bayernlb group investor presentation · 2020-05-14 · investor presentation. 2 contents ›...

Munich, June 2020

BayernLB Group Investor Presentation

2

Contents › Financial performance 3

Q1 2020

› Strategy & Outlook 18

› High portfolio quality 25

› Funding, liquidity

and Pfandbriefs 33

› Ratings 37

› Detailed charts 40

3

Financial performance Q1 2020

› Operating performance in line with forecasts: net interest and commission

income up slightly on the year-before period at just under EUR 500 m

› Risk provisions of EUR 72 m and a loss on fair value measurement of

EUR 65 m

› Profit before taxes in the Group was a negative EUR 151 m after

recognising in full the charge for the EU bank levy and contributions to

the deposit guarantee scheme of EUR 115 m

› Progress in the transformation process: initial cost-cutting measures

launched

› BayernLB is on hand to serve and support its customers in the

coronavirus crisis with a very solid CET1 ratio of 14.7%

BayernLB makes provisions for risks from the coronavirus pandemic and posts a loss in the first quarter of 2020

HIGHLIGHTS

4

5

Higher contributions for the bank levy and deposit guarantee scheme weigh on earnings

51(151)

Q1 2019 Q1 2020

Profit/loss before taxes

EUR mConsolidated profit/loss

EUR m

CIR

In %

RoE

In %

44(152)

Q1 2019 Q1 2020

Q1 2019 Q1 2020

72.791.4

Q1 2019

2.1

Q1 2020

(6.1)

6

Solid capital base despite market turbulence as a result of the Covid 19 pandemic

Total assets

EUR bnRWAs

EUR bn

CET1 capital (fully loaded)

EUR bn

CET1 capital ratio (fully loaded)

In %

241.8226.0

Dec 2019 Mar 2020 Dec 2019 Mar 2020

67.164.6

Mar 2020Dec 2019

10.1 9.9

Dec 2019 Mar 2020

15.6 14.7

7

Net interest and net commission income in line with our expectations at approx. EUR 500 m

› Net interest income in line with our expectations in

an intensely competitive environment and

unchanged on the year-before period

› Unchanged on year-before period

Net interest income

EUR m

Net commission income

EUR m

423 426

Q1 2019 Q1 2020

70 71

Q1 2019 Q1 2020

8

Gains or losses on fair value measurement and risk provisions impacted by coronavirus pandemic

› Significant loss on fair value measurement due to

market turbulence resulting from the coronavirus

pandemic

Gains or losses on fair value measurement

EUR m

(13) (65)

Q1 2020Q1 2019

› Precautionary increase in risk provisions to cover

currently foreseeable potential risks from the

coronavirus pandemic

› Year-before period buoyed by high releases and

recoveries on written down receivables

› NPL ratio remains unchanged at 0.7%

Risk provisions

EUR m

7 (72)

Q1 2019 Q1 2020

9

Capex-related higher administrative expenses and increased costs from BL/DG

› Higher investment in sales and digitalisation at

DKB

› Stable administrative expenses at BayernLB

Administrative expenses

EUR m

(366) (390)

Q1 2019 Q1 2020

› Expenses for the bank levy EUR 55 m (Q1 2019:

EUR 52 m)

› Expenses for the deposit guarantee scheme

approx. EUR 60 m (Q1 2019: EUR 41 m);

increase reflects cost of support measures

Expenses for the bank levy and deposit guarantee

scheme

EUR m

(93) (115)

Q1 2019 Q1 2020

10

Operating earnings in the Group on par with year-before period

DKB

96

28

› The decline in earnings at DKB was mainly due to

measurement losses as a result of the persistent

turbulence on the stock markets and strategically-

driven higher administrative expenses

› Earnings performance in Central Areas & Others

was largely marked by higher contributions for the

bank levy and deposit guarantee scheme and

measurement losses.

› Earnings in Real Estate & Savings Banks/FI in the

year-before period were buoyed by releases of risk

provisions. Earnings have grown this year due to the

positive trend in new business performance and the

precious metals business.

› Additional risk provisions in relation to coronavirus

and measurement losses weighed heavily on

earnings in Corporates & Markets.

Real Estate &

Savings Banks/FI

4

(89)

Corporates &

Markets

58 47

Central Areas &

Others

(106) (138)

Profit before taxes by segment

EUR m

Q1 2019 Q1 2020

Note: the previous year’s figures in all segments

apart from DKB have been changed following the

BayernLB Group’s strategic realignment

11

Real Estate & Savings Banks/FI

› Profit before taxes dropped to EUR 47 m (Q1

2019: EUR 58 m) as a result of an

extraordinary gain in the Real Estate Division

in the year-before period.

› The growth in earnings from net interest and

net commission income to EUR 138 m (Q1

2019: EUR 122 m) mainly reflects good new

business in real estate.

› Other earnings components benefited from the

significant increase in business with precious

metals in the Savings Banks & FI Division.

› Administrative expenses increased as a result

of Bank-wide capex for sales and projects.

› Earnings at BayernLabo were down on the

year-before period at EUR 4 m (Q1 2019:

EUR 14 m), due to losses on measurement of

interest rate hedges.

› Earnings of EUR 4 m (Q1 2019: EUR 4 m) at

Real I.S. and EUR 1 m (Q1 2019: EUR 2 m) at

BayernInvest were unchanged on the year-

before period.

RoE

In %

CIR

In %

Q1 2019 Q1 2020

70.2 64.9

Q1 2019

13.6

Q1 2020

11.0

EUR m Q1 2020 Q1 2019

Net interest income 80 70

Risk provisions in the credit

business(8) 17

Net commission income 57 52

Other earnings components 19 16

Administrative expenses (101) (97)

Profit/loss before taxes 47 58

Risk-weighted assets (RWAs) 12,243 12,532

12

Corporates & Markets

› Profit before taxes fell to EUR -89 m (Q1 2019:

EUR 4 m), driven mainly by lower earnings and

greater additions to risk provisions in relation to

the coronavirus crisis. Unlike the year-before

period they were not offset by releases of risk

provisions in a similar amount.

› Net interest and net commission income

dropped to EUR 85 m (Q1 2019: EUR 95 m),

mainly as a result of less high-commission new

business being concluded.

› Other earnings components were marked by

measurement losses.

› Administrative expenses were in line with year-

before period.

› RWAs lower than year-before period, due in

particular to the portfolio reduction in Markets.

RoE

In %

CIR

In %

Q1 2019 Q1 2020

92.6123.7

Q1 2019

0.5

Q1 2020

(-10.5)

EUR m Q1 2020 Q1 2019



business(71) (3)


Other earnings components (11) 3


Profit/loss before taxes (89) 4


13

DKB

› Profit before taxes dropped to EUR 28 m (Q1

2019: EUR 96 m), largely as a result of

measurement losses and higher administrative

expenses.

› Net interest income declined due to a market-

induced tightening of interest margins. Net

commission income grew thanks to currently

higher income related to the increasing

importance of contactless payment and the

considerable uptick in securities transactions.

› Other earnings components shrank due to

measurement losses, primarily from the fund

portfolio.

› Administrative expenses climbed to EUR 165

m (Q1 2019: EUR 141 m), mainly due to

strategic investment in digitalisation and

customer service and higher expenses to meet

regulatory requirements.

› Bayern Card-Services posted profit before

taxes of approx. EUR 1 m.

RoE

In %

CIR

In %

52.0

Q1 2019 Q1 2020

76.0 11.5

Q1 2019 Q1 2020

3.2

EUR m Q1 2020 Q1 2019



business5 (7)


Other earnings components (56) (4)


Profit/loss before taxes 28 96


14

Central Areas & Others

› Profit before taxes was affected mostly by high

expenses for the bank levy and deposit

guarantee scheme of EUR 86 m (Q1 2019:

EUR 65 m).

› An additional drag on profit before taxes came

from measurement losses in relation to the

coronavirus crisis.

EUR m Q1 2020 Q1 2019



business2 1

Net commission income (6) (7)

Other earnings components (138) (98)


Profit/loss before taxes (138) (106)


15

Performance of the CET1 ratio

› RWAs climbed, largely as a result of money market dealings, higher drawdowns on commitments and new

calculation requirements for securitisations. There was no rating-induced increase.

CET1

In %

Earnings

retention

H2 2019

Mar 2020

(0.2)

Dec 2019 Quarterly loss

0.315.6

(0.4)

Revaluation

surplus +

deductions

(prudent

valuation)

(0.6)

Increase

in RWAs

14.7

16

CET1 ratio well above SREP minimum ratios

4.50%

2.00%

14.70%1

March 2020

CET1 ratio

1.00%2.50%

2020

CET1 SREP requirement

10.00%

› Fully loaded CET1 ratio of 14.70% on 31 March

2020 was well above the SREP minimum ratio for

2020 of 10.0%

› The minimum CET1 ratio set by the CRR (Pillar 1

requirement) is 4.50%

› On top of that is an individual premium (Pillar 2

requirement) of 2.00% for 2020

› Additional capital buffers:

Capital conservation buffer: 2.50%: may be

temporarily undershot due to the corona crisis

Buffer for national, systemically important

institutions: 1.00%

Capital conservation buffer

Buffer for national systemic relevance

Pillar 1 requirement

Pillar 2 requirement

17

MREL requirement is significantly exceeded

MREL holdings

In % of RWAs

› Supervisory authority’s MREL requirement is 7.75%

of TLOF (equates to 25.34% of RWAs)

› MREL holdings as at 31 December 2019 stood at

20.19% of TLOF (equates to 68.15% of RWAs),

which far exceeds the supervisory authorities’

requirements

› Large portfolio of subordinated eligible liabilities

(senior non-preferred) not only effectively protects the

superior senior preferred category from losses, but

also offers broad protection within the senior non-

preferred category

1.70

MREL holdings

31 Dec 2019

68.15

Regulatory capital

Senior preferred - eligible

Senior non-preferred

Other

18.30

7.48

40.68

18

Strategy & Outlook

19

We will continue to be a reliable

partner to our customers in

Bavaria and Germany.

We will remain the principal bank

to the Free State of Bavaria and

strong partner to the public

sector.

We will still be the central bank of

the Bavarian savings banks, firmly

rooted in the S-Finanzgruppe.

We will invest in infrastructure

and IT at the core Bank and DKB

and will set ourselves up as

modern and secure.

At the same time we will

considerably reduce our cost

base, especially in the core Bank.

We will increase the efficiency of

the platform in Munich and thereby

also support the ongoing growth of

our subsidiary, DKB.

We will further expand our position

in real estate finance and

structured asset finance.

We will focus on profitable and

future-oriented sectors in our

corporates and capital market

business.

We will double our customer base

in DKB’s retail business.

We will focus our business more

closely on sustainability.

How we will achieve sustainable success on our own terms in future

We are focusing on our

STRENGTHS

We are improving our

EFFICIENCY

We are a strong

PARTNER

Our capital base: strongcornerstone of the BayernLB bank of the future

2019

~ 35.5

0.3

~ 68.0

~ 32.0

~0.5

2024

64.6

24.7

39.6

RWAs

EUR bn

15.6 >14CET1 ratio

in %

Focus

› Maintain volume of RWAs on

par with today in the target

vision

› Include investment and

restructuring costs in capital

planning

› Grow capital base, mainly via

retention of earnings

› Finance growth at DKB from the

Bank’s own resources

› Ensure ongoing ability to pay a

dividend

DKB

Other subsidiaries

BayernLB core Bank

6.7 ~ 8RoE

in %

20

Our future structure:three strong segments

Corporates & Markets DKBReal Estate /

Savings Banks & FI

› Special lender with in-depth

expertise in sectors of the

future

› Advanced structuring

expertise in financing:

structured asset finance and

debt capital markets (DCM)

› Streamlined offering of

Financial Markets’ risk

management products

› Reliable real estate lender with

special consulting expertise

in Germany and selected

foreign markets

› Central bank of the Bavarian

savings banks and a strong

partner to the public sector and

financial institutions

› Innovative tech bank,

which inspires its customers as

a digital companion and

sustainable partner

(#geldverbesserer)

› Strong earnings growth

through its target to double

customer numbers to 8 million

21

Major investment in the future...

› Core Bank: Invest in further increasing sector expertise in

business with corporate, real estate and special

customers; in addition, invest a triple-digit million

sum in infrastructure and IT to significantly

increase the efficiency of the platform in Munich

› DKB: Invest EUR 400 m in growth and in the future over

the next five years, both to modernise and

upgrade the IT systems and to achieve

considerable growth in retail and business

customers

Considerably reduce costs in the core Bank by 2024

› Streamline activities in the capital market and

corporate lending business, incl. reducing the range

of products and complexity in the trading and credit

processes

› Generate savings in the central areas and in IT costs

by significantly simplifying the IT landscape

› As announced in 2019, more socially responsible job

cuts will be required on top of the 400 already

mentioned, although it is not yet possible to put a

number on this. BayernLB is currently developing a

range of measures to optimise costs, which will only

be fleshed out in full in the next few weeks. However,

the Bank has ruled out redundancies until autumn

2022

INVESTMENT COSTS

…and efficiency improvements

22

Our transformation: systematic implementation to follow successful start

› Transformation programme spanning

several years set up for BayernLB core

Bank

› Growth initiatives at DKB and expansion

of IT launched

› Growth initiatives in the core Bank in real

estate finance and structured asset

finance started

› Streamlining in Corporates business

underway

› Realignment of Financial Markets put in

motion, new structures established

Implementation has already begun

› Modernisation and development of IT at DKB

and transformation of IT at the core Bank will

be pushed forward in 2020

› Targeted growth of sector expertise in the

Corporates business will be gradually rolled out

in this year

› Increase in product expertise in real estate and

structured asset finance is progressing as

planned

› Additional levers to cut costs, optimise

processes and improve efficiency in the core

Bank will be identified as another priority this

year and beyond

Important next steps (excerpts)

23

Outlook

BayernLB still declines to issue an earnings forecast for the full year.

As it emphasised in its annual results press briefing on 3 April, the Group

and the entire banking sector is facing exceptionally high uncertainty for

2020 on account of the coronavirus pandemic. The negative impact on

global economic output will be considerable and will be greater the longer

the pandemic continues.

This will also require a further increase in risk provisions. It is still not

possible to make a serious earnings forecast for 2020 at the moment.

24

25

High portfolio quality

26

Growing credit portfolio with excellent quality

276 280

20192018

Gross credit volume

EUR bn

Growing credit portfolio

› Launch of the new strategy already evident from

the growth in business in 2019

› Most of the growth took place in the Commercial

Real Estate sub-portfolio

NPL ratio

In %

0,80,7

2018 2019

Rising quality

› Low risk provisions of EUR 10 m (FY 2018:

release of EUR 103 m) thanks to good portfolio

quality.

› NPL ratio remains low at 0.7%

27

Most of the growth in the Commercial Real Estate sub-portfolio

Gross credit volume by region

In %

› Germany EUR +4.8 bn

› Western Europe EUR -1.5 bn

80%

11%

5%

Eastern Europe

Germany

Western Europe

North America 1%

Asia/Australia/Oceania

(EUR 1.8 bn, <1%)

Supranational orgs

(EUR 2.4 bn, <1%)

Latin America/Caribbean

(EUR 0.8 bn, <1%)

CIS

(EUR 1.0 bn, <1%)

Middle East

(EUR 1.4 bn, <1%)

Africa

(EUR 0.2 bn; <1%)

27%

19%

20%

12%

23%

Corporates

Financial Institutions

Commercial Real Estate

Retail/Other

Countries/Public Sector/

Non-Profit Org.

Gross credit volume by sub-portfolio

In %

› Commercial Real Estate EUR +5.0 bn

› Corporates EUR +1.0 bn

› Countries/Pub. Sec.

/Non-Prof. Org. EUR -2.0 bn

28

Portfolio quality improved further

Gross credit volume by rating category

EUR bn / %

65.1

7.0

MR 19-21MR 0-7 MR 8-11

173.7

MR 12-14 MR 22-24

26.1

MR 15-18

178.3

65.2

25.87.1 1.9 1.3 2.1 2.0

2018: Total EUR 276.0 bn


87.1%investment grade

Investment grade Non-investment grade Default categories

29

Persistently high granularity

Net credit volume

EUR bn / %

EUR 5 m to

EUR 50 m

EUR 250 m to

EUR 500 m

EUR 500 m

to EUR 1 bn

> EUR 2.5 bn EUR 50 m to

EUR 100 m

EUR 1 bn to

EUR 2.5 bn

35.3

EUR 100 m to

EUR 250 m

Up to EUR 5 m

20.816.3

2.7 3.2

15.9 19.124.9

20.8

36.9 38.2

23.7 24.8

49.154.4

33.9


2019: Total EUR 212.2 bn 82% up to EUR 500 m

› Decline posted in the “> EUR 2.5 bn” size category, as balances held with central banks were reduced

› Volume in the size categories up to EUR 0.25 bn was increased across the board, although the growth in

the Corporates sub-portfolio is particularly noteworthy

30

Corporates – increase in business and improvement of investment grade share

Corporates by sector

EUR bn

› Business volume grew by EUR 985 m

› Investment grade share improved further from 75.2% to 76.8%

Chemicals,

pharmaceuticals

& healthcare

Utilities Raw

materials,

oil & gas

Telecoms,

media &

technology

Consumer

goods,

tourism,

wholesale

& retail

Automotive

6.4

Logistics

& aviation

Mechanical

engineering,

aerospace

& defence

Construction

23.4

3.5

23.7

8.15.6

8.4 7.4 7.5 6.9 5.37.9 6.7 6.3 5.7 5.5 5.4 3.7



31

Commercial real estate finance

Gross credit volume by asset class/unit

EUR bn/Jan 2020

Highlights

› Portfolio was expanded as planned by EUR 5.2 bn

to EUR 55.5 bn

› Granular portfolio with 88% share in Germany

› Residential asset category includes around EUR

21.5 bn (FY 2018: EUR 19.0 bn) of low-risk

business due to local authority/government

ownership or guarantees and housing associations

› 85% investment grade share

› 70% of the cash flow generating gross exposure

(GEX) has a debt service capacity of > 8% p.a.

› Expected loss at 5 bp; stable trend

› Low average NPL ratio of 0.4%

Outlook

› Pursue a clearly defined, well considered growth path

in Germany and abroad with increasing risk

diversification within the real estate portfolio

› Realise growth in foreign business by using existing

infrastructure via foreign branches and local networks

while maintaining the current portfolio and risk profile

› Breakdown of asset classes in the target portfolio will

remain almost unchanged

6.4

Residential

25.4

Office

2.5

RetailManaged

real estate

34.4

6.5

9.7

2.9

3.54.4

BayernLB BayernLaboDKB

32

Private residential construction term loans

Gross credit volume by unit

EUR bn

Distribution in Germany

Granular portfolio with focus on Bavaria, mainly due

to BayernLabo

Outlook for DKB

Credit volume will increase from 2020 New business

will be managed in a targeted manner to improve

efficiency through higher loan amounts per

application

2018

0.4

20192017

14.0

0.3

14.7

0.2

13.7

3.5

10.8

3.3

10.4

3.2

10.3

BayernLB DKB BayernLabo

Highlights of the DKB portfolio

› Average ticket size (entire portfolio): EUR 144 k

› Average ticket size (new business): EUR 223 k

0.3

1.5

0.7

0.40.5

0.5

0.70.7

0.90.8

Volume (EUR bn)

0.5

1.04.8

0.1

0.1

33

Funding, liquidity and Pfandbriefs

34

Comfortable liquidity levels

Capital market funding

EUR bn/BayernLB core Bank not incl. BayernLabo

Funding strategy

› Lower funding needs in 2020 are the result of the

streamlining of BayernLB core Bank and the

related reduction in requirements

› Focus on unsecured funding at BayernLB level

using diversified sources of funding, especially

via the savings banks, institutional investors,

retail and the international DIP scheme

› Maintain capital market presence by regularly

issuing secured benchmark bonds

› Liquidity coverage ratio (LCR): 154% as at March

2020

Issued Planned

2018

4.03.5

2.2

2017

5.1

3.54.2

2019

1.1

4.0

2020e

5.7

8.2 8.6

5.1

Secured Unsecured

35

Investor-friendly structure on the liabilities side

Liabilities structure

EUR bn/2019

2.117.2

50.2

100.4

11.5

44.6

Bilanz

226.0

Liabilties to banks

Subordinated capitalLiabilities to customers

Securitised liabilities

Other liabilities

Equity

Of which

Pfandbriefs

29.2

Of which

unsecured

debt

instruments

under Section

46 f KWG

Of which

structured

debt

instruments

under Section

46 f KWG

31.0

4.0

Funding via Pfandbriefs

› BayernLB uses a total of four funding

programmes based on the German Pfandbrief

Act (PfandBG) as a low-cost, long-term source of

funding, two each at BayernLB and DKB

Broad base of unsecured liabilities

› BayernLB has an investor-friendly structure on

the liabilities side with sufficient unsecured bonds

in relation to total assets. The Bank actively

monitors and plans the proportion of unsecured

bonds in accordance with Moody’s Loss Given

Failure analysis

36

BayernLB Pfandbriefs

Public Pfandbriefs

The majority of the cover (>90%) consists of German

municipal finance and receivables guaranteed by

German states with a focus on Bavaria. Tap issues

and jumbolinos are issued on a regular basis to

maintain a liquid Pfandbrief curve.

Mortgage Pfandbriefs

Cover mainly includes commercial real estate,

primarily residential, office and retail with a focus on

Germany. The high overcollateralization provides

freedom to launch issues across all maturity bands.

Key figures for Q1 2020

Outstanding volume EUR 6.5 bn

Moody’s rating Aaa

Excess cover 26.4%

Cover pool Germany EUR 5.4 bn

Cover pool abroad EUR 2.5 bn

Key figures for Q1 2020

Outstanding volume EUR 18.5 bn

Moody’s/Fitch rating Aaa/AAA

Excess cover 22.1%

Cover pool Germany EUR 21.0 bn

Cover pool abroad EUR 1.2 bn

37

Ratings

38

Ratings

Fitch Ratings Moody's

Issuer rating A- (negative) Aa3 (stable)

Long-term, preferred senior unsecured A Aa3 (stable)

Long-term, non-preferred senior unsecured A- A2

Short term, unsecured F1 P-1

Public Pfandbriefs AAA Aaa

Mortgage Pfandbriefs - Aaa

Long-term, Derivative Counterparty / Counterparty Risk Assessment (CRA) A (dcr) Aa3 (cr)

Long-term, Counterparty Risk Rating (CRR) - Aa3

Short-term, Counterparty Risk Assessment (CRA) / Counterparty Risk Rating (CRR) - P-1 (cr) / P-1

Long-term, deposits A Aa3 (stable)

Short-term, deposits F1 P-1

Profit participation rights - Baa3

Subordinated bonds BB+ Baa2

Viability Rating / Baseline Credit Assessment bbb baa2

39

Above-average sustainability ratings overall

ISS ESG

(formerly oekom)imug (German partner of VigeoEiris) Sustainalytics MSCI

Rating C+ 22.03% 68 points AA

Ranking/investment

status“Prime”

Unsecured

bonds:

“neutral”

(CCC)

Public

Pfandbriefs:

“positive”

(BBB)

Mortgage

Pfandbriefs:

“positive”

(BB)

77 out of 340Above sector

average

Sector average D 27.06% 60 points BBB

Rating range A+ to D- -100% to 100% 0 to 100 points AAA-CCC

Benchmark

252

financials/public &

regional banks

27 savings banks 340 banks

Universe:

MSCI ACWI

Index

constituents,

Banks, n=218

Date Jan 2020 Mar 2019 Jun 2019 Oct 2019

40

Detailed charts

41

Year-on-year earnings comparison

EUR m Q1 2020 Q1 2019 Change in %

Net interest income 426 423 0.9

Risk provisions in the credit business (72) 7 -

Net interest income after risk provisions 354 430 (17.7)

Net commission income 71 70 2.4

Gains or losses on fair value measurement (65) (13) >100

Gains or losses on hedge accounting (19) (12) 56.8

Gains or losses on derecognised financial assets 0 0 -

Gains or losses on financial investments 11 31 (64.1)

Administrative expenses (390) (366) 6.7

Expenses for the bank levy and deposit guarantee scheme (115) (93) 23.9

Other income and expenses 2 4 (47.0)

Gains or losses on restructuring 0 0 -

Profit/loss before taxes (151) 51 -

Income taxes (1) (7) (83.1)

Profit/loss after taxes (152) 44 -

Profit/loss attributable to non-controlling interests 0 0 -

Consolidated profit/loss (152) 44 -

42

Segment overview

EUR m

Real Estate &

Savings Banks/

FI

Corporates &

MarketsDKB

Central Areas

& OtherGroup

Net interest income 80 69 238 38 426

Risk provisions in the credit business (8) (71) 5 2 (72)

Net interest income after risk provisions 73 (2) 243 40 354

Net commission income 57 15 5 (6) 71

Gains or losses on fair value measurement 17 (13) (28) (42) (65)

Gains or losses on hedge accounting 0 0 (3) (16) (19)

Gains or losses on derecognised fin. assets 0 1 (1) 0 0

Gains or losses on financial investments 0 0 2 9 11

Administrative expenses (101) (91) (165) (34) (390)


scheme0 0 (29) (86) (115)

Other income and expenses 1 0 3 (2) 2

Gains or losses on restructuring 0 0 0 0 0

Profit/loss before taxes 47 (89) 28 (138) (151)

Return on equity (RoE) (%) 11.0 (10.5) 3.2 - (6.1)

Cost/income ratio (CIR) (%) 64.9 >100.0 76.0. - 91.4

43

Segment overview Q1 2019

EUR m

Real Estate &

Savings Banks/

Association

Corporates &

MittelstandDKB

Central Areas

& OtherGroup

Net interest income 70 71 247 35 423

Risk provisions in the credit business 17 (3) (7) 1 7

Net interest income after risk provisions 87 68 240 35 430

Net commission income 52 24 0 (7) 70

Gains or losses on fair value measurement 13 3 14 (42) (13)

Gains or losses on hedge accounting 1 1 (2) (12) (12)

Gains or losses on derecognised fin. assets 0 0 0 0 0

Gains or losses on financial investments 0 0 6 25 31

Administrative expenses (97) (91) (141) (36) (366)


scheme0 0 (28) (65) (93)

Other income and expenses 2 0 6 (4) 4

Gains or losses on restructuring 0 0 0 0 0

Profit/loss before taxes 58 4 96 (106) 51

Return on equity (RoE) (%) 13.6 0.5 11.5 - 2.1

Cost/income ratio (CIR) (%) 70.2 92.6 52.0 - 72.7

44

Balance sheet overview

EUR billion Mar 2020 Dec 2019 Change in %

Loans and advances to banks 32.1 31.1 3.2

Loans and advances to customers 150.3 145.0 3.7

Assets held for trading 16.5 13.9 18.2

Financial investments 23.6 23.6 0.1

Total assets 241.8 226.0 7.0

Liabilities to banks 55.2 50.2 10.1

Liabilities to customers 107.9 100.4 7.4

Securitised liabilities 46.1 44.6 3.5

Liabilities held for trading 12.1 10.3 16.9

Subordinated capital 1.7 2.1 (17.4)

Equity 11.1 11.5 (3.8)

45

Key capital figures

Fully loaded Mar 2020 20191

CET1 capital (EUR bn) 9.9 10.1

CET1 ratio (%) 14.7 15.6

Total capital (EUR bn) 11.2 11.4

Total capital ratio (%) 16.7 17.6

RWAs (EUR bn) 67.1 64.6

Leverage ratio (%) 3.8 4.1

LCR (%) 154 168

1 Data as reported.

46

Contact

Volker Karioth

Senior Manager

[email protected]

+49 89 2171 23441

Disclaimer

47

The information in this presentation constitutes neither an offer nor an invitation to subscribe to or purchase securities or a

recommendation to buy. It is solely intended for informational purposes and does not serve as a basis for any kind of obligation,

contractual or otherwise.

Rounding differences may occur in the presentation.

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