Aegon Ltd. · EURONEXT:AGN
Aegon — Aegon Bank — Debt Investor Presentation (June 2019)
31 slides from Aegon's debt investor presentation, June 2019
Slide 1: Aegon Bank Investor Presentation: Inaugural Senior Non-Preferred Issuance
Aegon Bank Investor Presentation Inaugural Senior Non-Preferred Issuance June 2019 Helping people achieve a lifetime of financial security
Slide 2: Disclaimer
Disclaimer Disclaimer This presentation was prepared by Aegon Bank N.V. (“Aegon Bank” or the “Company”) and may contain marketing materials. Although the information in this presentation has been obtained from sources which the Company believes to be reliable, the Company does not represent or warra
Slide 3: Disclaimer
Disclaimer No representation, warranty or undertaking, express or implied, is made as to and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. This presentation is not to be relied upon in any manner as legal, ta
Slide 4: Contents
Contents 01 Introduction: Aegon N.V. 04 Minimum requirements for own funds and eligible liabilities Slides 7-10 Slides 27-28 02 Introduction: Aegon Bank 05 Transaction Summary Slides 12-17 Slides 30-31 03 Financials Slides 19-25 4
Slide 5: Executive summary
Executive summary Transaction summary Why Senior Non-Preferred Issuer Aegon Bank N.V. (Aegon Bank) • The National Resolution Authority (NRA) has imposed a Status Statutory Senior Non-Preferred minimum requirement for own funds and eligible liabilities Format / Tenor Reg S bearer / [5 year] (MREL) on
Slide 6: Introduction: Aegon N.V.
Introduction Aegon N.V. EGON
Slide 7: Aegon N.V. at a glance
Aegon N.V. at a glance What we do Life insurance, pensions & Underlying earnings before tax asset management for approximately (2018) 28.5 million customers (2018) Return on Equity Asia 2% 10.2% (2018) History Europe 37% Our roots date back to the first half of the 19th century EUR 2,074 Employees A
Slide 8: Targets 2019 – 2021
Targets 2019 – 2021 Growth strategy will deliver sustainable and attractive returns to all stakeholders Normalized capital generation Strong focus on customer centricity EUR 4.1 billion Cumulative for 2019 – 20211 Dividend pay-out ratio Building on strong market positions 45 – 55 % of normalized cap
Slide 9: Strategic categories
Active portfolio management Aegon Bank is core to Aegon’s growth strategy, and is categorized as a “Scale-up for future” business Normalized capital generation1 Aegon’s growth strategy (in EUR billion, cumulative for 3 years) 4.1 • Actively manage portfolio Strategic categories Scale-up for Future •
Slide 10: Capital position of Aegon and its main units
Capital position of Aegon and its main units Solid solvency ratios at both group and local unit level per year end 2018 Group Solvency II ratio1 Local solvency ratio by unit3 (Year-end 2018) 211% • Group Solvency II ratio up 10%-points US - RBC 201% • Driven by strong capital generation 465% 200% 17
Slide 11: Introduction: Aegon Bank
Introduction Aegon Bank 11
Slide 12: Aegon Bank at a glance
Aegon Bank at a glance What we do Retail banking with payment services, Capital position savings- and investment products for ca. (2018) 600,000 clients (2018) Size Total assets EUR 14.1 billion (2018) History 21.9% 21.6% Launched new online banking platform 4.4% in 2012 Employees Total capital rati
Slide 13: Aegon Bank's strategy execution
Aegon Bank’s strategy execution Aegon Bank successfully grew its balance sheet and built an online banking platform 2012 First mortgage loans on Aegon Bank balance sheet Launched new online banking platform 2013 First consumer loans on Aegon Bank balance sheet 2015 Aegon Bank issued its first Condit
Slide 14: Position of the bank within Aegon
Position of the bank within Aegon Aegon Bank is core to Aegon’s growth strategy as “Scale-up for future” business Position of the bank within Aegon N.V. Simplified organization structure • Categorized as “Scale-up for future” in Aegon’s growth strategy - Aegon Bank is a fully owned subsidiary of Aeg
Slide 15: The business model of the bank
The business model of the bank Focusing on growing retail and small business clients Retail banking services Net interest margin • Focus on being a scalable, modular retail bank with strong • Asset mix mainly consists of high strategic alliances quality mortgages originated and • Strong market posit
Slide 16: One bank with two distinct brands
One bank with two distinct brands Strong market position in self-employed market and banking savings • Knab provides over 225k retail and small business clients with insight in Fast growing Knab client base their personal financial situation and a state-of-the-art banking experience (in number of cl
Slide 17: Strategic priorities translate into ambitious targets
Strategic priorities translate into ambitious targets Priority Customer Cost Profitability Growth satisfaction control Net promotor Net customer Cost/Income Return on KPI score (NPS) growth ratio Equity (RoE) Target Maintain +40 points +70k clients 60% in 2022 9% in 2022 among Knab clients per year
Slide 18: Financials
Financials Aegon Bank in detail 18
Slide 19: Aegon ratings
Aegon ratings Objective to maintain strong ratings Insurance Financial AA-, A+, Strength rating, outlook negative stable Aegon N.V. A-, A-, Issuer rating, outlook negative stable Aegon Bank N.V. A+, A-, Issuer rating, outlook negative stable Expected Senior A A- Non-Preferred rating Aegon Bank N.V.
Slide 20: Balance sheet composition
Balance sheet composition Roughly 70% of total assets allocated to prime Dutch residential mortgage portfolio Balance sheet Mortgage loans (per 4Q 2018, EUR billion) 14.1 14.1 • Low-risk, high-quality mortgage portfolio, with low LtV and high NHG coverage1 Savings deposits Mortgage loans • Prime Dut
Slide 21: Capital and liquidity position
Capital and liquidity position Strong capital and liquidity position exceeding regulatory requirements Capital position (per 4Q 2018) • Strong Total capital ratio (21.9%) exceeding the bank’s current Overall Capital Requirement (OCR)1 of 17.3% • Solid CET1 ratio in place to ensure sufficient capital
Slide 22: Capital ratios improved in 2018
Capital ratios improved in 2018 The bank maintains a strong capital position, both on a risk weighted and unweighted basis Total capital ratio Total Risk Exposure Amount (TREA) Leverage ratio (in percentages) (in EUR millions) (in percentages) 2,604 2,863 21.0% 21.9% 3.9% 4.4% 2017 2018 2017 2018 20
Slide 23: P&L results reflect that bank is in a scale-up phase
P&L results reflect that bank is in a scale-up phase Net interest • Net interest margin improved as a result of Amounts in EUR millions 2018 2017 margin increasing scale and lower funding costs Interest income 339.0 295.8 Interest expense and related fees (147.3) (150.2) • Expenses increased as a re
Slide 24: Impact of IFRS 9 accounting principles
Impact of IFRS 9 accounting principles Growing consumer & small business loans portfolio increases impairment losses Changed carrying amounts • The implementation of IFRS 9 (as of January 1, 2018) caused a total remeasurement loss, net of tax, of EUR 8.1 million • This remeasurement loss was recogni
Slide 25: Key financial metrics over time
Key financial metrics over time Balance sheet growth and expense reduction initiatives, targeting an RoE of 9% in 2022 Cost/Income ratio1 Return on Equity2 89% 84% 9% 60% 3% 2% 2017 2018 Target: 2022 2017 2018 Target: 2022 • Strong focus on cost control and expense reduction, • Realized RoE over 201
Slide 26: Minimum requirement for own funds and eligible liabilities
Minimum requirement for own funds and eligible liabilities Aegon Bank 26
Slide 27: Resolution planning at Aegon Bank level
Resolution planning at Aegon Bank level Aegon Bank will comply with the (as of yet non-binding) indicative MREL target Resolution requirements setting • For Aegon Bank the National Resolution Authority (NRA) stated that the bail-in will form a part of the resolution strategy with a Single Point of E
Slide 28: Senior Non-Preferred transaction to fund MREL needs
Senior Non-Preferred transaction to fund MREL needs The SNP transaction anticipates future growth of the balance sheet and MREL needs Indicative MREL target and needs (based on default SRB formula1) Comments 33.35% MCC 1.45% (CBR - 1.25%) • Based on the 2018 default SRB formula2 and the bank’s curre
Slide 29: Transaction Summary
Transaction Summary 29
Slide 30: Summary
Summary • Customer satisfaction is a core strategic priority of the bank, aiming to maintain a Net Promoter Score at +40 Strategic priorities • The bank needs to grow its client base to achieve scale, targeting a net growth of 70k clients per year and KPIs • Increased cost control to ensure sufficie
Slide 31: Indicative term sheet
xx Indicative term sheet Issuer Aegon Bank N.V. Issuer Ratings A+ (negative) / A- (stable) (S&P Global/Fitch) Exp. Ratings of the Notes A / A- (S&P Global/Fitch) Status Statutory Senior Non-Preferred Notes Ranking The Notes qualify as, and comprise part of the class of, Statutory Senior Non-Preferre