ApoBank - The Leading Bank in the German Healthcare Market - April 2020
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apoBank – The Leading Bank in
the German Healthcare Market.
April 2020
Investor-Update. 1
Agenda.
1
Overview
2
The changing healthcare market.
3
B u s i n e s s m o d e l a n d s t r a t e g y.
4
Business performance.
5
R i s k m a n a g e m e n t , c r e d i t q u a l i t y, f u n d i n g .
Investor-Update. 2apoBank – At a glance.
Largest cooperative bank. 85 Close to our customers.
We are member of the National Association of Our 2,448 employees at 85 locations cater to the
Germen cooperative Banks (BVR) and part of the
needs of our customers.
BVR deposit insurance system.
A captivating idea.
481,070 customers, of which are 115,884
Our mission members of the bank, are convinced of our
mission.
We promote our members, in particular professionals
in the healthcare sector, and their organisations as Market leader
well as corporations active in the healthcare sector. We are market leader In payments services and
lending business, our market share in start-up
financing reaches 60 percent
Rating of Tier 1 Total Net profit New lending
apoBank: ratio: assets: after tax: business:
AA- 15.2 % 49.6 64.1 7.6
S&P bn Euro mn Euro bn Euro
December 2019
Investor-Update. 3Agenda.
1
Overview
2
The changing healthcare market.
3
B u s i n e s s m o d e l a n d s t r a t e g y.
4
Business performance.
5
R i s k m a n a g e m e n t , c r e d i t q u a l i t y, f u n d i n g .
Investor-Update. 4Background.
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-Update. 5The German health economy – an overview (2018).
369.8 bn Euro Every 8th Euro gross value added is
gross value added generated in the health economy.
7.6 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
84.2 bn Euro
195.8 bn Euro
Industrial health economy
Medical supply
89.9 bn Euro
Further sectors
Source: Gesundheitswirtschaft, Fakten & Zahlen, Ausgabe 2018,
Bundesministerium für Wirtschaft und Energie (BMWi)
Investor-Update. 6Health care market as a growth engine.
+ 3.6 % p.a. Share of GDP
415
2018:
357 12.1* % p.a.
291
242
216
166
2010 2016 2020
Health care expenditures, bn Euro thereof statutory health care expendutiures, bn Euro
Main growth engine is the so called secondary health care market.
*Forecast BMWi, Gesundheitswirtschaftliche Gesamtrechnung 2018
Source: Statistisches Bundesamt, Gesundheitsausgabenrechnung: 2015, 2017 and 2020 estimates and forecasts, respectively.
Investor-Update. 7Health care market turns more female.
Share of medical students Share of business founders
1975 2017
71 % 29 % 39 % 61 %
Men Women Men Women
Source: Statistisches Bundesamt Source: apoBank / Zi
Investor-Update. 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 % Appropriate childcare opportunities
Flexible working time
90 % & part-time models
Alleviation through
76 % delegation and digitisation
Job sharing in leading
70 % positions
Source: Kind und Kittel. Eine Studie zur Vereinbarkeit von Familie und Beruf in den Heilberufen (2019), apoBank
Investor-Update. 9Investors discover health care market as investment target.
1 2
Investors are looking for new …discovering healthcare as a global
investment opportunities… growth market.
4 3
They are looking for stable, The fragmented healthcare market
! cycle independent market
segments.
in Germany is prone to active
consolidation.
5 6
Capital and technology intensive
Current focus is on disciplines offer huge industrialising
outpatient care. potential.
Investor-Update. 10Agenda.
1
Overview
2
The changing healthcare market.
3
B u s i n e s s m o d e l a n d s t r a t e g y.
4
Business performance.
5
R i s k m a n a g e m e n t , c r e d i t q u a l i t y, f u n d i n g .
Investor-Update. 11Leading bank in German healthcare market.
Client base.
Self-employed &
Corporate clients employed healthcare
professionals
Retail clients
Professional associations &
clearing centres
Students of
medical professions
Institutional
investors
Promotion Reha-
Prevention Diagnosis Curation Nursing
of health bilitation
Patient
Investor-Update. 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 Profound knowledge of cash flows
health care professionals, and needs of health care
intensive cooperation with professionals
chambers, pension funds and Better risk assessment than
professional organisations competitors
High reputation in particular in
financing issues
DNA
Tailor-made solutions for health care professionals
Holistic customer service covering the whole range from lending
business to start-up financings
Value added offers beyond banking products
Investor-Update. 13apoBank‘s strategic focus.
Expansion of private wealth management
Private
Differentiated customer services via new sales model
clients
Upgrading digital customer experiences
Corporate Larger product range, i.e. arranger for financings
clients Differentiated and individual product offerings: standard, when sufficient;
tailor-made, when advisable
Professional Close networking to jointly shape the health care market
associations Management of payment transactions, investment consulting, interest and
currency management, structured financings, telematics infrastructure
Institutional Tapping new customer groups, i.e. charity funds, churches
investors More cooperation to enlarge product offerings
Custody services, investment consulting, risk management
Efficiency improvements to support growth strategy
New IT-platform, end-to-end digitisation, implementation of a data
warehouse
Optimisation of lending and securities processes
Investor-Update. 14Expansion of an integrated service spectrum.
Services Non-banking
Banking/non-banking services
Further development and
sales activities of non- Zahnpraxis der Zukunft
Start-up Rental of fully equipped dental practice
banking services and support in all start-up phases
consulting
Integration in sales concept,
accompanying health care
professionals throughout
their life Practice optimisation
Practice Holistic analysis of practices to identify
optimisation additional potential as well as
optimisation possibilities
Platform for
health care univiva
Broad range of seminar and event
professionals offerings
MARKOM – Marketing solutions for
health care professionals
Investor-Update. 15Agenda.
1
Overview
2
The changing healthcare market.
3
B u s i n e s s m o d e l a n d s t r a t e g y.
4
Business performance.
5
R i s k m a n a g e m e n t , c r e d i t q u a l i t y, f u n d i n g .
Investor-Update. 16Stable revenue basis.
Operating revenues, Operating expenditures, Operating result,
in mn Euro in mn Euro in mn Euro
854 869 919 701 153 160
810 817 594 635 133
550 561
113 117
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Risk provisioning from the Risk provisioning with reserve Net profit after tax,
operating business, in mn Euro character, in mn Euro in mn Euro
39 44 112 103 59 61 62 63 64
32 95 88
57
-6
-12 2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
Risk provisioning with reserve character
2016 and 2017 net release diminishes net profit, but serves for taxed capital accumulation
Investor-Update. 17Sustainable growth strategy in the customer business.
New lending business, Lending volumes,
in bn Euro in bn Euro
35.5
7.1 7.6 32.9
6.3 6.4 6.8 4,3
30.1 3,8
27.9 4,6
26.1 3,1
2,6 4,7
2.1 4,8
4,9 7,5
2015 2016 2017 2018 2019 5.1 7,1
6,6
6,3
6.2
Volume securities accounts, 17,3 19,1
14,1 15,6
private clients, in bn Euro 12.7
9.7
7.2 8.0 7.8
6.9
2015 2016 2017 2018 2019
Corporate clients Start-up loans
2015 2016 2017 2018 2019 Investment and private loans Real-estate loans
Investor-Update. 18Agenda.
1
Overview
2
The changing healthcare market.
3
B u s i n e s s m o d e l a n d s t r a t e g y.
4
Business performance.
5
R i s k m a n a g e m e n t , c r e d i t q u a l i t y, f u n d i n g .
Investor-Update. 19Very good portfolio quality.
Steady portfolio growth, focus on retail clients as well as
Retail clients 9.2%
32.8 bn Euro
23.3% professional associations and large corporates
1.3%
19.4% Volume of financial instruments stable on low level
90% of retail exposure and 86% of exposure to professional
46.8%
associations and large corporates are investment-grade rated
At 1.2% NPL-Ratio is at low level (2018: 1.3%)
Forbearance Ratio: 1.1%
Professional assoc.,
10.7% 13.8% Coverage Ratio: 39.9%
large corporates
0.7%
5.4 bn Euro
31.0%
43.8%
Financial instruments 19.3%
6.3 bn Euro
1.9%
0.4%
78.4%
AAA-AA BBB M a p p i n g o f i n t e r n a l a p o B a n k r a t i n g c l a s s e s ( B V R - M a s t e r s k a l a ) t o e xt e r n a l r a t i n g c l a s s e s
Not rated
b a s e d o n u n d e r l y i n g d e f a u l t p r o b a b i l i t i e s , d r a wd o w n s ( c l a i m s t o c u s t o m e r s , g r o s s , s e c u r i t i e s ,
A BB-C D off-balance sheet items)
Investor-Update. 20Satisfying regulatory capital position.
Regulatory capital, in mn Euro Regulatory capital ratios
26.1%
2,465 2,528 2,543 2.519 26.1%
2,411
275 233 194 21.8%
383 324
22.6% 18.3%
1,129 1,103 22.0% 16.5
1,017 1,100 19.5%
936
16.7%
15.2
1,092 1,124 1,154 1,181 1,222
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Supplementary capital Members’ capital contributions
Reserves, other Total capital Equity ratio Common equity tier 1 ratio
2019 2020
CET1 Equity ratio CET1 Equity ratio
Capital ratios will be dampened in future due to
further business expansion as well as Basle IV related
Overall capital increase in RWA
8.26% 11.78% 8.5% 12.0%
requirement
Anticycl. buffer 0.03% 0.25%
Continued capital increase via further allocation to
reserves
Capital conser-
vation buffer
2.5% 2.5% Leverage ratio: 4.4% (31.12.2018: 4.8%)
Total SREP
5.75% 9.25% 5.75% 9.25%
Liquidity coverage ratio: 140% (31.12.2018: 144%)
capital requirem.
Net stable funding ratio: 113% (31.12.2018: 111%)
Pillar 2 requirem, 1.25% 1.25%
Rillar 1 requirem. 4.5% 8.0% 4.5% 8.0%
Investor-Update. 21Credit risks predominant.
Risk weighted assets, in bn Euro Continued business growth, in particular in retail
and in corporate sector
15.3 Market risks in banking book only
13.9
9.5 11.6
9.2
2015 2016 2017 2018 2019
Distribution of RWA, in bn Euro
1,172
889 300 Retail
957 Cororates
Institutions
8,556 Participations
3,421 Other incl. states
Op Risk
Investor-Update. 22Diversified 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 Benchmark bonds callable
reliable 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, > 300 institutional client > 50 Partner banks
associations and large corporates
> 200 investors from the Geno- Funding of promotional loans via
Stable base of less volatile and Finanzgruppe KfW-Group and regional
steadily growing deposits from promotional banks
customers
Investor-Update. 23Part 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
The Institutsschutz covers:
all deposits and
Bearer bonds held by customers.
Further information:
www. b v r . d e / S E
www. b v r - i n s t i t u t s s i c h e r u n g . d e
Investor-Update. 24Excellent ratings. S&P Fitch Ratings (Group-rating) Counterparty credit rating AA- Issuer default rating long-term AA- Short-term debt A-1+ Issuer default rating short-term F1+ Covered bonds rating AAA Outlook negative Senior unsecured (preferred) AA- Senior Subordinated (non preferred) A+ Outlook negative Investor-Update. 25
Stable funding sources.
in mn Euro
50.000
Demand deposits
Term and savings deposits incl.
40,000 subordinated property receipts
apoObligations (retail)
Senior unsecured
30,000
Covered bonds
Profit participation rights and
20,000 subordinated capital,
excl. property receiptsefe)
Public funding facilities
10,000
0
2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
1,632 3,190 3,674 5,125 6,326 Covered bonds
3,555 4,522 5,315 6,218 7,151 Cover assets*
1,872 1,214 1,641 1,093 825 Ex c es s c over
* i n c l . s t i p u l a t e d l i q u i d e xc e s s c o v e r
Investor-Update. 26Increased capital markets funding.
Overall, constant share in capital markets funding to
in bn Euro
total funding from 22% (end of 2019) to 18% (end of
10.7 10.9 2024)
0.5 10.3 10.3
0.5 10.0 9.9
0.3 0.2 0.2 0.2 0.2
1.1 0.2 0.2 0.2 0.2
3.2 3.2 3.4
3.5 3.4
3.3
6.8 6.7 6.6
5.8 6.2 6.2
2019 2020 2021 2022 2023 2024
ECB tender Capital markets, unsecured, long-term
Capital markets, short-term Capital markets, secured, long-term
Investor-Update. 27Highly granular cover pool.
Focus on high quality, residential
Cover pool, in mn Euro
mortgages 7,151
6,218
Very granular cover pool, only domestic
exposure Inc l. 185 m illion Euro (12/2019);
265 m illion Euro (12/2018)
Non-performing loans (debt in arrears, s tipulated liquid ex c es s c over
cancelled, impaired) and customers, which 31.12.2018 31.12.2019
do not meet the required rating, are not
included in the cover pool according to Cover pool by type
internal rules and are automatically Apartments 1.669
excluded from the cover pool in agreement Single/two family houses 3,229
with the trustee Multi family houses 589
Internal apoBank rules regarding the Other, commercial 1,479
matching cover are stricter than the 6,966
Total
requirements by law
Voluntary public commitment for an
Cover pool by size
extended collateralisation for mortgage
Pfandbriefe up to 300k Euro 5,177
300k - 1 mn Euro 767
1 mn Euro - 10 mn Euro 701
> 10 mn Euro 321
Total 6,966
Investor-Update. 28High quality cover pool.
31.12. 31.12.
§ 28 PfandBG
2019 2018
Maturity structure and fixed -interest period,
Seasoning 4.7 years 4.6 years in mn Euro, 31.12.2019 (§28 PfandBG)
2,736 2,698
Average weighted
55.4% 55.3%
loan-to-value
S&P analysis 30.9. 31.12.
(AAA rating) 2019 2018
Available over-
15.24% 17.21%
collateralisation
Overcoll. consistent with
4.96% 5.39%
current (AAA) rating
1,112
1.045
Unused notches 5 5 864
743 715 727
623
540
420
352 338 294
165
15 70 20Covered bonds (Pfandbriefe).
Maturity profile, in mn Euro (31.12.2019)
1.200
1.000
800
600
400
200
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 > 2030
Covered bonds LCR 2A Covered bonds PP (non-LCR) Covered bonds LCR 1B
Investor-Update. 30Contact.
ALEXANDER VAN ECHELPOEL RAINER VOGEL BARBARA ZIERFUß
Head of Treasury Trading Desk Investor Relations
+49 211 5998 9750 +49 211 5998 8914 +49 211 5998 4687
alexander.vanechelpoel@apobank.de rainer.vogel@apobank.de barbara.zierfuss@apobank.de
Investor-Update. 31Annex. Investor-Update. 32
Development of P&L.
Net interes t inc om e, in m n Eur o Net c om m is s ion inc om e, in m n Euro Adm in. ex pens es , in m n Euro
675.2 625.6 691.1 175.3 683.9
606.2 632.4 156.3 164.9 597.6
133.0 139.0 496.0 516.4 530.1
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
O perating prof it bef or e r is k pr ovis ions , Ris k provis ioni ng f rom the operating Ris k provis ioni ng with res erve
in m n Euro bus ines s , in m n Euro c harac ter, in m n Euro
304.8 39.2 43.5
249.2 223.7 233.6 217.7 31.9 112.2 103.0
95.3 88.3
57.1
-5.7 -12.1
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
2016 / 2017 net revers al
O perating res ult, in m n Eur o T ax es , in m n Euro Net prof it af ter tax , in m n Euro
94.3 98.6 59.1 61.0 61.9 62.9 64.1
153.4 159.6 70.9
132.8 113.4 117.1 50.4 53.0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Investor-Update. 33Continuously growing customer business.
Total assets, in bn Euro Customers (in thsd) Members (in thsd)
49.6 481 111 113 116
45.4 436 459 108 110
41.4 397 416
36.4 38.6
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Investor-Update. 34Customer loans and deposits dominate balance sheet.
As s ets , in bn Eur o
37.291
34.652
32.013
29.492
27.893
5.681 6.058 5.714 5.558 5.796 5.800
4.520
2.131 2.381 3.017
211 531 222 450 222 403 233 412 247 470
2015 2016 2017 2018 2019
Bank balances Loans to customers Securities Fixed assets and participations Other
29.237
Liabilit ies , in bn Eur o 27.449
25.797 26.037
23.588
8.950 9.636
8.105
7.214 6.930 7.396
5.876
1.124 4.202
2.739 2.934 1.144
1.783 1.799 1.165 1.257 1.810 1.291 1.868 1.467
2015 2016 2017 2018 2019
Liabilities to banks Liabilities to customers Securitised liabilities Balance sheet equity Other
Investor-Update. 35Disclaimer
This document is for information purposes only. The individual consultation by a lawyer, auditor or tax adviser
information contained in this presentation has been that may be necessary in the light of the circumstances
thoroughly researched by Deutsche Apotheker- und of the individual case.
Ärztebank using exclusively sources that are considered
This draft may be neither reproduced nor passed on to
reliable. Nevertheless, Deutsche Apotheker- und
third parties without the consent of Deutsche Apotheker-
Ärztebank provides no assurance or guarantee that this
und Ärztebank. Deutsche Apotheker- und Ärztebank
information is up-to-date, accurate or complete, accepts
assumes no liability for direct or indirect damage arising
no liability for any damage or loss caused by or related
from or related to the distribution and/or use of this
to the use of this information, and points out that this
document.
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
Investor-Update. 36You can also read
