DEUTSCHE PFANDBRIEFBANK AG 
Results Q3/9M 2023 - Company Presentation
December 2023
Disclaimer
- This presentation is not an offer or invitation to subscribe for or purchase any securities in any jurisdiction, including any jurisdiction of the United States. Securities may not be offered or sold in the United States absent registration or pursuant to an available exemption from registration under the U.S. Securities Act. Deutsche Pfandbriefbank AG (pbb) does not intend to conduct a public offering of securities in the United States.
- No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial condition of pbb and its direct and indirect subsidiaries and their securities. Nothing in this presentation shall form the basis of any contract or commitment whatsoever.
- This presentation may only be made available, distributed or passed on to persons in the United Kingdom in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 does not apply.
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- This presentation is furnished to you solely for your information. You may not reproduce it or redistribute to any other person.
- This presentation contains forward-looking statements based on calculations, estimates and assumptions made by the company's top management and external advisors and are believed warranted. These statements may be identified by such words as 'may', 'plans', 'expects', 'believes' and similar expressions, or by their context and are made on the basis of current knowledge and assumptions. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. Such factors include general economic conditions, the conditions of the financial markets in Germany, in Europe, in the United States and elsewhere, the performance of pbb's core markets and changes in laws and regulations. No obligation is assumed to update any forward-looking statements.
- By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the noted limitations.
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 2 |
AGENDA
- pbb at a Glance
- Highlights 9M/23
- P&L
- REF New Business & Portfolio
- Funding
- Capital
- Summary & Outlook
- Appendix
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 3 |
BUSINESS MODEL & STRATEGY | Specialist Bank for Commercial Real Estate |
lending with clear focus on Green transformation | |
of the CRE sector |
Core Business
Funding
- Strong capital market presence: benchmark issuances and private placements
- Resilient Pfandbrief as main funding source complemented by unsecured bonds
- pbb one of most active senior unsecured Green Bond issuers
- EUR and foreign currencies
- Scalable retail deposit online-platform (pbb direkt)
- Call and term deposits (EUR, USD)
CRE Lending | |
Specialized on-balance sheet | - Pfandbrief-eligiblesenior loans, |
lending … | complemented by limited non-senior loans |
- Structuring expertise for complex/large | |
transactions | |
- ~ 150 deals per year | |
… based on stable, well | - Ø deal size ~€ 50-70 mn |
diversified funding base | - Green Loans integral part of business |
model: CRE transformation partner |
USP
- Leading specialized CRE bank with conservative lending standards and high-risk competence
- Strong franchise with long- standing client relationships
- Local presence in core Europe and the US
-
Resilient Pfandbrief
as main funding source - in addition, scalable retail deposit platform
New Business Lines
RE Invest. Mgmt.
- Issuance of open-endedreal estate funds
- Capital-efficientand scalable income source
Partners
pbb Debt
- Provide required formats to institutional investors (e.g. debt funds)
- Leverage our extensive market access
Green Consulting
- Advise on holistic solutions within the green transformation of RE (e.g. green development loans, green capex facilities)
Strategy Update
- Maintain a conservative risk profile and retain strict cost discipline
- Increase of profitability by growth and capital light strategic initiatives
- Sustainable finance as an important contributor for all growth initiatives
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 4 |
STRATEGIC AGENDA 2026
2023
Invest into our business
Start investing to lay the
foundation for the
implementation of our plan and steer through difficult markets
We aim to deliver our plan in three phases by 2026
2026 & beyond | ||
2024 & 2025 | Release our full | |
potential | ||
Accelerate our | ||
Further scale up our growth | ||
performance | initiatives beyond 2026 | |
Harvest first benefits to lift our | ||
performance beyond past levels |
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 5 |
GUIDANCE 2026
> 10%
RoE b.t.
(> 9% RoCET1 a.t.)
> 14%
CET1 ratio1
We release our full potential by 2026 and reach a higher profitability level with >10% RoE b.t.
> € 300 | < 45% |
Gross interest margin2 | Cost-income ratio |
Profit b.t. | |
(REF new business |
- 30% 50% + 25%
Green REF portfolio share2 | Payout ratio for 2023-253 |
1. Calibrated towards anticipated Basel IV levels (fully-loaded) 2. Green assets according to pbb's green loan framework (Green loan eligible) 3. Dividend policy of 50% regular dividend plus 25% special dividend; based on consolidated PAT attributable to shareholders acc. to IFRS and after AT1 coupon - no payment of special dividend for 2023
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 6 |
AGENDA
- pbb at a Glance
- Highlights 9M/23
- P&L
- REF New Business & Portfolio
- Funding
- Capital
- Summary & Outlook
- Appendix
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 7 |
HIGHLIGHTS Q3/9M 2023 | pbb increases LLPs and is fully on track to |
deliver on 2026 targets | |
pbb adjusts PBT full-yearguidance for 2023 to € 90-110mn due to increased risk provisioning and substantial business investments |
In reaction to the ongoing weak CRE markets (esp. in the US), pbb follows its risk conservative approach and increases LLPs to
- -104mn1 for 9M/23 (9M/22: € -38 mn) - full-year guidance already anticipates a further noticeable Q4 addition to LLPs (incl. potential management overlay) caused by still dynamic market situation
Given its sound financial strength, pbb is able to deliver a significant PBT of € 91 mn for 9M/23 - despite increased risk costs and substantial expenses to deliver on the strategic agenda 2026
In specifying the Basel IV orientation, pbb intends to move to the so-called Foundation Internal Ratings-based Approach (F-IRBA) after implementation of Basel IV (~2025) - after a transition period, CET1 ratio expected at ~15% (09/23: 15.2%)
Taking into account the challenging situation on the real estate markets, pbb assumes that unlike in previous years a special dividend will not be distributed. However, the overall dividend proposal remains subject to the conditions of pbb's dividend policy and will be decided upon and communicated together with our full year results 2023.
pbb is fully on track to deliver on 2026 targets:
Increasing NII+NCI (+20% q-o-q)
Portfolio growth (€ +1.2 bn ytd) with margin uplift (gross new business margin 9M/23: +30bp vs. FY 2022)
Strong retail deposit growth (€ +1.5 bn ytd)
Significant cost cutting expected to deliver from 2024 onwards (back to 2022 level in 2026)
1. € +7 mn stage 1&2, € -111 mn stage 3
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 8 |
OPERATING & FINANCIAL OVERVIEW | pbb proves operating resilience |
REF New business | Net interest and commission income |
General and admin. expenses
€ bn (commitments, incl. extensions > 1 yr.) | € mn (IFRS) |
- mn (IFRS) 40%
46%
47%
CIR3
9.0 | 9.0 |
3.3 | 2.4 |
2023e: | Q4 | ||||
€ 6.5-8.0 bn | |||||
502 | 497 | 2023e: | ||||||
127 | € ~480 mn | |||||||
135 | 351 | |||||||
Q4
2023e:
Q4
1.9 | 2.3 |
Q3 |
4.2 |
124 | 117 | 133 |
Q3
219
224
€ <260 mn | Q3 |
1.6 | 2.2 |
1.7
Q2
126 | 121 | 111 |
Q2
68
67
57 |
2.1 | 2.1 |
2021 | 2022 |
1.5 Q1
1.0
9M/23
125 | 124 | 107 |
2021 | 2022 | 9M/23 |
Q1
49
51
51
2021
51
53
53
2022
65 | Q1 |
58 | |
9M/23 |
Portfolio
€ bn (financing volumes)
Net income from risk provisioning
- mn (IFRS)
Q4 add-on
Pre-tax profit
- mn (IFRS)
7.5%6.3%
3.1%
43.7 | 43.7 | 43.4 | |
16.1 | 14.4 | 12.9 | 2023e: |
< € 12.5 bn | |||
27.6 | 29.3 | 30.5 | 2023e: |
> € 31.0 bn | |||
2021 | 2022 | 9M/23 | |
Non Core Unit | REF |
1 |
-35 |
-47 |
-81 |
2021
Stage 1&21
-5-39
-44
2022
Stage 3 Other2
7
-111
-1049M/23
242
56 | 213 |
54 | |
72 | 52 |
62 | 65 |
52 | 42 |
2021 | 2022 |
RoE b.t.4 | |
2023e: | Q4 |
€ 90-110 mn | Q3 |
91 | Q2 |
10 | |
49 Q1
32
9M/23
Note: Figures may not add up due to rounding 1. Incl. provisions in off balance sheet lending business 2. Recoveries from written-off financial assets 3. CIR = (GAE + net income from write-downs and write-ups on non-financial assets)/operating
income 4. After AT1 coupon (2021: € 17 mn ; 2022: € 17 mn; Q3/9M 2023: pro-rata€ 6 mn / € 17 mn)
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 9 |
AGENDA
- pbb at a Glance
- Highlights 9M/23
- P&L
- REF New Business & Portfolio
- Funding
- Capital
- Summary & Outlook
- Appendix
Deutsche Pfandbriefbank AG, November 2023 (IFRS, pbb Group, unaudited) / © Deutsche Pfandbriefbank AG | 10 |
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Deutsche Pfandbriefbank AG published this content on 18 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 December 2023 11:33:54 UTC.
