NORD/LB Group Presentation June 2016

Transcription

1 NORD/LB Group Presentation June

2 Agenda. NORD/LB at a glance 3 Financials 10 Segments 23 Outlook 37 Appendix 40 2

3 NORD/LB at a glance Established commercial bank in northern Germany. Successful universal bank for over 250 years in the market Among the top seven German banks Market leader in Northern Germany in its business units private, commercial and corporate customers Excellent knowledge in renewable energy and infrastructure projects Over 30 years of experience in ship and aircraft finance Represented in important financial centres worldwide Member of the extended Guarantee Funds of landesbanks and savings banks 3

4 NORD/LB at a glance Ownership structure and regional network. Strong support from our owners¹ Headquarters and ownership region Saxony-Anhalt Savings Banks Holding Association 5.3% 3.7% Special Purpose Holding Association of the Mecklenburg-Western Pomerania Savings Banks Hanover Brunswick Lower Saxony Savings Banks and Giro Association 26.4% Magdeburg 5.6% 59.1% State of Saxony-Anhalt State of Lower Saxony ¹ Total differences are rounding differences 4

5 NORD/LB at a glance Domestic and international represented in important financial and trade centres. New York Hamburg London Bremen Schwerin Amsterdam Hanover Brunswick Magdeburg Duesseldorf Luxembourg Paris Frankfurt Nuremberg Stuttgart Munich Warsaw Head offices Hanover, Brunswick, Magdeburg Branches worldwide London, New York, Singapore, Shanghai German branches Duesseldorf, Hamburg, Munich, Schwerin, Stuttgart and approx. 100 branches of Braunschweigische Landessparkasse Subsidiaries and bank holdings Bremer Landesbank, Deutsche Hypothekenbank, NORD/LB Asset Management, NORD/LB Luxembourg Covered Bond Bank, NORD/LB Vermögensmanagement Luxembourg Shanghai Singapore Addresses and more details: 5

6 NORD/LB at a glance Our business segments. Corporate Energy and Infrastructure Aircraft Private and Commercial Private customer business Private Banking Commercial customer business Insurance services for private customers in cooperation with public insurances in Lower Saxony Corporate customer business Agricultural Banking Finance with public and cooperative housing associations Acquisition finance Syndication business with associated savings banks Markets Business with Institutional customers Savings banks/ financial institutions Public-sector customers Municipal customer business Renewable energy finance Infrastructure finance Leasing Export and Trade finance Ship Ship finance Container Vessels Bulker Tanker Multi-Purpose Offshore Oil & Gas Cruise/ Ferries Aircraft finance Narrowbodies Widebodies Freighters Regional Jets Turboprops Helicopter Spare Engines Finance and Operating Lease Real Estate Banking Commercial real estate finance Social care property finance 6

7 NORD/LB at a glance Our subsidiaries and holdings. 1 Private and Commercial Corporate Markets Ship, Aircraft, Energy/Infrastructure, Real Estate Banking 54,83% 100% % 2 100% 100% 2 Asset Management Private and corporate customers North-west Germany Ship finance Commercial real estate finance Private and commercial customers Loans Financial Markets & Sales Client Services & B2B Wealth management Portfolio management Fund management Asset Management for institutional clients ¹ For additional information about subsidiaries and affiliated companies please consult or our Group Annual Reports 2015 page 257 ff ² NORD/LB ensures that the companies mentioned in the annual repot 2015 note (75) are able to meet their obligations ³ Incorporated under public law with partial legal capacity 7

8 NORD/LB at a glance Our ratings offer reliability for investors. NORD/LB credit ratings Long Term (senior unsecured) with outlook A3, Rating under Review A- / stabil / F1 Deposits with outlook A2, Rating under Review - Short Term (Notes/Deposit) P-1/P-1, Review for Downgrade - Baseline Credit Assessment / Viability Rating Ba2, Review for Downgrade bb+ Tier 2 Ba1, Review for Downgrade - Tier 1 B2(hyb) and B3(hyb), Rating under Review - Public-Sector / Mortgage / Aircraft Pfandbriefe Aaa / Aaa / Aa3, Review for Downgrade AAA stabil / - / - NORD/LB sustainability ratings Uncovered Bonds Public-Sector Pfandbriefe Mortgage Pfandbriefe Aircraft Pfandbriefe Positive BB Very Positive A Positive BB Positive B In total: C+ Investment status Prime Industry Leader 63 of 100 points Best-in-Class 8

9 Agenda. NORD/LB at a glance 3 Financials 10 Segments 23 Outlook 37 Appendix 40 9

10 Financials NORD/LB reports negative quarterly results (1/2). Group results with -84m significantly below previous year s results, stable operating business performance Loan loss provisions increased significantly to 435 m compared to last year s provisions of 104m Specific valuation allowances increased to 393m, general loan loss provisions broadly stable at 48m. The majority derived from Ship Reduction of shipping portfolio Due to difficult shipping markets and the planned medium-term portfolio reduction to 12-14bn, the share of shipping loans of the total loan exposure will be reduced even further Solid capital ratios With 12.6 per cent for Common Equity Tier 1 (CET1) and 16.7 per cent for total regulatory capital, our ratios are clearly above the required ratios. We will maintain adequate capital to meet all future regulatory capital requirements Total assets nearly unchanged Moderate increase by 1 per cent to 181.9m. We are already below the EU target of 195bn for year-end

11 Financials NORD/LB reports negative quarterly results (2/2). Income statement (in m) 1 Jan 31 Mar Jan 31 Mar 2015 Net interest income Loan loss provisions (llps) Moderate decrease due to low interest-rate levels and asset reduction Increase mainly due to specific valuation allowances for ships Net commission income Stable net commission income Profit/loss from financial instruments at fair value incl. hedge accounting Profit/loss from financial assets 7 2 Profit/loss from investments accounted for using the equity method Administrative expenses Other operating profit/loss Earnings before reorganisation and taxes Trading profit/loss: Based on interest rates. Fair-Value result: Based on interest rates and credit spreads Positive effects from less impairments; lower sale proceeds -7 - Negative results from affiliated companies at equity Moderate reduced staff expenses; contribution to security reserve for landesbanks ( 22m) Negative net effect from redemption of own bonds. Contribution to EU single resolution fund (49 m) Reorganisation expenses -7-6 Net allocations to reorganisation expenses for severance agreements previously agreed to Earnings before taxes Income taxes Consolidated profit

12 Financials Income statement overview. Income statement (in m) 1 Jan 31 Mar Jan 31 Mar Jan 31 Dec Jan 31 Dec Jan 31 Dec 2013¹ 1 Jan 31 Dec 2012¹ Net interest income ,974 1,985 1,931 1,959 Loan loss provisions Net commission income Profit/loss from financial instruments at fair value incl. hedge accounting Profit/loss from financial assets Profit/loss from investments accounted for using the equity method Administrative expenses ,114 1,125 1,167 1,158 Other operating profit/loss Earnings before reorganisation and taxes Reorganisation expenses Earnings before taxes Income taxes Consolidated profit CIR 46,9% 45,7% 46.4% 51.4% 51.9% 61.2% RoE -4,8% 13,5% 8.7% 3.8% 1.8% 1.0% ¹ Some previous year figures were adjusted, see Group Annual Reports 2013 and 2014, Note (2) 12

13 Financials Shipping market prospects let provisions rise. in m Provisions for lending business ¹ 2013¹ 2014¹ 2015¹ 1 Jan - 31 Mar 2015¹ Jan - 31 Mar 2016¹ Net allocations to specific valuation allowances Net allocations to general loan loss provisions Other² ¹ Including proportion of Group Management / Others and Reconciliation ² Include: provisions, additions to receivables written off, direct write-offs of bad debts, premium payments for credit insurance, lump-sum specific loan loss provisions (see Annual Report 2015, Note (21)) 13

14 Financials Total assets nearly unchanged. Balance sheet data (in m) 31 Mar Dec 2015 Total assets 181, ,998 Total assets nearly unchanged Loans and advances to customers 106, ,878 Still large balance sheet item, slight decrease of loans and advances from ship and aircraft mortgages Loans and advances to banks 22,273 21,194 Increase of short-term loans and advances resulting from money market transactions Financial assets 34,065 34,515 Slight reduction of afs financial assets Customer deposits 58,178 60,597 Decrease especially from money market transactions and savings deposits Equity capital (balance sheet) 8,312 8,513 Fall mainly based on consolidated results and revaluation of pension plans 14

15 Financials Balance sheet development at a glance. Balance sheet data (in m) 31 Mar Dec Dec Dec 2013¹ 31 Dec 2012 Total assets 181, , , , ,550 Loans and advances to customers 106, , , , ,577 Loans and advances to banks 22,273 21,194 23,565 27,481 34,378 Financial assets 34,065 34,515 45,120 47,043 52,423 Customer deposits 58,178 60,597 57,966 54,859 55,951 Liabilities to banks 47,841 48,810 58,986 59,181 65,079 ¹ Some previous year figures were adjusted, see Annual Report 2014, Note (2) 15

16 Financials Loans to customers ratio at high level. Total assets Loans to customers Net interest and commission income in bn in bn in m ,127 2,094 2,170 2, ¹ Mar 2016 Loans to customers ratio of total assets 50.8% 53.6% 54.8% 59.6% 58.4% ¹ Mar ¹ Mar ¹ Mar Mar 2016 ¹ Some previous year figures were adjusted, see Annual Reports 2013 and 2014, Note (2) 16

17 Financials Security exposure: High quality and well diversified. Exposure 1 by industry by country 1 as at 31 Mar 2016 Public administration 45% Other 7% Financing institutes / insurance companies 48% 34.0bn as at 31 Mar 2016 Northamerica 9% Rest Europe 8% Other 5% Germany 51% 34.0bn by rating 1 Euro-Countries (excl. Germany) 27% by maturity 1 as at 31 Mar 2016 Reasonable / satisfactory 1% Good / satisfactory 4% Increased risk 1% Default (= NPL) 1% Very good to good 93% 34.0bn as at 31 Mar 2016 > 5 years 46% < 1 year 15% 1-5 years 39% 34.0bn 1 Exposure at default. The relevant balance sheet items are Financial Assets and Financial Instruments at fair value through profit or loss 17

18 Financials High quality of total portfolio: 76 per cent in the highest category. NPL ratio in % 2.7% 3.7% 4.2% 4.7% 4.8% Total exposure 1 in bn , default (=NPL) very high risk high risk increased risk reasonable/satisfactory good/satisfactory very good to good Total differences are rounding differences 2 Figures were adjusted, see Interim Report as at 30 June 2015, page ² Mar

19 Financials Funding structure. Securitised liabilities 1 Subordinated capital as at 31 Mar 2016 Other debt securities 39% Money market instruments 5% Mortgage Pfandbriefe 30% 37.6bn as at 31 Mar 2016 Silent participations 14% Participatory capital 2% Subordinated liabilities 84% 3.9n Public sector Pfandbriefe 26% > 5 years 12% < 1 year 11% CRR figures Leverage Ratio as at 31 March 2016: 4.2 per cent Liquidity Coverage Ratio (LCR 2 ) as at 31 March 2016: per cent ¹ Carrying amount ² Acc. to ITS 1 to < 5 years 77% 19

20 Financials Capital ratios strengthened in recent years (CRR, 2014 transitional) (CRR, fully loaded) (CRR, transitional) (CRR, fully loaded) (CRR, transitional) (CRR, fully loaded) 2 CET1 ratio 10.85% 11.84% 10.66% 8.41% 13.07% 12.16% 12.58% 11.94% Total capital ratio 13.84% 14.32% 13.18% 12.40% 16.72% 16.66% 16.67% 16.45% Total risk exposure amount Common Equity Tier 1 (CET1) in m in m 77,863 68,500 69,231 63,675 63,749 8,451 8,112 7,381 8,320 8, ³ 2013¹ ² 2014² 2015² ² ¹ Adjustment of the previous year s figures, please see Annual Report 2014, note (72) ² According to IFRS ³ German GAAP (HGB), Solvability Regulation ³ 2013² 2014² 2015² ²

21 Financials NORD/LB Group capital. Regulatory capital (in m) 1 31 Mar Dec Dec 2014 Paid-up capital including premium 4,930 4,930 4,960 Reserves 2,759 2,908 2,187 Eligible components of CET 1 capital at subsidiaries Other components of CET 1 capital Deductible items (from CET 1 capital) ,199 Adjustments due to transition rules ,710 Balancing item to prevent negative AT 1 capital Common Equity Tier 1 capital (1) 8,020 8,320 7,381 Transitional adjustments due to grandfathered AT1 Capital instruments Adjustments due to transition rules Balancing item to prevent negative AT 1 capital Additional Tier 1 Capital (2) Tier 1 Capital 8,285 8,440 7,381 Paid-up instruments of Tier 2 capital 2,713 2,616 2,788 Eligible components of Tier 2 capital at subsidiaries Deductible items (from Tier 2 capital) Adjustments due to transition rules ,432 Tier 2 Capital (3) 2,343 2,207 1,742 Own funds 10,628 10,647 9,123 Comments on selected items (1) Deductible items ( 828m) include primarily the shortfall from the shipping portfolio. Audited loan loss provisions have a decreasing effect (2) AT1 mainly containing our old-style Fürstenberg -bonds, partly accounted for in AT1; Eligibility is reduced by 10 percentage points every year (3) Paid-up instruments of Tier 2 capital comprise subordinated liabilities including Fürstenberg -bonds; increased fair value boosted that item SREP ratio as at 1 Jan 2016: 9.25 per cent as at 31 Dec 2016: 9.75 per cent D-SIB buffer as at 1 Jan 2019: 1 per cent Monitoring of upcoming capital requirements from Minimum Requirements of Own Funds and Eligible Liabilities (MREL) ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 21

22 Agenda. NORD/LB at a glance 3 Financials 10 Segments 23 Outlook 37 Appendix 40 22

23 Segments Our business segments in numbers. in m as at 31 Mar 2016 Private and Commercial Corporate Markets Energy and Infrastructure Ship Aircraft Real Estate Banking Net income Expenses Operative earnings Loan loss provisions/ valuation Earnings before taxes CIR 76.2% 35.4% 44.2% 36.3% 23.5% 22.2% 28.9% RoRaC 16.7% -1.0% 37.2% 22.9% -46.0% 21.2% 23.4% 23

24 Segments Sound segment contributions balance loss from Ship. Earnings before taxes¹ in m 1 Jan 31 Mar Private and Commercial Corporate Markets Energy and Infrastructure Ship Aircraft Real Estate Banking Group Management/ Others, Reconciliations NORD/LB Group ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 24

25 Segments Shipping loans remain primary driver for risk provisions. Loan loss provisions by segments 12 in m 1 Jan 31 Mar Private and Commercial Corporate Markets Energy and Infrastructure Ship Aircraft Real Estate Banking Group Management/ Others, Reconciliations NORD/LB Group ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 2 Since 1 January 2016 we show specific valuation allowances and general loan loss provisions per segment 25

26 Segments Well diversified business model. as at 31 Mar 2016 Real Estate Banking 14% Aircraft 7% Group Management/ Others 12% Ship 16% Customer loans Private and Commercial 7% Energy- and Infrastructure 13% 106.3bn Corporate 20% Markets 11% Real Estate Banking 10% Aircraft 7% Total risk exposure amount by business units as at 31 Mar 2016 Group Management/ Others 16% Ship 22% Private and Commercial 6% 63.7bn Corporate 21% Marktes 7% Energy and Infrastructure 11% 26

27 Segments Private and Commercial. Deeply rooted in the home region. Exposure by industry 1 as at 31 Mar 2016 Other service industry 13% Private household with domestic staff 44% Other 9% Manufacturing industry 3% Land, housing 18% Public administration, defence, social insurance 13% 8.0bn With nearly 100 branches well represented in the Brunswick region for over 250 years We offer customer-oriented consulting and selected products and services for private and commercial customers within the region of Braunschweigische Landessparkasse, in Hanover, in Hamburg as well as throughout the business region of the Bremer Landesbank NORD/LB, Braunschweigische Landessparkasse, Bremer Landesbank and NORD/LB Vermögensmanagement Luxembourg offer inheritance optimisation, trust management, participation products and individual asset management for private banking clients Our related partners, Öffentliche Versicherung Braunschweig, Versicherungsgruppe Hannover (insurance companies), Landesbausparkasse (building society) and Deka complete our services in these businesses ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 27

28 Segments Corporate customer business. Successful growth strategy. as at 31 Mar 2016 Service industries/other 33% Financing institutes/ insurance companies 6% Exposure by industry 1 Transport/ communications Agriculture, 7% forestry and fishing 8% Manufacturing industry 17% Trade, maintenance and repairs 12% 26.7bn Energy, water and mining 15% Construction 2% Successfully advanced our growth strategy of corporate customer business Strengthened expertise in acquisition finance business Market leader in agricultural banking in Germany NORD/LB is one of the leading public housing lender in Germany SME: Traditional loan financing for corporate customers, also in close cooperation with regional savings banks Corporate finance: Complex solutions for strategic positioning and financing, change management, transaction- and receivables management as well as corporate lending structures ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 28

29 Segments Markets. Frequent issuer of benchmarks. Recent issues 1Q15 2Q15 3Q15 4Q15 Public Sector PB 1 4y, 500m 0.025% Public Sector PB 1 4y, 500m 0.025% TAP Sen. Unsec, 3y, 1,000m 0.625% 1Q16 Sen. Unsec, 5y, 750m 1.000% Lettre de Gage 5y, 500m 0.250% Lettre de Gage 3y, 500m 0.125% Mortgage PB 1 7y, 500m 0.125% Sen. Unsec 2y, 350m 3M Euribor+50bps Mortgage PB 1 6y, 500m 0.250% Issuer of Pfandbriefe (public-sector, mortgage, ship and aircraft), Lettres de Gage (covered bonds according to Luxemburg law), bearer bonds, promissory notes, money market securities Successful positioning as lead manager/arranger of bond issues, particularly covered bonds Comprehensive, customized range of money and capital market products in private placement segment International funding programmes:² 25bn euro MTN Program, 10bn euro CP Program, 4bn euro French CD Program, $3bn US dollar CP Program As at 31 Mar bn ECB eligible securities concerning NORD/LB Group, thereof 23.7bn for NORD/LB AöR ¹ PB = Pfandbrief according to German Pfandbrief Act 2 NORD/LB AöR 29

30 Segments Energy- and Infrastructure. Focus on growth segments. as at 31 Mar 2016 Other energy 6% Supply and disposal 5% Gas / biogas 4% Solar energy 8% By industry 1 Wind offshore 1% Exposure at default: 18.9bn Wind onshore 39% Years of experience in renewable energy finance. Focus is on wind and solar energy finance (mainly energy production). Market leader in our European core markets Germany, France, Ireland and UK. Expansion of customer base in North America through diversified new business Concentration on social infrastructure projects in the fields of accommodation, education, blue light and waste/ water; Public Finance Initiative (PFI) as well as project finance business For over 25 years, Bremer Landesbank is one of the leading lenders to leasing companies Public Sector 4% Financial Services 10% Transportation 5% Media and IT 2% Manufacturing industry 2% Trade and Services 14% ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 30

31 Segments Ship. Progress in portfolio transformation. By type of ships 1 as at 31 Mar 2016 Other ships 4% Crude oil tankers 3% MPP General Cargo 8% LPG/LNG tankers 3% Cruise ships / ferries 1% Gas-/Prod.- tankers 7% Offshore 6% MPP Heavy Lift 7% Corporates 7% Chemical tankers 4% Exposure at default: 18.0bn Bulk Carrier - Capesize 3% Bulk Carrier - Handymax 5% Bulk Carrier - Handysize 6% Bulk Carrier - Panamax 4% Container ships - Feeder 4% Container ships - Feedermax 5% Containerships - Handy 4% Container ships - Panamax 6% Container ships - Post-Panamax 7% Container ships - Sub-Panamax 6% Financing of cargo and multipurpose vessels resp. offshore oil & gas Cruise and Ferries For over 45 years NORD/LB offers individual and tailor-made solutions in the segment ship finance worldwide Broad range of shipping finance: from structuring, interest-rate and currency hedging by ECA-covered financing to alternative finance like promissory loans and securitisations. In addition we offer services like out-flagging of ships or M&A consultancy ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 31

32 Segments Ship. Declining number of ships Allocations in m Financed ships in portfolio Quantity -17% 1,768 1,698 1,544 Loan loss provisions for ship customers ,490 1,443 1,309 1,256 1, Ships without SVA Ships with SVA , , Our anti-cyclical risk- and business strategy Portfolio management Active portfolio management and optimisation by using appropriate securitisation and funding instruments Selective new business Expansion of exposure to cruise ships, ferries, specialised tonnage as well as very selectively in offshore. Exposure to merchant shipping will be reduced respectively Transformation Enhancement of business model and portfolio by further regional and asset class diversification. In addition expansion and development of our product range Reduction Additional exploration of possible exit channels Specific valuation allowances ( 2.5bn) and general loan loss provisions total 388m: 16.3 per cent of total exposure Specific valuation allowances (SVA) General loan loss provisions (GLLP) 32

33 Segments Industry outlook shipping: remain at low levels. Feeder/Subpanamax Containerships < 3K TEU Panamax Containerships 3-5K TEU Postpanamax Containerships > 5K TEU Bulker Multi-Purpose Heavy Lift & General Cargo Current market level: Current market level: Current market level: Current market level: Current market level: low low medium low low Expected market development: up to 12 mths / mths Expected market development: up to 12 mths / mths Expected market development: up to 12 mths / mths Expected market development: up to12 mths / mths Expected market development: up to12 mths / mths unchanged/ slight increase unchanged/ slight increase unchanged/ slight increase unchanged / slight increase unchanged / unchanged Crude oil tankers Product tankers Other tankers Cruise ships and ferries Off shore Current market level: Current market level: Current market level: Current market level: Current market level: high Expected market development: up to 12 mths / mths high Expected market development: up to12 mths / mths medium Expected market development: up to12 mths / mths increased Expected market development: up to12 mths / mths weak Expected market development: up to12 mths / mths Unchanged / decrease unchangd /slight decrease unchanged unchanged decrease / slight decrease Source: NORD/LB sector research based on charter rates and market values (new constructions and second hand) / as at April

34 Segments Aircraft customers. High-quality portfolio. Well diversified. By type of aircraft and year of manufacture 1 as at 31 Mar 2016 Regional Jets 6% Freighter 14% Ultra Large Aircraft 8% Widebodies 23% Turboprop 2% 53% Exposure at default: 7.4bn Narrowbodies 47% Aircraft portfolio with 602 aircraft and 15 engines is well diversified. Considering only long-standing and fungible assets Exposure has very high collateralisation ratio (approx. 95 per cent) Average age of assets is at roughly 5 years Warehouse and operating lease structures During the last 20 years established as a market leader in aircraft finance: broad range of commercial and covered financing of Widebody, Narrowbody, Regional Jets and Helicopters Conservative risk approach in line with our financing principles and high risk awareness 34% Focus on reliable and well-known partners 7% 6% Construction year 2004 and earlier Construction year Construction year New delivery since 2015 ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 34

35 Segments Real Estate Banking. Focus on commercial real estate in Germany. By country 1 as at 31 Mar 2016 UK 8% USA 4% France 6% Spain 1% Other 2% Benelux 18% Exposure at default: 16.6bn Germany 61% Deutsche Hypothekenbank is the competence centre for commercial real estate (CRE) within NORD/LB Group Tailored financial solutions and individual, high quality customer consultation Emphasis is on financing of office buildings, shopping malls, hotels, logistics facilities and multi-story residential properties in preferred urban centres with good tenant structure and above average cash flow Financing is focussed on Europe especially on Germany and finance of commercial real estate in UK, France, Benelux and Poland Bremer Landesbank financed the first affordable housing project in the 1980`s. Today, the bank is one of the leading institutes to finance affordable housing projects nationwide Successful strategic cooperation with pension funds as financing partners for high-volume projects ¹ The chart may include minor differences that occur in the reproduction of mathematical operations 35

36 Agenda. NORD/LB at a glance 3 Financials 10 Segments 23 Outlook 37 Appendix 40 36

37 Outlook 2016: negative expectation of earnings. Challenges 2016 Key topics are low interest rates, the development of the euro countries, the situation in shipping markets, increasing competition and digitisation within the financial industry as well as the strength of the US dollar and regulatory requirements Diversity is our strength We are going to increase diversification in our market segments by active risk management in portfolios, concentrating on core clients and selective new business Strengthening of our conservative risk policy For 2016 we expect a significant increase in shipping loan loss provisions. In other business segments of the bank we expect compensation effects. With our robust and diversified business model we will cope with these new challenges Further strengthening of equity capital During the course of the year we will further strengthen our capital ratios. The measure will be flanked by securitisation of loans, active management of total assets and total risk exposure. NORD/LB Group has a sufficient capital base to meet all of the regulatory capital requirements in the foreseeable future Earnings before taxes Against this background we so far expect to show a negative year-end result 2016 for NORD/LB Group (IFRS) as well as for NORD/LB as a single entity (German GAAP) 37

38 Outlook Financial calendar. Interim Report as at 30 June August 2016 Interim Report as at 30 September November 2016 Annual Report as at 31 December 2016 April

39 Agenda. NORD/LB at a glance 3 Financials 10 Segments 23 Outlook 37 Appendix 40 39

40 Appendix Pfandbriefe (covered bonds): first class and secure collateral (1/2). Mortgage Pfandbrief (by building type) Public-Sector Pfandbrief (by debtor) 2 3 as at 31 Mar bn 1 as at 31 Mar bn 1 Office buildings 18% Countries 10% Apartment buildings 41% Commercial buildings 6% Industrial buildings 7% Other 32% Regional authorities 33% One and two family houses 22% Condominiums 6% Weighted average life 4 : of outstanding Pfandbriefs: 3.9 years of the cover pool: 4.2 years ¹ Nominal value, NORD/LB AöR ² Debtors incl. statutory overcollateralisation ³ 95 per cent in Germany 4 Moody s Performance Overviews, January Local authorities 25% Weighted average life 4 : of outstanding Pfandbriefs : 6.0 years of the cover pool : 6.4 years

41 Appendix Pfandbriefe (covered bonds): first class and secure collateral (2/2). Ship Pfandbrief (by type) Aircraft Pfandbrief (by type) as at 31 Mar m 1 as at 31 Mar bn 1 Others 14% Bulker 27% Widebody 13% Freighter 12% Ultralarge 18% Tankers 24% MPP 2% Containers 33% Turboprop 4% Regional Jet 4% Narrowbody 49% Weighted average life 2 : of outstanding Pfandbriefs: 2.3 years of the cover pool : 2.3 years 1 Nominal value, NORD/LB AöR 2 Moody s Performance Overview, January

42 Appendix Pfandbriefe at a glance. Nominal values as at 31 Mar 2016 (in m) Public-Sector Pfandbriefe Mortgage Pfandbriefe Ship Pfandbriefe Aircraft Pfandbriefe Total outstanding 14, , ,006.0 Total cover pool 18, , ,198.1 Over-collateralisation 3, , Over-collateralisation in % 25.2% 63.8% 188.1% 19.1% 42

43 Appendix Institutional protection and deposit guarantee schemes of NORD/LB. Legal responsibility Capital requirements Basic protective measures to avoid bankruptcy The Capital Requirements Regulation (CRR, Kapitaladäquanzverordnung ) is a EU regulation in banking containing requirements for capital adequacy under Basel III Institutional Protection Scheme of the Savings Banks Finance Group German Act on the Recovery and Resolution of Credit Institutions Institutional Protection Scheme of the Savings Banks Finance Group was founded in the 1970s Since July 2015 the Institutional Protection Scheme is recognised as a deposit guarantee scheme under Germany s Deposit Guarantee Act (EinSiG) 13 guarantee funds: of the Landesbanken (1), of the regional savings banks (11) and of the building associations (1) Bail-in of shareholders and creditors Equity: Tier 1, AT 1, Tier 2, subordinated capital Liabilities: Senior unsecured and other (structured) liabilities Excluded: i.a. deposits (under Deposit Guarantee Act: up to 100,000 /person), covered bonds as well as money market instruments European Scheme The Single Resolution Mechanism (SRM) is augmented by the Single Resolution Fund (SRF), which can provide the financial resources needed for resolution. European deposit guarantee scheme: The German banking industry defeats the proposed regulations of the EU commission 43

44 Appendix Agreements with EU Commission fully on track. In 2011/12 NORD/LB agreed to fulfil the following commitments concerning its capital-boosting programme approved by the EU Commission The fulfilment of the commitments is monitored by an independent trustee, giving information on the implementation status to the EU Commission on a half-yearly basis. The trustee confirmed the scheduled implementation of the commitments in all reports. Some commitments were only valid until 2014 or have already be fulfilled by NORD/LB (e.g. the sale of investments). A cap for total assets and business volume in several segments as well as for the administrative costs and new acquisitions is still in place until year-end From today s point of view all outstanding commitments will be fulfilled as planned until year-end

45 Appendix Important links. Declaration of Norddeutsche Landesbank Girozentrale on the German Corporate Governance Codex: NORD/LB protection scheme Sustainability (report, ratings) NORD/LB supervisory board NORD/LB Annual, Interim Reports and Disclosure Reports 45

46 Contact. NORD/LB Norddeutsche Landesbank Girozentrale Investor Relations Georgsplatz Hanover, Germany ir@nordlb.de Gabriele Bödeker (Head of Investor Relations) gabriele.boedeker@nordlb.de Tel.: Thomas Breit thomas.breit@nordlb.de Tel.: Carsten Halbe carsten.halbe@nordlb.de Tel.: Bitte hier Ihr Foto einfügen Svenja Pohlmann svenja.pohlmann@nordlb.de Tel.:

47 Disclaimer. This presentation and the information contained herein, as well as any additional documents and explanations (together the material ), are issued by NORDDEUTSCHE LANDESBANK GIROZENTRALE ( NORD/LB ). This presentation contains certain forward-looking statements and forecasts reflecting NORD/LB management s current views with respect to certain future events. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without, limitation, those regarding NORD/LB s future financial position and results of operations, strategy, plans, objectives, goals and targets and future developments in the markets where NORD/LB participates or is seeking to participate. The NORD/LB Group s ability to achieve its projected results is dependent on many factors which are outside management s control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain key assumptions. The following important factors could cause the Group s actual results to differ materially from those projected or implied in any forward-looking statements: the impact of regulatory decisions and changes in the regulatory environment; the impact of political and economic developments in Germany and other countries in which the Group operates; the impact of fluctuations in currency exchange and interest rates; and the Group s ability to achieve the expected return on the investments and capital expenditures it has made in Germany and in foreign countries. The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements as a prediction of actual results. All forwardlooking statements included herein are based on information available to NORD/LB as of the date hereof. NORD/LB undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to NORD/LB or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The material is provided to you for informational purposes only, and NORD/LB is not soliciting any action based upon it. The material is not intended as, shall not be construed as and does not constitute, an offer or solicitation for the purchase or sale of any security or other financial instrument or financial service of NORD/LB or of any other entity. Any offer of securities, other financial instruments or financial services would be made pursuant to offering materials to which prospective investors would be referred. Any information contained in the material does not purport to be complete and is subject to the same qualifications and assumptions, and should be considered by investors only in light of the same warnings, lack of assurances and representations and other precautionary matters, as disclosed in the definitive offering materials. The information herein supersedes any prior versions hereof and will be deemed to be superseded by any subsequent versions, including any offering materials. NORD/LB is not obliged to update or periodically review the material. All information in the material is expressed as at the date indicated in the material and is subject to changes at any time without the necessity of prior notice or other publication of such changes to be given. The material is intended for the information of NORD/LB s institutional clients only. The information contained in the material should not be relied on by any person. 47

48 Disclaimer. In the United Kingdom this communication is being issued only to, and is directed only at, intermediate customers and market counterparties for the purposes of the Financial Services Authority s Rules ("relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. To the extent that this communication can be interpreted as relating to any investment or investment activity then such investment or activity is available only to relevant persons and will be engaged in only with relevant persons. Viewing the following material involves no obligation or commitment of any kind by any person. Viewers of he following material are not to construe information contained in it as a recommendation that an investment is a suitable investment or that any recipient should take any action, such as making or selling an investment, or that any recipient should refrain from taking any action. Prior to making an investment decision, investors should conduct such investigations as they consider necessary to verify information contained in the relevant offering materials and to determine whether the relevant investment is appropriate and suitable for them. In addition, investors should consult their own legal, accounting and tax advisers in order to determine the consequences of such investment and to make an independent evaluation of such investment. Opinions expressed in the material are NORD/LB s present opinions only. The material is based upon information that NORD/LB considers reliable, but NORD/LB does not represent, guarantee, or warrant, expressly or implicitly, that the material or any part of it is valid, accurate or complete (or that any assumptions, data or projections underlying any estimates or projections contained in the material are valid, accurate or complete), or suitable for any particular purpose, and it should not be relied upon as such. NORD/LB accepts no liability or responsibility to any person with respect to, or arising directly or indirectly out of the contents of or any omissions from the material or any other written or oral communication transmitted to the recipient by NORD/LB. Neither the material nor any part thereof may be reproduced, distributed, passed on, or otherwise divulged directly or indirectly by the party that receives it, to any other person without the prior written consent of NORD/LB. The distribution of the material in certain jurisdictions may be restricted by law and persons into whose possession the material comes are required by NORD/LB to inform themselves about, and to observe, any such restrictions. This presentation does not constitute an offer to sell or the solicitation of an offer to purchase or subscribe for any securities of NORD/LB in the United States. No part of this presentation should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities of NORD/LB. Any offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from NORD/LB and will contain detailed information about NORD/LB, its management and its financial statements. None of NORD/LB s securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1993, as amended, or pursuant to an exemption from registration therefrom. By viewing the following material, the recipient acknowledges, and agrees to abide by, the aforementioned. 48