Danske Bank A/S · OMXCOP:DANSKE
Danske Bank A/S — Sampo Housing Loan Bank — Debt Investor Presentation (September 2011)
32 slides from Danske Bank A/S's debt investor presentation, September 2011
Slide 1: Sampo Housing Loan Bank Covered Bonds Investor Presentation
Sampo Housing Loan Bank Covered Bonds Investor Presentation September 2011
Slide 2: Table of contents
Table of contents • Executive Summary 3 • SHLB’s merger – restructuring of CB platform 4 • Sampo Bank Group Overview 5 • Finnish Economy and Housing Market 12 • Finnish Covered Bond Legislation 18 • Loan Process 20 • Cover Pool Characteristics 23 • Appendix 28 • Contact details 32 2
Slide 3: Executive summary
Executive summary • Sampo Housing Loan Bank plc (“SHLB”), the Issuer - 100% owned and supported by Sampo Bank plc - Fully integrated in Danske Bank Group, one of the largest financial institutions in the Nordic region (A2/A/A+, outlook negative/negative/negative) • Sampo Bank plc - Well-diversified
Slide 4: SHLB's merger – Restructuring of CB platform
SHLB’ s merger – Restructuring of CB platform - Act on Mortgage Credit Bank Operations states that covered bonds can be issued either by specialized mortgage credit bank or any licensed credit institution authorized by FIN- FSA to engage mortgage credit business - At year end 2011 SHLB as a separate
Slide 5: Sampo Bank Group Overview
Overview — Sampo Sampo Bank Group
Slide 6: Strong Nordic franchise
Strong Nordic franchise Personal customers 1,1 M Business customers 0,1M Branches 121 Sampo Bank is a part of Danske Bank Group Employees 2.712 One of the largest bank groups in northern Europe Market rank 3 Five million customers Deposit growth (Y/Y) -2,3% 21,536 employees Loan growth (Y/Y) +
Slide 7: A bank with a long history
A bank with a long history ” The Postal Savings Bank opened its first branch in 1897. Today, Sampo Bank has 121 branches around Finland from the southern coast to Lapland Postipankki and the Finnish Export 2011- Credit Agency, merge to become Leonia Mandatum joins Sampo. The group is named Sampo Gro
Slide 8: Sampo Bank Group – Key figures H1 2011
Sampo Bank Group – Key figures H12011 EUR million H12011 H12010 Change FY2010 Profit before taxes 47,8 92,1 -44,3 152,3 Net interest income 163,5 158,3 5,2 321,9 net fee and commission income 101,2 94,6 6,6 188,7 Impairment losses on loans and receivables -45,6 -13,1 -32,5 32,7 Solvency ratio, % - t
Slide 9: Sampo Bank Group's funding structure 31st August 2011
Sampo Bank Group’s funding structure 31st August 2011 Term Issued Subordinated funding bonds debt from Group 6 % 1% Deposits • Strong deposit base 2% 63 % • Covered bond will be a core funding tool Covered bonds going forward 13 % Deposits taken from Group 4% Cd's 7% MM deposits 4% 9
Slide 10: Quarterly impairment balances and net credit losses of housing loans
Quarterly impairment balances and net credit losses of housing loans in % Sampo Bank Group, % of outstanding housing loan exposure 0,18 Impairment balance Net losses 0,16 0,14 0,12 0,10 0,08 0,06 0,04 0,02 0,00 -0,02 -0,04 Q4/2008 Q1/2009 Q2/2009 Q3/2009 Q4/2009 Q1/2010 Q2/2010 Q3/2010 Q4/2010 Q1/20
Slide 11: Housing loans in arrears as percentage of housing loan portfolio
Housing loans in arrears as percentage of housing loan % portfolio of Sampo Bank 1,0 30-60 days 60-90 days Over 90 days 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0,0 16-09-2011 11
Slide 12: Finnish Economy and Housing market
Finnish Economy and Housing market
Slide 13: Macro economy
Macro economy GDP in Nordic countries Labour market has been performing relatively well GDP indexed 2007 = 100 % 105,0 105,0 18 18 16 16 102,5 Sweden 102,5 14 14 100,0 Norway 100,0 12 12 Euro area 97,5 Finland 97,5 10 10 8 8 95,0 Denmark 95,0 6 Finland 6 92,5 92,5 Iceland 4 4 90,0 90,0 2 2 2007 2008
Slide 14: Public finances
Public finances 157,7 Source: European Commission forecast for 2011 (May 2011) Source: European Commission forecast for 2011 (May 2011) Yield on 10 year government bonds % 7 7 • Being part of core euro-zone Republic 6 Spain 6 of Finland has access to funding levels 5 5 close/in line with Germany Ita
Slide 15: Housing market – housing prices
Housing market – housing prices Price of old apartments 1985 - 1985 = 100, index • The recession caused only a minor dip in housing prices in 2500 160 2008/2009 winter. Construction fell to very low levels 150 Price, nominal (euro per square metre, left hand scale) • High confidence coupled with low
Slide 16: Housing market – household debt
(asteikko oikealla) Housing market – household debt Household debt to disposable income • Household indebtedness has grown mainly due to p e r c e n t o f d is p o s a b le in c o m e housing loans 110 10 • Thanks to low interest rates, debt is less 100 9 burdensome than in the past In t e r e s t p
Slide 17: Outlook for 2011-2012
Outlook for 2011-2012 forecast forecast National accounts 2008 2009 2010 2011 2012 Volume, y-o-y % GDP 1,2 -8,2 3,6 2,5 1,2 Imports 6,6 -16,1 7,4 3,0 1,5 Exports 6,5 -21,5 8,6 2,0 1,0 Consumption 2,0 -2,0 2,1 2,5 1,2 - Private 1,7 -3,1 2,7 3,2 1,5 - Public 2,7 0,9 0,6 0,5 0,5 Investments -0,2 -13,5
Slide 18: Finnish Covered Bond Legislation
Finnish Covered Bond Legislation
Slide 19: Main features of Finnish MCBA
Main features of Finnish MCBA • Act on Mortgage Credit Bank Operations (“MCBA”, statute 688/2010), came into force 1 August 2010 • Covered bonds are issued either by specialized mortgage credit bank or any licensed credit institution authorized by FIN-FSA to engage mortgage credit business • Cover p
Slide 20: Loan process
V1) ue Loan process — Sampo
Slide 21: Loan granting process
Loan granting process • Customer identification - Customer must be identified and verified, also regarding age and legal capacity - Customer’s background and financial position must be determined, both external (credit bureau) and internal payment defaults • Application scoring - Customer is applica
Slide 22: Collateral valuation and loan decision
Collateral valuation and loan decision Collaterals • all collateral is located in Finland • only residential purposes • must be valued by a valuer independent of the credit decision process • External qualified valuer or • Internal valuer who have sufficient qualifications and experience and is inde
Slide 23: Cover Pool Characteristics
V1) Cover Pool Characteristics — Sampo
Slide 24: Key characteristics of SHLB cover pool
Key characteristics of SHLB cover pool Pool notional EUR 3.31 bn Number of Loans 70,631 Residential/ 100 % Finnish prime owner occupied residential properties, no Commercial vacation/second homes, no commercial mortgages WA Indexed LTV 39.6 % WA Seasoning 55 Months WA Remaining Term 15.8 Years Rate
Slide 25: SHLB Asset pool characteristics – regional distribution
SHLB Asset pool characteristics - regional portfolio distribution by collateral value Eastern Finland Lapland 6.6 % 3.1 % Oulu 3.1% 7.3 % 7.3% 2/3 of Finns live south of this Western line Finland Southern 6.6% 22.8 % Finland 22.8% 60.1 % 60.1% Helsinki 25
Slide 26: SHLB Asset pool characteristics – loans by LTV and balance size
SHLB Asset pool characteristics - loans by LTV and balance size 1 000 14 000 700 35 000 900 12 000 600 30 000 800 Loan balance, EUR m 500 25 000 Loan balance, EUR m 700 10 000 Loan count Loan count 600 400 20 000 8 000 500 300 15 000 6 000 400 300 200 10 000 4 000 200 100 5 000 2 000 100 0 0 0 0 0-1
Slide 27: SHLB Asset pool characteristics – origination year and rate type
SHLB Asset pool characteristics - loans by origination year and rate type 600 12 000 Rate Type 500 10 000 Sampo Loan balance, EUR m 400 8 000 Prime 14 % Euribor 3M Loan count 25 % Fixed 300 6 000 8% 200 4 000 Euribor 6M 6% 100 2 000 Euribor 0 0 12M <= 2000 2001 2002 2003 2004 2005 2006 2007 2008 200
Slide 28: Appendix
Appendix
Slide 29: Branch network comparison
Branch network comparison Nordea: OP Pohjola Group: Sampo Bank: 312 branches over 550 branches 121 branches ~ 31% market share ~ 36 % market share ~ 14% market share of housing loans of housing loans of housing loans Sources: Finnish Banking Federation, Financial reports 29
Slide 30: Non-performing loans
Non-performing loans Termination letter sent (* Loan transferred to collection (default) 1. Reminder 2. Reminder 3. Reminder Customer Letter sent Letter sent Letter sent defaulted Due 14 29 55 85 90 Days *) Until defined termination conditions are fulfilled, 3.reminder letter is sent repeatedly 16-0
Slide 31: Arrears collection process – Acceleration notice to public auction
Arrears collection process - Acceleration notice to public auction Letter of Termination Cumulative Days Voluntary Sale / Restructuring Payment +21 Days The loan cannot become current again after registered to debt collection system. Will need full Debt Management +128 payment. Days It takes about 2
Slide 32: Danske Bank Group's funding team
Danske Bank Group’s funding team Steen Blaafalk Tel.: + 45 45 14 63 60 Senior Executive Vice President E-mail: [email protected] Peter Holm Tel.: + 45 45 12 84 85 Claus Jensen Tel.: +45 45 12 84 83 Senior Vice President E-mail: [email protected] Chief Funding Manager E-mail: clauj@danske
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