Results Q1/24 - Analyst Presentation
14 May 2024
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Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 2 |
KEY MESSAGES | Solid start into 2024 |
Pre-tax profit of € 34 mn, slightly higher than previous year (Q1/23: € 32 mn)
Pre-provision profit of € 81 mn, benefitting from strong NII and realisation income
Risk provisioning remains elevated in line with guidance
Strategic active balance sheet management started
Portfolio remains solid with an avg. LTV of 54%1
100% senior lender, always first ranking
Selective new business with favourable risk/return profile - REF portfolio stable vs. year-end 2023 Slowing NPL dynamic through active NPL management
Already strong liquidity position of € >6 bn further improved
Resilient Pfandbrief market - recent Mortgage Pfandbrief Benchmark tapped by € 100 mn at manageable cost No need to issue Senior Unsecured benchmark in 2024
Retail deposit further increased by € 0.5 bn to € 7.1 bn in Q1/24
1. Based on performing investment loans only
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 3 |
AGENDA
- Highlights Q1/24 and P&L
- Portfolio Quality
- Focus
- USA
- Development
- Germany
- Funding
- Capital & Balance Sheet Management
- Economic Outlook & Summary
- Appendix
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 4 |
HIGHLIGHTS Q1/24
- Solid PBT of € 34 mn on the back of intact operating trends
- Strong operating income compensates for still elevated level of risk provisioning
- Stable REF portfolio with improving margin
- New business with strong margin uplift
- Strong liquidity position further improved
- Growth of retail deposits and resilient Pfandbrief market
- Well capitalised, significantly above MDA
1. 03/23 excl. interim result, 12/23 incl. full-year result, 03/24 incl. interim result
Strong KPIs despite challenging markets
PBTOperating income
€ 34 mn | € 146 mn |
(Q1/23: € 32 mn; Q4/23: € -1 mn) | (Q1/23: € 119 mn; Q4/23: € 188 mn) |
REF PortfolioNew business margin
€ 31.2 bn | ~245 bp |
(12/23: € 31.1 bn, 03/23: € 29.4 bn) | (2023: ~205 bp, 03/23: ~200 bp) |
Liquidity | CET1 ratio |
€ >6 bn | 15.2% |
(03/24) | (12/23: 15.7%, 03/23: 16.6%)1 |
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 5 |
OPERATING & FINANCIAL OVERVIEW | Selective new business at strong margins |
REF new business
€ bn (commitments, incl. extensions > 1 yr.)
REF portfolio
- bn (financing volume)
~200 bp | ~245 bp |
1.0
0.7
- Selective new business volume with focus on risk/return profile
- Strong uplift of gross interest margin
31.131.2
margin business
- REF portfolio stable
- Improved gross portfolio margin
Q1/23Q1/24
12/23 | 03/24 |
Funding - retail deposits
- bn
Non-Core portfolio
- bn (financing volume)
+8% | |
6.6 | 7.1 |
- Growth of retail deposits at favourable costs, well ahead of plan
- Strong liquidity position further improved
-6%
12.411.6
- Optimisation of non-core portfolio ongoing
- Accelerated asset reduction at attractive price levels
12/2303/24
Note: Figures may not add up due to rounding
12/23 | 03/24 |
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 6 |
OPERATING & FINANCIAL OVERVIEW | Operating trends intact - risk provisioning on |
elevated level, as expected |
Operating income
- mn (IFRS)
119
12
107
NII/NCI
Realisation & other income
146
20
126
- NII/NCI up y-o-y, benefitting from portfolio growth and improved gross portfolio margin
- Realisation income up
General admin. expenses
- mn (IFRS)
58
24
34
Personnel Non-personnel
58
23
35
- GAE stable y-o-y
- Inflationary cost pressure successfully mitigated
Q1/23Q1/24
Net income from risk provisioning | Stage 1&2 |
€ mn (IFRS) | Stage 3 |
Q1/23Q1/24
Pre-tax profit
- mn (IFRS)
5 -7
-2
-10
-37
- Risk costs at elevated level, as expected
- Still dominated by US loans and German developments
3234
- pbb remains clearly profitable in challenging enviroment
- PBT slightly up y-o-y - in line with expectation and guidance
-47
Q1/23Q1/24
Note: Figures may not add up due to rounding
Q1/23Q1/24
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 7 |
OPERATING INCOME
Operating income | NII/NCI | Net other op. income | |||||||||||||||||||||||
€ mn (IFRS) | Realisation income | Other | |||||||||||||||||||||||
Income from fair value measurement | |||||||||||||||||||||||||
188 | |||||||||||||||||||||||||
1 | |||||||||||||||||||||||||
15 | 146 | ||||||||||||||||||||||||
40 | |||||||||||||||||||||||||
119 | 4 | ||||||||||||||||||||||||
23 | |||||||||||||||||||||||||
1 | |||||||||||||||||||||||||
14 | 134 | 126 | |||||||||||||||||||||||
107 | |||||||||||||||||||||||||
-1 | -2 | -2 | -4 | ||||||||||||||||||||||
-3 | |||||||||||||||||||||||||
Q1/23 | Q4/23 | Q1/24 |
Pre-provision profit
- mn (IFRS)
107
81
32
Q1/23 | Q4/23 | Q1/24 |
Note: Figures may not add up due to rounding
Pre-provision profit remains strong and well ahead previous year
Net income from realisations
Q1/24: € mn (IFRS)
Prepayment fees
2
Derecognition of
time barred liabilities 4
11 | Asset sales | |
€ 23 mn | (non-core portfolio) |
6
Liability management
- Strong operating income
- NII benefitting from strategic portfolio growth and improved gross margins y-o-y - slightly down q-o-q due to reduction of non-core portfolio and refinancing costs
- Net income from realisations mainly driven by optimisation of non-core portfolio and liability management
- Pre-provisionprofit remains strong, supported by
- stable cost base
- no expenses for European bank levy in Q1/24
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 8 |
RISK COSTS
Net income from risk provisioning
- mn (IFRS)
Stage 1&21
Stage 3
Other2
Risk provisioning on elevated level, but significantly lower vs. Q4/23, as expected
Stage 1&2
Other
UK -1 1
-7 | 5 | -9 | 1 | -10 |
-2 | -37 | |||
-100 | -47 | |||
-108 | ||||
Q1/23 | Q4/23 | Q1/24 |
Challenging market environment reflected in credit risk and interest rate changes
-
Stage 1&2: € -10 mn net additions still dominated by US - credit risk changes (€ -15 mn) and macroeconomic impact from interest rate rises (€ -4 mn) partly compensated by release of management overlay
(€ +9 mn) - Stage 3: € -37 mn net additions driven by US office and German development
Stage 3
- -10mn
-10
USA
(incl. release of € 9 mn management overlay)
UK -1
-17 Germany
- -37mn
USA -19
1. Incl. provisions in off balance sheet lending business 2. Recoveries from written-off financial assets
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 9 |
RISK COSTS
Balance sheet - loss allowances
€ mn | Stage 1 | |
Stage 2 | ||
REF loan loss allowance coverage further strengthened
Stage 1&2
Other Germany
14 15
REF | 189 bp | |
coverage | ||
589 | ||
134 | 41 | |
414 |
Stage 3
199 bp
623
39
142
442
UK
24
€ 181 mn
USA
(incl. € 22 mn mgmt. overlay)
128
12/23 | 03/24 | |
Mgmt. | 31 | 22 |
overlay | ||
- Further build up of loss allowances - increase of REF coverage by 10 bp to 199 bp
- Stage 1&2: net increase by € 6 mn - additions partly reduced by positive effect from stage 3 transfer
- Release of € 9 mn management overlay for US loans
- Stage 3: net increase by € 28 mn - additions, FX and interest rate effects partly compensated by write-offs
Stage 3 | Other | Germany |
26 | 65 | |
€ 442 mn | |||
UK | 212 | 139 | USA |
Results Q1/24 (IFRS, pbb Group, unaudited) 14 May 2024 | 10 |
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Deutsche Pfandbriefbank AG published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2024 05:18:02 UTC.