annual general meeting 2015
TRANSCRIPT
Slide 1
Frankfurt/Main, 25 June 2015
Annual General Meeting
Welcome!
Slide 2
DVB passes ECB’s Asset Quality Review (1)
Annual General Meeting 2015 | ECB’s Asset Quality Review
Result ECB’s Asset Quality Review and stress test passed – three important results: Our allowance for credit losses is in compliance with applicable accounting standards in line with
IAS 39. None of the findings had an impact on the financial statements for 2013. No adjustments to our equity capital had to be made.
Volume “Only“ our Shipping Finance portfolio was subject to the ECB review.
Conclusion DVB's business model has proven to be stable, powerful and sustainable.
Expenditure During the test, which lasted for nine months The review generated costs in the amount of approximately €2.6 million. The aggregate data volume for the ECB comprehensive assessment is equivalent to more than
177 complete editions of the 30-volume BROCKHAUS encyclopedia (4.4 million pages in total). Stacking these volumes would lead to a tower of data 301 meters high.
Slide 3
DVB passes ECB’s Asset Quality Review (2)
Stacking these volumes would lead to a tower of data 301 meters high. The brand new ECB Tower in Frankfurt is only 201 meters tall.
Annual General Meeting 2015 | ECB’s Asset Quality Review
Slide 4
DVB passes ECB’s Asset Quality Review (3)
Annual General Meeting 2015 | ECB’s Asset Quality Review
Result ECB’s Asset Quality Review and stress test passed – three important results: Our allowance for credit losses is in compliance with applicable accounting standards in line with
IAS 39. None of the findings had an impact on the financial statements for 2013. No adjustments to our equity capital had to be made.
Volume “Only“ our Shipping Finance portfolio was subject to the ECB review.
Conclusion DVB's business model has proven to be stable, powerful and sustainable.
Expenditure During the test, which lasted for nine months The review generated costs in the amount of approximately €2.6 million. The aggregate data volume for the ECB comprehensive assessment is equivalent to more than
177 complete editions of the 30-volume BROCKHAUS encyclopedia (4.4 million pages in total). Stacking these volumes would lead to a tower of data 301 meters high.
Slide 5
Diversification – A major pillar of success
Annual General Meeting 2015 | Diversification
Diversification
Diversified funding
Valuable credit portfolio
Global client base
International organisation
Diversity of staff
Slide 6
Less than 1 year 8.4%
1 to 3 years 20.9%
3 to 5 years 19.1%
5 to 10 years 36.2%
10 to 15 years 9.7%
15 years and longer 5.7%
by loyalty
Global client base – Distribution and loyalty
Annual General Meeting 2015 | Diversification – Global client base
Australia & New Zealand 1.0%
by region Europe 47.7%
North America 18.8%
Asia 17.1%
Middle East & Africa 4.4%
Offshore 4.6%
South America 6.4%
Shipping Finance 46.1%
Aviation Finance 25.2%
Land Transport Finance 7.4%
Business no longer in line with DVB’s strategy 3.8%
Investment Management 2.1%
ITF Suisse 7.1%
Offshore Finance 8.4%
by business division
Slide 7
International organisation
Shipping Finance
Aviation Finance
Offshore Finance
AMERICA EUROPE ASIA/PACIFIC
New York
Curaçao Singapore
Tokyo
Hamburg
Frankfurt/Main
Zurich
Oslo
Athens
Amsterdam
London
Land Transport Finance
Annual General Meeting 2015 | Diversification – International organisation
Slide 8
Valuable credit portfolio – Diversification criteria
Annual General Meeting 2015 | Diversification – Valuable credit portfolio
By asset vintage
By asset manufacturers
By geographic exposure
By borrowers & clients
By types of financings
By asset employment
Our valuable credit portfolio is diversified over various criteria and categories:
By sectors & subsectors of the asset to be financed
By asset users
By assets (means of transport such as ships, aircraft, offshore support vessels and platforms as well as rolling stock)
Slide 9
Example – Shipping Finance portfolio
Total lending volume by asset type
Annual General Meeting 2015 | Diversification – Valuable credit portfolio
€10.1 billion
Tankers 43.4% thereof: 13.0% Crude oil tankers 11.3% Product tankers 10.7% Gas tankers 8.4% Chemical tankers
Others 7.8%
Container boxes 3.7%
Bulk carriers 25.4%
Container carriers 16.8%
Ferries, passenger vessels 2.9%
Slide 10 Annual General Meeting 2015 | Diversification – Diversified funding
Products1) Investors2)
Institutional investors 36.1%
Banks 10.4%
Volksbanken Raiffeisenbanken cooperative financial network 6.5%
Retail 3.4%
Diversified funding
Short-term funding 5.5% thereof: 2.8% Cash collateral 2.7% Short-term deposits from clients/banks
Long-term funding 94.5% thereof: 51.6% Uncovered bearer debt securities 38.3% Promissory notes/long-term deposits 2.4% Ship covered bonds 2.2% Subordinated liabilities Diversified, granular funding base
Approx. 1,000 investors 1) Nominal volume
DZ BANK 43.6%
2) Estimates
€21.2 billion €21.2 billion
Slide 11
42.0%
13.3%
11.9%
6.7%
5.0%
3.8%
3.4%
13.9%
British
Dutch
German
US-American
Singaporean
Norwegian
32 other nationalities
Greek
304
221
56
Diversity of staff – Business areas and nationalities
581 employees by business
division
Service areas
Transport Finance/ Investment Management
LogPay Financial Services
Annual General Meeting 2015 | Diversification – Diversity of staff
581 employees by nationalities
Slide 12
Development of results as at 31 December
277.1
332.7 341.2
284.8 304.5
100.9
143.3 157.2
106.0 116.8
0
50
100
150
200
250
300
350
400
2010 2011 2012 2013 2014
Total income (before IAS 39) Consolidated net income before IAS 39 and taxes
[€ mn]
Annual General Meeting 2015 | Consolidated net income 2014 – as at 31 December
+6.9%
+10.2%
Slide 13
At a glance – Income statement
[IFRS] 1 Jan 2014 − 31 Dec 2014
1 Jan 2013 − 31 Dec 2013
%
Net interest income
Allowance for credit losses
Net interest income after allowance for credit losses
Net fee and commission income
Results from investments in companies accounted for using the equity method
Net other operating income/expenses
Results (before IAS 39)
General administrative expenses
Consolidated net income before IAS 39 and taxes
Net result from financial instruments in acc. with IAS 39
Consolidated net income before taxes
Consolidated net income (after taxes)
€215.9 mn
€-62.4 mn
€153.5 mn
€108.5 mn
€12.4 mn
€30.1 mn
€304.5 mn
€-187.7 mn
€116.8 mn
€-12.8 mn
€104.0 mn
€84.9 mn
€243.0 mn
€-87.9 mn
€155.1 mn
€128.7 mn
€5.1 mn
€-4.1 mn
€284.8 mn
€-178.8 mn
€106.0 mn
€18.2 mn
€124.2 mn
€110.6 mn
-11.2
-29.0
-1.0
-15.7
--
--
6.9
5.0
10.2
--
-16.3
-23.2
Annual General Meeting 2015 | Consolidated net income 2014 – Income statement
Slide 14
Net allowance for credit losses
Annual General Meeting 2015 | Consolidated net income 2014 – Net allowance for credit losses
2013 2014
147.2
8.6
9.9
62.4 83.5
154.4
9.6
6.7
87.9
69.4
Additions Direct write-offs
Recoveries on loans and
advances previously written off
Net allowance for credit
losses
Reversals Additions Direct write-offs
Recoveries on loans and
advances previously written off
Net allowance for credit
losses
Reversals
Slide 15
At a glance – Income statement
[IFRS] 1 Jan 2014 − 31 Dec 2014
1 Jan 2013 − 31 Dec 2013
%
Net interest income
Allowance for credit losses
Net interest income after allowance for credit losses
Net fee and commission income
Results from investments in companies accounted for using the equity method
Net other operating income/expenses
Results (before IAS 39)
General administrative expenses
Consolidated net income before IAS 39 and taxes
Net result from financial instruments in acc. with IAS 39
Consolidated net income before taxes
Consolidated net income (after taxes)
€215.9 mn
€-62.4 mn
€153.5 mn
€108.5 mn
€12.4 mn
€30.1 mn
€304.5 mn
€-187.7 mn
€116.8 mn
€-12.8 mn
€104.0 mn
€84.9 mn
€243.0 mn
€-87.9 mn
€155.1 mn
€128.7 mn
€5.1 mn
€-4.1 mn
€284.8 mn
€-178.8 mn
€106.0 mn
€18.2 mn
€124.2 mn
€110.6 mn
-11.2
-29.0
-1.0
-15.7
--
--
6.9
5.0
10.2
--
-16.3
-23.2
Annual General Meeting 2015 | Consolidated net income 2014 – Income statement
Slide 16
3.1 2.9 4.5 7.7 8.5 2.8
3.6
3.6 3.7 4.3
14.9
16.6 17.4
4.5
10.0
23.0
27.9 29.6
4.3% 9.1%
18.4%
25.1% 34.8%
0
10
20
30
40
50
2010 2011 2012 2013 2014
Estimated costs incurred due to regulatory measures
[€ mn]
General administrative expenses (staff expenses for additional head count, non-staff costs, taxes on bonus payments) Bank levy
Interest burden (liquidity reserve, tier 2 capital issues) Percentage share in consolidated net income
Annual General Meeting 2015 | Consolidated net income 2014 – Regulatory costs
Slide 17
At a glance – Income statement
[IFRS] 1 Jan 2014 − 31 Dec 2014
1 Jan 2013 − 31 Dec 2013
%
Net interest income
Allowance for credit losses
Net interest income after allowance for credit losses
Net fee and commission income
Results from investments in companies accounted for using the equity method
Net other operating income/expenses
Results (before IAS 39)
General administrative expenses
Consolidated net income before IAS 39 and taxes
Net result from financial instruments in acc. with IAS 39
Consolidated net income before taxes
Consolidated net income (after taxes)
€215.9 mn
€-62.4 mn
€153.5 mn
€108.5 mn
€12.4 mn
€30.1 mn
€304.5 mn
€-187.7 mn
€116.8 mn
€-12.8 mn
€104.0 mn
€84.9 mn
€243.0 mn
€-87.9 mn
€155.1 mn
€128.7 mn
€5.1 mn
€-4.1 mn
€284.8 mn
€-178.8 mn
€106.0 mn
€18.2 mn
€124.2 mn
€110.6 mn
-11.2
-29.0
-1.0
-15.7
--
--
6.9
5.0
10.2
--
-16.3
-23.2
Annual General Meeting 2015 | Consolidated net income 2014 – Income statement
Slide 18
53.0
45.7
31 Dec 2014 31 Dec 2013
8.1
10.3
31 Dec 2014 31 Dec 2013
Development of key ratios
Annual General Meeting 2015 I Consolidated net income 2014 – Key ratios
28.5
22.8
31 Dec 2014 31 Dec 2013
Return on equity before taxes [%]
Cost/income ratio [%]
Economic Value Added [€ mn]
Target value for 2015: 8-12% Target value for 2015: 48-52% Positive, single-digit million euro amount
Slide 19
Total capital (CRR) and capital ratios
31 Dec 2014
Total capital ratio: 21.6% Common equity tier 1 ratio: 18.7%
Capital ratios ‒ Basel III (following the confirmation of profits)
[€ mn]
1,222.0
0.0 186.6
1,408.6
Common equity tier 1
Additional tier 1 Tier 2 Modified available equity
Annual General Meeting 2015 I Consolidated net income 2014 – Total capital and capital ratios
Slide 20
Consolidated net income, as at 31 March (€ million)
2014 2015
82.5
+1.2
-0.9 -6.2
33.9
Total income (before IAS 39)
Net result from financial instruments
in accordance with IAS 39
Bank levy (fiscal year)
Income taxes
Consolidated net income
79.8
+60.8
-10.3 -9.4
74.9
Annual General Meeting 2015 I Consolidated net income, as at 31 March
Adminis-trative
expenses
-46.0 -42.7
Total income (before IAS 39)
Net result from financial instruments
in accordance with IAS 39
Bank levy (quarter)
Income taxes
Consolidated net income
Adminis-trative
expenses
Slide 21
Market outlook 2015
Annual General Meeting 2015 | Market outlook and targets 2015
Demand forecasts for the aviation and land transport markets remain positive. Airlines around the globe are reporting strong incomes, and the weak oil price should add to their profitability. In passenger and freight transport, we expect transport price, lease rate and utilisation rate increases across the board – in ascending order: Europe, Australia, North America.
Demand growth in the shipping markets will generally be positive, with a cyclic recovery expected to take hold in some key consuming markets – but also with an expected slowdown in the previous decade’s strong demand growth for dry bulk commodities.
Oversupply remains the current key issue in most sectors, and additional newbuildings can weigh down the nascent recovery in fleet utilisation expected in some sectors within the next one or two years. Excess shipyard capacity remains a challenge.
The tanker market is currently experiencing a temporary ‘rebound’ – benefitting from the low oil price which leads to stocking up of oil reserves and to tankers being used as floating storage. This eventually results in a stronger demand for crude tankers than supported by fundamentals.
The low oil price environment prevailing has a negative impact on Offshore E&P spending, with oil and gas companies cutting costs even more than expected. Although a slowdown in Offshore E&P spending was expected, the extent of the reduction in spending is greater than anticipated. The total Offshore E&P spending is expected to decrease in 2015 compared to 2014.
As a consequence, demand for all offshore asset types is expected to be lower than expected. Demand in regions with comparatively higher oil price breakevens such as the North Sea, West Africa or Brazil is expected to be more affected than lower cost regions such as the Middle East.
Slide 22
Targets 2015
We strive to deliver stable results for the 2015 business year, which should be above the 2014 results.
We continuously expand our funding sources, as well as funding tools and structures.
We focus on additional service offers for our clients, with a particular focus on the capital markets business.
We expect a significant contribution from our Investment Management activities.
We will further reinforce our “new clients” approach, particularly in our Shipping Finance division.
We keep on working intensely on reducing our risk positions in parts of our shipping lending business.
Annual General Meeting 2015 | Market outlook and targets 2015
Slide 23
Frankfurt/Main, 25 June 2015
Annual General Meeting
Thank you!