september/2011 hypo noe group public sector pfandbriefe
TRANSCRIPT
September/2011
HYPO NOEGROUP
Public Sector Pfandbriefe
HYPO NOE Group is one of Austria‘s largest regional banks. We provide our customers with innovative, quality services that live up to our “Reliability and Excellence” motto.
Founded in 1888, the bank’s sole owner is the State of Lower Austria. HYPO NOE Group unveiled its new corporate design and name in autumn 2010.
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Tradition of Quality for over 120 Years
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Commitment to quality-oriented growth Tailor-made customer solutions in promising markets Centre of excellence – in-house skills combined with outside expertise
when necessary Pursuit of sustainable corporate earnings based on risk awareness Focus on strong customer relationships that live up to our core values:
sustainability, quality and stability
Our Principles
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Executive Summary 5 HYPO NOE Group 6 – 10 Financial Assets 11 Funding and Funding Strategy 12 – 13 Austrian Pfandbrief Law 14 Public Sector Pfandbrief Program 15 – 17 Substitution of Hungarian Exposure 18 Appendix 19 – 24 Contacts 25 – 26
Table of Contents
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A Young Bank with more than 120 Years of Tradition Austrian Commercial Bank with a Focus on Public-Sector Financing 100% owned by the Province of Lower Austria (Aaa; stable)
Rebranding as of 23 October 2010: HYPO NOE Group HYPO NOE Group:
S&P Counterparty Rating: A/Stable/A-1 Moody’s Public Sector Pfandbrief Rating: Aaa High Quality Cover Pool with a Clear Regional Focus
Well Established Jurisdiction: Issuance under the Austrian Pfandbrief Law (1927, amended 2005)
Executive Summary
History
1888 Establishment of a regional mortgage bank for Lower Austria
1992 Establishment of Niederösterreichische Landesbank-Hypothekenbank AG (NÖ HYPO-BANK). Sole owner: Lower Austria.
1996 Partial privatisation – shareholders: 74% Lower Austria, 26% ÖVAG (Austrian bank)
1999 Change in shareholder structure – shareholders: 59% Lower Austria, 41% ÖVAG
2006 ÖVAG decides to sell its shares in NÖ HYPO-BANK back to Lower Austria
2007 Transfer of ÖVAG shares to Lower Austria. Split into HYPO Investmentbank AG and NÖ HYPO-BANK for retail customers
2010 Rebranding: HYPO NOE Gruppe Bank AG (former HYPO Investmentbank AG), HYPO NOE Landesbank AG (former Niederösterreichische Landesbank-Hypothekenbank AG / NÖ HYPO-BANK)*
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Map of Lower Austria
* No governmental support was needed during the financial crisis. The 100% ownership of the Province of Lower Austria can be regarded as a long term, strategic investment
Vienna
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Province of Lower Austria at a glance Sole Shareholder of HYPO NOE Group:
Moody’s long-term debt and issuer rating: Aaa (stable)* Lower Austria accounts for 15.8% of national GDP** Strong expected GDP growth: ***
2011p: +2.3% 2012p: +2.0%
Low unemployment rate in comparison: Lower Austria: 6.0%** EU27: 9.5%****
* Moody‘s Investors Service, 22 March 2011; Credit Analysis** Statistik Austria (Source data: GDP 2008; Unemployment rate 2011)*** ECONOMICA/IHS (Wirtschaftsprognose für NÖ 2010; p = prognosis)**** Eurostat data for 2011
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Group Structure
HYPO NOE Group:Regional market leader in the public finance sector in combination with:HYPO NOE Real ConsultHYPO NOE Leasing
HYPO NOE Landesbank:
All-purpose bank with private and corporate clients in Lower Austria and Vienna
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Total Assets 11.8bn Net Interest Income 75.8mn Other Operating Result 16.1mn General Administrative Expense 45.7mn Risk Provisions 12.2mn Pre-tax Profit 21.9mn Tier I Ratio* 12.17% Equity Ratio* 17.63% Pre-tax Return on Equity 5.2% Cost Income Ratio 57.2% Average Number of Employees 604
HYPO NOE Group Financial Information (IFRS)
As of 30 June 2011* According to Austrian Banking Act
Group Loan PortfolioBy Industries
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18.0%Commerce
14.0%Construction and Housing*
16.7%Private Customers
1.3%Self Employed
Total EUR 8.735bn as of 30 June 2011
50.0%Public Sector
* Thereof more than 90% secured by guarantees of the State of Lower Austria (subsidised housing loans) and/or by mortgages
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By Rating By Asset Class
40.56%A
6.42%AA
17.9%< A / not rated
Total EUR 2.038bn as of 30 June 2011
22.43%Government/Public
69.72%Bank/Financial**
2.77%Corporates
5.08%ABS
35.05%AAA
* Thereof, the top 5 countries Austria 43.8%, USA 5.4%, Netherlands 5.3%, Italy 4.6% and Poland 4.2%** Thereof 44.0% Guaranteed by Federal States, 12.0% Covered Bonds 3.6% and Government Guaranteed
Financial Assets*
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52.2%Debt securities in issue (there of 67,6% Senior Bonds with Deficiency Guarantee)
18.5%Deposits fromCredit Institutions
19.5%Deposits from Customers
1.7%Subordinated
8.0%Others incl. Equity
Total EUR 11.801bn as of 30 June 2011
Funding
13Over-Collateralisation Development as of 31 August 2011
Funding StrategyPublic Sector Pfandbriefe
will be the Major Future Funding Source
0
500.000.000
1.000.000.000
1.500.000.000
2.000.000.000
2.500.000.000
3.000.000.000
3.500.000.000
Public Sector Cover Pool Outstanding Public Sector
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Established 1927, Amended 2005 Maturity Matching Requirements Mandatory 2% Over-collateralisation in High Liquid Cover Assets Public Sector Cover Assets Limited to Austria, EEA and Switzerland** The Trustee („Treuhänder“) is a Strong Supervisory Authority Legal Protected Insolvency Remoteness
* The other Austrian Covered Bond Laws are the Gesetz für fundierte Bankschuldverschreibungen and the Hypothekenbankgesetz
Austrian Pfandbrief LawThe Austrian Pfandbrief Law is one of Austria‘s strong Covered Bond Laws*
** The maximum risk weighting according to the Directive 2000/12/EC for public sector entities eligible for the Cover Pool must not exceed 20% (this excludes therefore regional governments or local authorities in Rumania, Bulgaria, Liechtenstein, Malta and the Baltics)
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Moody‘s Rating: Aaa Public Sector Cover Pool: € 3.027bn* Public Sector Pfandbriefe: € 1.967bn**
Over-collateralisation on Nominal Basis: 50.9 %***
Over-collateralisation on NPV Basis: 46.0 %
Public Sector Pfandbrief Program
As of 31 August 2011
* Thereof € 94mn equivalent in CHF** Thereof € 343mn equivalent in CHF*** Net of the legally required minimum 2% over-collateralisation
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Borrowers and Guarantors Clear Regional Focus
As of 30 June 2011
Public Sector Cover Pool (1/2)
86.9%Lower Austria
74.74%Province of Lower Austria
12.13%Municipalities in Lower Austria
5.25% Hungarian Public Entities
5.86%Other AustrianMunicipalities and Provinces
2.03%Republic of Austria
7.9%Rest Austria
5.2%Hungary
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Quality of Cover Assets More Than 1,100 Single Loans
8.0%Bonds
4.7%Aa
9.1%A
As of 30 June 2011
6.6%< A
92.0%Loans
79.6%Aaa
Public Sector Cover Pool (2/2)
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Substitution of Hungarian Exposure
As of 7 September 2011 As of 30 June 2011
5.2%Hungary
94.8% Austria98.5% Austria
0.4%CZ0.3%
SK
0.8%PL
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APPENDIX
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Key Financial Figures€ mn.
Q2 2011 Δ Q2 2010-11 Q2 2010 2010 2009Statement of Financial Positions
Total Assets 11.801 -0,5% 11.863 12.004 11.645 Loans and advances to customers 8.735 5,2% 8.302 8.879 8.581 Financial assets 2.143 -6,3% 2.286 2.094 2.283 Deposits from customers 2.305 -3,8% 2.397 2.327 2.461 Debt securities in issue 6.160 16,3% 5.298 5.945 5.167
Income StatementNet interest income 75,8 8,1% 70,1 135,1 138,6Risk provisions for loans and advances -12,2 24,5% -9,8 -17,7 -34,1Net fee and commission income 3,8 -17,4% 4,6 7,2 7,2Net trading income 1,1 120,0% 0,5 16,1 2,0General administrative expenses -45,7 10,1% -41,5 -81,9 -76,7Other operating result 16,2 92,9% 8,4 -47,6 4,1Loss from financial assets and from hedging activities -17,1 -3520,0% 0,5 -3,6 -16,2Gains or losses on disposals of consolidated subsidaries - - - -Income Tax -5,5 -32,9% -8,2 -0,5 -4,8Net Profit 16,4 -33,3% 24,6 7,1 20,1
Changes of Market Value Change in the positions ofAvailable For Sale net (after deferred taxes) -57,4 335,0% -13,2 -28,6 27,1Available For Sale gross -76,6 335,0% -17,6 -38,1 36,2Designated at Fair Value Through Profit and Loss -0,9 -573,8% 0,2 0,3 -0,1
Key FiguresEligible core capital (tier 1 capital) 452 2,4% 442 452 438 Risk weighted assets 3.718 -2,9% 3.831 3.943 3.938 Core capital ratio 12,17% 6,0% 11,48% 11,47% 11,11%Equity ratio 17,63% 2,2% 17,26% 17,30% 16,70%Return on equity before tax 5,2% -35,0% 8,0% 1,9% 6,8%Cost income ratio 57,2% 16,0% 49,3% 76,4% 57,3%
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Group Outstanding Funding
€ `000
Money Markets and Debt Capital Markets Funding 30/06/2011 in %Deposits from credit Institutions 2.183.778 18,5% thereof Austrian National Bank 650.023 thereof other banks 1.533.755 thereof Schuldscheindarlehen with deficiency guarantee 610.510
Deposits from customers 2.304.505 19,5% thereof saving deposits 766.845
thereof time and sight deposits 1.537.660
thereof Schuldscheindarlehen with deficiency guarantee 605.720
thereof Schuldscheindarlehen without deficiency guarantee 40.835
Debt securities in issue 6.159.804 52,2% thereof Pfandbriefe and Covered Bonds 1.993.656 thereof Public Sector Pfandbriefe 1.951.924
thereof Mortgage Backed Pfandbriefe 41.732
thereof Covered Bonds 0
thereof Senior Bonds (without profit participation rights) 4.165.496 thereof Senior Bonds with deficiency guarantee 3.947.952
thereof Senior Bonds without deficiency guarantee 217.544
Subordinated capital 203.780 1,7%Others incl. equity 949.589 8,0%Total liabilities and equity 11.801.456 100%
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> 5mn(Total 2,458mn: Nr. 79)
300k – 5mn(Total 364mn; Nr. 303)
< 300k (Total 65mn; Nr. 786)
Public Sector Cover Pool as of 30 June 2011
Size of Cover Assets
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States2.2% (Total 64mn; Nr. 8)
Provincial States 17.7% (Total 526mn; Nr. 85)
Municipalities11.6% (Total 346mn; Nr. 898)
Guaranteed by Provincial States 61.0% (Total 1.814mn; Nr. 55)
Guaranteed by States 1.2% (Total 37mn; Nr.8 )
Others1.9% (Total 56mn; Nr. 12)
Guaranteed by Municipalities4.5% (Total 133mn; Nr. 104)
Public Sector Cover Pool as of 30 June 2011
Types of Debtors
and Guarantors
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Maturity Structure
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628
983
1.343
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1.333
176
409
0 200 400 600 800 1.000 1.200 1.400
up to 12 months
from 12 to 60 months
from 60 to 120 months
more than 120 months
Public Sector Pfandbriefe
Cover Pool
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Felix DiemHead of Team
Financial Institutions & Sovereigns
Tel: +43 (0)5 90 910 1560
Investors – Contacts
Ivo MinkovSenior AnalystFinancial Institutions & Sovereigns
Tel: +43 (0)5 90 910 1478
Georg LehmanSenior Manager
Rating & Investor Advisory
Tel: +43 (0)5 90 910 1557
HYPO NOE Group, Wipplingerstrasse 4, A-1010 Wien
www.hyponoe.at
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Hermann MaschlHead of Funding
Tel: +43 (0)5 90 910 1222
Debt Capital Markets Funding - Contacts
Alexandra NitzladerSenior Funding Manager
Tel: +43 (0)5 90 910 1252
Herbert PabischSenior Funding Manager
Tel: +43 (0)5 90 910 1369
HYPO NOE Group, Wipplingerstrasse 4, A-1010 Wien
www.hyponoe.at
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This document, which has been issued by HYPO NOE Group, comprises the written materials/slides for a presentation concerning a proposed offering of covered bonds (Pfandbriefe) (the “Offering”). This document does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, any securities in HYPO NOE Group, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto. Any such offers will only be made when a prospectus in relation to the Offering is published in due course.
The contents of this presentation is to be kept confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.
No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, expressed or implied, is given by or on behalf of HYPO NOE Group or the banks represented at this presentation or any of such institutions’ affiliates, directors, officers or employees, advisors or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability whatsoever is accepted for any such information or opinions or any use which may be made of them.
This document is intended for distribution in the United Kingdom only to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or to those persons to whom it can otherwise lawfully be distributed. Neither this document nor any copy of it may be taken or transmitted in or into the United States or to any US person (as defined by Regulation S of the US Securities Act of 1933 (the “Securities Act”)) or transmitted in or into Australia, Canada or Japan or to Australian, Canadian or Japanese persons. Securities of HYPO NOE Group have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration under the Securities Act or exemption from the registration requirements thereof. There will be no public offer of securities of HYPO NOE Group in the United States. The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with this restriction may constitute a violation of applicable securities law.
Certain market data and financial and other figures (including percentages) in this document were rounded in accordance with commercial principles. Figures rounded in this manner may not in all cases add up to the stated totals or the statements made in the underlying sources. For the calculation of percentages used in the text, the actual figures, rather than the commercially rounded figures, were used. Accordingly, in some cases, the percentages provided in the text may deviate from percentages based on rounded figures.
Certain statements in this presentation are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. HYPO NOE Group does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak as only of the date of this presentation. Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.
Although due care has been taken in compiling this document it cannot be excluded that it is incomplete or contains errors. HYPO NOE Group, its shareholders, advisors and employees are not liable for the accuracy and completeness of the statements, estimations and the conclusions contained in this document. Possible errors or incompleteness do not constitute any grounds for liability, neither with regard to indirect nor direct damages.
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NOT FOR DISTRIBUTION IN THE UNITED STATES, AUSTRALIA, CANADA AND JAPAN.
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