NORD/LB Group Presentation (PDF, 1,6 MB)

1

NORD/LB Group Presentation November 2017

2

Agenda.

NORD/LB at a glance 3

Financials 10

Segments 19

Outlook 36

Appendix 41

3

Established commercial bank in northern Germany.

NORD/LB at a glance

Market leader in Northern Germany in its business units private, commercial and corporate customers

Excellent knowledge in renewable energy and infrastructure projects

Over 30 years of experience in ship and aircraft finance

Represented in important financial centres worldwide

Member of the extended Guarantee Funds of landesbanks and savings banks

Among the top seven German banks

Successful universal bank for over 250 years in the market

4

Ownership structure and regional network.

NORD/LB at a glance

¹ Total differences are rounding differences

59.1% 5.6%

26.4%

5.3%

3.7%

Saxony-Anhalt Savings Banks Holding Association

Special Purpose Holding Association of the Mecklenburg-Western Pomerania Savings Banks

State of Lower Saxony

Lower Saxony Savings Banks and Giro

Association

State of Saxony-Anhalt

Strong support from our owners¹ Headquarters and ownership region

Hanover Brunswick

Magdeburg

5

Represented in important financial and trade centres worldwide.

NORD/LB at a glance

Addresses and more details: www.nordlb.com/nordlb/about-us/locations-worldwide

Head offices Hanover, Brunswick, Magdeburg

Branches worldwide London, New York, Singapore, Shanghai

German branches Bremen, Duesseldorf, Hamburg, Munich, Oldenburg Schwerin, Stuttgart and approx. 100 branches of Braunschweigische Landessparkasse

Subsidiaries and bank holdings Deutsche Hypothekenbank, NORD/LB Asset Management, NORD/LB Luxembourg Covered Bond Bank

London

Amsterdam

Paris Luxembourg

Frankfurt

Munich

Nuremberg

Bremen

Hamburg

Brunswick Magdeburg Hanover

Duesseldorf

Schwerin

Warsaw

New York

Shanghai

Singapore

Stuttgart

Oldenburg

6

Our business segments.

NORD/LB at a glance

Corporate

Customers

Corporate customer business

Agricultural Banking

Finance with public and cooperative housing associations

Syndication business with associated savings banks

Corporate Finance

Private and Commercial Customers

Private customer business

Private Banking

Commercial customer business

Insurance services for private customers in cooperation with public insurances in Lower Saxony

Energy and Infrastructure

Customers

Renewable energy finance

Infrastructure finance

Leasing

Real Estate Banking

Customers

Commercial real estate finance

Social care property finance

Markets

Business with

Institutional customers

Savings banks/ financial institutions

Public-sector customers

Municipal customers

Aircraft Customers

Aircraft finance

Narrowbodies

Widebodies

Freighters

Regional Jets

Turboprops

Helicopter

Spare Engines

Finance and Operating Lease

Ship Customers

Ship finance

Container Vessels

Bulker

Tanker

Multi-Purpose

Offshore Oil & Gas

Cruise/ Ferries

7

Holding structure and brands.1

NORD/LB at a glance

100%2 100%2 100%2

Private and Commercial Customers Corporate Customers Markets Ship, Aircraft, Energy/Infrastructure, Real

Estate Banking

Private and commercial customers

Loans Financial Markets & Sales Client services & B2B

Commercial real estate finance

3

Asset Management for institutional clients

Asset Management

¹ For additional information about subsidiaries and affiliated companies please consult https://www.nordlb.com/nordlb/about-us/investments/ or our Group Annual Reports 2016, note 84 ² NORD/LB ensures that the companies mentioned in the Annual Report 2016 note (75) are able to meet their obligations ³ Incorporated under public law with partial legal capacity

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Long Term (senior unsecured) Baa3 / negative A- / negative

Deposits Baa2 / negative A-

Short Term (Notes/Deposit) P-2 / P-2 F1 / F1

Adjusted Baseline Credit Assessment / Viability Rating ba3 bb

Tier 2 B1 -

Tier 1 Caa2(hyb) -

Public-Sector / Mortgage / Aircraft Pfandbriefe Aa1 / Aa1 / A3 -

Our ratings.

NORD/LB at a glance

NORD/LB credit ratings

NORD/LB sustainability ratings

Corporate Rating C+ Prime AA 64 of 100 points

Unsecured Bonds CCC Public-Sector Pfandbriefe BBB Mortgage Pfandbriefe BB Shipping Pfandbriefe CCC

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Agenda.


Financials 10

Segments 19

Outlook 36

Appendix 41

10

Financials

Earnings before taxes of €326m significantly exceed previous year’s result (€-624m) due to lower loan loss provisions and one-off effects shown in other operating income

Positive operating results reflect satisfactory earnings in all market segments, with the exception of Shipping Finance

Net allocation to loan loss provisions amounting to € 683m (€ 1,347m) Predominantly caused by shipping portfolio. Only marginal loan loss provisions from the other segments

Downsizing of the shipping portfolio Portfolio reduction on track. Within the first nine months the portfolio was reduced by additional €3.5bn, reaching its 2018 target range of €12-14bn

Strengthened capital ratios With an CET1 ratio at 11.5 per cent (11.2 per cent fully loaded) and total capital ratio at 16.9 per cent (16.6 per cent fully loaded) we are significantly above the regulatory requirements (8.33 per cent resp. 11.83 per cent)

Assets further reduced Total assets reduced to €165.2bn (from €174.8bn) through reduction of the shipping and securities portfolios

(Previous year’s figures in brackets)

NORD/LB with positive nine-month figures.

11

Financials

NORD/LB with positive nine-month figures.

Income statement (in €m) 1 Jan –

30 Sep 2017 1 Jan –

30 Sep 2016

Change in %

Net interest income 1,065 1,357 -22

Loan loss provisions (llps) 683 1,651 -59

Net commission income 89 164 -46

Profit/loss from financial instruments at fair value incl. hedge accounting

253 354 -29

Profit/loss from financial assets

133 61 >100

Profit/loss from investments accounted for using the equity method

29 -18 >100

Administrative expenses 883 835 6

Other operating profit/loss 372 -47 >100

Earnings before reorganisation and taxes

375 -615 >100

Reorganisation expenses 49 9 >100

Earnings before taxes 326 -624 >100

Income taxes 98 112 -13

Consolidated profit 228 -736 >100

Net interest income: Decrease due to persistently low interest rates

and declining assets on average (esp. shipping)

Loan loss provisions: Especially from the shipping portfolio,

unremarkable in all other segments

Net commission income: Decreased loan acquisition fees, increased

guarantee premiums, special effects in 2016

Profit/loss from financial instruments at fair value incl. hedge

accounting: Decrease in trading profits due to increased EUR

interest-rate level and tightening of EUR/USD basis spread

Profits from sale of financial assets classified as Available-for-Sale

Profit/loss from investments accounted for using the equity

method: Previous year disproportionately burdened by

impairments, sales profits occur this year

Administrative expenses: Higher costs for data processing (IT

Roadmap) und slightly increased staff expenses; incl. €17m for the

security reserve for Landesbank and EZB levy

Other operating profit/loss: Profits from promissory notes and

repurchases of own issues, contribution for Single Resolution Fund

€53m p.a.

Reorganisation expenses for full takeover of Bremer Landesbank

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694 697 726

2,702

1,624

599

55 19

-67 -217 -145

2 97 19 39

471

172

82

2013¹ 2014¹ 2015¹ 2016¹ 30 Sep 2016 30 Sep 2017

Allocation to specific valuation allowance Allocation to general loan loss provisions Other²

Significant decrease in loan loss provisions.

Financials

¹ Including proportion of Group Management / Others and Reconciliation ² Include: provisions, additions to receivables written off, direct write-offs of bad debts, premium payments for credit insurance, lump-sum specific loan loss provisions (see Group annual report 2016, Note (22))

in €m

Provisions for lending business

2,956

846 735 698

1,651

683

13

Total assets further reduced.

Financials

Balance sheet (in €m) 30 Sep 2017 31 Dec 2016 Change in %

Total assets 165,220 174,797 -5

Loans and advances to banks 28,045 21,747 29

Loans and advances to customers

97,643 105,640 -8

Financial assets 27,836 31,574 -12

Liabilities to banks 44,886 49,241 -9

Liabilities to customers 56,920 57,301 -1

Equity capital (balance sheet) 6,398 6,247 2

Reduction of total assets as scheduled (i.e. reduction of the

shipping portfolio and financial assets)

Loans and advances to banks: Increase especially due to

short-term loans and advances from money market

transactions to German banks

Loans and advances to customers: With 59 per cent still

largest balance sheet item. Decrease of receivables from

public-sector promissory notes, strategic reduction of the

shipping portfolio

Financial assets: Reduction through maturities and

repayments

Liabilities to banks: Funding needs declined due to reduced

assets, especially decrease of liabilities from money market

transactions

Liabilities to customers: Fewer money market transactions

Equity capital (balance sheet): Strengthened by retained

earnings

14

3.7% 4.2% 4.7% 5.5% 5.4%

158.7 160.9 146.3 147.6 145.4

17.8 15.4

13.9 16.6 16.2

11.6 9.9

9.9 8.7 6.9

9.0 8.6

7.7 5.3 3.6

3.3 3.3

3.2 1.8 1.2

4.5 4.1

3.7 4.1 2.7

7.8 8.8

9.1 10.7 10.1

2013 2014² 2015 2016² 30 Sep 2017

default (=NPL)

very high risk

high risk

increased risk

reasonable/satisfactory

good/satisfactory

very good to good

High quality of total portfolio: 78 per cent in the highest category.

Financials

1 Total differences are rounding differences 2 Figures were adjusted, see Interim Report as at 30 Jun 2015, page 28 and Interim Report as at 30 Sep 2017, page 30

in €bn

193.7 194.8

212.7

in %

211.0

NPL ratio

Total exposure1 186.1

15

Money market instruments

1%

Mortgage Pfandbriefe

33%

Public sector Pfandbriefe

26%

Other debt securities

40%

Funding structure.

Financials

¹ Carrying amount

< 1 year 13%

1 to < 5 years 69%

> 5 years 18%

as at 30 Sep 2017

Securitised liabilities1

€33.6bn as at 30 Sep 2017

Subordinated capital

€3.8bn

Subordi-nated

liabilities 87%

Partici-patory capital

1%

Silent partici-pations

12%

16

Capital ratios strengthened through active balance sheet management.

Financials

Successfully closed securitisations strengthen the bank‘s capital ratios, further placements to come, e.g. Northvest

Capital ratios are at target range between 11 – 12 per cent and significantly above the regulatory requirements

97% 101% 110%

188% 186%

31 Dec 14 31 Dec 15 31 Dec 16 30 Jun 17 30 Sep 17

10.7% 13.1% 11.3% 11.5% 11.5%

13.2%

16.7% 16.3% 16.1% 16.9%


CET1 Total capital

3.5% 4.3% 3.7% 3.5% 3.4%


Capital ratios (transitional)

69.2 63.7 59.9 53.2 51.8


Risk-weighted assets (RWA)

in €bn

Leverage ratio LCR

SREP ratios required as at 30 Sep 2017 CET1: 8.33 per cent

Buffer to CET1-ratio (Trans.): 3.2 percentage points Total capital: 11.83 per cent

Buffer to total capital ratio (Trans.): 5.1 percentage points Capital ratios (fully loaded)

CET1: 11.2 per cent Buffer to SREP-CET1-requirements: 2.9 percentage points

Total capital: 16.6 per cent Buffer to SREP-requirements: 4.8 percentage points

17

NORD/LB Group capital.

Financials

Comments on selected items

(1) Deductible items (€463) include primarily the shortfall from the shipping portfolio. Audited loan loss provisions have a decreasing effect

(2) Grandfathered AT1 mainly containing our old-style “Fürstenberg”-bonds, partly accounted for in AT1; Eligibility is reduced by 10 percentage points every year, currently at 50 per cent

(3) Paid-up instruments of Tier 2 capital comprise subordinated liabilities including “Fürstenberg”-bonds

Monitoring of upcoming capital requirements like Minimum Requirements of Own Funds and Eligible Liabilities (MREL)

¹ The chart may include minor differences that occur in the reproduction of mathematical operations

Regulatory capital (in €m)1 30 Sep 2017 31 Dec 2016

Paid-up capital including premium 4,930 4,930

Reserves 1,475 1,439

Eligible components of CET 1 capital at subsidiaries

- 207

Other components of CET 1 capital -151 -68

- Deductible items (from CET 1 capital) -463 -580

Adjustments due to transition rules 180 825

Common Equity Tier 1 capital (1) 5,971 6,752

Paid-up instruments of AT 1 capital 50

Transitional adjustments due to grandfathered AT1 Capital instruments

443 451

Eligible components of Additional Tier 1 Capital at subsidiaries

- 24

Adjustments due to transition rules -53 -105

Additional Tier 1 Capital (2) 440 369

Tier 1 Capital 6,411 7,122

Paid-up instruments of Tier 2 capital 2,762 2,568

Eligible components of Tier 2 capital at subsidiaries

- 282

Other capital components - 267

- Deductible items (from Tier 2 capital) -10 -10

Adjustments due to transition rules -429 -452

Tier 2 Capital (3) 2,323 2,656

Own funds 8,733 9,777

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Agenda.


Financials 10

Segments 19

Outlook 36

Appendix 41

19

Our solid and diversified business model proved its strength against market distortions.

Segments

in €m as at 30 Sep 2017

Private and Commercial Customers

Corporate Customers

Markets


Customers

Ship Customers

Aircraft Customers

Real Estate

Banking Customers

Portfolio share1 8.9% 29.6% 8.3% 16.5% 14.6% 10.3% 11.8%

Operative

earnings2 34 209 141 127 133 66 113

Earnings share2 9.9% 54.1% 38.1% 29.9% -139.5% 17.3% 28.5%

Loan loss provisions -3 6 -2 15 656 1 6

Earnings before taxes

37 203 143 112 -523 65 107

1 Risk-weighted assets without Group Management/Others, Reconciliations (83 per cent) 2 Earnings before taxes without Group Management/Others, Reconciliations (€140m out of total of €375m)

Positive development of bank’s core business continues

Only 15 per cent of the bank’s portfolio are allotted to shipping – approx. 85 per cent of the portfolio is profitable!

A diversified portfolio of business segments with only marginal correlation is a key factor of business model’s stability

20

1,651

-44

-7

1

1,590

29

0

82

0

683

4

6

1

656

15

-2

6

-3 30 Sep 2017

30 Sep 2016

Positive development in segment results. Loan loss provisions still affected by ship financing.

Segments

1 Minor differences might occur in the reproduction of mathematical operations ² Earnings before provisions, reorganisation and taxes ³ Before reorganisation

in €m

Loan loss provisions1 Earnings before taxes1,3

in €m

-614

139

132

70

-1.372

92

158

126

40

375

229

107

65

-523

112

143

203

37 30 Sep 2017

30 Sep 2016

NORD/LB Group

Aircraft Customers

Ship Customers

Energy & Infrastructure Customers

Markets

Corporate Customers

Private & Commercial Customers

Real Estate Banking Customers

Group Controlling/ Others

Operative earnings of the segments compensate the negative impact from loan loss provisions

Ship Customers: Loan loss provisions still on high level (€656m), significantly below previous year’s level

EBT rose strongly to €375m (30 Sep 2016: €-614m)

1,036

95

125

71

218

121

158

208

40

1,056

233

113

66

133

127

141

209

34 30 Sep 2017

30 Sep 2016

Operative earnings1,2

in €m

21

Private and Commercial

Customers 7%

Corporate Customers

23%

Markets 11%

Energy- and Infra-

structure Customers

15%

Ship Customers

12%

Aircraft Customers 6%

Real Estate Banking

Customers 15%

Group Management/

Others 11%

Well diversified business model.

Segments

Private and Commercial

Customers 7%

Corporate Customers 24%

Markets 7%


Customers 14%

Ship Customers 12%

Aircraft Customers

9%

Real Estate Banking Customers

10%

Group Management/ Others

17%

as at 30 Sep 2017 as at 30 Sep 2017

Customer loans Total risk exposure amount by business units

€97.6bn €51.8bn

22

Private and Commercial Customers. Deeply rooted in the home region.

Segments


as at 30 Sep 2017

Exposure by industry1

Exposure at default: €7.8bn

With nearly 100 branches well represented in the Brunswick region for over 250 years

We offer customer-oriented consulting and selected products and services for private and commercial customers within the region of Braunschweigische Landessparkasse, in Hanover, in Hamburg as well as in Bremen and Oldenburg

NORD/LB and Braunschweigische Landessparkasse offer inheritance optimisation, trust management, portfolio management and individual asset management for private banking clients

Our related partners, Öffentliche Versicherung Braunschweig, Versicherungsgruppe Hannover (insurance companies), Landesbausparkasse (building society) and Deka complete our services in these businesses

Other 12%

Land, housing 19%

Public administration, defence, social insurance 12%

Private household 45%

Other service industry 12%

€m 30 Sep 2017 30 Sep 2016

Earnings 166 175 Expenses 132 135 Operative earnings 34 40 Loan loss provisions -3 0 Earnings before taxes 37 40

23

Corporate customer business. Stable and well diversified portfolio.

Segments


Manufacturing industry

16%

Energy, water and mining

15%

Construction 2%

Trade, maintenance and

repairs 12%

Agriculture, forestry and fishing 8%

Transport/ communications

6%

Financing institutes/ insurance companies

9%

Service industries/other

32%

as at 30 Sep 2017

Exposure by industry1

Exposure at default: €28.3 bn

Corporate customer business increased through successful implementation of strategic initiatives

Strong position and high competence in acquisition finance business confirmed

As market leader in agricultural banking partner in all industry cycles

Successful marketing of asset- and structuring expertise in public housing segment

SME: Traditional loan financing for corporate customers, also in close cooperation with regional savings banks

Corporate finance: Complex solutions for strategic positioning and financing, change management, transaction- and receivables management as well as corporate lending structures

€m 30 Sep 2017 30 Sep 2016

Earnings 336 315 Expenses 127 107 Operative earnings 209 208 Loan loss provisions 6 82 Earnings before taxes 203 126

24

Markets. Frequent issuer of benchmarks.

Segments

1 NORD/LB AöR 2 Issued on 15 Feb 2016 (€500m), increased on 15 Jul 2016 3 PB - Pfandbrief (Covered Bond)

Issuer of Pfandbriefe (public-sector, mortgage, ship and aircraft), Lettres de Gage (covered bonds according to Luxemburg law), bearer bonds, promissory notes, money market securities

Successful positioning as lead manager/arranger of bond issues, particularly covered bonds

Comprehensive , customized range of money and capital market products in private placement segment

International funding programmes1: €25bn euro MTN Programme, €10bn euro CP Programme, €4bn euro French CD Programme, $3bn US dollar CP Programme

As at 30 Sep 2017 €28.4bn ECB eligible securities concerning NORD/LB Group, thereof €20.8bn for NORD/LB AöR

Recent issues

Sen. Unsec,

3y, €1bn 0.625% TAP

Sen. Unsec, 5y, €750m

1.000%

Lettres de Gage 3y, €500m

0.125%

Mortgage PB3

6y, €500m 0.250%

4Q15 1Q16 2Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Mortgage PB 2, 3

7y, €750m 0.25%

Mortgage PB3

8y, €750m 0.25%

Lettres de Gage 7y, €500m

0.375%

Public Sector PB3

10y, €500+300m 0,625%

Public Sector PB3

10y, €500m 0,250%

Lettres de Gage 4 ½y, €500m

0,25%

€m 30 Sep 2017 30 Sep 2016

Earnings 245 259 Expenses 104 101 Operative earnings 141 158 Loan loss provisions -2 0 Earnings before taxes 143 158

Mortgage PB3

8y, €500m 0.375%

Public Sector PB3

7y, €500m 0,375%

Green Bond PB3

6y, €500m 0,125%

25

Energy- and Infrastructure Customers. Stability and expansion in growth industries.

Segments


Expansion and strengthening of our market position through long-term expertise and customised structuring in renewable energy finance; our focus is on energy from wind and solar, leading financer in European core markets Germany, France, Ireland and UK. Expansion of customer base in North America and Asia in energy sector

Concentration on social infrastructure projects in the fields of education, accommodation, blue light and transportation; Public Finance Initiative (PFI) as well as public project finance business

For over 25 years we are one of the leading lenders for leasing companies

Manufacturing industry

2%

Media and IT 1%

Transportation 3%

Financial Services 11%

Public Sector 4%

Supply and disposal 3%

Other energy 10%

Gas / biogas 4%

Solar energy 8%

Wind onshore 40%

Trade and Services 14%

as at 30 Sep 2017

By industry1

Exposure at default: €18.9.bn

€m 30 Sep 2017 30 Sep 2016


26

Industry outlook ships: Continued recovery of demand with positive effects on charter rates.

Segments

→ Improved market environment leads to a decrease of ship breakings → Shifting effects expected for 2018

→ Capital markets include the developments on shipping markets already in its prices

→ Container- und bulker segments are driven by developments in Q3 2017 → Negative development in crude oil tankers’ market → Lay-ups reached year-low in Q3 2017

Bloomberg Shipping Indices

Performance 1Q16 1H16 9M16 2016 1Q171 2Q171 3Q171

Container Index -8% -14% -20% -24% -13% -7% 4%

Bulker Index -31% -43% -34% -23% 6% -7% 1%

Tanker Index -10% -17% -20% -20% -14% -22% -24%

1 Subscripted to 1 Jan 2016

Delivery schedule

no

. o

f ve

sse

ls

no

. o

f ve

sse

ls

Demolitions

delivered

27

Bulk Carrier - 10,000 - 40,000 tdw; 5%

Bulk Carrier - 40,000 - 60,000 tdw; 4%

Bulk Carrier - 60,000 - 100,000 tdw; 3%

Bulk Carrier - > 100,000 tdw; 4%

Container ships – >900 TEU 4%

Container ships 900-1300 TEU 5%

Containerships – 1300 – 2000 TEU 5%

Container ships – 2000 – 3000 TEU 5%

Container ships – 3000 – 5000 TEU 7%

Container ships - >5000 TEU 4%

Chemical tankers; 4%

Corporates; 9%

Gas-/Prod.- tankers; 8%

Cruise ships / ferries ; 2%

LPG/LNG tankers; 3%

MPP General Cargo; 9%

MPP Heavy Lift; 8%

Offshore; 5%

Crude oil tankers; 3%

Other ships; 3%

Ship financing. Diversified portfolio.

Segments


as at 30 Sep 2017

By type of ships1


Operative earnings fell by €85m. This is due to the reduction of the shipping portfolio: Since 30 Sep 2016 the portfolio fell by €3.7bn

Selective new business In the segments cruises, ferries and special tonnage (e.g. cement and asphalt carrier)

Transformation Business strategy development through further segmentation and geographic diversification as well as by the expansion of the product range

€m 30 Sep 2017 30 Sep 2016

Earnings 221 298 Expenses 88 80 Operative earnings 133 218 Loan loss provisions 656 1,590 Earnings before taxes -523 -1,372

28

Successful transformation and reduction of ship financings.

Segments

¹ The chart may include minor differences that occur in the reproduction of mathematical operations 2 Incl. USD development (approx. €0.4bn)

Reduction by €3.5bn in the first nine months of 2017 (represents 180 shipping loans), reduction by €1.3bn (51 shipping loans) in the third quarter

Scheduled reduction of financings in weaker segments of MPPs and container ships

Reduction is achieved by: decrease in balloon financing, extraordinary repayments and outplacements

Target exposure is €12-14bn by end 2018. Reached the goal!

EaD shipping loans

Dec 2016

Redemptions2

NORD/LB Group – planned exposure reduction1

Already negotiated reductions of loans

EaD shipping loans

Sep 2017

in €bn

Focused reduction of

ship loans

Non-commercial shipping

13.3

16.8

1.7 1.7

-0.6 -0.6

1.3

15.1 12.3 11.0

0.7 0.9

14.5

EaD shipping loans

June 2017

29

31 Dez 2016 30 Sep 2017

Rating class 16-18

Rating class 11-15

Rating class 1-10

Shipping portfolio.

1 The chart may include minor differences that occur in the reproduction of mathematical operations

€16.8m

€13.3m

Segments

Container; €3,139; 34%

Bulker; €1.411m; 16% Others;

€207m; 2%

Off shore; €351m; 4%

MPP heavy lift ; €911m; 10%

MPP general cargo;

€835m; 9%

Chemical tankers;

€320m; 4%

LNG/LPG tankers;

€164m; 2%

Product tankers €609m; 7%

Crude oil tankers;

€24m; 0%

Corporates; €1,134m; 12%

as at 30 Sep 2017

NPL-ship financings (exposure)1

€9.1bn

Compared to 31 Dec 2016 new allocations to the NPL portfolio of €2.2bn, whereas €2.5bn NPLs were reduced in the same time period

Shipping portfolio by rating1

€bn

9.4

3.8

1.9

9.1

3.6 2.3

30

Shipping portfolio by types1.

1 The chart may include minor differences that occur in the reproduction of mathematical operations 2 Single loan loss provisions and market value acc. to non-performing portfolio

in €m Containers Tankers Bulkers MPP Others Total

Total 3,964 2,371 2,073 2,265 2,613 13,286

Performing portfolio 825 1,253 662 519 921 4,180

Non-Performing portfolio 3,139 1,118 1,411 1,746 1,692 9,106

Non-Performing ratio 79% 47% 68% 77% 65% 69%

Market value 1,306 640 715 935 466 4,062

Cash flow 408 171 271 308 16 1,174

Single loan loss provisions 1,425 307 425 504 1,209 3,869

Cover ratio2 87% 85% 81% 82% 99% 87%

Segments

31

Ship Customers. Portfolio reduction continues.

Segments

1 Due to roundings, slight differences may occur

16.6 17.7

19.0

16.8

14.5 13.3

2013 2014 2015 2016 30 Jun 17 30 Sep 17

in €bn

Ship exposure

1,698 1,544 1,481

1,363 1,235 1,183

2013 2014 2015 2016 30 Jun 17 30 Sep 17

Number of ships

Ships

NPL portfolio

5.4 6.5

7.3

9.4 9.1 9.1

2013 2014 2015 2016 30 Jun 17 30 Sep 17

in €bn

1,208 1,822

2,369

4,320 3.960 3.869 368

421 345

151 150 127

2013 2014 2015 2016 30 Jun 17 30 Sep 17

Single loan loss provisions portfolio loan loss provisions

2,714 2,243

4,471

in €m

Loan loss provisions for shipping (balance sheet)

3,996

1,576

4,110

32

Cautious optimism justified by stable sectors at the end of the year 2017.

Segments

Source: NORD/LB sector research based on charter rates and market values (new constructions and second hand) / as at September 2017

Current market level:

weak


weak

Expected market development:

up to 12 mths / 12-36 mths

unchanged/ slight increase


weak


weak

Neo-/Postpanamax Containerships >(6-14,9/

>15K TEU


up to12 mths / 12-36 mths

unchanged / slight increase



unchanged / unchanged






slight decrease / unchanged


weak

Cruise ships and ferries


increased


weak


weak







Feeder Containerships < 3K TEU

Intermediate Containerships 3-5,9K TEU

Multi-Purpose Heavy Lift & General Cargo

Crude oil tankers

Product tankers

Other tankers

Off shore

Bulker


low


medium



unchanged / unchanged







33

Aircraft customers. High-quality portfolio. Well diversified.

Segments


Aircraft portfolio with 556 aircrafts, 6 helicopters and 3 spare engines is well diversified.

Considering only long-standing and fungible assets (aircrafts and turbines)

Exposure has very high collateralisation ratio (approx. 95 per cent)

Average age of roughly 6 years

Warehouse and operating lease structures

During the past 20 years established as a market leader in aircraft finance: broad range of commercial and covered financing of Widebody, Narrowbody, Regional Jets and Helicopters

Conservative risk approach in line with our financing principles and high risk awareness as well as ensuring appropriate redemption payments/finance structures

Focus on reliable and well-known partners

Narrow-bodies

46%

Widebodies 21%

Ultra Large Aircraft

7%

Regional Jets 6%

Freighter 14%

Turboprop 6%

as at 30 Sep 2017

By type of aircraft and year of manufacture1


9%

41% 48%

2%

Construction year2006 and earlier

Construction year2007 - 2011

Construction year2012 - 2016

New delivery since2017

€m 30 Sep 2017 30 Sep 2016


34

Real Estate Banking Customers. Focus on commercial real estate in Germany.

Segments


Deutsche Hypothekenbank is the competence centre for commercial real estate (CRE) within NORD/LB Group

Tailored financial solutions and individual, high quality customer consultation

Emphasis is on financing of office buildings, shopping malls, hotels, logistics facilities and multi-story residential properties in preferred urban centres with good tenant structure and above average cash flow

Financing is focussed on Europe especially on Germany and finance of commercial real estate in UK, France, Benelux and Poland

Bremer Landesbank financed the first affordable housing project in the 1980`s. Today, the bank is one of the leading institutes to finance affordable housing projects nationwide

Successful strategic cooperation with pension funds as financing partners for high-volume projects

Spain 1%

France 7%

USA 1%

UK 9%

Benelux 20%

Germany 60%

Other 2%

as at 30 Sep 2017

By country1


€m 30 Sep 2017 30 Sep 2016

Earnings 158 172

Expenses 45 47

Operative earnings 113 125

Loan loss provisions 6 -7

Earnings before taxes 107 132

35

Agenda.


Financials 10

Segments 19

Outlook 36

Appendix 41

36

Outlook

Targets for 2017 will be achieved.

Common Equity Tier I ratio > 11,0 %

Return to profit zone

Reduction shipping portfolio

Integration BLB and

transformation „One Bank“

Capital ratio significantly strengthened through active management (e.g. disciplined RWA- and balance sheet management). Common Equity Tier 1 ratio at 11.5 per cent per 30 Sep 2017, significantly above regulatory requirements (8.3 per cent)

Consolidated profit before taxes with €326m as at 30 Sep 2017 well above previous years figures (€-624m). NORD/LB on track to show profit again in 2017

Reduction of shipping portfolio achieved faster than expected; with an exposure of approx. €13bn, the original goal of the portfolio reduction to €12-14bn will already be reached by the end of 2017

Full merger accomplished as planned by 1 Sep 2017. Transformation programme „One Bank“ successfully started to reduce further costs and to identify new and future earnings targets.

37

Our goals.

Outlook

Simplification of the Group structure, just as started with full integration of Bremer Landesbank

Enhancing the operating model and significant improving of the

bank‘s efficiency

Focus on core business segments, portfolio reduction in Shipping

Customers‘ segment

Group structure Operating model Business model

CET1

ca. 12 per cent

Revenue level at

roughly €2bn

Sustainable earnings

Sound capital base

Cost-income ratio

< 50 per cent Higher efficiency €150-200m

until the end of 2020

Target level

< €1bn

Administrative expenses

Cost reduction (incl. synergies of

BLB1 merger)

Cost synergies Target of BLB1 merger

up to €80m

¹ Bremer Landesbank

38

Our challenges 2018.

Outlook

Strengthening of

capital ratios

Transformation

Shipping portfolio

Regulatory requirements

All regulatory requirements will be fully fulfilled! Strengthening of capital ratios has top priority since regulatory requirements will increase further

The bank strives to become more profitable! Systematic execution of the transformation program „One Bank“ which includes cost-reduction targets of €150-200m by the end of 2020 through synergies

Continuation of consequent and successful portfolio reduction with increased focus on the reduction resp. management of the NPLs

Fulfillment of new regulatory requirements like IFRS 9 or Basel IV plus successful completion of EU-wide stress test in 2018

39

Financial calendar.

Outlook

Interim Report as at 30 September 2017 29 Nov 2017

Annual Report 2017 17 Apr 2018

40

Agenda.


Financials 10

Segments 19

Outlook 36

Appendix 41

41

106 505

3,962

392 949

4,969

NORD/LB ShipPfandbriefe

NORD/LB AircraftPfandbriefe

NORD/LB CBBLettres de Gage

Total outstanding

Total cover pool

2,695

7,738

5,266

9,325

NORD/LB Dt. Hypo

Total outstanding

Total cover pool

Pfandbriefe (covered bonds) at a glance.

Appendix

16,941

4,700

19,155

5,881

NORD/LB Dt. Hypo

Total outstanding

Total cover pool

Total cover pool: €25.0 bn as at 30 Sep 2017

Public Sector Pfandbriefe

Total cover pool: €14.6bn as at 30 Sep 2017

Mortgage Pfandbriefe

Total cover pool: €6.3bn as at 30 Sep 2017

Other Pfandbriefe/Covered Bonds

After the merger between NORD/LB and BLB on 1 Sep 2017 BLB does not have a separate cover pool anymore. Cover pools of NORD/LB and BLB have been merged and will be released together in der transparency guidelines for the first time as at 30 Sep 2017.

42

Countries 8%

Regional authorities

24%

Local authorities 37%

Other 28%

Loans acc. To § 20, sec. 2/2 3%

Pfandbriefe (covered bonds): first class and secure collateral (1/2).

Appendix

1 Nominal value NORD/LB AöR 2 Debtors incl. statutory overcollateralisation 3 94 per cent in Germany 4 Moody‘s Performance Overview, 30 Jun 2017

Office buildings

10% Commercial

Buildings 7%

Industrial buildings

1% Other commerial buildings

13%

Condomi-niums

5% One and two family

houses 17%

Apartment buidings

47%


Mortgage Pfandbrief (by building type) Public-Sector Pfandbrief (by debtor)2 3

€5.3bn1 €19.2bn1

Outstandings 2,694.7

Cover pool total 5,265.6

Over-collateralisation 2,570.9 / 95.4%

Weighted average life of outstanding Pfandbriefe 4

2.9 years

Weighted average life of the cover pool4

4.6 years

Outstandings 16,941.3

Cover pool total 19,155.2

Over-collateralisation 2,213.9 / 13.1%


6.4 years


6.5 years

43

Pfandbriefe (covered bonds): first class and secure collateral (2/2).

Appendix

1 Nominal value, NORD/LB AöR 2 Moody‘s Performance Overview, 30 Jun 2017

Freighter 23%

Narrowbody 42%

Regional Jet 7%

Turboprop 6%

Ultralarge 11%

Widebody 11%

Bulker 8%

Containers 14%

MPP 17%

Tankers 45%

Others 16%


Ship Pfandbrief (by type) Flugzeugpfandbrief (nach Typ)

€392m1 €949m1

Outstandings 106.1

Cover pool total 392.4

Over-collateralisation 286.3 / 269.8%

Outstandings 505.0

Cover pool total 949.0

Over-collateralisation 444.0 / 87.9%


0.9 years


4.3 years

44

NORD/LB Group - Pfandbriefe at a glance.

Appendix

1 Outstandings 30 Sep 2016 versus 30 Sep 2017

Nominal values as at 30 Sep 2017 (in €m)

Outstandings Cover pool

total Over-collateralisation

Over-collateralisation in %

Change of outstandings in 20161

NORD/LB AöR Public-Sector Pfandbrief

16,941.3 19,155.2 2,213.9 13.1 3,579.4

NORD/LB AöR Mortgage Pfandbrief

2,694.7 5,265.6 2,570.9 95.4 789.1

NORD/LB AöR Ship Pfandbrief

106.1 392.4 286,3 269.8 26.1

NORD/LB AöR Aircraft Pfandbrief

505.0 949.0 444.0 87.9 -501.0

Deutsche Hypo Public-Sector Pfandbrief

4,700.3 5,881.4 1,181.1 25.1 -959.0

Deutsche Hypo Mortgage Pfandbrief

7,737.8 9,324.7 1,586.9 20.5 -625.5

NORD/LB Luxembourg Lettres de Gage Publique

3,961.9 4,968.7 1,006.8 25.4 375.2

Total 36,647.1 45,937.0 9,289.9 2,684.3

45

Income statement (in €m) 1 Jan –

30 Sep 2017 1 Jan –

30 Sep 20161

1 Jan – 31 Dec 2016

1 Jan – 31 Dec 2015

1 Jan – 31 Dec 2014

1 Jan – 31 Dec 2013¹

Net interest income 1,065 1,357 1,735 1,974 1,985 1,931

Loan loss provisions 683 1.651 2,956 698 735 846

Net commission income 89 165 219 234 185 163

Profit/loss from financial instruments at fair value incl. hedge accounting

253 354 415 280 130 73

Profit/loss from financial assets 133 61 49 72 -3 11

Profit/loss from investments accounted for using the equity method

29 -18 -2 8 -37 33

Administrative expenses 883 835 1,113 1,114 1,125 1,167

Other operating profit/loss 372 -47 -173 -97 -75 49

Earnings before reorganisation and taxes 375 -614 -1,826 659 325 247

Reorganisation expenses 49 9 39 6 49 107

Earnings before taxes 326 624 -1,865 653 276 140

Income taxes 98 112 94 135 71 -84

Consolidated profit 228 -735 -1,959 518 205 224

CIR 48.8% 46.1% 50.7% 46.4% 51.4% 51.9%

RoE 7.6% -10.4% -24.5% 8.7% 3.8% 1.8%

Income statement overview.

Appendix

¹ Some previous year figures were adjusted, see Group Annual Reports 2013 and 2014, Note (2)

46

Balance sheet development at a glance.

Appendix

¹ Some previous year figures were adjusted, see Annual Report 2014, Note (2)

Balance sheet (in €m) 30 Sep 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013¹

Total assets 165,220 174,797 180,998 197,607 200,823

Loans and advances to banks 28,045 21,747 21,194 23,565 27,481

Loans and advances to customers 97,643 105,640 107,878 108,255 107,604

Financial assets 27,836 31,574 34,515 45,120 47,043

Liabilities to banks 44,886 49,241 48,810 58,986 59,181

Customer deposits 56,920 57,301 60,597 57,966 54,859

Equity capital (balance sheet) 6,398 6,041 8,513 7,902 8,169

47

Institutional protection and deposit guarantee schemes of NORD/LB.

Appendix

Basic protective measures to avoid bankruptcy The Capital Requirements Regulation (CRR , “Kapitaladäquanzverordnung”) is a EU

regulation in banking containing requirements for capital adequacy under Basel III

Institutional Protection Scheme of the Savings Banks Finance Group was founded in the 1970s Since July 2015 the Institutional Protection Scheme is recognised as a deposit

guarantee scheme under Germany’s Deposit Guarantee Act (EinSiG) 13 guarantee funds: of the Landesbanken (1), of the regional savings banks (11) and of

the building associations (1)

Bail-in of shareholders and creditors Equity: Tier 1, AT 1, Tier 2, subordinated capital Liabilities: Senior unsecured and other (structured) liabilities

Excluded: i.a. deposits (under Deposit Guarantee Act: up to 100,000€/person), covered bonds as well as money market instruments

The Single Resolution Mechanism (SRM) is augmented by the Single Resolution Fund (SRF), which can provide the financial resources needed for resolution.

European deposit guarantee scheme: The German banking industry defeats the proposed regulations of the EU commission. There is a compromise proposal from the EU parliament. But it is still quite uncertain, whether this proposal will come into effect.

Legal responsibility

Institutional Protection Scheme of the Savings Banks Finance Group

German Act on the Recovery and Resolution of Credit Institutions

European Scheme

Capital requirements

48

Important links.

Appendix

Declaration of Norddeutsche Landesbank Girozentrale on the German Corporate Governance Codex:

www.nordlb.com/legal-information/legal-notices/corporate-governance/

NORD/LB protection scheme

www.nordlb.com/legal-information/legal-notices/security-mechanisms/

Sustainability (report, ratings)

www.nordlb.com/nordlb/sustainability/

NORD/LB supervisory board

www.nordlb.com/nordlb/investor-relations/committees-and-executive-bodies/

NORD/LB Annual, Interim Reports and Disclosure Reports

www.nordlb.com/reports

49

Contact.

NORD/LB Norddeutsche Landesbank Girozentrale Investor Relations Georgsplatz 1 30159 Hanover, Germany [email protected] www.nordlb.de/www.nordlb.com

Bitte hier Ihr Foto einfügen

Gabriele Bödeker (Head of Investor Relations) [email protected] Tel.: ++49 511 361-4338

Thomas Breit [email protected] Tel.: ++49 511 361-5382

Marcel Mock, CIIA, CEFA [email protected] Tel.: ++49 511 361-8914

Svenja Pohlmann [email protected] Tel.: ++49 511 361-4683

50

Disclaimer.

This presentation and the information contained herein, as well as any additional documents and explanations (together the “material“), are issued by NORDDEUTSCHE LANDESBANK GIROZENTRALE (“NORD/LB”).

This presentation contains certain forward-looking statements and forecasts reflecting NORD/LB management’s current views with respect to certain future events. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without, limitation, those regarding NORD/LB’s future financial position and results of operations, strategy, plans, objectives, goals and targets and future developments in the markets where NORD/LB participates or is seeking to participate. The NORD/LB Group’s ability to achieve its projected results is dependent on many factors which are outside management’s control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain key assumptions. The following important factors could cause the Group’s actual results to differ materially from those projected or implied in any forward-looking statements:

– the impact of regulatory decisions and changes in the regulatory environment;

– the impact of political and economic developments in Germany and other countries in which the Group operates;

– the impact of fluctuations in currency exchange and interest rates; and

– the Group’s ability to achieve the expected return on the investments and capital expenditures it has made in Germany and in foreign countries.

The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements as a prediction of actual results. All forward-looking statements included herein are based on information available to NORD/LB as of the date hereof. NORD/LB undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to NORD/LB or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.

The material is provided to you for informational purposes only, and NORD/LB is not soliciting any action based upon it. The material is not intended as, shall not be construed as and does not constitute, an offer or solicitation for the purchase or sale of any security or other financial instrument or financial service of NORD/LB or of any other entity. Any offer of securities, other financial instruments or financial services would be made pursuant to offering materials to which prospective investors would be referred. Any information contained in the material does not purport to be complete and is subject to the same qualifications and assumptions, and should be considered by investors only in light of the same warnings, lack of assurances and representations and other precautionary matters, as disclosed in the definitive offering materials. The information herein supersedes any prior versions hereof and will be deemed to be superseded by any subsequent versions, including any offering materials. NORD/LB is not obliged to update or periodically review the material. All information in the material is expressed as at the date indicated in the material and is subject to changes at any time without the necessity of prior notice or other publication of such changes to be given. The material is intended for the information of NORD/LB´s institutional clients only. The information contained in the material should not be relied on by any person.

51

Disclaimer.

In the United Kingdom this communication is being issued only to, and is directed only at, intermediate customers and market counterparties for the purposes of the Financial Services Authority’s Rules ("relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. To the extent that this communication can be interpreted as relating to any investment or investment activity then such investment or activity is available only to relevant persons and will be engaged in only with relevant persons.

Viewing the following material involves no obligation or commitment of any kind by any person. Viewers of he following material are not to construe information contained in it as a recommendation that an investment is a suitable investment or that any recipient should take any action, such as making or selling an investment, or that any recipient should refrain from taking any action. Prior to making an investment decision, investors should conduct such investigations as they consider necessary to verify information contained in the relevant offering materials and to determine whether the relevant investment is appropriate and suitable for them. In addition, investors should consult their own legal, accounting and tax advisers in order to determine the consequences of such investment and to make an independent evaluation of such investment. Opinions expressed in the material are NORD/LB´s present opinions only. The material is based upon information that NORD/LB considers reliable, but NORD/LB does not represent, guarantee, or warrant, expressly or implicitly, that the material or any part of it is valid, accurate or complete (or that any assumptions, data or projections underlying any estimates or projections contained in the material are valid, accurate or complete), or suitable for any particular purpose, and it should not be relied upon as such. NORD/LB accepts no liability or responsibility to any person with respect to, or arising directly or indirectly out of the contents of or any omissions from the material or any other written or oral communication transmitted to the recipient by NORD/LB.

Neither the material nor any part thereof may be reproduced, distributed, passed on, or otherwise divulged directly or indirectly by the party that receives it, to any other person without the prior written consent of NORD/LB.

The distribution of the material in certain jurisdictions may be restricted by law and persons into whose possession the material comes are required by NORD/LB to inform themselves about, and to observe, any such restrictions.

This presentation does not constitute an offer to sell or the solicitation of an offer to purchase or subscribe for any securities of NORD/LB in the United States. No part of this presentation should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities of NORD/LB. Any offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from NORD/LB and will contain detailed information about NORD/LB, its management and its financial statements. None of NORD/LB’s securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1993, as amended, or pursuant to an exemption from registration therefrom.

By viewing the following material, the recipient acknowledges, and agrees to abide by, the aforementioned.

Documents

NORD/LB Group Presentation (PDF, 1,6 MB)