nordea kredit investor presentation 2016 q1...2016/03/31 · nordea kredit – in brief ii •...
TRANSCRIPT
Nordea Kredit
Investor Presentation 2016 Q1
Published 12 May, 2016
Nordea Kredit
Introduction and contact information
This Investor Presentation has been compiled by Nordea Kredit for information
purposes only and offers facts and figures on Nordea Kredit and the mortgage
collateral supporting outstanding covered mortgage bonds and mortgage bonds.
If you have any questions, please feel free to contact:
Finn Nicolaisen, First Vice President, Nordea - TALM Exposures,
phone +45 3333 1625
Juho-Pekka Jääskeläinen, Senior Treasury Manager, Nordea - TALM Exposures,
phone +45 3333 1626
Contents:
• Nordea Kredit – in brief
• Ratings and OC
• Loan portfolio
• LTV
2
Nordea Kredit – in brief I
• Founded in 1993, number of employees (in FTEs) 101 (as per 2015 Q4)
• New issues are covered mortgage bonds (SDROs), exclusively
• All bonds issued by Nordea Kredit are rated AAA (by S&P) and Aaa (by Moody’s)
• Profit before tax 2015, DKK 1,913m and Cost/Income ratio 10.6%
• Mortgage loans at nominal value 2016 Q1: DKK 390.7bn (2015 Q4: DKK 383.8bn)
• Mortgage loans at fair value 2016 Q1: DKK 384.9bn (2015 Q4: DKK 385.9bn)
• Market share 2016 Q1: 15.0% (2015 Q4: 15.0%)
(Mortgage loans at nominal value as a share of all Danish mortgage bank loans)
3
Nordea Kredit – in brief II
• Weighted average LTV 2016 Q1: 64% (2015 Q4: 63%)
• Total capital ratio at end of 2015: 29.7% and Tier 1 capital ratio 29.7% (excl. transitional rules)
• Match-funded “Pass Through” setup complying with the Danish specific balance
principle
• Late payments by borrowers 2015 Q4: 0.16% (2015 Q3: 0.17%)
(Residential properties and holiday homes, 3½ months after the December 31, 2015 payment date)
• Danish mortgage banks are regulated and supervised by Finanstilsynet
(The Danish FSA)
• All covered bonds issued by Nordea Kredit are ECBC-labeled – see
http://nordeakredit.dk/ - Investor information
4
Nordea Kredit – ratings and over-collateralisation
OC and CE requirements as set by Moody´s and S&P, respectively TPI leeway and unused uplift as defined by Moody´s and S&P, respectively OC data in the lower right hand box as computed by Nordea Kredit
AAA AAA Aaa Aaa Ratings of issued bonds
S&P Moody´s
4
4 6 7 TPI leeway/Unused uplift
2.69
4.44
0.0
0.0
Required OC / CE for
Aaa and AAA rating, %
CC 2 CC1 CC2 CC 1
CC1: 8.1
CC2: 9.8
OC per Q1 2016, %
5
Nordea Kredit`s market shares - outstanding loans in per cent
of all Danish mortgage credit loans
0
2
4
6
8
10
12
14
16
18
2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1
per
ce
nt
Other properties Private rental housing
Commercial Agriculture
Owner occupied dwellings and holiday homes All segments
-
6
Nordea Kredit – profit and net new lending
0
400
800
1200
1600
2000
0
5
10
15
20
25
30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Pro
fit be
fore
tax
DK
K m
N
et
ne
w le
nd
ing
DK
K b
n
<< Net new lending DKK bn (lhs)
Profit before tax DKK m (rhs) >>
7
CC I, RO:
DKK 16.1bn, 4.1 %
Nordea Kredit has two capital centers:
• CC I: Mortgage Bonds
(Realkreditobligationer, “RO”)
No open series.
About 83% of the bonds in CC I
are grandfathered covered bonds
according to UCITS/CRD.
• CC II: Covered Mortgage Bonds
(Særligt dækkede realkredit-
obligationer,”SDRO”) are issued
out of CC II (2007 - ).
All bonds in CC II are covered
bonds according to UCITS/CRD.
Nordea Kredit capital centers
CCs I&II, 2016 Q1: DKK 390.7bn (mortgage loans at fair value)
8
CC II, SDRO:
DKK 374.6bn, 95.9 %
Match-funded setup due to the specific Balance Principle
Investor
Nordea
Kredit
Interest
payment
Interest
payment
Principal
payment
Contribu-
tion fee
Principal
payment
Nordea Kredit complies with the
specific Balance Principle and has a
match-funded “Pass Through” setup.
Nordea Kredit has no prepayment risk
and only negligible interest rate and
foreign exchange risk.
Borrower
9
Nordea Kredit – loan portfolio split by property categories
10
DKK 260.7bn, 66.7%
DKK 30.1bn, 7.7%
DKK 41.6bn, 10.7%
DKK 48.1bn, 12.3% DKK 10.2bn, 2.6%
Owner occ. dwellings &holiday homes
Private rental housing
Commercial
Agriculture
Other properties
Capital centres I & II, 2016, Q1 at fair value: DKK 390.7bn
Distribution of all loans by property category
DKK 60.4 bn 17.6%
11
Nordea Kredit – loan portfolio - loan type split
DKK 100.7bn, 25.8%
DKK 55.2bn, 14.1%
DKK 53.8bn, 13.8%
DKK 85.1bn, 21.8%
DKK 2.7bn, 0.7%
DKK 2,8bn, 0.7%
DKK 37.0bn, 9.5% DKK 53.4bn, 13.7%
Fixed
Fixed IO
ARM
ARM IO
FRN capped
FRN capped IO
FRN
FRN IO
Capital centres I & II, 2016, Q1 at fair value: DKK 390.7bn
Distribution of all loans by loan type
Nordea Kredit – loan portfolio - loan type split (Developments from 2015, Q1 - 2016, Q1 – nominal value)
12
91.6bn 24.4%
95.4bn 25.1% 98.1bn
25.7%
99.5bn 25.9%
100.0bn 26.0%
53.3bn 14.2%
54.3bn 14.3%
55.0bn 14.4%
55.1bn 14.3%
54.6bn 14.2%
24.2bn 6.4%
22.0bn 5.8%
19.4bn 5.1%
16.5bn 4.3%
16.5bn 4.3%
40.1bn 10.7%
36.7bn 9,7%
32.5bn 8.5%
26.1bn 6.8%
24.3bn 6.3%
31.6bn 8.4%
33.6bn 8.8%
33.8bn 8.8% 35.1bn
9.1% 35.8bn 9.3%
56.6bn 15.1%
59.1bn 15.6%
59.5bn 15.6% 59.8bn
15.6% 58.4bn 15.2%
30.6bn 8.2%
31.7bn 8.4%
34.6bn 9.1%
37.8bn 9.9%
39.6bn 10.3%
47.6bn 12.7%
47.0bn 12.4%
48.8bn 12.8%
54.1bn 14.1%
56.2bn 14.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016Fixed rate - amort Fixed rate - IO ARMs 1-2 years - amort ARMs 1-2 years - IO
ARMs 3-10 years - amort ARMs 3-10 years - IO Cita, Cibor, cap - amort Cita, Cibor, cap - IO
59,8%
40,2%
59.8%
40.2%
59.9%
40.1%
60.7%
39.3%
61.5%
38.5%
DKK 60.4 bn 17.6%
13
DKK 82.4bn, 31.6%
DKK 46.8bn, 17.9%
DKK 36.2bn, 13.9%
DKK 67.0bn, 25.7%
DKK 2.4bn, 0.9%
DKK 2.7bn, 1.0%
DKK 8.3bn, 3.2%
DKK 14.8bn, 5.7%
Fixed
Fixed IO
ARM
ARM IO
FRN capped
FRN capped IO
FRN
FRN IO
Owner occupied dwellings and holiday homes, capital centres I & II, 2016 Q1 at fair value: DKK 260.7bn
Distribution of loans by loan type
Nordea Kredit – loan type split for owner occupied dwellings
DKK 17.3bn, 4.4%*
DKK 10.5bn, 4.0%** (0.58m citizens – 10.3%)
DKK 89.9bn, 23.0%*
DKK 56.8bn, 21.8%** (1.28m citizens – 22.7%)
DKK 61.6bn, 15.8%*
DKK 35.4bn, 13.6%** (1.21m citizens – 21.3%) DKK 73.5bn, 18.8%*
DKK 50.7bn, 19.5 %** (0.82m citizens – 14.5%)
* All segments
** Owner occupied dwellings and holiday homes
Total number of citizens 5.7m, April 1, 2015 – Source: Statistics Denmark
North
Denmark
Region
Central
Denmark
Region
South
Denmark
Region Region
Zealand
Capital
Region of
Denmark
DKK 148.4bn, 38.0%*
DKK 107.3bn, 41.1%** (1.77m citizens – 31.2%)
14
Capital centres I & II, 2016 Q1 at fair value: All property categories: DKK 390.7bn
Owner occupied dwellings & holiday homes: DKK 260.7bn
Geographical distribution by Danish regions
Nordea Kredit - loans by Danish regions and property
categories
Asset quality - late payments by borrowers, 2015 Q4
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
200
6Q
1
200
6Q
3
200
7Q
1
200
7Q
3
200
8Q
1
200
8Q
3
200
9Q
1
200
9Q
3
201
0Q
1
201
0Q
3
201
1Q
1
201
1Q
3
2012Q
1
201
2Q
3
201
3Q
1
201
3Q
3
201
4Q
1
201
4Q
3
201
5Q
1
201
5Q
3p
er
ce
nt
Owner occupied dwellings and holiday homes, arrears as a percentage of the Q4, 2015 scheduled payments - 3½ months after due date
All mortgage banks* Nordea Kredit
All mortgage
banks 0.23%
(last 0.21%)
Nordea Kredit 0.16%
(last 0.17%)
*) Including Nordea Kredit
15
Nordea Bank Danmark takes “first losses” on Nordea Kredit loans according to the
table below:
Property type Guarantee period * Guarantee level **
Owner occupied dwellings Lifetime of loan 25 per cent
Holiday homes Lifetime of loan 25 per cent
Subsidized property Lifetime of loan 10 per cent
Housing for youth/elderly Lifetime of loan 10 per cent
Agricultural property Lifetime of loan 25 per cent
Commercial property Lifetime of loan 25 per cent
Asset quality - loss guarantee by Nordea Bank Danmark
*) The guarantee period starts when a loan is disbursed or remortgaged. The former guarantee period of 5 or 10
years, respectively was changed to the lifetime of the loans on December 9, 2013.
**) As a percentage of the original principal – disregarding all amortisation
-The guarantee amount is not reduced during the guarantee period, but cannot exceed the outstanding debt.
-By the end of Q4 2015 loss guarantees from Nordea Bank comprised loans totalling DKK 357.6bn. The actual
loss guarantees amounted to DKK 100.0bn.
16
Net losses in per cent of mortgage loans at nominal value
0,00%
0,20%
0,40%
0,60%
0,80%
1,00%
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
500.000
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
Lo
sse
s %
of m
ortg
age
loa
ns, n
om
ina
l va
lue
M
ort
ga
ge
lo
an
s n
om
ina
l va
lue
, D
KK
m
Mortgage loans at nominal value
Net loss for the year in per cent of mortgageloans at nominal value (rhs)
17
Nordea Kredit – LTV, loan-to-value 2016 Q1 (2015 Q4)
LTV CC I & II LTV CC I LTV CC II
2016Q1 2015Q4 2016Q1 2015Q4 2016Q1 2015Q4
Owner occupied
dwellings
70 69 69 68 70 69
Private rental housing 58 58 76 77 57 58
Commercial 54 54 48 47 54 54
Agriculture 50 50 47 47 50 50
Other properties 36 37 39 38 36 37
Total 64 63 65 64 64 63
- The figures are weighted averages for the respective property categories
- Please also see the information about Nordea Kredit in the ECBC covered bonds labelling
18
Legislation
• Danish mortgage financing is regulated and supervised by the
DFSA (Finanstilsynet): www.ftnet.dk
• Some legislation can be found in English at the DFSA’s English website:
http://www.finanstilsynet.dk/en/Regler-og-praksis/Translated-regulations.aspx
• All relevant legislation can be found in Danish at the DFSA’s Danish website:
http://www.finanstilsynet.dk/da/Regler-og-praksis/Lovsamling.aspx
19
DISCLAIMER – IMPORTANT NOTICE
This presentation and any information contained in this presentation or supplied in connection therewith, whether in writing or not, are provided for information purposes
only. Nordea Bank AB (publ) including its subsidiaries (“Nordea”) is not acting as your financial adviser or in any other fiduciary capacity and this presentation should
not be treated as if Nordea is giving investment advice.
This presentation and any information contained in this presentation or supplied in connection therewith, whether in writing or not, do not constitute or form a part of,
and should not be construed as, an offer, recommendation, advertisement of an offer or invitation to subscribe for or purchase any securities of any Nordea Group
company anywhere in the world or a solicitation of any such offer, and shall neither form the basis of, or be relied on in connection with, any offer or commitment
whatsoever.
Information contained in this presentation is derived from publicly available sources which Nordea believes are reliable, and includes market information based on data
provided by third party sources identified herein and estimates, assessments, adjustments and judgments that are based on Nordea's experience and familiarity with
the sectors in which it operates. Even though Nordea believes the third party sources to be reliable no independent verification has been made, consequently the
correctness and completeness in the information can not be guaranteed. There is no assurance that such estimates, assessments and judgments are the most
appropriate for making determinations relating to market information or that market information prepared by other sources wil l not differ materially from the market
information included herein. This presentation contains forward-looking statements that reflect management's current views with respect to certain future events and
potential financial performance. Although Nordea believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result
of various factors. Important factors that may cause such a difference for Nordea include, but are not limited to: (i) the macroeconomic development, (ii) change in the
competitive climate, (iii) change in interest rate and foreign exchange rate levels and (iv) change in the regulatory environment and other governmental actions. This
presentation does not imply that Nordea has undertaken to revise these forward-looking statements, beyond what is required by applicable law or applicable stock
exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided.
Neither Nordea nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the
accuracy or completeness of the information contained in this presentation. Neither Nordea nor any its directors, officers, employees or advisors nor any other person
shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation.
This presentation (i) does not and will not constitute or include an invitation to tender for purchase or sale, an advertisement or an offer of any securities in
circumstances which could qualify as a public offer (oferta pública) or as a private offer (oferta particular) pursuant to the Portuguese Securities Code (Código dos
Valores Mobiliários) enacted by Decree Law no. 486/99, of 13 November, and published by Decree Law no. 357-A/2007 of 31 October, as amended from time to time
and (ii) complies with all applicable laws and regulations of the Republic of Portugal.
You may not distribute this presentation, in whole or part, without our prior express written permission. This presentation is not for release, directly or indirectly, in or
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