ApoBank - The Health Care Bank - September 2021.
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apoBank –
The Health Care Bank.
September 2021.
Investor presentation 1
Agenda.
Overview.
The changing health care market.
Business model and strategy.
Business performance.
Risk management, credit quality, funding.
Investor presentation 2
apoBank – At a glance.
Largest cooperative bank. Close to our customers.
We are member of the National Association of Germen Our 2,300 employees at 82 locations cater to the needs of
cooperative Banks (BVR) and part of the BVR deposit our customers.
insurance system. A captivating idea.
482,000 customers, of which are 115,646 members of the
Our mission. bank, are convinced of our mission.
We promote our members, in particular professionals
in the healthcare sector, and in their organisations as Market leader.
We are market leader In payments services and lending
well as corporations active in the healthcare sector.
business, our market share in start-up financing reaches
60 percent.
.
Rating of Tier 1 ratio: Total assets: Net profit after tax:
apoBank:
16.3 % 65.8 37.0
A+ bn Euro mn Euro
S&P
Investor presentation 3Agenda.
Overview.
The changing health care market.
Business model and strategy.
Business performance.
Risk management, credit quality, funding.
Investor presentation 4The German health economy – an overview (2019).
372 bn Euro Every 8th Euro gross value added is
gross value added generated in the health economy.
7.5 mn employees Every 6th job is located in the health
economy.
In comparison: The total automotive
sector counts 2 mn employees
Sectors of value creation
81.2 bn Euro
199.4 bn Euro Industrial health care economy
Medical supply
91.4 bn Euro
Further sectors
Source: Gesundheitswirtschaft, Fakten & Zahlen, Ausgabe 2019,
Bundesministerium für Wirtschaft und Energie (BMWi)
Investor presentation 5Health care market as a growth engine.
4 % p.a. 474
411
345 Share of GDP 2019: 11.9 % p.a.
289
233 Expenses per head 2019: 4,944 Euro
199
Main growth engine is the so called
secondary health care market.
2015 2019 2024*
The time lag until the next 100 billion mark in health
Health care expenses, bn Euro
spending is reached has thus been halved since 1998 from
therof statutory health care insurance expenses, bn Euro 14 to 7 years. .
Source: Statistisches Bundesamt, Gesundheitsausgabenrechnung: 2015, 2019; 2024* estimates and forecasts, respectively
Investor presentation 6Health care sector – Background.
Technical progress: Usage of medical-technical innovations.
Demographic development: Significant ageing of society increases weight of morbidity.
Increasing health care expenses, growing health awareness.
Future supply needs and thus growing expenses enlarge health care market sustainably.
Investor presentation 7Health care market turns more female.
Share of medical students Share of business f ounders
62%
54%
1975 2019
51%
49%
46%
38%
71 % 29 % 38 % 62 %
men women men women
2012/2013 2014/2015 2018/2019
Source: Statistisches Bundesamt Source: apoBank / Zi
Investor presentation 8Feminisation leading to new working models.
Appropriate childcare opportunities and flexible working time models are most important issues to improve
working conditions.
What needs to be changed in order to reconcile family and work for health care professionals?
92
92 % % Compatible childcare services
Flexible working time models and
90 %
90 %
part-time offers
Relief through delegation and
76 %
76 %
digitisation
70 %
70 % Job sharing in management positions
Source: Kind und Kittel. Eine Studie zur Vereinbarkeit von Familie und Beruf in den Heilberufen (2019), apoBank
Investor presentation 9Investors discover health care market as investment target.
Investors are looking for new … discovering health care as a
investment opportunities... global growth market
They are looking for stable, The fragmented health care
cycle independent market market in Germany appealing for
segments. active consolidation.
Capital - and technology-intensive
Current focus is on disciplines offer great
outpatient care. industrialisation potential.
Investor presentation 10The future of the health care market is digital.
The empowered health customer Dynamic competition with
as a driver of digitisation international players
Market &
Patients
Players
Health care Technologies
professionals & trends
Need for information New technologies and
of the health professionals heath apps
Health care
politics
Pandemic as a catalyst for digitalisation
While there were only just under 3,000 video consultation hours
nationwide in 2019, there were almost 1.4 million in the first half E-Health-law,
of 2020. Around 203,000 video consultation hours were recorded DVG, PDSG, DVPMG
in the first quarter, and almost 1.2 million in the second quarter.
Source: KBV-Analysis
Investor presentation 11Agenda.
Overview.
The changing health care market.
Business model and strategy.
Business performance.
Risk management, credit quality, funding.
Investor presentation 12apoBank: Deeply rooted in the health care market.
Unique cooperation and client Deep knowledge of the health care
access market and of health care professionals
• Historically grown access to health • Profound knowledge of cash flows and
care professionals, intensive needs of health care professionals
cooperation with chambers, • Better risk assessment than competitors
pension funds and professional
organisations
• High reputation in particular in
financing issues DNA
Tailor-made solutions for health care professionals
• Value added offers beyond banking products
Investor presentation 13apoBank‘s strategy.
apoBank – The Health Care Bank
• Cutting costs and capital consumption
• Create new solutions for the customer
Optimisation and Personal Unique solutions Sustainable New offerings for
digitisation of the customer increase in value health care
banking business relationships professional
Investor presentation 14Consistent expansion of new offerings.
univiva – digital platform for products and services
ZPdZ – innovative practise model: Self employed without purchasing a practise
apoHealth – competence centre for digitisation in the health care market
Partner of Health Innovation Port –
digital innovations for diagnoses and therapies
optiPrax – Data-driven analysis for practice optimisation
Investor presentation 15Strategy programme Oskar launched.
Transformation of apoBank into a Strengthening the bank in the long-
modern and future-oriented bank term and safeguarding its
for health care professionals competitiveness
Customer-centred Strong
Focus on the needs of health care professionals Appropriate dividend in the long-term
Simple Stable
Leans processes, controls and organisation Accumulation of reserves
Digital Competitive
Data-driven customer advise and expansion of digital Strong capitalisation (equity ratio: 15.5%)
channels / apoDirect and efficiency (70% cost income ratio)
Investor presentation 16The health care bank.
360 degree focus on the health care professional as a customer and his needs
Partner of professional organisations, institutional investors and corporate clients
Customer-centric care model with personal customer advisor
Holistic support, in particular also for questions relating to assets
Customer determined access to apoBank – personal, digital, hybrid
Modern and simple controlling as well as processes to increase efficiency
Investor presentation 17Agenda.
Overview.
The changing health care market.
Business model and strategy.
Business performance.
Risk management, credit quality, funding.
Investor presentation 18Business performance at a glance.
Robust development in loans for start-ups and corporate customers
Positive development of asset advisory and management services
Still no Corona pandemic-related credit risk reserves required
Increasing net profit for the year, which allow an appropriate dividend payout
Investor presentation 19Stable revenue basis.
O per ating revenues , O perating ex penditures , O perating res ult,
in m n Euro in m n Euro in m n Euro
984 799 133
869 919 701 117
817 635 113 111
594
491 388 73
2017 2018 2019 2020 1HY 2017 2018 2019 2020 1HY 2017 2018 2019 2020 1HY 2021
2021 2021
Ris k provis ioni ng f r om the oper ating Ris k provis ion ing with res erve Net prof it af ter tax ,
bus ines s , in m n Eur o c harac ter, in m n Euro in m n Euro
44 40
32 103 65
88 62 63 64
6 57 37
33
24
-12
2017 2018 2019 2020 1HY 2017 2018 2019 2020 1HJ 2017 2018 2019 2020 1HY
2021 2021 2021
Risk prov. with reserve character diminishes net
2017 net release
profit, but serves for taxed capital accumulation
Investor presentation 20Selective growth strategy in the customer business.
New lending bus ines s , in bn Eur o Lending volum es , in bn Euro
36.7 36.3
35.5
7.6 32.9 4.9 4.9
6.8 7.1 4.3
5.8 30.1 3.8
3.1 4.6 6.2 6.1
4.7
2,3
4.8
7.5
7.2 7.4
7.1
2017 2018 2019 2020 1HY 2021 6.6
Volum e s ec urities ac c ounts , pr ivate
c lients , in bn Euro
19.1 18.4 18.0
11.4 17.3
10.4 15.6
9.7
8.0 7.8
2017 2018 2019 2020 1HY 2021
2017 2018 2019 2020 1HY 2021 Corporate clients Investment and private loans Start-up loans Real-estate loans
Investor presentation 21Financial outlook for the current fiscal year.
Increase in operative income
New lending business with optimized equity utilisation
Further investments in structures and processes
Increasing net profit for the year
Investor presentation 22Agenda.
Overview.
The changing health care market.
Business model and strategy.
Business performance.
Risk management, credit quality, funding.
Investor presentation 23Very good portfolio quality.
Retail c lients • Steady portfolio growth, focus on retail clients as well as professional
32.8 bn Euro 12.2% 19.4% associations and large corporates
1.7%
21.7% • Volume of financial instruments on low level
44.9% • 86% of retail exposure and 78% of exposure to professional associations
and large corporates are investment-grade rated
Pr of es s ional as s oc ., • At 1.4% NPL-Ratio is at low level (2020: 1.4%)
9.2%
22.3%
lar ge c orporates
1.2% • Forbearance Ratio: 1.0%
6.1 bn Euro
37.4% • Coverage Ratio: 36.9%
29.9%
Financ ial ins trum ents
9.9%
9.0 bn Euro 0.5%
2.0%
Mapping of internal apoBank rating classes (BVR-
AAA-AA BBB not rated
87.7% Masterskala) to external rating classes based on
A BB-C D underlying default probabilities, drawdowns (claims to
customers, gross, securities, off-balance sheet items)
Investor presentation 24Satisfying regulatory capital position.
Regulatory capital, in mn Euro Regulatory capital ratios
2,720 2,777 21.8%
2,528 2,543 2,519 230
261 18.3% 18.0% 17.8%
275 233 194 16.5%
19.5%
1,103 1,262 1,313 16.7%
1,100 1,129 16.3% 16.3%
15.2%
1,154 1,181 1,222 1,197 1,234
2017 2018 2019 2020 1HY 2021 2017 2018 2019 2020 1HY 2021
Supplementary capital Members’ capital contributions
Total capital Equity ratio Common equity tier 1 ratio
Reserves, other
• Capital ratios may be dampened in future due to 31.12.2020 30.6.2021
further business expansion as well as Basle IV Leverage ratio 4.7 % 5.1 %
related increase in RWA
Liquidity coverage ratio 186 % 218 %
• Continued capital increase via further allocation to
reserves Net stable funding ratio 118 % 129 %
Investor presentation 25Regulatory capital requirements.
2020 2021
CET 1 Equity ratio CET1 Equity ratio
Overall capital requirement 7.7% 11.75% 7.7% 11.75%
Anticyclical buffer 0% 0%
Capital conservation buffer 2.5% 2.5%
Total SREP capital
5.2% 9.25% 5.2% 9.25%
requirement
Pillar 2 requirement 0.7% 1.25% 0.7% 1.25%
Pillar 1 requirement 4.5% 8.0% 4.5% 8.0%
Investor presentation 26Credit risks predominant.
Ris k weighted as s ets , in bn Eur o
• Selective business growth, rising exposure in retail
and corporate sector
15.3 15.1 15,6
11.6
13.9 • Market risks in banking book only
2017 2018 2019 2020 1HY 2021
Dis tr ibutio n of RW A, in bn Eur o
560
Retail
732 735 1,371 Corporates
8,255 Institutions
Participations
3,993
Other incl. States
Op risk
Investor presentation 27Diversified funding.
TARGETS PRODUCTS FEATURES
• Congruent funding of lending business • Commercial paper • Fixed coupon
• Expansion of product range provides • Promissory notes • ascending / descending
funding flexibility • Registered bonds • Variable coupon
• Growing investor base • Registered covered bonds • with collar
• Perception in the capital markets as reliable • Benchmark bonds • callable
and regular issuer
Debt Issuance Programme (DIP): • single right to cancel
• Increasing share of covered bonds
• apoObligationen (retail) • multiple rights to cancel
• Bearer bonds
• Covered bonds
CUSTOMERS INVESTORS PARTNER BANKS
• > 480,000 retail clients, associations • > 300 institutional client • > 50 Partner banks
and large corporates • > 200 investors from the Geno- • Funding of promotional loans via KfW-
• Stable base of less volatile and Finanzgruppe Group and regional promotional banks
steadily growing deposits from
customers
Investor presentation 28Part of a strong cooperative group.
• BVR Institutssicherung GmbH guarantees in
accordance to EU-regulation deposits in a volume
of up to 100,000 Euro per head/client
• A voluntary additional guarantee mechanism by
the BVR-Sicherungseinrichtung safeguards the
existence of member institutes (Institutsschutz)
that enter financial distress
100% covered are:
• The Institutsschutz covers: • Savings deposits
• Savings books
• all deposits and • Savings bonds
• Time deposits
• bearer bonds held by customers • Time deposits and current
account balances of private
individuals and companies Further information:
www.bvr.de/SE
• Bearer bonds such as
www.bvr-institutssicherung.de
certificates
Investor presentation 29Excellent ratings.
S&P Fitch Ratings (group rating)1)
Issuer credit rating A+ Issuer Default Rating long-term AA-
Short-term debt A-1 Issuer Default Rating short-term F1+
Covered bonds (Pfandbriefe) AAA Outlook stable
Senior unsecured (preferred) A+
Senior subordinated (non preferred) A
Outlook stable
1 Group rating for cooperative FinanzGruppe
Investor presentation 30Stable funding sources.
Demand deposits
50,000 Term and savings deposits incl.
subordinated property receipts
apoObligations (retail)
40,000 Senior unsecured
Covered bonds
30,000 Profit participation rights and
subordinated capital,
excl. property receipts)
20,000 Public funding facilities
10,000
0
2017 2018 2019 2020 1 HJ 2021
in m n Euro
2017 2018 2019 2020 1HY 2021
3,674 5,125 6,326 6,710 7,995 Covered bonds
5,315 6,218 7,151 8,604 8,810 Cover assets*
1,641 1,093 825 1,894 815 Excess cover
*incl. stipulated liquid excess cover
Investor presentation 31Capital markets funding.
• Overall, constant share in capital markets
bn Euro
funding of 14-19%
• In 2020 temporarily increase in capital
15.4 markets funding to 26% due to participation
in ECB TLTRO 3
5.5
0 9.1
0.2 0.1 8.0
3.1 7.3
2.7 0.2 0.1 6.8 6.4
0.2 0.1
2.6 0.2 0.1 0.2 0.1
2.4 2.3 1.9
6.7 6.2
5.1 4.6 4.3 4.3
2020 2021 2022 2023 2024 2025
EZB tender Capital markets, unsecured, long-term
Capital markets, short-term Capital markets, secured, long-term
Investor presentation 32Highly granular cover pool.
Cover pool, in m n Eur o • Focus on high quality, residential mortgages
8,604 8,810
• Very granular cover pool, only domestic exposure
Incl. 360 million Euro (6/2021); • Non-performing loans (debt in arrears, cancelled,
510 million Euro (12/2020) stipulated
31.12.2020 30.06.2021 liquid excess cover impaired) and customers, which do not meet the
required rating, are not included in the cover pool
Cover pool by type
according to internal rules and are automatically
Apartments 2,049 excluded from the cover pool in agreement with
Single/two family houses 4,030 the trustee
Multi family houses 770
• Internal apoBank rules regarding the matching
Other, commercial 1,602
cover are stricter than the requirements by law
Total 8,450
• Voluntary public commitment for an extended
Cover pool by s ize collateralisation for mortgage Pfandbriefe
up to 300k Euro 6,167
300k - 1 mn Euro 1,136
1 mn Euro - 10 mn Euro 722
> 10 mn Euro 426
Total 8,450
Investor presentation 33High quality cover pool.
31.12. 30.6. Maturit y s truc ture and f ix ed - interes t period,
§ 28 PfandBG
2020 2021 in m n Euro, 30.6.2021 ( §28 Pf andBG )
Seasoning 5.4 years 5.4
3,147
Average weighted 2,703
55.1% 55.0
loan-to-value
S&P analysis 30.9. 31.3.
(AAA rating) 2020 2020
Available over-
23.32% 10.83%
collateralisation 1,190 1,148
991 961 912 943
Overcoll. consistent with 813
5.99% 5.25%
current (AAA) rating 545 551 548 518
480 500 430
407
Unused notches 5 4
20Benchmark issues (Pfandbriefe).
Maturit y prof ile, in m n Eur o ( 30.6.2021)
1.400
1.200
1.000
800
600
400
200
0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 > 2031
Covered bonds LCR 1B Covered bonds PP (non-LCR)
Investor presentation 35Contact.
Alexander van Echelpoel
+49 211 5998 9750
Head of Treasury
alexander.vanechelpoel@apobank.de
Rainer Vogel
+49 211 5998 8914
Liquidity Management and Funding
rainer.vogel@apobank.de
Barbara Zierfuß
+49 211 5998 4687
Financial communication
barbara.zierfuss@apobank.de
Investor presentation 36Development of P&L.
Net interest income, in mn Euro Net commission income, in mn Euro A d m i n . e xp e n s e s , i n m n E u r o
750.4 175.3 184.3 683.9 720.9
632.4 691.1 156.3 164.9 597.6
606.2 530.1
102.0 371.2
3358.9
2017 2018 2019 2020 1HY 2021 2017 2018 2019 2020 1HY 2021 2017 2018 2019 2020 1HY 2021
Operating profit before risk Risk provisioning from the operating R i s k p r o v i s i o n i n g wi t h r e s e r v e c h a r a c t e r ,
provisions, in mn Euro business, in mn Euro in mn Euro
43.5 40.1
233.6 31.9
223.7 217.7 6.1 103.0
184.7 88.3
103.0 57.1
-12.1 33.4 24.1
2017 2018 2019 2020 1HY 2021
2017 2018 2019 2020 1HY 2021 2017 net reversal 2017 2018 2019 2020 1HY 2021
Operating result, in mn Euro T a xe s , i n m n E u r o N e t p r o f i t a f t e r t a x, i n m n E u r o
70.9
132.8 50.4 53.0 61.9 62.9 64.1 65.3
113.4 117.4 111.2 45.9
72.7 35.7 37.0
2017 2018 2019 2020 1HY 2021 2017 2018 2019 2020 1HY 2021 2017 2018 2019 2020 1 HY 2021
Investor presentation 37Continuously growing customer business.
T otal as s ets , in bn Eur o Cus tom ers (in ths d) Mem bers (in ths d)
481 481 482
459
436
65,8
59.4
49.6
45.4 111 113 116 116 116
41.4
2017 2018 2019 2020 1HY 2021 2017 2018 2019 2020 1HY 2021 2017 2018 2019 2020 1HY 2021
Investor presentation 38Balance sheet structure.
As s ets , in bn Euro 37.291 38.240 38.209
34.652
32.013
16.500
12.458
10.403
7.964
5.714 4.520 5.558 5.796 5.800
3.017
222 403 233 412 247 470 243 534 247 432
2017 2018 2019 2020 1HY 2021
Bank balances Loans to customers Securities Fixed assets and participations Other
Liabilit ies , in bn Eur o 35.585
33.241
29.237
26.037 27.449
18.000
15.379
8.950 9.636 8.734
8.105 7.396 7.398
5.876
4.202
1.768 1.257 1.810 1.291 1.868 1.467 1.915 1.506 1.948 1.524
2017 2018 2019 2020 1HY 2021
Liabilities to banks Liabilities to customers Securitised liabilities Balance sheet equity Other
Investor presentation 39Our understanding of sustainability.
apoBank is committed to cooperative values. We enable health by supporting our Our ratings
customers in providing health care to the population in Germany. In doing so, we
assume responsibility for sustainable development in the areas of economy,
environment, social affairs, and corporate governance by
• advising our customers comprehensively, competently
• and in line with their needs;
• offering products and services that provide added value for our customers and
society;
• being an attractive and fair employer for our employees;
• continuously optimizing the environmental and climate-related impacts of our
business operations;
• engage with society; and
Unsolicited rating:
• involve our business partners in our sustainability-related measures. 46 percent
Investor presentation 40Sustainability at apoBank: Where we act.
Financing in the healthcare market:
Exclusion lists in customer lending business for companies or projects whose sustainability risks have
a negative impact on people's health
Securities business:
Consideration of sustainability for customer business and in own investments
Social commitment in Düsseldorf, nationwide and worldwide through our foundation
Commitment to our employees:
Diversity, continuing education, health protection, and work-life balance
Resource consumption - reducing our carbon footprint:
Investing in energy-saving technology for our IT systems, lighting, heating and cooling,
100% certified electricity from renewable sources
Further information available on: www.apobank.de/nachhaltigkeit
Investor presentation 41Our sustainability targets.
What we want to achieve in 2021 What we want to achieve in the medium-term
• Development of an explicit sustainability • A sustainable reduction in operational CO2 consumption of 10
percentage points (compared to the base year 2017) by 2022 (We have
strategy and transfer to the organisational
already significantly exceeded this target in 2020 due to the pandemic
structure.
measures).
• Stronger integration of sustainability into the
• A female quota at the first management level of 20% and at the second
range of products and services: complete
management level of 25% by June 30, 2022
conversion of apoVV SMART asset
management. • An employee identification score, known as the Organisational
Commitment Index (OCI), of at least 70 every year by 2024
• Coordination of all regulatory developments
and measures resulting from regulatory • All securities products used in consulting are fully subject to apoBank's
requirements on the topic of sustainable minimum sustainability standard "Exclusion of direct investments in
finance agricultural commodities and controversial weapons" until 2025. In 2021,
this minimum standard for new business has been expanded to include
the exclusion of companies that violate the UN Global Compact
Investor presentation 42Disclaimer.
This document is for information purposes only. The information This draft may be neither reproduced nor passed on to third parties
contained in this presentation has been thoroughly researched by without the consent of Deutsche Apotheker- und Ärztebank. Deutsche
Deutsche Apotheker- und Ärztebank using exclusively sources that are Apotheker- und Ärztebank assumes no liability for direct or indirect
considered reliable. Nevertheless, Deutsche Apotheker- und Ärztebank damage arising from or related to the distribution and/or use of this
provides no assurance or guarantee that this information is up-to-date, document.
accurate or complete, accepts no liability for any damage or loss
caused by or related to the use of this information, and points out that
this information may be subject to change.
The estimates and evaluations reflect the opinion of the author at the
time of preparation, and may be outdated or have changed in another
way as a result of later developments.
The circumstances presented are for illustration purposes only and do
not necessarily correspond to the actual facts. Any statements on future
profit or loss are forecasts or model calculations. The actual market
development and the resulting profit or loss may differ. This
presentation is not a suitable substitute for an individual consultation by
a lawyer, auditor or tax adviser that may be necessary in the light of the
circumstances of the individual case.
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