'. 'Prime' is awarded for an above-average commitment in the areas of environmental and social responsibility. HYPO NOE was rated in 2016 by the Austrian rating agency rfu and awarded with the status of 'rfu qualified' (rating result: 'ba'). rfu is an Austrian company specialising in sustainable investment and in particular sustainability analysis. The best performing companies are awarded with the status 'rfu qualified' and added to the rfu sustainable investment universe. 7
I. Group Business Strategy Top Sustainability Ratings from imug HYPO NOE is in the upper quarter of all rated issuers of Public Pfandbriefe (Public Sector Covered Bonds). HYPO NOE is the best of all rated issuers of Public Pfandbriefe in the savings bank sector. 1 HYPO NOE is in the upper quarter of all rated issuers of mortgage bonds (Mortgage Covered Bonds). HYPO NOE is the best of all rated issuers in the savings bank sector. 1 HYPO NOE is in the upper quarter of all rated financial institutions (including development banks). HYPO NOE is the best of all rated issuers in the savings bank sector. 1 1 As an issuer HYPO NOE is assigned to the savings bank sector (incl. Landesbanks and mortgage banks). 8
I. Group Business Strategy Competence and Experience Drive Business Focus Strategic Business Units Public Finance Corporate & Structured Finance Financing and leasing solutions for the public sector Corporate & Structured Finance Corporate and structured finance solutions Project and infrastructure finance Retail Customers Public Finance Religious Communities, Special Interest Groups & Agriculture Local SMEs Religious Communities, Special Interest Groups & Agriculture Financing solutions Ethical investments Property & facility management Real Estate Finance Financing of commercial projects and housing developers Real Estate Services Real Estate Services Real Estate Finance Project development and management Property management Facility management Retail Customers Experts on mortgages and housing for private customers and special services for professionals 9
I. Group Business Strategy Public Finance Business position Partner of local and regional authorities, public agencies and infrastructure companies Public construction projects including leasing solutions and PPP (Public-private-partnership) Focus on Lower Austria and Vienna, active in selected countries of Danube region Long-standing cooperation with EIB, KfW, EBRD Recent developments Key revenue generator Reference project Mistelbach-Gänserndorf State Hospital: design-build general contractor solution that brought the project in on budget and on schedule Strategy Remaining core business of HYPO NOE Gruppe Reduction and diversification of Public Finance portfolio actively promoted resulting in a lower balance sheet total Expanding market share in Austria Syndications HYPO NOE Group Total Assets 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2016 2015 2014 2013 HYPO NOE Group Total Revenues 2 Retail customers Real Estate Finance Corporate & Structured Finance Public Finance 26% 29% Public Finance 29% 16% Corporate & Structured Finance Real Estate Finance Retail customers 1 Pro-forma analytical breakdown over all IFRS segments (12/2016) 2 Fee income + interest income 10
I. Group Business Strategy Corporate & Structured Finance 1 Business position HYPO NOE Group Total Assets 1 Corporate and structured corporate finance solutions for the mid-cap and large corporate segments Regional focus Austria, Germany and defined markets of the Danube region International business focus on infrastructure and corporates of strategic relevance. Specialized team for target group religious communities, interest groups and agriculture Recent developments 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2016 2015 2014 2013 Retail customers Real Estate Finance Corporate & Structured Finance Public Finance Intense competition and subdued credit demand Focus on SME business in core markets Financing of the renovation of sacral buildings Selective financing of renewable energy projects HYPO NOE Group Total Revenues 2 26% Public Finance 29% Strategy Structured corporate lending will remain a high priority Drive Danube strategy forward by partnering with Austrian and local businesses in the region Build up a range of ethical investment products 29% 16% Corporate & Structured Finance Real Estate Finance Retail customers 1 33% of corporate portfolio is accounted for by SMEs 2 Pro-forma analytical breakdown over all IFRS segments (12/2016) 3 Fee income + interest income 11
I. Group Business Strategy Real Estate Finance and Promoted Housing 1 Business position Financing solutions for the asset classes: office, logistics, warehouse and residential property, shopping centers, retail parks, hotels, rental apartment properties/portfolios Active in Austria, Germany and Danube region Promoted housing developers (Wohnbaugenossenschaften) low risk business Recent developments Rising demand across all real estate categories due to low interest rates A number of early repayments, mainly as a result of early refinancing or property disposals by customers HYPO NOE Group Total Assets 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2016 2015 2014 2013 HYPO NOE Group Total Revenues 2 Retail customers Real Estate Finance Corporate & Structured Finance Public Finance Strategy Growth in Austria and Germany Close watch on regional real estate trends in Danube region Maintaining strong relationships with promoted housing developers in Austria 26% Public Finance 29% 29% 16% Corporate & Structured Finance Real Estate Finance Retail customers 1 45% of real estate portfolio is accounted for by promoted housing 2 Pro-forma analytical breakdown over all IFRS segments (12/2016) 3 Fee income + interest income 12
I. Group Business Strategy Retail Customers and Professionals Business position Universal banking services for 70,000 customers Branches in Lower Austria and Vienna Strategic focus on finance & housing, saving & investment and accounts & cards Specialized services for professionals like doctors, pharmacists or lawyers Recent developments Increases of retail deposits Customer-focused efforts led to significant cut in the number of foreign currency loans Improved accessibility via service centers Roll out of user friendly homepage including new mobile services HYPO NOE Group Total Assets 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2016 2015 2014 2013 HYPO NOE Group Total Revenues 2 26% 29% Retail customers Real Estate Finance Corporate & Structured Finance Public Finance Public Finance Strategy Corporate & Structured Finance Focus on growth of the customer base and retail deposits Real Estate Finance Efforts in the area of digitalisation will be further enhanced and developed 29% 16% Retail customers 1 Pro-forma analytical breakdown over all IFRS segments (12/2016) 2 Fee income + interest income 13
II. Business Outlook for 2017 Update for the first half Public Finance will remain core business Reduction and diversification of the Public Finance portfolio actively promoted in coming years Loans and advances to the public sector reduced by EUR 378 mn or 7.3 % in the first half of 2017 Continued focus on real estate and infrastructure financing in Lower Austria, Vienna and on a selective basis in the neighbouring Danube Region New lending of EUR 493 mn in the first half of 2017 HYPO NOE Group acts as an engine of economic growth in the region Business in fee and commission based services is intended to be strengthened in particular in the light of low interest rate environment Increase in fee and commission based income by EUR 0.5 mn or 6.2 % in the first half of 2017 Diversification of available funding instruments Customer deposits intended to remain a sustainable source of refinancing Continued growth in customer deposits by EUR 342 mn or 8.9 % in the first half of 2017 Efforts in the area of digitalisation will be further enhanced and developed Modern HYPO NOE Online Banking with additional functions and features launched in the first half of 2017 14
III. Financial Figures Key Facts and Ratios Key Facts (in EUR '000s) HY 2017 HY 2016 FY 2016 FY 2015 FY 2014 Total assets 15,909,013 16,248,359 15,392,051 15,895,645 15,926,960 Loans and advances to customers 10,358,218 10,940,802 10,854,932 11,557,287 11,194,066 Deposits from customers 1 4,190,331 4,170,940 3,847,855 3,260,856 2,305,056 Financial assets 1,765,900 2,198,954 1,987,488 2,108,456 2,249,653 Net interest income 56,176 62,955 124,439 130,840 129,909 2 Net fee and commission income 7,481 7,044 13,458 13,850 13,979 Profit before tax 11,196 17,224 93,430 11,659-39,810 Profit after tax 9,003 13,074 69,998 6,404-30,988 Key Ratios (%) HY 2017 HY 2016 Return on equity before tax 3.5 % 5.9 % Return on equity before tax (operating) 3 8.2 % 10.8 % Cost income ratio 87.7 % 72.2 % Cost income ratio (operating) 4 67.7 % 56.9 % Core Capital Ratio (CRR) 17.3 % 13.9 % Equity Ratio (total, CRR) 17.5 % 15.1 % Levies in respect of public authorities Financial stability contribution ( bank tax ) HY 2017: EUR 8.2 mn (thereof: EUR 6.8 mn one-off amount) HY 2016: EUR 7.4 mn Deposit insurance contribution and resolution fund HY 2017: EUR 8.4 mn HY 2016: EUR 8.1 mn Provisions for potential interest rebates as a result of Supreme Court judgments on negative interest EUR 2.4 mn (for the period 2015 to 2016) EUR 1.7 mn (for the period 01.01. to 30.06.2017 1 Including promissory notes placed with customers (HY 2017: 355 EUR mn) 2 Adjusted net gains & losses on investments accounted for using the equity method disclosed in a separate line (Appendix: Consolidated Statement of Comprehensive Income (I)) 3 ROE before tax excl. financial stability contribution, contributions to resolution and deposit insurance funds, and regulatory costs/ave. equity adjusted for financial stability contribution, contributions to resolution and deposit insurance funds, and regulatory costs 4 Cost/income ratio excl. financial stability contribution, contributions to resolution and deposit insurance funds, and regulatory costs Notes on major one-off effects: 2016: Significant non-recurring income from the sale of Carinthian Compensation Payment Fund (KAF) zero-coupon bonds received under the swap for HETA securities incl. unwinding: EUR 59.5 mn 2014-2015: Cumulated write-down (HETA): EUR 87.1 mn including impairment hedge adjustment (35.85 % of face value EUR 225 mn) 15
III. Financial Figures Solid Capitalisation Capitalisation Equity Ratios phased-in vs. fully-loaded (CRR/CRD IV) 25% 20% 15% 10% Basel II (BWG) until 2013 18.79% 17.89% 16.31% 14.71% 13.25% 12.33% Basel III (CRR/CRD IV) as of 2014 17.10% 17.54% 14.85% 15.16% 17.28% 16.34% 13.45% 12.26% 018% 018% 018% 017% 017% 17.54% 13.45% 17.28% 17.77% 14.05% 17.51% 017% 5% 017% 0% FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 HY 2017 017% phased-in fully-loaded Equity Ratio Tier 1 Capital Ratio Basel III Requirement Equity Ratio Tier 1 Capital Ratio Capital base (EUR '000s) HY 2017 HY 2016 Total eligible core capital 622,446 585,909 Capital requirement (CRR/CRD IV) 283,969 309,940 Surplus capital 338,477 275,696 Difference between phased-in and fully loaded CET Ratios predominantly due to 100% eligibility of AfS-reserve Minimum regulatory requirements for core and total capital ratio of 4.5 % and 8.0 % again considerably exceeded LCR > 100 % Leverage ratio 4.34 % 1 NSFR (indicative) 101 % 1 with consideration of the approval by FMA (without consideration of IC transactions) 16
In EUR '000s III. Financial Figures Loan Portfolio and Risk Provisions Breakdown of loans and advances to customers Waterfall of risk provisions HY 2017 Volume (in EUR '000s) HY 2017 NPL Public sector customers 4,772,568 0.16 % Business customers 1,787,255 6.79 % 120000 100000 80000 97,462 0 8,256-13,550-7,916-1,200 0 83,052 Housing associations 1,529,896 0.02 % 60000 Retail customers 2,208,577 2.21 % 40000 Professionals 59,922 4.51 % 20000 Total 10,358,218 1.74 % 0 Breakdown by country Breakdown by currency Details on CHF loan portfolio 7% 4% <1% 10 % <1% Leasing / Insurance companies Industries 71 % Retail 17 % Internal rating 1A-2E AAA bis BBB- 80 % 3A-4E BB+ bis C 19 % 89% 90% Corporates 12 % 5A-5E D 1 % States / Municipalities <1 % Austria Germany EU & CH Others EUR CHF GBP 17
III. Financial Figures Securities Portfolio 1 Breakdown by Sectors Breakdown by Rating Banks 603,485,000 Sovereigns 757,055,000 1% <1% International Organisations 35,000,000 Corporates 14,683,507 Sub-sovereigns and municipalities 83,000,000 Supranational banks 19,000,000 Total 1,512,223,507 18% 22% 59% Aa1 - Aa3 A1 - A3 Baa1 - Baa3 Ba1 B1 6% 2% 1% <1% Sovereigns Regional Distribution 40% 50% Banks Sub-sovereigns and municipalities International organisations Supranational banks TOP 5 sovereign exposures in Austria, France, Poland, Slovakia and Czech Republic: approx. 60 % 100 % EUR denominated Rest of portfolio well diversified within 21 countries Average portfolio rating 'A1' Corporates 1 Based on nominal values (30.06.2017) 18
IV. Funding Diversified Funding Base Money Markets and Debt Capital Markets Funding as of June 2016, in EUR '000s Covered bonds 4,880,030 31 % Senior unsecured bonds 3,218,140 20 % Subordinated debt 202,357 1 % Deposits from customers 1 4,190,331 26 % Deposits from banks 2 1,421,801 9 % Funding Strategy Benchmark issues secured and unsecured Private placements with tailor-made solutions Retail deposits through branch network Customer deposits from institutional clients Equity 650,890 4 % Other liabilities 3 1,345,464 9 % Total 15,909,013 100 % Highlights 2016 CHF 100 mn, senior unsecured benchmark EUR 100 mn public sector covered bond private placement Significant increase in customer deposits (+ ~ EUR 590 mn year-on-year) Increased repurchase of own issues with final maturity 2017 Outlook 2017 Planned funding volume of around EUR 1,150 mn (EUR 966 mn already issued) Focus on public sector covered bond benchmark EUR 500 mn public sector covered bond benchmark very successfully issued on March 28, 2017 (first soft-bullet repayment structure in Austria) Successful increase of the outstanding EUR 300 mn from the mortgage cover pool by EUR 200 mn to now a benchmark size of EUR 500 mn Complementing senior unsecured funding Continuous geographical expansion of investor base 1 including promissory notes placed with customers of EUR 355 mn 2 including promissory notes placed with banks of EUR 376 mn 3 i.a. liabilities held for trading and hedge accounting 19
IV. Funding HYPO NOE Public Sector Covered Bond (as of 30.09.2017) Public Sector Pfandbrief Volume of outstanding bonds Cover pool Rating (Moody s) EUR 3,452 mn EUR 4,342 mn 'Aa1' Minimum Overcollateralisation 1 20.5 % Effective Overcollateralisation (PV) 2 35.4 % Bloomberg HYNOE <Corp> Outstanding HYPO NOE Pfandbrief benchmark issues EUR 500 mn 1.625% Pfandbrief 2012-19 due September 2019 XS0829215838 EUR 500 mn 1.75% Pfandbrief 2013-20 due October 2020 XS0981808933 EUR 500 mn 3.00% Pfandbrief 2012-22 due May 2022 XS0780267406 EUR 500 mn 0.375% Pfandbrief 2017-23 due May 2023 XS1590565112 Tenor: 5-30 years HYPO NOE Landesbank among leading Austrian issuers of Public Sector Pfandbriefe 1 Last Moody s performance overview based on data as of March 31, 2017 2 Effective overcollateralisation: PV total cover pool / PV of total outstanding bonds (%) 20
IV. Funding HYPO NOE Public Sector Covered Bond (as of 30.09.2017) Types of Debtors and Guarantors (in EUR mn) Guaranteed by federal states 2,069 48 % Federal states 1,588 36 % Municipalities 330 8 % Guaranteed by municipalities 210 5 % States 92 2 % Guaranteed by states 53 1 % Total 4,342 100 % by Rating (in EUR mn) Aaa 3,652 84.1 % Aa 602 13.9 % A 48 1.1 % < A 40 0.9 % Gesamt 4,342 100.0 % Loans vs. Bonds (in EUR mn) Loans 4,250 97.9 % Bonds 92 2.1 % Total 4,342 100.0 % 8% 5% 2% 1% Guaranteed by Federal States Cover Pool by Geography (in EUR mn) Austria 4,274 98.4 % Federal States Slovakia 35 0.8 % Municipalities Guaranteed by Municipalities Poland 20 0.5 % Czech Republic 13 0.3 % Total 4,342 100 % 36% 48% States Guaranteed by States Average Size Cover Asset EUR 0.1mn per debtor EUR 0.1mn per loan 21
IV. Funding Examples: Classic and Social Infrastructure Research centre for cancer treatment Client: Facility: Amount: Role: Location: EBG MedAustron EIB-Loan 100 mn Euro Arranger Wiener Neustadt, Lower Austria Boat Terminal & World Heritage Centre Client: Facility: Amount: Role: Location: Kremser Immobiliengesellschaft (KIG) Loan 2 mn Euro Lender & Project Manager Krems-Stein, Lower Austria Copyright: Welterbezentrum 22
IV. Funding HYPO NOE Mortgage Covered Bond (as of 30.09.2017) Mortgage Covered Bonds Volume of outstanding bonds Cover pool Rating (Moody s) EUR 1,109 mn EUR 1,536 mn 'Aa1' Minimum Overcollateralisation 1 10.5 % Effective Overcollateralisation 2 41.0 % Bloomberg HYNOE <Corp> Outstanding HYPO NOE Pfandbrief benchmark issues EUR 500 mn 0.75% Pfandbrief 2014-21 due September 2021 XS1112184715 EUR 500 mn 0.50% Pfandbrief 2015-20 due November 2020 XS1290200325 Cover Pool by Currencies (in EUR mn) EUR 1,494 97.3 % CHF 41 2.6 % JPY and USD 1 > 1.0 % Gesamt 1,536 100.0 % Cover Pool by Countries (in EUR mn) Austria 1,269 82.6 % Germany 250 16.3 % Netherlands 17 1.1 % Gesamt 1,536 100.0 % 1 Last Moody s performance overview based on data as of March 31, 2017 2 Effective overcollateralisation: nominal value total cover pool / volume of bonds outstanding (%) 23
IV. Funding HYPO NOE Mortgage Covered Bond (as of 30.09.2017) Regional Distribution Distribution by Asset Type 6% 2% 2% 3% 8% 1% Lower Austria Vienna Styria Other Austrian Federal States North Rhine-Westphalia 12% 16% 1% 37% Austrian promoted housing loans Austrian residential loans Austrian comercial loans German comercial loans Bavaria 17% 61% Other German Federal States Utrecht (NL) LTV Distribution 1 LTV 0-40 26.9 % LTV 40-50 17.3 % LTV 50-60 18.4 % LTV 60-70 20.1 % LTV 70-80 6.8 % LTV >80 10.6 % Average LTV (acc. Moody's) 1 54.2 % Average LTV (acc. to Austrian definition) 2 48.3 % 1 LTV Austria Definition: (amount covered per receivable (including subtracted total of prior encumbrances)) current property value 2 LTV based on rating agency definition: (total receivables per borrower group + total prior encumbrances) total current property values Dutch comercial loans 34% Cover Pool by Maturities (in years) Seasoning 5.8 Remaining average life total 8.1 Remaining average life residential 9.4 Remaining average life commercial 4.4 Cover Pool by Loan Size (in EUR mn) # of Loans < 100,000 207 4,938 100,000-300,000 285 1,800 300,000-500,000 104 268 500,000-1,000,000 198 276 1,000,000-5,000,000 373 206 > 5,000,000 369 32 Total 1,536 7,520 24
IV. Funding Examples: Commercial and Promoted Housing Werderscher Markt Client: Amount: Quartier am Auswärtigen Amt 37 mn Euro Size: 19,470 m² Tenants: Arcotel (53%), Office + Retail (37%), Residential (8%) Location: Berlin, Germany Promoted Housing in Lower Austria Client: Siedlungsgenossenschaft Neunkirchen Amount: 5.75 mn Euro Size: 4,033 m² Location: Neunkirchen, Lower Austria Winner of the Lower Austrian Housing award 2011 25
V. Contacts Thomas Fendrich Head of Group Treasury / Capital Markets / FI +43 (0) 590 910 1233 thomas.fendrich@hyponoe.at Markus Payrits Head of Liquidity Management +43 (0) 590 910 1222 markus.payrits@hyponoe.at Peter Olsacher Treasury Solutions Team +43 (0) 590 910 1597 peter.olsacher@hyponoe.at Harald Klimt Treasury Solutions Team +43 (0) 590 910 1581 harald.klimt@hyponoe.at Martin Leppin Head of Financial Institutions +43 (0) 590 910 1054 martin.leppin@hyponoe.at Agnieszka Feiler Financial Institutions +43 (0) 590 910 1489 agnieszka.feiler@hyponoe.at 26
Appendix 27
Appendix HYPO NOE Group Balance Sheet Assets (consolidated) in EUR '000s 30.06.2017 31.12.2016 Δ absolut Cash and balances at central banks 4,494,020 164,587 1,329,433 Loans and advances to banks 995,574 998,347-2,773 Loans and advances to customers 10,358,218 10,854,932-496,714 Risk provisions -83,052-97,462 14,410 Assets held for trading 490,339 555,293-64,954 Positive fair value of hedges (hedge accounting) 381,804 483,215-101,411 Available-for-sale financial assets 1,746,041 1,967,148-221,107 Financial assets designated as at fair value through profit or loss 19,859 20,340-481 Investments accounted for using the equity method 30,410 29,922 488 Investment property 53,267 54,117-850 Intangible assets 708 918-210 Property, plant and equipment 71,125 77,525-6,400 Current tax assets 20,273 20,333-60 Deferred tax assets 1,914 1,443-471 Other assets 327,015 261,393 65,622 Disposal groups held for sale (IFRS 5) 1,499 0 1,499 Total assets 15,909,013 15,392,051 516,962 28
Appendix HYPO NOE Group Balance Sheet Liabilities (consolidated) in EUR '000s 30.06.2017 31.12.2016 Δ absolut Deposits from banks 1,421,801 1,462,298-40,497 Deposits from customers 4,190,331 3,847,855 342,476 Debts evidenced by certificates 8,098,170 7,698,831 399,339 Liabilities held for trading 443,106 502,954-59,848 Negative fair value of hedges (hedge accounting) 699,131 793,697-94,566 Provisions 41,886 50,155-8,269 Current tax liabilities 19,760 20,127-367 Deferred tax liabilities 33,961 36,955-2,994 Other liabilities 107,620 129,429-21,809 Subordinated capital 202,357 202,381-24 Equity (including minority interests) 650,890 647,369 3,521 Owners equity 642,076 638,950 3,126 Non-controlling interests 8,814 8,419 395 Total equity and liabilities 15,909,013 15,392,051 516,962 29
Appendix Consolidated Statement of Comprehensive Income (I) in EUR '000s HY 2017 HY 2016 Δ absolut Interest and similar income 262,762 285,489-22,727 Interest and similar expense -206,586-222,534 15,948 Net interest income 56,176 62,955-6,779 Credit provisions 1,698-9,627 7,929 Net interest income after risk provisions 57,874 53,328 4,546 Fee and commission income 8,888 8,448 440 Fee and commission expense -1,407-1,404-3 Net fee and commission income 7,481 7,044 437 Net trading income 1,698-7,836 9,534 Administrative expenses -67,418-69,595 2,177 Net other operating income 14,471 21,536-7,092 Income from investments accounted for using the equity method 2,280 1,444 836 Net gains or losses on available-for-sale financial assets -520 13,828-14,348 Net gains or losses on financial assets designated as at fair value through profit or loss 65-35 100 Net gains or losses on hedges -4,703-2,635-2,068 Net gains or losses on other financial investments -32 118-150 Profit before tax 11,196 17,224-6,028 Income tax expense -2,239-4,150 1,911 Profit for the period from continuing operations 8,957 0 8,957 Earnings from discontinued operations 46 0 46 Profit for the period 9,003 13,074-4,071 Non-controlling interests -395-140 -255 Profit attributable to owners of the parent 8,608 12,934-4,326 30
Appendix Consolidated Statement of Comprehensive Income (II) Other comprehensive income (in EUR '000s) HY 2017 HY 2016 Δ absolut Profit attributable to owners of the parent 8,608 12,934-4,326 Items not to be reclassified to profit or loss Change in actuarial gains or losses (before tax) -192 0-192 Change in deferred tax 48 0 48 Items that may be reclassified subsequently to profit or loss Change in available-for-sale financial instruments (before tax) 2,217 8,059-5,841 Change in non-current assets held for sale and discontinued operations (before tax) 0-1 1 Change in deferred tax -554-2,015 1,461 Total other comprehensive income 1,519 6,044-4,525 Total comprehensive income attributable to owners of the parent 10,126 18,978-8,852 Other comprehensive income is entirely attributable to owners of the parent 31
Appendix Breakdown of Earnings Power by Segments 1.1.-30.06.2017 (in EUR '000s) Gruppe Bank Leasing Other Landesbank Consolidation Total Interest and similar income 37,727 16,704 2,213-468 0 56,176 Credit provisions 758 123 790 27 0 1,698 Net interest income after risk provisions 38,485 16,827 3,003-441 0 57,874 Net fee and commission income/expense 213 7,271-3 0 0 7,481 Net trading expense 1,720 0 0 0-22 1,698 Net gains or losses on hedges -4,648-55 0 0 0-4,703 Net gains or losses on other financial assets FVO 65 0 0 0 0 65 Net gains or losses on other financial assets AFS -520 0 0 0 0-520 Net gains or losses on other financial investments -30 0 0 642-644 -32 Net other operating expense/income 11,359 746 1,969 7,432-7,035 14,471 Operating income after credit risk provisions 46,644 24,790 4,969 7,633-7,701 76,334 Staff costs -14,567-10,904-1,418-4,944 0-31,833 Other administrative expenses -24,138-12,981-828 -2,412 7,701-32,658 Depreciation, amortisation and impairment (excl. Investment properties) -905-872 -52-1,100 0-2,928 Operating expense -36,609-24,757-2,298-8,456 7,701-67,419 Net gains or losses on investments accounted for using the equity method 2,717 0-11 -426 0 2,280 Profit before tax 9,752 33 2,660-1,249 0 11,196 Income tax -2,239 Profit for the period from continuing operations 8,957 Earnings from discontinued operations 0 0 0 46 0 46 Profit after tax 9,003 Non-controlling interests -395 Profit attributable to owners of the parent 8,608 32
Appendix Austrian Legal Framework for Covered Bonds Pfandbriefe Fundierte Bankschuldverschreibungen Hypothekenbankgesetz (Mortgage Banking Act 1899) Pfandbriefgesetz (Pfandbrief Act 1927) Gesetz betreffend Fundierte Bankschuldverschreibungen (Covered Bond Act 1905) Erste Group Bank Bank Austria Österreichische Landes-Hypothekenbanken HYPO NOE Landesbank BAWAG P.S.K Kommunalkredit Raiffeisenbanken VOLKSBANK WIEN 33
Appendix Comparison of Austrian vs. German Pfandbrief Law Austria Germany Pfandbrief law in place YES YES Mortgage and public sector collateral assets in separate pools YES YES Cover register YES YES Collateral assets limited to EEA, CH YES NO Legally required minimum overcollateralisation YES YES Cover pool monitoring (Trustee) YES YES Special proceedings in case of insolvency YES YES Pfandbriefe remain outstanding in case of issuers s bankruptcy YES YES NPV matching YES 1 YES Austrian Pfandbrief law was initially based on German legislation Important changes to the German Pfandbrief law were followed by Austrian legislation Main differences: Germany allows collateral from non-european countries; NPV matching is compulsory in Germany and voluntary in Austria (self-commitment by issuing bank in Articles of Association) 1 if included in the Articles of Association of the respective credit institution 34
Appendix Deficiency Guarantee by the State of Lower Austria Guarantee WITHOUT Limitation Guarantee WITH Limitation NO Guarantee Originated < 03/04/2003 > 03/04/2003 < 01/04/2007 > 01/04/2007 Maturity > 30/09/2017 < 30/09/2017 n/a Deficiency guarantee by the State of Lower Austria WITHOUT time limitation: All liabilities originated before 03/04/2003 Deficiency guarantee by the State of Lower Austria WITH time limitation: All liabilities originated after 03/04/2003 and before 01/04/2007 and maturing before 30/09/2017 NO deficiency guarantee by the State of Lower Austria: All liabilities originated between 03/04/2003 and 01/04/2007 and maturing after 30/09/2017 All liabilities originated after 01/04/2007 35
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