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NORD/LB Group Presentation February 2013 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 forward-looking 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. 2 February 2013 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. 3 February 2013 Agenda page NORD/LB at a glance 5 Financials 12 Outlook 33 Appendix 36 4 February 2013 NORD/LB at a glance Established commercial bank in northern Germany. Successful universal bank for nearly 250 years in the market Market leader in Northern Germany in its business units private, commercial and corporate customers Excellent knowledge in renewable energy and infrastructure projects More than 30 years of experience in ship and aircraft finance Deutsche Hypo is the established competence centre for commercial real estate finance within the Group Represented in all important financial centres worldwide Member of the extended Guarantee Funds of landesbanks and savings banks 5 February 2013 NORD/LB at a glance Strong support from our owners. State of Saxony-Anhalt 5.57% Lower Saxony Savings Banks 26.36% and Giro Association State of Lower Saxony 5.28% Saxony-Anhalt Savings Banks Holding Association 59.13% 3.66% Special Purpose Holding Association of the Mecklenburg-Western Pomerania Savings Banks 6 February 2013 NORD/LB at a glance NORD/LB: represented in all important financial centres. Moscow Beijing New York Shanghai Mumbai Head offices Singapore Hannover, Braunschweig, Magdeburg Branches worldwide London, New York, Singapore, Shanghai and representative offices in Beijing, Moscow, Mumbai Hamburg Bremen German branches Amsterdam London Hannover Schwerin Duesseldorf, Hamburg, Schwerin Luxembourg Magdeburg Braunschweig and more than 100 branches of Duesseldorf Frankfurt Nuremberg Paris Munich Braunschweigische Landessparkasse Subsidiaries and bank holdings Bremer Landesbank, Deutsche Hypothekenbank, NORD/LB Asset Madrid Management, NORD/LB Luxembourg, NORD/LB Covered Finance Bank 7 February 2013 NORD/LB at a glance Our business segments. NORD/LB Group NORD/LB Group Private and Private and Corporate Customers & Corporate Customers & Energy and Energy and Ship and Ship and Real Estate Banking Real Estate Banking Commercial Commercial Markets Markets Infrastructure Infrastructure Aircraft Customers Aircraft Customers Customers Customers Customers Customers Customers Customers •• Private customer Private customer •• Corporate customer Corporate customer •• Renewable energy Renewable energy •• Ship finance Ship finance •• Commercial real estate Commercial real estate business business business business finance finance •• Aircraft finance Aircraft finance finance finance •• Private Banking Private Banking •• Agricultural Banking Agricultural Banking •• Infrastructure finance Infrastructure finance •• Social care property Social care property •• Commercial customer Commercial customer •• Housing Housing •• Leasing Leasing finance finance business business •• Acquisition finance Acquisition finance •• Export and Trade Export and Trade •• Insurance services Insurance services •• Municipal customer Municipal customer finance finance business business •• Syndication business Syndication business with associated savings with associated savings banks banks •• Business with Business with -- Institutional customers Institutional customers -- Savings banks/financial Savings banks/financial institutions institutions -- Public-sector customers Public-sector customers Savings Banks Network, Public-Sector Development Business Savings Banks Network, Public-Sector Development Business 8 February 2013 NORD/LB at a glance Our subsidiaries and holdings1). Private and corporate customers Ships and aircraft Energy and infrastructure Financial Markets 54.83% 100%2) 3) 100%2) 100%2) 2) Private and corporate Asset Management for Commercial real estate Private and commercial Private Banking customers North-west institutional clients finance customers Corporate Banking Germany Ship finance Financial Markets 100%2) Funding of savings banks and municipal customers 1) Please find additional subsidiaries and affiliated companies in our Group Annual Report 2011 page 253 ff 2) “NORD/LB ensures that the banks and financial institutions included in the Group accounts as wholly-owned subsidiaries of NORD/LB can meet their obligations.” 3) Incorporated under public law with partial legal capacity 9 February 2013 NORD/LB at a glance Our ratings offer reliability for investors. Long term (outlook) / short term A3 (stable) / P-2 A / F1 - Bank Financial Strength Rating (outlook) / Viability Rating (outlook) D (stable) bbb- (stable) - Subordinated debt: lower tier 2 (outlook) Ba1 (stable) - - Subordinated debt: tier 1 Ba3 - - Public sector Pfandbriefe / Mortgage Pfandbriefe / Aircraft Pfandbriefe Aaa / Aaa / A2 AAA / - / - - Deutsche Hypothekenbank Long term (outlook) / short term Baa2 (stable) / P-2 - - Bank Financial Strength Rating (outlook) E+ (stable) - - Subordinated debt: lower tier 2 (outlook) Ba3 (stable) - - Subordinated debt: tier 1 B2 - - Public sector Pfandbriefe / Mortgage Pfandbriefe Aa2 / Aa2 - - Norddeutsche Landesbank Luxembourg Long term (outlook) / short term Baa3 (stable) / P-3 - - Bank Financial Strength Rating (outlook) D (stable) - - NORD/LB Covered Finance Bank Long term (outlook) / short term - A (stabel) / F1 BBB+ (stable) / A-2 Lettres de Gage publiques (outlook) - AAA AA+ (stable) NORD/LB G-MTN S.A. Guaranteed medium term note-programme Aa1 AAA - Bremer Landesbank Long term (outlook) / short term A3 (stable) / P-2 A / F1 - Bank Financial Strength Rating (outlook) /Viability Rating (outlook) D+ (stable) bbb (stable) - Hannover Funding Short term P-1 F1 A-1 10 February 2013 Agenda page NORD/LB at a glance 5 Financials 12 Outlook 33 Appendix 36 11 February 2013 Financials Nine-month figures are satisfactory. Net interest income rose significantly New business margins at attractive levels, particularly in the Net interest income €1,504m + 15% corporate customer business and project finance Loan loss provisions further increased Loan loss provisions - €352m >100% Provisions rose in shipping business Development of earnings as expected Except of ship financing all business segments develop Earnings before taxes €209m - 46% operatively well; development in shipping business as expected; diversified business model proves its strength Solid capital base Core capital ratio 10.49% (9.44%) All capital measures are fully implemented Total capital ratio 13.42% (12.65%) 12 February 2013 Financials Substantial increase in net interest income. Conservatively-built LLPs. €m 30.9.2012 30.9.2011 31.12.2011 31.12.2010* Net interest income 1,504 1,311 1,763 1,662 Loan loss provisions -352 -111 -205 -642 Net commission income 125 123 166 197 Profit/loss from financial instruments at fair value -100 -202 -61 -38 Profit/loss from hedge accounting -14 93 130 153 Profit/loss from financial assets -12 -16 -41 82 Profit/loss from investments accounted for using the equity method -15 -6 - -73 Administrative expenses 824 792 1,091 1,070 Other operating profit/loss -68 -15 69 48 Earnings before reorganisation and taxes 244 385 730 319 Reorganisation expenses -28 - - - Expenses for public guarantees related to reorganisation -7 - - - Earnings before taxes 209 385 730 319 Income taxes 68 123 194 5 Consolidated profit 141 262 536 314 13 February 2013 Financials New business margins raise net interest income. Net interest income Net commission income €m €m 1,763 1,662 197 1,504 1,387 1,311 168 166 123 125 2009* 2010* 2011 30.09.2011 30.09.2012 2009* 2010* 2011 30.09.2011 30.09.2012 * Some previous year figures were adjusted, see Annual Report 2010, 2011 Note (2) 14 February 2013 Financials Admin. expenses rose slightly. Tariff increases are noticeable. Administrative expenses Cost-Income-Ratio €m 1,070 1,091 60.8% 986 62 87 57.5% 54.9% 52.8% 70 49.0% 824 792 468 444 68 64 436 306 309 540 560 480 450 419 2009 2010 2011 30.09.2011 30.09.2012 2009* 2010* 2011 30.09.2011 30.09.2012 Amortisation * Some previous year figures were adjusted Other administrative expenses Staff expenses 15 February 2013 Financials Earnings as expected. Earnings before taxes Consolidated profit €m €m 730 536 314 262 385 319 141 209 -215 -173 2009* 2010* 2011 30.09.2011 30.09.2012 2009* 2010* 2011 30.09.2011 30.09.2012 * Some previous year figures were adjusted, see Annual Report 2010, 2011 Note (2) 16 February 2013 Financials Nearly all business segments develop as planned. Earnings before taxes as at 30 Sep 2012 €m 39 -303 49 101 329 209 -7 Private and Corporate Energy and Ship and Real Group Earnings Commercial Customers Infrastructure Aircraft Estate Management/ before Customers* & Markets Customers Customers Banking Others, taxes Customers Reconciliations * Profit/loss from special funds of ÖVBS is shown in the item Group Management/Others, Reconciliations 17 February 2013 Financials Reduction of total assets: Focus on core business proceeds. €m 30.9.2012 31.12.2011* 31.12.2010* 31.12.2009* Total assets 225,184 227,630 228,524 238,472 Loans and advances to customers 114,963 114,714 113,605 112,083 Loans and advances to banks 33,841 34,618 36,734 42,356 Financial assets 52,516 54,499 58,666 63,076 Liabilities to customers 59,211 60,648 60,742 61,303 Return-on-Equity 3.6% 10.6% 5.6% -4.4% Cost-Income-Ratio 57.5% 52.8% 54.9% 49.0% Core capital ratio 10.49% 9.44% 7.86% 8.70% Total capital ratio 13.42% 12.65% 11.05% 9.70% * Some previous year figures were adjusted, see Annual Report 2010, 2011 Note (2) and Interim Report as at 30 September 2012, Note (3) 18 February 2013 Financials Well diversified portfolio. Segmentation „Loans and advances to customers“ RWA by business areas* as at 30 Sep 2012 €115.0bn as at 30 Sep 2012 €80.2bn* Ship and Aircraft Ship and Aircraft Customers Customers 22% 30% Energy and Infrastructure Customers 10% Real Estate Banking Energy and Customers Infrastructure 16% Customers Real Estate Banking 9% Customers 16% Corporate Customers & Group Corporate Customers & Group Markets Management/ Markets Management/ 29% Others 19% Others 16% Private and Private and 19% Commercial Commercial Customers Customers 7% 7% * Risk-weighted assets excluding shortfall 19 February 2013 Financials Sovereign exposure in EU periphery countries further reduced. €m 3,679 3,389 2,972 2,018 1,959 1,904 666 331 435 383 497 412 275 219 285 295 352 10 Greece Ireland Italy Portugal Spain Total Sovereign (31.12.2010) Sovereign (31.12.2011) Sovereign (30.9.2012) Total sovereign exposure is around one per cent of the total exposure 20 February 2013 Financials Shipping portfolio - risks continuously under control. By type of ship as at 30 Jun 2012 €19.5bn* Containers Others < 3.000 TEU €m 30.9.12 30.9.11 2011 2010 19% 19% Net income 309.6 265.4 363.4 351.6 Expenses 33.4 30.0 38.1 35.7 Containers Offshore 3.000 - 4.999 TEU Operative earnings 276.2 235.4 325.3 315.9 supplier 7% 3% Loan loss provisions -299.7 -49.7 -170.7 -180.3 Cruise ships/ Earnings before ferries Containers -23.5 185.7 154.6 135.6 3% > 5.000 TEU taxes 8% * Due to rounding slight deviations might occur. Bulkers Crude oil tankers 12% 4% Tonnage surplus, enforced by a dampening economy, Gas tankers puts freight and charter rates under pressure and leads Multi-purpose 3% to increased expenses for monitoring the bank‘s portfolio Product and general cargoMulti-purpose 8% heavy lift chemical tankers Focus on existing customers by an intensive monitoring 11% 7% and controlling of the portfolio Declining portfolio: Single loan loss provisions 2009: 2,100 ships, 2010: 1,920 ships, 2011: 1,850 ships, 299.7 09/2012: 1,780 ships 158.7 180.3 170.7 New business only very selectively and conservatively built up Single loan loss provisions still on high level, just as 2009 2010 2011 30.09.2012 expected * Exposure at Default TEU = Twenty-foot Equivalent Unit; measure for the capacity of container ships and port handling volumes 21 February 2013 Financials Aircraft finance portfolio – young fleet and well secured. By type of aircraft and year of construction as at 30 Sep 2012 €7.8bn* Ultra Large Regional €m 30.9.12* 30.9.11 2011 2010 Aircraft Jets 8.3% 6.9 % Net income 86.6 71.8 102.4 103.4 Freighter 8.1% Expenses 9.9 8.7 11.3 9.4 Widebodies 21.8% Turboprop Operative earnings 76.7 63.1 91.1 94.0 2.6% Loan loss provisions -4.2 -1.9 -2.6 0.2 Earnings before 72.5 61.2 88.5 94.2 taxes * Due to rounding slight deviations might occur. Narrowbodies Widely diversified portfolio containing more than 750 air 52.4% planes. Exposure has a high collateralisation ratio of 90 per cent; the asset‘s average age is at 5 years Construction year 2001 and Our financial policies show our high risk-awareness and earlier our conservative business approach 9.4% New delivery 2012 Only financing of sustainable and fungible assets 14.0% Focus on reliable and well-known partners Construction year Ensuring of an appropriate redemption and finance 2002-2006 structure 20.5% Construction year 2007-2011 56.1% *Exposure at Default 22 February 2013 Financials Commercial real estate concentrated in Germany. By countries as at 30 Sep 2012 €24.2bn* €m 30.9.12* 30.9.11 2011 2010 Net income 195.5 195.0 265.3 276.2 UK Expenses 45.4 45.0 56.1 67.2 8.6% Benelux 10.1% Operative earnings 149.1 150.0 209.2 209.0 USA France Loan loss provisions -110.5 -63.2 -90.9 -109.7 9.9% 3.5% Earnings before Spain 38.6 86.8 118.3 99.3 taxes 1.6% * Due to rounding slight deviations might occur. Other countries 2.8% Concentration of real estate finance in Deutsche Hypo (NORD/LB Group‘s centre of competence for CRE finance). In particular office and commercial buildings, shopping centres and housing construction measures in preferred conurbations with a correspondingly good tenant structure and good cash flow are financed 87 per cent of financing is focused on Europe. Nearly Germany two thirds of the total portfolio is financed in Germany 63.5% Adjustment of the business strategy: No new business in Spain and the US; focus on established core markets. * Exposure at Default 23 February 2013 Financials Sound funding. Successfully placed new issues. Issued debt structure Strategy as at 30 Sep 2012 €61.8bn* Matched funding of new business with regard to currency and maturity Money Wholesale funding primarily via private market Mortgage > 5 years placements in form of bearer bonds, instruments Pfandbriefe “Schuldschein” or “Namenspapier” sold into the 5% 9% 14% < 1 year 17% strong German investor base Several Pfandbrief issues Public sector International funding programmes**: Pfandbriefe €25bn Euro MTN Program, 23% Other debt €10bn Euro CP Program, securities €4bn Euro French CD Program, 58% 1 - < 5 years 74% $3bn US CP Program €48.5bn potential ECB eligible securities concerning NORD/LB Group, thereof €28.2bn for NORD/LB AöR July 2012: Successful issuance of the first Aircraft Pfandbrief worldwide - € 500m 07/2017 1.625% Oversubscribed Public Sector Pfandbrief - € 500m 12/2019 1.5% October 2012: Inaugural 144a/RegS Public Sector Pfandbrief - $1bn 10/2015 0.875% * Carrying amount **NORD/LB AöR 24 February 2013 Financials Credit investment portfolio of high quality. Credit Investment Portfolio as at 30 Sep 2012 €26bn* BBB Sovereigns 21% 1-<5 years Corporates Non-Investment- 52% 30% 23% grade 8% Not rated 5-10 years 10% 23% A 32% AAA 9% Financial AA > 10 years < 1 year institutions 20% 14% 11% 47% *Nominal value 25 February 2013 Financials Reduction of ABS portfolio on schedule. Asset Backed Securities as at 30 Sep 2012 €3.2bn* Residential Mortgages Commercial A 8.0 16% Mortgages 38% BBB 6.7 23% 12% 5.2 4.1 Non-investment 1.9* 3.2 Auto Loans/Leases grade 6% 5% 1.6* 2.2 Trade AAA 1.6 Commercial 13% Receivabes Loans D ec 0 8 D ec 0 9 D ec 10 D ec 11 Sep 12 9% 36% Others AA *Portfolio of Hannover Funding 10% 32% *Nominal value 26 February 2013 Financials Conservatively-built loan loss provisions. Increase as expected. Loan loss provisions €m 1,060 321 642 206 352 739 205 436 470 319 111 11 100 -114 -118 1) 2) 1) 2) 1) 2) 1) 2) 2) 2009 2010 2011 30.09.2011 30.09.2012 Portfolio based loan loss provisions Single loan loss provisions 1) Some previous year figures were adjusted, see Annual Report 2010 and 2011, Note (2) and Interim Report as at 30 September 2012, Note (5) 2) Including proportion of Group Management / Others and Reconciliation 27 February 2013 Financials NPL ratio declined despite reduced exposure. 2.6% 2.5% 2.4% 1.5% NPL ratio 0.8% 0.9% 2.3 261.6 2.2 1.9 255.4 3.8 241.7 2.8 6.4 245.0 6.5 2.1 15.0 6.0 5.8 239.7 5.9 234.4 5.6 1.6 3.8 4.8 5.4 €bn 4.5 11.7 6.8 22.3 14.3 9.0 4.8 4.9 9.6 8.2 21.6 12.5 16.8 7.8 22.1 17.0 default (= NPL) 20.5 19.6 very high risk 21.7 high risk increased risk reasonable/satisfactory 211.0 good/satisfactory 195.5 196.5 185.6 179.6 172.0 very good to good 2007 2008 2009 2010 2011* 30.09.2012 *Previous year‘s figures were adjusted, see Interim Report as at 31 March 2012, page 17, footnote 6 28 February 2013 Financials Reinforced capital ratios. 13. 42% 12.65% 11.05% 10.49% 10.02% 9.70% 9.45% 9.44% Total capital ratio 8.10% 7.86%* 8.70% 6.96% Core capital ratio 98,156 89,825 92,575 €m 86,850 84,800 80,213 8,051 8,414 Risk-weighted assets 6,831 7,235 6,829* 8,005 Core capital 2007 2008 2009 2010 2011 30.09.2012 * Adjustment, see Annual Report 2011, Note (67) 29 February 2013 Financials Capital strengthening program includes inter alia… Time frame Equity increase Measure Counterparty State of Lower Saxony, Saxony-Anhalt Savings Banks December 2011 Holding Association, € 521m Cash contribution January 2012 Special Purpose Holding Association of the Mecklenburg- Western Pomerania Savings Banks December 2011 Conversion of silent participations State of Lower Saxony, € 1,146m January 2012 and other subordinated securities savings banks of Lower Saxony Cash contribution from sale of capital notes of Hannoversche August 2012 € 400m State of Lower Saxony Beteiligungsgesellschaft mbH to NORD/LB Conversion of silent participations August 2012 € 445m State of Bremen in Bremer Landesbank Conversion of silent participations Lower Saxony Savings Banks and August 2012 € 47m + € 71m in Bremer Landesbank Giro Association 30 February 2013 Financials Commitments to the EU Commission. In the context of the EU Commission’s approval for NORD/LB’s capital measures, including a contingent guarantee scheme provided by NORD/LB’s owners Lower-Saxony and Saxony-Anhalt, NORD/LB agreed with the EU Commission to a catalogue of commitments, including: No dividend payments by NORD/LB and Bremer Landesbank for the years 2012 and 2013 No larger acquisitions and divestments of non-core subsidiaries Concentration on our core clients and regions Closure of representative offices in Madrid (Deutsche Hypo), Mumbai and Beijing (NORD/LB AöR) Reduction of total assets by 15 per cent by 2016 in comparison with the end of 2011 Reduction of administrative expenses 31 February 2013 Agenda page NORD/LB at a glance 5 Financials 12 Outlook 33 Appendix 36 32 February 2013 Outlook Cautious view. But expecting positive result for 2012. NORD/LB Group‘s fiscal year 2012 developed operatively well. Pressure on ship portfolio as expected. Due to the ongoing uncertainties in the markets the bank has a cautious view of the future. We expect the economy to slow down. NORD/LB is expecting to achieve a positive result for 2012 as a whole, but it will remain well below previous year’s very good result. 33 February 2013 Outlook Financial calendar. Release of annual results 2012 23 April 2013 Release of Q1 2013 30 May 2013 Release of Q2 2013 29 August 2013 Release of Q3 2013 28 November 2013 34 February 2013 Agenda page NORD/LB at a glance 5 Financials 12 Outlook 33 Appendix 36 35 February 2013 Appendix History. 1765 Formation of “Herzogliches Leyhaus“, since 1919 “Braunschweigische Staatsbank” (oldest predecessor) 1937 First-time participation in Bremer Landesbank, est. in 1883 (until 1997 gradual increase up to 92.5 per cent) 1970 Formation of NORD/LB by merger of four predecessor companies 1972 Formation of NORD/LB Luxembourg (since 1975 100 per cent subsidiary of NORD/LB) 1985 NORD/LB opens a branch in London 1991 NORD/LB opens a branch in New York 1994 NORD/LB opens a branch in Singapore 2004 NORD/LB starts its operating business in Shanghai Founding of DnB NORD together with the Norwegian DnB NOR; the new established bank concentrates the activities of both partners in the Baltic 2005 Abolition of the guarantor’s liability and modification of the maintenance obligation; determination of new statutes (with Mecklenburg-Western Pomerania no longer being an owner of NORD/LB) Foundation of NORD/LB Covered Finance Bank S.A. NORD/LB and its owners decide to convert the Braunschweigische Landessparkasse into a 2006 public-law institute with partial legal rights. NORD/LB opens representative offices in Paris, Moscow and Mumbai NORD/LB and savings banks in Lower Saxony, Saxony-Anhalt and Mecklenburg-Western Pomerania establish a regional reserve fund as of 1. 2007 January 2007 2008 Take over of Deutsche Hypo Formation of NORD/LB G-MTN S.A. as SPV to issue the guaranteed Medium Term Note – programme. NORD/LB allows the programme to 2009 expire at the end of 2009 2010 Sale of Berenberg Bank, BerlinHyp and DnB NORD stake Sale of DekaBank stake. Silent participations and other capital instruments were converted into equity capital. Furthermore fresh money was 2011 injected 10 July 2012, NORD/LB issued the first Aircraft Pfandbrief worldwide. As at 25 July 2012 the EU Commission approved NORD/LB’s capital- 2012 boosting programme. 16 October 2012, NORD/LB placed its first Public Sector Pfandbrief under 144A/RegS in the US market. 36 February 2013 Appendix Pfandbriefe (covered bonds): collaterals – first class and secure. Mortgage Pfandbrief (by utilisation) Public Sector Pfandbrief (by client groups)2) as at 30 Sep 2012 €2.2bn1) as at 30 Sep 2012 €26.6bn1) Liquidity Additional reserve cover assets 3% acc. to § 20 (2) Over- No 2 PfandBG collatera- Liquidity reserve 3% lisation Over-collatera- 5% Countries lisation 2% 2% 8% Office buildings 23% Public enterprises and Apartment associations 8% buildings 18% Regional German and authorities Commercial multilateral buildings 27% development 8% banks 14% Industrial One- and Two- buildings 8% Banks, savings family-houses banks and 28% Condominiums building Local 8% associations authorities (grandfathered) 19% 1) Nominal value, NORD/LB AöR 2) 95 per cent in Germany 16% 37 February 2013 Appendix German Landesbanks. Kiel Hamburg Ein Unternehmen der NORD/LB Hannover Braunschweig Berlin Magdeburg Leipzig Frankfurt Mainz Saarbrücken Stuttgart München 38 February 2013 Appendix NORD/LB Group: Reporting of business segments. According to changing conditions and market development and to intensify the focus on our customer potential, NORD/LB Group amended its business model. This has an impact on the structure and on the number of the bank’s business segments Our new business segments are: Private and Commercial Customers Corporate Customers & Markets Energy and Infrastructure Customers Ship and Aircraft Customers Real Estate Banking Customers The new segment Corporate Customers & Markets replaces the former segments Savings Bank Network, Financial Markets/Institutional Customers and Corporate Customers. We are now able to offer our products and services in a more focussed and customer-oriented way 39 February 2013 Appendix Private and Commercial Customers. Products and services €m* 30.9.2012 30.9.2011 Lending and deposit business Net income 232 279 Asset management and financial advisory Expenses 234 238 Operative earnings -2 41 SME business Loan loss provisions / Valuation -5 -2 Monetary transfers (Germany and abroad) Earnings before taxes -7 39 CIR 100.7% 85.3% RoRaC -2.3% 19.2% * Due to rounding slight deviations might occur Further information With approx. 100 branches and self-service centres well represented in the Braunschweiger Land region for nearly 250 years We offer customer-oriented consultancy and selected products and services for private and commercial customers within the region of Braunschweigische Landessparkasse as well as throughout the business region of the Bremer Landesbank NORD/LB, Braunschweigische Landessparkasse, Bremer Landesbank and NORD/LB 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) and Landesbausparkasse (building society), complete our services in these businesses 40 February 2013 Appendix Corporate Customers & Markets. Products and services €m* 30.9.2012 30.9.2011 SME business Net income 527 384 Expenses 152 143 Agricultural banking and housing Operative earnings 375 241 Acquisition finance Loan loss provisions / Valuation -46 -20 Municipal customer business Earnings before taxes 329 261 Savings bank syndicate business CIR 28.9% 37.3% Business with institutional customers, savings banks/ financial institutions, public-sector customers RoRaC 32.1% 36.4% * Due to rounding slight deviations might occur We professionally advice corporate customers in Germany focussing on Northern Germany We are one of the leading banks in Germany in agricultural banking and market leader in the Northern region As an expert in financing of residential housing associations we have a long-term expertise and an excellent competence concerning the implementation of urban development concepts and the development of individual financial solutions In corporate finance our experts solve even complex problems relating to strategic positioning and financing, change management, transaction- and receivables management as well as structuring complex corporate lending NORD/LB is based in all the world’s most important financial centres. Therefore, we are able to offer our customers an international platform Our relationship manager and sales experts are reliable partners for our institutional clients and financial institutes in Germany and abroad offering all of NORD/LB's complete products and services For our investors we offer a wide variety of money - and capital market products. NORD/LB is not only an issuer of international CP and MTN programmes but also an important issuer of Pfandbriefe – according to German and Luxembourg law – as well as debentures 41 February 2013 Appendix Energy and Infrastructure Customers. Products and services €m* 30.9.2012 30.9.2011 Financial engineering and arrangement of Net income 150 145 individual financial solutions in Germany and abroad Expenses 41 36 Focus on growth industries renewable energy and Operative earnings 109 109 social infrastructure Loan loss provisions / Valuation -8 -2 Project- and export finance Earnings before taxes 101 107 Leasing, document transfers & international monetary CIR 27.2% 24.7% transfers RoRaC 20.9% 26.6% * Due to rounding slight deviations might occur Further information Close ties between our teams enable early pursuit of market trends and an efficient transfer of proven financial concepts between branches and industries throughout the Group As an established partner, we started to do the renewable energy finance business in the mid 1990´s. In this segment, we focus on wind and solar energy finance (mainly energy production) We concentrate on social infrastructure projects in the fields of accommodation, education, blue light and waste/ water. Here we do the Public Finance Initiative (PFI) as well as the project finance business Number and volume of the successful transactions underpin the excellent market position of NORD/LB. Our strengths are the first class customer and industry network, competence in financial engineering and the knowledge of the local market For more than 25 years Bremer Landesbank has been one of the leading SME banks, with close ties to leasing banks and originators in Germany. Thanks to our expertise, we are able to coach our customers in line with their property portfolio at any time 42 February 2013 Appendix Ship and Aircraft Customers. Products and services €m* 30.9.2012 30.9.2011 Ship finance: cargo and multipurpose vessels Net income 396 338 Aircraft finance: air carrier, engines, warehouse- and Expenses 43 39 operating-lease structured finance Operative earnings 353 299 Loan loss provisions / Valuation -304 -52 Earnings before taxes 49 247 CIR 10.9% 11.5% RoRaC 2.5% 19.6% * Due to rounding slight deviations might occur Further information NORD/LB has been running the ship financing business for more than 45 years. We are one of the leading addresses worldwide with a long-standing and continuously grown customer base Our team has fundamental knowledge and financial expertise in this segment supporting our customers in all kinds of the ship financing business: structuring, interest- and currency hedges or related services like flagging out ships After 20 years in this business, we are established as one of the market leader in aircraft finance. We offer a broad variety of classical and covered lending for widebody, narrowbody and regional carriers During the recent years, we have enlarged our product range in warehouse facilities, operating-lease and pre- delivery finance 43 February 2013 Appendix Real Estate Banking Customers. Products and services €m* 30.9.2012 30.9.2011 National and international Net income 195 195 commercial real estate finance Expenses 45 45 Residential and nursing homes Operative earnings 150 150 Loan loss provisions / Valuation -111 -63 Earnings before taxes 39 87 CIR 23.3% 23.1% RoRaC 4.2% 10.9% * Due to rounding slight deviations might occur Further information Deutsche Hypothekenbank is the commercial real estate (CRE) competence centre within the NORD/LB Group Deutsche Hypo focuses on CRE finance with professional customers. Tailor-made financial solutions and individual, high qualified customer advisory are the bank's strength. We mainly finance office buildings, shopping malls, new building projects in preferred urban centres with a good tenant structure and a cash flow above average Our focus is Europe. Apart from Germany, Deutsche Hypo does its CRE business in UK, France, Spain, the Benelux countries and Poland Bremer Landesbank financed the first social buildings in the 1980`s. Today, the bank is one of the leading institutes in the field of financing social buildings nationwide 44 February 2013 Appendix Savings Bank Network. Products and services Institutional savings banks business Securities business for retailers and private banking Syndicate savings banks business Promotional loans Municipal business Since 1 January 2012 the Savings Bank Network is not an own business segment of NORD/LB anymore. It is now seen as a cross-sectional task. A special department is co-ordinating the relationship between the Savings Banks and its account manager at NORD/LB We offer services in the fields of classical lending business, special finance, foreign business, structured products for the retail market, funding and monetary transfers The fundamental strength of our associated savings banks in Lower Saxony, Saxony-Anhalt, Mecklenburg- Western Pomerania and in further federal states is its wide-spread customer base with a market share up to 50 per cent Furthermore we support our states and local authorities in fulfilling their public duties. Here we focus on municipal finance and credit management Apart from the classical customer's business and term transformation we support the savings banks in gaining further profit and controlling it by actively managing their balance sheets, taking into account the risk-bearing capacity of the respective savings bank * Since 1.1.2012 results are included in “Corporate Customers & Markets” 45 February 2013 Appendix Leading regional and commercial bank in Northwest Germany. Regional and commercial bank Hanseatic and down to earth, but also modern and highly professional: Bremer Landesbank. Close to the market and the Location: Northwest Germany people we are linked to the northwest region of Germany We support Total assets: €34.8bn our customers with first-class solutions and are strong in equity and profit, guaranteed by more than 1,000 committed employees in Owners: 54.83% NORD/LB Bremen and Oldenburg 41.2% Land Bremen With total assets of approx. €34.8bn (as at 31 Dec 2011), Bremer 3.97% SVN* Landesbank (BLB) is the largest regional bank between the rivers Business units:Association business, Ems and Elbe in Northwest Germany corporate customers, private BLB is a universal bank. It is a regional commercial bank with supra- customers, special finance, financial regional special business while fulfilling its role as a Landesbank and markets as a central bank for its partner savings banks at the same time The core region of its business is Northwest Germany. From this position BLB supports its regional and supra- regional clients in Europe and offers them first class solutions for their financial activities. For this the bank actively uses its market leadership in the financial network of the savings banks. BLB’s sales activities are focussed on 5 fields of business: Association business, corporate & private customers, special finance and financial markets Additionally, BLB fulfils its particular regional responsibility through its participating interest. The emphasis of its interest portfolio lies on regional and supra-regional special institutes in the financing industry, especially within the financial network of the savings banks * SVN – Sparkassenverband Niedersachsen, Savings banks association in Lower Saxony 46 February 2013 Appendix Expertise in private banking and a flexible partner within the Group. Luxembourgian Eurobank Norddeutsche Landesbank Luxembourg S.A. is an independent joint-stock company according to Luxembourg law and a 100 per Location: Luxembourg cent subsidiary of NORD/LB since 1975 Total assets: €15.4bn Additionally, the bank has a dedicated market presence in Employees: 170 international money markets, foreign currency markets, bond markets and derivative markets and has proved to be very Owners: 100% NORD/LB successful in the field of interest rate management Business units: Private banking, NORD/LB Luxembourg conducts all financial business that is credit banking, common in the Euro market, especially revolving and roll-over loans financial markets to large German and international borrowers As a specialist for private banking, NORD/LB Luxembourg is more customer oriented than a conventional bank. Factors which make it a flexible and strong international player for the interests of clients are the high competence of its experts, the moderate size, the location and the absolute independence. The private banking activities of NORD/LB are coordinated within the Group from Luxembourg Thanks to the compact size, the location and its independence, NORD/LB Luxembourg is a flexible, powerful international player and a reliable partner providing other Group members with pragmatic solutions 47 February 2013 Appendix Specialised commercial bank with licence to issue „Lettres de Gage publiques“. Specialised commercial bank First and only Subsidiary of “Norddeutsche Landesbank Luxembourg S.A.” (foundet 2006) Location: Luxembourg 100% fully consolidated subsidiary with a hard letter of comfort by Total assets: €7.1bn NORD/LB AöR Hannover und NORD/LB Luxembourg S.A. Owners: 100% NORD/LB Equity of €123.9m and core capital of €93.0m Luxembourg Ratings: Business units: Issue of Lettres de NORD/LB CFB: Gages (Lux. Covered Fitch Ratings: A/F1/stable outlook; bonds) Municipal Standard & Poor‘s: BBB+/A-2/stable outlook corporate lending Lettres de Gage publiques (LdG): business Fitch Ratings: AAA/stable outlook Standard & Poor‘s: AA+/stable outlook Specialist for municipal corporate lending (savings banks, municipal utilities, energy suppliers, waste management companies and infrastructure enterprises predominantly influenced by public authorities in Germany as well as other municipal authorities and institutions Increase the issuance and variety of covered products of the group by focussing on medium-term and long-term issuances beyond the Euro region 48 February 2013 Appendix Competence centre for commercial real estate banking. Mortgage bank NORD/LB actually holds 100 per cent of the registered capital and the share voting rights of Deutsche Hypo Location: Hannover Deutsche Hypo is a prospering real estate financing bank with Total assets: €35.0bn expanding business in the field of commercial real estate. The bank Employees: 419 has about 419 employees at its domestic locations (Hannover, Duesseldorf, Frankfurt, Hamburg, Nuremberg and Munich) and at Owners: 100% NORD/LB its offices in Amsterdam, London, Madrid and Paris Business units:CRE banking Mortgage and public sector Pfandbriefe of Deutsche Hypo are Aa2- rated by Moody's By combining the power of the two banks NORD/LB will attain a stronger position in the market for clients, business partners and investors in the field of commercial real estate financing 49 February 2013 Appendix Asset management for institutional investors. Investment trust/Portfolio manager NORD/LB Asset Management offers professional asset management for institutional investors. Thereby, we focus on Location: Hannover individual solutions for our clients. Our services comprise the Employees: 61 investment conception, portfolio management of special and mutual funds, funds administration on a daily basis, risk control Owners: 100% NORD/LB and reporting Business units: Portfolio management, Our services are offered by two companies: origination and NORD/LB Capital Management GmbH (€8.34bn assets under management for management), responsible for the portfolio management, and restricted and mutual NORD/LB Kapitalanlagegesellschaft AG (€12.09bn assets under funds administration), responsible for the administration of special funds and master KAG-constructions Since 2005, we offer our institutional clients a wide range of mutual funds that enables them to invest in attractive asset classes even in small investment amounts 50 February 2013 Appendix NORD/LB‘s ABCP programme Structured and innovative securitization via Hannover Funding. The NORD/LB Conduit “Hannover Funding“ purchases trade receivables on a revolving basis The receivables pool will be structured to rating standard “A”, the credit rating of the customer is less important Refinancing for the ongoing purchased receivables is done anonymously at the capital market – the customer profits from favorable refinancing costs of the Conduit Hannover Funding Sponsor and provider of full government backed liquidity support SPE Corporate Customer Receivable Pool Capital Market Pool of transactions / receivables For more than 10 years, NORD/LB has been offering its customers successful revolving anonymous financing options with its ABCP programme Businesses with a receivable pool of at least €50m are generally suitable In general lower costs of funding especially compared to a credit line or factoring for all companies rated lower than A due to diversification of debtors, sponsors and collaterals NORD/LB’s ABCP programme provides customers with lower cost of finance 51 February 2013 Appendix Hannover Funding: An ABCP programme for customers, bank and owners. Realignment of the ABCP programme: focus on target & existing customers Focus on receivables of target and core customers Portfolio composition Target asset classes: trade receivables, leases (auto & equipment), car loans Trade receivables Target regions: European and German receivables as well as worldwide Commercial 24.3% loan portfolios receivables of target and core customers 53.1% Specialized in funding of pools of receivables from different currencies and Consumers jurisdictions with a minimum volume of €50m 2.8% No new investments in CLO, CDO, CMBS, RMBS nor in similarly structured or Insured loan portfolios levered products 9.5% Car leases Reduction of existing CLO/CDO positions to decrease RWA under 10.4% 31 December 2011 consideration of balance sheet effects True sale only, no synthetic transactions CP placement with a diversified investor basis* Transaction highlights in 2011 Corporates Banks Total investments in 41 transactions 0.4% 10.2% Municipals 20.8% Primary USD-funding, funded 100% through CP on the Capital Market RWA relief of €1.939bn Security lenders Insurances Securitization of freight rates are successfully established as an alternative 3.8% 24.6% source of financing the maritime industry – successful initial transaction with largest German shipping company Money market funds 27.2% Asset managers 13.0% *Hannover Funding USCP placement by Goldman Sachs (December 2011) 52 February 2013 Appendix Successful cooperation with renowned partners (1/2). “Öffentliche Versicherung Braunschweig” (ÖVBS) is an insurance company which offers property insurance and personal insurance ÖVBS is the market leader in the southeast of Lower Saxony and with its more than 250 years of experience; it has a fine tradition in Germany. ÖVBS has a dense service network and offers innovative product and consulting services, which makes it an ideal partner for NORD/LB. This also derives from the closer cooperation between ÖVBS and Braunschweigischer Landessparkasse started in 2010: Clients should not only be adviced comprehensively but also make use of most of the bank's resp. the insurance's products and services NORD/LB holds 75 per cent of the owners’ capital in ÖVBS KreditServices Nord (KSN) was founded in 2005 It has specialised in the consolidation and processing of the risk management activities in standardised lending business. The aims of KSN are: top quality, quick processing times, low costs NORD/LB holds a 100 per cent stake in in KSN 53 February 2013 Appendix Successful cooperation with renowned partners (2/2). With its partners ”LBS” (Norddeutsche Landesbausparkasse Berlin - Hannover) and “LBS Immobilien” NORD/LB completes its product range for retail customers concerning house building and living Customised savings contracts help our clients to fulfil their wishes in view of acquisition of property. Together with LBS and LBS Immobilien NORD/LB offers its customers professional support and know-how from objective and competent advice to financing and purchase of property NORD/LB holds 44 per cent of the owners' capital in LBS LHI was founded in 1973 as a leasing company. Today it offers asset and finance management referring to real estates, aviation and renewable energy (solar and wind) to corporates, the public sector, private investors, family offices, foundations, and institutional investors LHI structures tailor-made solutions for corporates and the public sector. LHI offers one-stop service from the conception to financing, from realisation to administration. LHI mutual funds and LHI private placements provide a balanced risk-return profile to investors NORD/LB has a 49 per cent stake in LHI; 51 per cent is held by Landesbank Baden-Württemberg 54 February 2013 Contact NORD/LB Norddeutsche Landesbank Girozentrale Investor Relations Friedrichswall 10 30159 Hanover Fax: +49 511 361-4952 email: email@example.com www.nordlb.com Gabriele Bödeker (Head of Investor Relations) firstname.lastname@example.org Tel.: +49 511 361-4338 Thomas Breit email@example.com Tel.: +49 511 361-5382 Svenja Pohlmann firstname.lastname@example.org Tel.: +49 511 361-4683 55 February 2013
"NORD LB Group Presentation"