13th August 2020

Investor Call – Interim Report H1/2020Gero Bergmann, Member of the Board

Statement of Profit and Loss

2

❗

❗

❗

Euro mn H1/2020 H1/2019 ∆ Difference

Interest / Commission income 178,5 163,8 14,7

Net interest income 167,8 155,4 12,4

Net commission income 10,7 8,4 2,3

Operating expenditure 86,8 86,1 0,8

Staff expenditure 35,1 45,9 -10,8

Other operating expenditure 39,6 37,0 2,6

of which expenditure for bank levy 13,4 12,0 1,4

Depreciation of tangible assets 12,1 3,2 8,9

Other operating earnings/expenditure 0,7 -2,4 3,1

Operating result before risk provisioning 92,4 75,3 17,1

Risk provisioning 65,4 -5,4 70,8

Operating result after risk provisioning 27,0 80,7 -53,7

Net income from financial investments -1,1 0,5 -1,6

Allocation to the fund for general banking risks 20,0 55,0 -35,0

Other taxes 0,1 0,0 0,1

Pre-tax profit 5,8 26,2 -20,4

Income tax 0,1 0,3 -0,2

Expenditure from profit transfer 5,7 25,9 -20,2

Net income 0,0 0,0 0,0

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Key Figures & Business Development

3

5.46.0

8.1

6.1

7.3

2.5

2015 2016 2017 2018 2019 HY1/2020

New lending in € bn, incl. extension

50.3

44.0

51.2

45.2

52.9

48,5

9.1

11.8

16.9 18.2

11.6

3.8

2015 2016 2017 2018 2019 HY1/2020

Profitability Cost-Income-Ratio (%)

Return on Equity (%)

18.3 18.520.5

23.125.5 25.5

7.6 7.99.1 9.2 9.9 10.2

2015 2016 2017 2018 2019 HY1/2020

Loan Portfolio Development, RWAin € bn

Loan Portfolio(incl. irrevocable loan commitments)

RWA

20 50 70 105 90 20

17,4 17,5 16,8

15,6

13,3 13,5 13,513,1

3,53,9 4 4,3 4,6

4,0

2015 2016 2017 2018 2019 HY1/2020

EquityAllocation to the fund for general banking risks (€ mn)

Total Capital Ratio (%)

CET 1 -Ratio (%)

Leverage Ratio (%)

New Business

4

%

%

46%

23%

14%

15%

2%

Geographical distribution

Germany - A Cities

Germany - B Cities

Germany - Rest

BeNeLux

Poland / CzechRepublic

64%

26%

10%

Investor types

Investors

Building contractors /Developers

Housing companies

30

26

14

10

20

Office

Residential

Retail

Logstics

Other

Type of use

97

3

0

Rating classes 1-7

Rating classes 8-12

Rating classes 13-18

Rating classes

0.1

0.8

2.6

96.5

without rating class

Rating Classes 13-18

Rating Classes 8-12

Rating Classes 1-7

%

Rating classes

71%

12%

8%

6% 2%

1%

Geographicaldistribution

Germany

BeNeLux

France

Poland / CzechRepublic

Others

UK

Loan Portfolio

• Current crisis has main impact on hotels & retail

properties

• Close monitoring and stress testing of loan portfolio

• Participation in the vdp moratorium on repayments

and bilateral agreements with clients

• Affected loan nominal: € ~326 Mio.

• Transfer of loans to restructuring department not

necessary yet

NPLs€ 166mn

0.66%

Ø LTV54.6% 5

10

5

16

25

44

Other

Logistics

Retail

Residential

Office

%Type of use

Commercial Real Estate Market – Germany HY1/2020 (I)

6

Source: RIWIS / bulwiengesa, Berlin Hyp Research, CBRE ab 2017, BNPPRE, RCA

1st half of 2020

• The current year started with a strong first quarter, which was

mainly characterised by company participations, such as

Aroundtown's investment in TLG

• The second quarter was marked by a sharp drop in

transactions as deals were postponed or cancelled due to the

corona virus

• Nevertheless, a 24% increase in transaction volume to a total

of EUR 41.8 billion was achieved in the first half of the year.

1215

17

2624

2832

40

12 13

8

910

18

13

1411

10

57

3

3

5

4

4

8 7

7

2

4

5

4

9

7

12

7 11

11

4

6

11

16

13

23

11

15

17

17

7

12

39.1

46.8

53.9

79.2

64.2

72.6

77.4

84.8

30.3

41.8

2012 2013 2014 2015 2016 2017* 2018* 2019* HY1/19* HY1/20*

Transaction Volume in Germany (in EUR bn)

Residential (<50 units)

Other (Hotel)

Logistics

Retail

Office

Source: CBRE

• Initial yields in all segments almost stable at previous

year's level

• Yields tending to rise

• Current widening of yield spreads due to declining 10-

year Bunds

• Price index for commercial real estate declines for the

first time since 2009, residential index continues to rise

• Corona pandemic amplifies structural change in the

retail sector and thus price decreases

7Source: Berlin Hyp Research, vdp

Source: Berlin Hyp Research, RIWIS/bulwiengesa, Macrobond

vdp-Property-Price-Index (2010=100)

-2

0

2

4

6

8

2008 2010 2012 2014 2016 2018 H1/2020

Logistics

Office

Retail

10y Bunds

95

105

115

125

135

145

155

165

175

Residential

Overall Index

Commercial

Ø Top Yields in German A-Cities (Initial Net Yields, weighted

average acc. to inhabitants, in %)

Commercial Real Estate Market – Germany HY1/2020 (II)

Mid-term market value expectations

Residential ± 0% Stable to slight decline due to less liquidity in

the market

Office - 10% Less liquidity in the market & larger supply.

Future drivers: space efficiency, hygienic

regulations and new working environments

Shopping –

Non Food-25%

Clear drop due to lockdown;

accelerated structural change (regional)

Shopping –

Food± 0% Stable. Rather positive effects by COVID-19

Logistics ± 0%Stable because mainly independent of COVID-

19, rather positive effects by lockdown and

digitization

Hotel -25% Sharp decline due to oversupply, ongoing travel

limitations, virtual meetings, etc.

Estimation of the short-/medium-term performance

8

Deviation of the Market Value from the Mortgage

Lending Value by Asset Class

• The charts on the left side show by what

percentage the market value of Berlin Hyp’s

domestic and international portfolio exceeds the

mortgage lending value (MLV)

• The MLV is a conservative value of a property that

can be expected to be realised at any point during

the term of the loan, irrespective of temporary

fluctuations in the property value

• According to the Pfandbrief Act, only 60% of the

MLV are eligible for the cover pool

9

20%

40%

60%

80%

Dec 16 Dec 17 Dec 18 Dec 19 Jun 20

Germany

Management

Office

Residential

Logistics

Retail

20%

40%

60%

80%

Dec 16 Dec 17 Dec 18 Dec 19 Jun 20

Abroad

Management

Retail

Office

Residential

Logistics

Berlin Hyp’s Ratings

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RatingOutlook/

WatchRating

Outlook/

Watch

Mortgage Pfandbrief Aaa Stable - -

Senior Preferred Aa2 Stable AA- Negative

Senior Non-Preferred A2 - A+ Negative

Short Term P-1 - F1+ Stable

Adj. BCA / Viability a3 - bbb Stable

Last rating actions

April 2020: Fitch upgrades Berlin Hyp‘s senior preferred rating by one notch and confirms the rating for senior-

non-preferred. The status under criteria observation (UCO) is removed.

March 2020: As a result of the world wide coronavirus disruption Fitch changes the outlook on Berlin Hyp‘s IDR

from stable to negative which impacts both, senior preffered and senior non-preferred ratings. The revision of

the outlook follows a similar rating action on Berlin Hyp‘s ultimate parent Sparkassen-Finanzgruppe to negative.

March 2020: On 4 March Fitch places the rating for Berlin Hyp‘s senior preferred bonds under criteria

observation (UCO) reflecting a possible upgrade under Fitch‘s revised rating methodology for banks.

January 2020: Fitch confirms Berlin Hyp‘s ratings and maintains the stable outlook.

Funding & Spread Development

11

9471.410

2.1151.938

1.248 1.121

520

1.239

607 515

126

1.200

50

3598 50

167

846

86 565

138

840

105

500

545

50

97

1.161

105

205 405

638

140

500

17

505

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 >2030

HyPfe Öpfe Senior Non-Preferred Senior Preferred

Maturity Profile

TLTRO participation

€ 458mn Privat Placements,

for the first time also in green

€ 303mn buy back of Pfandbriefe

0

50

100

150

200

250

Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20

iBoxxprBNKsnE7y10y

Berlin Hyp SNP Index (created out of iBoxx)

Berlin Hyp SP Index (created out of iBoxx)

I-Spreads Berlin Hyp vs. Comparables (bp); Quelle: Commerzbank, 3. August 2020

-20

0

20

40

60

80

100

120

140

Jan. 15 Jan. 16 Jan. 17 Jan. 18 Jan. 19 Jan. 20

iBoxx € France Covered iBoxx € UK Covered

iBoxx € Sweden Covered iBoxx € Hypothekenpfandbriefe

iBoxx € Spain Covered iBoxx € Italy Covered

BHH Benchmarks

Spreads Berlin Hyp vs. Covered Bonds (bp/mid swaps); Quelle: LBBW Credit Research, iBoxx, 4. August 2020

bp

bp

Covered Bond

Senior Unsecured

• Incentivising and financing of energy-efficiency related

refurbisments

New Sustainability Agenda

Commitment to the Paris Climate Agreement

and the German Climate Path

1/3 of Portfolio Green

until 2025

Portfolio Transparency until

2023

New Sustainability Product:

Transformation loan

• Sustainable development on an ecological, economic and social

level based on the objectives of the Paris Climate Agreement and

the Climate Path of the Federal Republic of Germany

• Goal: Climate neutral by 2050; including a 40% reduction in CO2

emissions between 2020 and 2030 ( Climate path)

• Even stronger consideration of energy efficiency in future

lending decisions

• Green new business continues to grow in importance

• Goal: 1/3 of all financing in Berlin Hyp's loan portfolio green by

2025

• Systematic determination of energy values, CO2 emissions and

climate risks

• Expansion of the data base at portfolio level by obtaining,

analysing and recording energy performance certificates for

all loans financed by us

• Goal: Achieving transparency across the entire portfolio

12

1.

3.

2.

4.

Outlook HY2/2020

13

Outlook 2020vs.

previsous

year

New Business

Interest income

Risk provisioning

Allocation to the fund for

general banking risks

Return on equity

CRE Market

• Due to the corona pandemic, a significant decrease in

transaction volume is expected for the coming half-year

• Continued focus on asset classes hotel and shopping

• Resilience and structural change in the office and shopping

segment as central themes

People value exchange and personal interaction. Real estate

offers space for that. Virtual channels increasingly offer

alternatives, but are no substitute for personal contact or the

"real experience"

Funding

Mortgage

Pfandbriefe

Senior

Unsecured

Currently no benchmark sized

needs

Privat

Placements

Your Contacts at Berlin Hyp

• Ratings• Green Bonds

• Framework• Reportings

• Financial Reportings• Base Prospectus / Final Terms• §28 Pfandbrief Act / HTT• Euro Commercial Paper Programme • Awards

Bodo WinklerHead ofFunding & Investor Relations

Tel.: +49 30 2599 9521bodo.winkler@berlinhyp.de

Felix ZillmannFunding & Investor Relations

Tel.: +49 30 2599 9529felix.zillmann@berlinhyp.de

You will find further information on Berlin Hypif you visit our website www.berlinhyp.de:

14

Disclaimer

This presentation was produced by Berlin Hyp AG (hereinafter “Berlin Hyp”) for information purposes only. It is not investment advice.

The prior consent of Berlin Hyp is required for the copying of information or data, in particular for the use of texts, parts of text or picture

material. To the best of our knowledge, the facts and information contained in this presentation are correct at the time of production and

are subject to change in future. Neither Berlin Hyp nor members of its Board of Management, management staff, employees, advisors or

other persons furnish any warranty or guarantee, explicit or implied, in relation to the correctness or completeness of the information

contained in this presentation. All liability by Berlin Hyp, members of its Board of Management, management staff, employees, advisors

or other persons for losses incurred, directly or indirectly, in whatever way by the use of this presentation or its contents or otherwise in

connection therewith is excluded.

Every reasonable care has been taken to ensure that the facts contained in this presentation are correct at the time they were collected,

and that the views expressed are fair and reasonable. However, this document contains selected information and is merely an

introduction to and overview of the business activities of Berlin Hyp. Opinions expressed in this document can change at any time.

Neither Berlin Hyp nor any other person is obliged to correct, update or keep updated the information contained herein, or inform you

about this. A significant proportion of the information contained in this document, including market data and information about trends, is

based on estimates or expectations of Berlin Hyp and there is no guarantee that these estimates or expectations will be proved correct

in future.

This presentation may contain future-oriented statements which reflect our present view with regard to future developments. These

statements can be identified as such by words like “expectation” or “target” or “forecast” and similar expressions, or by their context.

These statements are made on the basis of current knowledge and current assumptions in each case at the time they are made. They

harbour risks and uncertainties including but not limited to changes in interest rates or exchange rates. If these risks or uncertainties

materialise, or if the knowledge or assumptions forming the basis of our future-oriented statements prove incorrect, actual future results,

performance or events in the future could differ from those described in these statements. There is no obligation to update future-

oriented statements or to inform you about this.

This document does not constitute an offer for the sale of securities. Securities of Berlin Hyp may not be offered or sold in the United

States if they are not registered there or are not exempt from the obligation of registration according to the U.S. Securities Act 1993 in its

current applicable version.

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