BayernLB Group Investor Presentation - Munich, January 2021
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BayernLB Group Investor Presentation Munich, January 2021
The German banking system stands on 3 pillars
Private banks Public banks Co-operative banks
› Big banks (4) › Landesbanks (6) including BayernLB › DZ Bank (central institution)
› Deutsche Bank
› DekaBank › Credit co-operatives (878)
› DB Privat- und
Firmenkundenbank › Savings banks (386) › Building and loan associations (1)
› Commerzbank
› UniCredit Bank › Building and loan associations (8) › Mortgage banks (2)
› Regional and other banks (159)
› Mortgage banks (2)
› Branches of foreign banks (119)
› Building and loan associations (11)
› Mortgage banks (7)
Source: Bundesbank, Statistische Beihefte Bankenstatistik, p. 104; figures as of 2018 adjusted by BayernLB Research excluding development banks
2
Strong owners
Association of Bavarian
Free State of Bavaria
Savings Banks
~ 25% ~ 75 %
BAYERNLB HOLDING AG 100% state
100% guarantee
from the Free
State of
Bavaria
Institution established under public law
100%
1
1 A body established under public law w hich is a legally dependent part of BayernLB
3
Free State of Bavaria compares
well to its European neighbours AAA
Top ratings
2019 gross domestic product by country The Free State of Bavaria has the
highest ratings from Standard & Poor's
EUR bn
and Moody's – AAA/Aaa
3,436
2,523
EUR 633 bn
Gross domestic product
2,419
Bavaria accounted for 18.4% of
Germany's nominal gross domestic
1,788 product in 2019.
1,245
DAX 30
Bavaria
812
633 628 Bavaria – a state with a strong economy
529 475 473
399 359 347 Around 25% of all DAX 30 corporations
311 240
212 188
are in Bavaria. Bayern has one of the
strongest economies of all the German
states and is home to a large number of
Mittelstand companies.
Sources: BayernLB Research, Eurostat, German federal and state statistics offices, Datastream
4
Savings banks – major
customers and sales partners
Savings banks are the top financial
services providers throughout Bavaria
› 64 savings banks
› EUR 222.7 bn in total assets
› EUR 142.3 bn credit volume
› EUR 175.0 bn in customer deposits
› 36,621 employees and trainees
› 2,748 branches (incl. self service)
› 14.9 m savings, current and securities
accounts
As at: 31 December 2019
5Our value proposition as the
BayernLB bank of the future:
1. As a streamlined, specialised bank we are the reliable innovation
partner for companies in high-growth business sectors of the
future in particular in Bavaria and Germany, and support our
corporate customers sustainably and for the long term with in-depth
expertise
2. In real estate financing, we use our specialist knowledge and
network to support our customers throughout the entire value chain
in Germany and other selected markets
3. We are the central bank for the Bavarian savings banks and the
main bank for the Free State of Bavaria
4. As a tech bank, DKB provides its customers with an excellent client
experience and outstanding digital solutions
5. Our asset management companies Real I.S. and BayernInvest
enable our customers to choose from a wide variety of sustainable
investments
6Our structure:
three strong segments
Corporates & Markets Real Estate / DKB
Savings Banks & FI
› Special lender with in-depth › Reliable real estate lender with › Innovative tech bank,
expertise in sectors of the special consulting expertise which inspires its customers as
future in Germany and selected a digital companion and
foreign markets sustainable partner
› Advanced structuring
(#geldverbesserer)
expertise in financing: › Central bank of the Bavarian
structured asset finance and savings banks and a strong › Strong earnings growth
debt capital markets (DCM) partner to the public sector and through its target to double
› Streamlined offering of financial institutions customer numbers to 8 million
Financial Markets’ risk
management products
7We are there for you
at home in Bavaria and abroad
Germany
Munich
Nuremberg
Stuttgart
Frankfurt
Dusseldorf
Hamburg
Berlin
Leipzig
Foreign Representative office Munich head office
branches: Moscow
London
Milan German Centres
Paris Shanghai
New York Taicang
Support for your international activities thanks to around
1,100 correspondent banks in 100 countries
8DKB –
retail pillar of the BayernLB Group
DKB – Das kann Bank DKB Group IFRS financial statements 30 June 2020
Our products and services lead the market and are renowned
Total assets EUR 97.7 bn
for their fair prices.
We provide an intelligent banking experience based on the Equity EUR 3.7 bn
latest technology. Our retail customers carry out their daily Liabilities to customers EUR 65.4 bn
banking transactions conveniently and securely online. Our
Net interest income EUR 477.6 m
business customers are served personally on location by our
sector experts. Profit/loss before taxes EUR 118.0 m
RoE 7.4%
› Approx. 4.5 m retail customers
› Germany’s second largest online bank
› The most sustainable of Germany’s top 20 banks (e.g. social
bond for retail customers, sustainability funds and the crowd
investing platform DKB-Crowd)
› In business with corporate and infrastructure customers, the
focus is on sectors with long-term growth potential in
Germany
› Financing partner for more than 4,000 municipalities,
administrative districts and municipal associations
Convenient and secure – DKB business customers –
DKB’s internet banking personal service
9BayernLabo –
development bank of the BayernLB Group
Subsidised housing and municipal lending for Bavaria 31 December 2019
BayernLabo has the legal mandate to promote social housing
Total assets EUR 18.0 bn
and municipal construction in Bavaria. In addition, BayernLabo
issues government and municipal loans in Bavaria. Own funds EUR 2.8 bn
CIR 48%
› The Free State of Bavaria is liable for all the liabilities assumed
Employees 219 FTE
by BayernLabo
› BayernLabo has a Aaa rating from Moody’s
› Solva 0 status
› LCR status level 1
› No bail-in risk
Aaa
BayernLabo’s rating
from Moody’s
BayernLabo –
a sustainably good company
10BayernLB posts earnings before taxes
of EUR 276 m
› Stable operating performance: net interest income on par with year-
before period, net commission income higher
› Risk provisions raised to EUR 175 m to cover potential risks from the
coronavirus pandemic
› Strategic investments, particularly in IT infrastructure, cause rise in
HIGHLIGHTS administrative expenses
› Transformation continues on schedule despite operational challenges
from the coronavirus pandemic
› Solid capital base: CET1 ratio at 15.6%
11Operating profit was stable
Profit/loss before taxes Consolidated profit/loss
EUR m EUR m
433 394
276
179
9M 2019 9M 2020 9M 2019 9M 2020
CIR RoE
In % In %
65.3 65.4 6.0
3.7
9M 2019 9M 2020 9M 2019 9M 2020
12Capital base still sound
Total assets RWAs
EUR bn EUR bn
265.6 64.6 65.0
226.0
Dec 2019 Sep 2020 Dec 2019 Sep 2020
CET1 capital CET1 capital ratio
EUR bn in %
10.1 10.1 15.6 15.6
Dec 2019 Sep 2020 Dec 2019 Sep 2020
13Net interest and net commission income up slightly
on 9M 2019 at approx. EUR 1.5 bn
Net interest income Net commission income
EUR m EUR m
1,292 1,324 205 224
9M 2019 9M 2020 9M 2019 9M 2020
› Net interest income unchanged on the year-before › Increase of approx. 9% on 9M 2019, due in
period despite the difficult climate particular to new business
14Risk provisions for expected charges from the
coronavirus pandemic
Gains or losses on fair value measurement Risk provisions
EUR m EUR m
73 (8) (175)
(29)
9M 2019 9M 2020 9M 2019 9M 2020
› Earnings higher, boosted mainly by precious metals › Risk provisions increased, in particular to cover
business potential risks from the coronavirus pandemic
(post model adjustment)
› Year-before period buoyed by high releases and
recoveries on written down receivables
› Average NPL ratio remains low: 0.6%
15Increased administrative expenses due to
investment, higher contribution to bank levy and
deposit guarantee scheme
Administrative expenses Expenses for the bank levy and deposit guarantee
EUR m scheme
EUR m
(1,078) (1,135) (123) (150)
9M 2019 9M 2020 9M 2019 9M 2020
› Strategic investment, especially in modernisation of › Expenses for the bank levy EUR 67 m
IT at BayernLB and DKB (9M 2019: EUR 56 m)
› Initial reductions in operating costs, mainly at › Expenses for the deposit guarantee scheme
BayernLB core Bank approx. EUR 83 m (9M 2019: EUR 68 m), mainly
due to higher secured deposits at DKB
16Segment results marked by positive earnings trend
and risk provisions
Profit before taxes by segment Note: the previous year’s figures in all segments
EUR m apart from DKB have been changed following the
9M 2019 9M 2020 BayernLB Group’s strategic realignment
165 241 234
140
19 (70) 10 (28)
Real Estate & Savings Corporates & DKB Central Areas &
Banks/Financial Institutions Markets Others
› Increase in earnings in Real Estate & Savings › Expected drop in earnings at DKB resulting from
Banks/FI due to pleasing new business performance strategic investments in sales and digitalisation was
in real estate and very good business with precious moderate, as it was softened by net positive risk
metals. Earnings in the previous year were favoured provisions and gains on measurement of equity
by releases of risk provisions. investments.
› Positive earnings trend and savings in administrative › Earnings in Central Areas & Others impacted
expenses in Corporates & Markets overshadowed by considerably by low one-off income, additional costs
risk provisions to cover potential risks arising from to resolve the last legacy issues and higher
the coronavirus pandemic. contributions to the bank levy and deposit guarantee
17 scheme.CET1 ratio well above SREP minimum ratios
15,6
9,5 Buffer for national systemic relevance
0,5
2,5 Capital conservation buffer
2,0 Pillar 2 requirement
4,5 Pillar 1 requirement
Sep 2020 2020
CET1 ratio CET1 SREP requirement
› CET1 ratio of 15.6% on 30 September 2020 was › Additional capital buffers:
well above the SREP minimum ratio for 2020 of Capital conservation buffer: 2.5%: may be
9.5% temporarily undershot due to the corona crisis
› The minimum CET1 ratio set by the CRR (Pillar 1 Buffer for national, systemically important
requirement) is 4.5% institutions: 0.5%1
› On top of that is an individual premium (Pillar 2
requirement) of 2.0% for 2020
1 Reduction of 0.5 percentage points from 1 December 2020
18MREL requirement is significantly exceeded
MREL holdings › MREL holdings as at 30 Sep 2020 take account of
In % of RWAs changes resulting from the banking package (e.g.
senior preferred and other MREL are no longer
56.72 eligible)
› Supervisory authority’s MREL requirement is 7.75%
of TLOF (equates to 25.34% of RWAs)
› MREL holdings as at 30 Sep 2020 stood at 14.38%
of TLOF (equates to 56.72% of RWAs), which far
38.78 Senior non-preferred exceeds the supervisory authorities’ requirements
› Large portfolio of subordinated eligible liabilities
(senior non-preferred) not only effectively protects
the superior senior preferred category from losses,
but also offers broad protection within the senior
non-preferred category
17.93 Regulatory capital
MREL holdings
30 Sep 2020
19Transformation process and outlook
Progress with the transformation
Despite operational challenges posed by the coronavirus pandemic, the
BayernLB Group is forging ahead as planned with its extensive, multi-year
transformation programme Fokus 2024 launched in January 2020. BayernLB
has achieved key project milestones in the past few months and, for example,
launched various IT modernisation projects in the core Bank and DKB. In
addition, it has taken initial measures to improve earnings and profitability in
the Group’s business areas and implemented the first efficiency initiatives in all
units of the Bank, including, for example, redesigning the credit process and
optimising trading and transaction processes. The core Bank is on schedule
with reducing its operating costs.
Outlook
As it currently stands, BayernLB expects profit before taxes to be positive for
financial year 2020 – nevertheless the coronavirus pandemic and the related
challenges are the source of exceptionally high uncertainty. The negative
impact on global economic output will be considerable and will be greater the
longer the pandemic continues.
20How we will achieve sustainable success on our
own terms in future
We are focusing on our We are improving our We are a strong
STRENGTHS EFFICIENCY PARTNER
We will further expand our position We will invest in infrastructure We will continue to be a reliable
in real estate finance and and IT at the core Bank and DKB partner to our customers in
structured asset finance. and will set ourselves up as Bavaria and Germany.
modern and secure.
We will focus on profitable and We will remain the principal bank
future-oriented sectors in our At the same time we will to the Free State of Bavaria and
corporates and capital market considerably reduce our cost strong partner to the public
business. base, especially in the core Bank. sector.
We will double our customer base
We will increase the efficiency of We will still be the central bank of
in DKB’s retail business.
the platform in Munich and thereby the Bavarian savings banks, firmly
We will focus our business more also support the ongoing growth of rooted in the S-Finanzgruppe.
closely on sustainability. our subsidiary, DKB.
21Our capital base: strong
cornerstone of the BayernLB bank of the future
RoE 6.7 ~8 Focus
in % › Maintain volume of RWAs on
par with today in the target
CET1 ratio 15.6 >14 vision
in % › Include investment and
restructuring costs in capital
planning
RWAs ~ 68.0
EUR bn 64.6 › Grow capital base, mainly via
~0.5
0.3 retention of earnings
DKB › Finance growth at DKB from the
Bank’s own resources
BayernLB core Bank ~ 35.5
39.6 › Ensure ongoing ability to pay a
Other subsidiaries
dividend
~ 32.0
24.7
2019 2024
22Major investment in the …and efficiency
future... improvements
INVESTMENT COSTS
› Core Bank: Considerably reduce costs in the core Bank by 2024
Invest in further increasing sector expertise in
business with corporate, real estate and special › Streamline activities in the capital market and
customers; in addition, invest a triple-digit million corporate lending business, incl. reducing the range
sum in infrastructure and IT to significantly of products and complexity in the trading and credit
increase the efficiency of the platform in Munich processes
› Generate savings in the central areas and in IT costs
› DKB: by significantly simplifying the IT landscape
Invest EUR 400 m in growth and in the future over
the next five years, both to modernise and
› In addition to the 400 job cuts agreed at the end of
upgrade the IT systems and to achieve
2019, further socially responsible job cuts of a similar
considerable growth in retail and business
scope are planned. However, the Bank has ruled out
customers
redundancies until autumn 2022.
23Rating agencies commend BayernLB‘s performance
Moody´s 2009 2011 2014 2016 2017 2018 2019 2020
Issuer Rating A1 Baa1 A3 A2 A1 Aa3 Aa3 Aa3
Preferred Senior Unsecured Aa3 Aa3 Aa3
Non Preferred Senior Unsecured A2 A2 A2
Baseline Credit Assessment ba3 ba3 ba2 ba1 baa3 baa3 baa2 baa2
Fitch 2009 2011 2014 2015 2016 2018 2019 2020
Issuer Rating A+ A+ A+ A- A- A- A- A-
Preferred Senior Unsecured A- A- A
Non Preferred Senior Unsecured A- A- A-
Viability Rating bb+ bb+ bb+ bbb bbb+ bbb+ bbb
24Excellent asset quality
Gross credit volume Credit portfolio
EUR bn › Growth in lending in part due to participation in
the ECB tender (TLTRO III)
280 307 › Portfolio quality very high
› Impact of coronavirus pandemic still low
Dec 2019 Jun 2020
Rising quality
› NPL ratio and NPL portfolio shrank slightly in the
NPL ratio first half of the year and remain low
In %
› Slight drop to 0.6% is the result of reducing
individual exposures
0.7
0.6 › Cover ratio stable at 42% without collateral
Dec 2019 Jun 2020
25Well diversified credit portfolio
Gross credit volume by region Gross credit volume by sub-portfolio
In % In %
Supranational orgs CIS
(EUR 2.7 bn,Very high investment grade share
Gross credit volume by rating category
EUR bn / %
Dec 2019: Total EUR 279.7 bn
Jun 2020: Total EUR 307.3 bn
87.9%
investment grade
201.2
178.3
65.2 68.9
25.8 26.4
7.0 7.6 1.3 1.4 2.0 1.9
MR 0 - 7 MR 8-11 MR 12-14 MR 15-18 MR 19-21 MR 22-24
Investment grade Non-investment grade Default categories
27Highly granular
Net credit volume
EUR bn / %
Dec 2019: Total EUR 212.2 bn
Jun 2020: Total EUR 235.2 bn 76% up to EUR 500 m
54.4 57.5
37.2 38.2 36.0 35.3 35.4
26.9 24.8 21.7
19.1 17.2 20.8
16.3
3.2 3.3
> EUR 2.5 bn EUR 1 bn to EUR 500 m EUR 250 m to EUR 100 m to EUR 50 m to EUR 5 m to Up to EUR 5 m
EUR 2.5 bn to EUR 1 bn EUR 500 m EUR 250 m EUR 100 m EUR 50 m
› Considerable growth posted in the “> EUR 2.5 bn” size category, as balances held with central banks
were increased at Deutsche Bundesbank
› The portfolio remains highly granular and a very high volume of EUR 151 bn still falls under the size
categories up to EUR 0.25 bn
28Diversified corporate customer portfolio which
maintains a high investment grade share
Corporates by sector
EUR bn
Dec 2019: Total EUR 74.1 bn
Jun 2020: Total EUR 74.9 bn
23.7 24.2
8.4 8.5 7.9 8.2 7.5 7.4 6.7 6.5 5.4 5.6 5.7 5.5 5.3 5.2
3.5 3.8
Utilities Consumer Logistics Telecoms, Mechanical Raw Automotive Chemicals, Construction
goods, & aviation media & engineering, materials, pharmaceuticals
tourism, technology aerospace oil & gas & healthcare
wholesale & defence
& retail
› Business volume grew by EUR 760 m
› Investment grade share remains very high at 74.9% and is only down slightly due to the coronavirus
pandemic
29Commercial real estate finance
Gross credit volume by asset class/unit Highlights
EUR bn/Jan 2020 › Portfolio was expanded as planned by EUR 5.2 bn
to EUR 55.5 bn
BayernLB DKB BayernLabo
› Granular portfolio with 88% share in Germany
› Residential asset category includes around EUR
34.4 21.5 bn (previous year: EUR 19.0 bn) of low-risk
business due to local authority/government
6.5 ownership or guarantees and housing associations
› 85% investment grade share
› 70% of the cash flow generating gross exposure
(GEX) has a debt service capacity of > 8% p.a.
› Expected loss at 5 bp; stable trend
25.4 › Low average NPL ratio of 0.4%
9.7
Outlook
6.4 › Pursue a clearly defined, well considered growth path
4.4
3.5 in Germany and abroad with increasing risk
2.5 2.9 diversification within the real estate portfolio
Residential Office Managed Retail › Realise growth in foreign business by using existing
real estate infrastructure via foreign branches and local networks
while maintaining the current portfolio and risk profile
30 › Breakdown of asset classes in the target portfolio will
remain almost unchangedPrivate residential construction term loans
Gross credit volume by unit Distribution in Germany
EUR bn/Dec 2019 Granular portfolio with focus on Bavaria, mainly due
BayernLB DKB BayernLabo to BayernLabo
14.7 14.0 13.7 0.4
0.4 0.3 0.1 0.5
0.2
0.7 0.8
0.5 0.9
10.8 10.4 10.3 1.5 0.7
0.5
0.7
0.3
0.1
4.8
3.5 3.3 3.2 1.0
2017 2018 2019
Volume (EUR bn)
Highlights of the DKB portfolio Outlook for DKB
› Average ticket size (entire portfolio): EUR 144 k Credit volume will increase from 2020. New business
› Average ticket size (new business): EUR 223 k will be managed in a targeted manner to improve
efficiency through higher loan amounts per
application
31Comfortable liquidity levels
Funding strategy Capital market funding
› Lower funding needs in 2020 are the result of the EUR bn/BayernLB core Bank not incl. BayernLabo
streamlining of BayernLB core Bank and the Secured Unsecured
related reduction in requirements
› Slight uptick in funding volumes in 2021 due to
Issued Planned
planned new business
› Focus on unsecured funding at BayernLB level 8.2 8.6
using diversified sources of funding, especially
via the savings banks, institutional investors, 3.5 6.1
4.2 4.5
retail and the international DIP scheme
0.0 2.3
› Maintain capital market presence by regularly
issuing secured benchmark bonds 5.1 4.5
4.0 3.8
› EUR 27bn participation in TLTRO III ECB tender
(BayernLB and DKB)
2018 2019 2020 2021e
› Liquidity coverage ratio (LCR): 233% as at Sep
2020
32Investor-friendly structure on the liabilities side
Liabilities structure Funding via Pfandbriefs
EUR bn/Jun 2020 › BayernLB uses a total of four funding
Liabilties to banks Other liabilities programmes based on the German Pfandbrief
Liabilities to customers Subordinated capital Act (PfandBG) as a low-cost, long-term source of
Securitised liabilities Equity funding, two each at BayernLB and DKB AG
258.0 30.2 29.4
17.7 11.6 Broad base of unsecured liabilities
43.3 1.7 › BayernLB has an investor-friendly structure on
the liabilities side with sufficient unsecured bonds
112.1 in relation to total assets. The Bank actively
monitors and plans the proportion of unsecured
bonds in accordance with Moody’s Loss Given
4.6
71.6 Failure-Analysis
balance Of which Of which Of which
sheet total Pfandbriefs unsecured structured
debt debt
instruments instruments
under Section under Section
46 f KWG 46 f KWG
33BayernLB Pfandbriefs
Mortgage Pfandbriefs Public Pfandbriefs
Cover mainly includes commercial real estate, The majority of the cover (>90%) consists of German
primarily residential, office and retail with a focus on municipal finance and receivables guaranteed by
Germany. The high overcollateralization provides German states with a focus on Bavaria. Tap issues
freedom to launch issues across all maturity bands. and jumbolinos are issued on a regular basis to
maintain a liquid Pfandbrief curve.
Key figures for Q3 2020 Key figures for Q3 2020
Outstanding volume EUR 3.9 bn Outstanding volume EUR 17.9 bn
Moody’s rating Aaa Moody’s/Fitch rating Aaa/AAA
Excess cover 140.6% Excess cover 28.3%
Cover pool Germany EUR 6.1 bn Cover pool Germany EUR 21.2 bn
Cover pool abroad EUR 3.0 bn Cover pool abroad EUR 1.3 bn
34A Group with a strong sustainability background
Focus areas of the
Association of
Free State of Bavaria Bavarian Sustainability
Bavarian Savings Banks Strategy
› Climate change
~ 25 % ~ 75 % › Sustainable energy
› Natural resources
100 % state › Sustainable mobility
guarantee › Social cohesion
from the Free
› Education and research
Institution established under public law State of
Bavaria › Sustainable economy
100 %
and consumption
› Nutrition, health, care
› State and administration
› Sustainable financial
policy
Legally dependent institution › Global responsibility
established under public law w ithin
BayernLB
BayernLB has a mandate geared towards sustainability based on the approach of the Free State of Bavaria and the
EU Taxonomy. To this end, all issuing entities have established a green and/or social framework
35Position of BayernLB
Promoting sustainability
› BayernLB has been actively engaged in the promotion of sustainability for
25 years, achieving numerous milestones along the way
Prime Status
Awarded by ISS ESG (formerly
› Signing UNEP-Finance Initiative ("Environmental Banks") in 1995, ISS Oekom) and held by
commitment to World Bank standards in 2004, regular and detailed
BayernLB since 2006 (first
sustainability reporting since 2007, signing of UN Principles for
sustainability rating in 2000)
Responsible Investment (PRI) by BayernInvest in 2011, first DKB
Green Bond in 2016, BayernLabo Social Bond in 2017, first DKB
Social Bond in 2019 and BayernLB Sustainable Finance Framework Industry Leader
in 2020 (formerly “Green Bond Framework”) with subsequent Green BayernLB, DKB and BayernLabo
Bond issues for retail customers
are ranked among the leading,
› In 2019 the bank cemented sustainability as a core building block of its sustainable banks in their sectors
new strategy, further strengthening its commitment to a sustainable future
› The bank is already one of the largest financiers of renewable energies in
Germany and has extensive expertise and market knowledge in European
and non-European markets
› The leading ESG rating agencies confirm BayernLB's commitment to
sustainable development, which is well above the industry average
› BayernLB’s subsidiary DKB also shows top performance. It has been rated
separately since 2015 and is currently rated "B-", the best rating in its
industry and thus the "Industry Leader". The development bank
BayernLabo also receives a separate rating and qualifies for prime status
D- D D+ C- C C+ B-
Prime
36BayernLB’s Sustainable Financing Framework
Overview Details
Use of Proceeds
Significant contribution! › In the first phase, only renewable energy projects are included in
the Sustainable Loan Pool. In the second phase, mass public
transportation as well as green real estate will be added
› All assets in the pool contribute significantly to the UN Sustainable
Development Goals
Process for Project Evaluation and Selection
Assessment and selection of
projects lead by Sustainability › Assets are assessed in a two-step process with credit departments
Working Group proposing a project/loan and the Sustainability Working Group
deciding on its merit
Management of Proceeds
Sustainable Loan Pool
(currently 2.45 EURbn) › Proceeds from sustainable issuances are managed by Group
Treasury within the general liquidity pool while ensuring that the
sustainable asset pool surpasses all outstanding sustainable
funding in volume (i.e. portfolio approach)
Reporting
› BayernLB will publish an annual impact and allocation reporting
Plain/structured containing details of the asset pool (volume, geographical/
Annual impact and bonds/Schuldschein technological split, capacity installed, CO2 avoided) and details of
allocation reporting loans the issued sustainable securities
Commercial paper
Framew ork and second party opinion are available on our Investor-Relations-Homepage
37Renewable Energy Portfolio
Overall Sustainable Loan Portfolio Technological split (in EURm)
Solar Wind
3%
1,610 EURm 13%
Photovoltaik On-Shore
Off-Shore
860 EURm 97% 87%
Comments Geographical split
› The renewable energies portfolio of Solar Wind
BayernLB (without DKB) comprises 1.6
6% Germany 6% 11% Germany
EURbn in wind energy projects as well 18%
as 860 EURm in solar power plants Italy United States
22%
31% 20% Turkey
› Clear focus on Western and Northern United
States UK
Europe but also significant exposure in 27% UK
the United States and Canada 19% Canada
Others 22%
18% Others
Information based on data provided for the second party opinion.
38Sustainability Ratings of the Group
ISS ESG Sustainalytics imug MSCI ISS ESG imug ISS ESG
Rating C+ 68 Points 48,69 % AA B- 43,61% C+
Unsecured
Public
bonds "neutral"
Pfandbriefs
(CCC)
„Prime“ „very
Ranking / Public Above
(Rank 7 positive" (A)
Investment 77 out of 340 Pfandbriefs industry „Prime“ „Prime“
out of 252 Mortgage
Status "positive" (BBB) average
Banks) Pfandbriefs
Mortgage
"positive"
Pfandbriefs
(BBB)
"positive" (BB)
Industry
D 60 Points 50,99 % A D 21,45% n/a
average
-100 % -
Range A+ to D- 0 - 100 Points 0% - 100 % AAA to CCC A+ to D- A+ to D-
100 %
252 MSCI ACWI 281
„Financials/
„Financial Index „Financials/
24 „Savings Mortgage &
Benchmark s/ Public & 340 „Banks“ constituents, Public & 57 Banks
Banks“ Public Sector
Regional Banks, Regional
Finance"
Banks" n=200 Banks"
Date 01 / 2020 06 / 2019 03 / 2020 10 / 2020 01 / 2020 03 / 2019 12 / 2019
39Selected BayernLB policies for critical sectors
BayernLB observes the World Bank’s environmental and social standards in all relevant financing transactions. These
are based on the performance standards of the World Bank Group’s International Finance Corporation (IFC) and the
World Bank's Environmental, Health, and Safety (EHS) Guidelines.
› Excluded from financing in particular are projects that are harmful to the climate or the environment. For
Fossil Fuels
example, financing is not provided for the construction of new coal-fired power plants or to extract natural gas
or crude oil through fracking or extraction from tar sands. Companies that generate their sales exclusively from
products and services employed in areas excluded from financing by the financing guidelines are excluded
from corporate financing
› Projects and all related goods and services for mining or extracting nuclear fuels and constructing new nuclear
Nuclear
power plants are excluded from financing, while companies that generate their sales exclusively from products
and services employed in the excluded areas are excluded from general corporate financing
› BayernLB recognizes the right of a state to defend itself. On this basis, offering services to arms companies or
Weapons
individual financial transactions for weapons and armaments is in principle possible within the framework of
existing laws. We require that the financing is approved following an mandatory case-specific examination
› With BayernLB’s new strategic focus defense ceased to be a focus sector at the end of 2019 and will be
scaled down over the long term
› BayernLB Group does not engage in speculative transactions in staple foods. In this vein the Group does not
invest directly in staple foods, nor indirectly in derivatives which replicate or speculate on the price performance
Food
and/or shortages of staple foods. Furthermore, the bank does not offer any investment products which replicate
or speculate on the price performance and/or shortages of staple foods
More details are available in our 2019 Annual Report (link to financial reports)
40Contact Volker Karioth Senior Manager volker.karioth@bayernlb.de +49 89 2171 23441 41
Disclaimer The information in this presentation constitutes neither an offer nor an invitation to subscribe to or purchase securities or a recommendation to buy. It is solely intended for informational purposes and does not serve as a basis for any kind of obligat ion, contractual or otherwise. Rounding differences may occur in the presentation. 42
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