Danske Hypotek - investor presentation
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Danske Hypotek – investor presentation Q1 2021
Danske Hypotek Q1 2021
Agenda
1 Danske Bank Group – Covered bond universe
2 Danske Bank - Personal Banking SE
3 Danske Hypotek - Structure and expected development
4 Danske Hypotek - Funding
5 Appendix – Nordic macro
6 Contacts
1
Danske Bank Group - Covered bond universe
Danske Hypotek Q1 2021
Danske Bank covered bond universe, a transparent pool structure1
Residential mortgages from
• Denmark, D-pool Danske Bank A/S C-pool
S&P AAA
• Norway, I-pool Fitch AAA
• Sweden, Danske Hypotek AB +
• Finland, Danske Mortgage Bank Plc
Commercial mortgages from
• Sweden and Norway, C-pool
Danske Bank A/S I-pool Finland
S&P AAA
Fitch AAA
Danske Mortgage Bank Plc
Norway Moody’s Aaa
Pass-through principle based on mortgages from Sweden
Denmark primarily
Danske Hypotek AB
• Capital Centre T S&P AAA
‒ Adjustable-rate mortgages Realkredit Danmark
NCR2 AAA
A/S
• Capital Centre S S&P AAA
‒ Fixed-rate callable mortgages Fitch AAA/AA+
Scope AAA
Denmark
Danske Bank A/S D-
pool
S&P AAA
Fitch AAA
1The migration to Danske Hypotek of Swedish residential loans from Danske Bank’s I-pool and Swedish residential-like loans from Danske Bank’s C-pool is ongoing
2Nordic Credit Rating (NCR)
Details of the composition of individual cover pools can be found on the respective issuers’ website 3Danske Bank – Personal Banking SE - Strategy in Sweden
Danske Hypotek Q1 2021
A challenger
in a dynamic Swedish market
5Danske Hypotek Q1 2021
Balanced organic growth
Strengthening our
position in the
Swedish market
Partners
Customer Profitability
satisfaction
Online
Controlled
risks Cross BU collaboration
6Danske Hypotek Q1 2021
Growing with controlled risks
Target the right customers Early actions to mitigate risks
Strategic partnerships Ahead of regulations
SACO & TCO customers Strategic partners Early actions to mitigate risks
Higher credit quality than Debt-to-income (DTI) caps
average
Amortisation
Higher use of digital tools 650,000 1,300,000 650.000 requirements
and channels than average members members members
23 affiliated 14 affiliated
LTV cap on high priced
Faster to broaden their associations associations
140.000 properties in Stockholm
relation than average savers
Launch Launch Launch
February 2016 April 2017 Jan 2020
7Danske Hypotek Q1 2021
Online with customer Holistic Approach
Digital interfaces and processes Focus on customer value
Digital on-boarding of new customers Life event based solutions
Simplicity & transparency Customer relations digital
Customer Program Online meetings
8Danske Hypotek Q1 2021
Strong mortgage portfolio
Mortgage portfolio compared to Share of Swedish mortgage market ,
market average 1 2020
Higher resilience in stress tests Market share 3.8%
Higher household income Share of market growth 4.2%
Larger share in urban areas
1) Finansinspektionen, The Swedish Mortgage Market , 2019 9Danske Hypotek - Structure and expected development
Danske Hypotek Q1 2021
Purpose and Structure
Danske Bank Group has a strong commitment to the Swedish mortgage market
• Ensure stable funding for our customers through the cycle
• Long term funding solution for continued growth of Swedish retail mortgage business
• Market communication; strong commitment to the Swedish Market
Danske Hypotek – Structure Danske Hypotek pool (incl. indicative future transfer capacity)
Origination Principal
and interest SEKbn
Swedish
Danske Bank
mortgage lending 150
New lending
Sale of Parent Loan
mortgages 117
Danske Hypotek
Principal and Bond
interest proceeds EOY 2020 2021 2022 Longer term
Asset release
Covered Bonds
Cover pool in
Existing cover pools
Danske Hypotek
EMTCN SEK
Covered Programme Covered Programme
New originated loans
11Danske Hypotek Q1 2021
Governance model
Funding, Hedging, Liquidity and Capitalisation
Governance model Funding
• Danske Hypotek primarily funds itself in the Swedish Covered
Benchmark market
• EMTCN programme mainly for complementary capacity purposes
• Danske Hypotek’s primary interim source of liquidity is through a
Governance model parent loan
Hedging
• Danske Bank A/S is Danske Hypotek’s primary swap counterpart
• On the liability side, all cash flows from issued bonds are swapped to
SLA- 3m Stibor based flows
Dedicated Steering
management / • On the asset side, all cash flows from the mortgages are swapped to
organisation documentation
Outsourcing
3m Stibor based flows
Liquidity and capitalisation
I II III • Danske Hypotek meets SFSA liquidity requirements
Key capabilities and resources within Danske Bank • Danske Hypotek is compliant with capital requirements as stated in
e.g. CRR/CRD IV as well as specific Swedish regulation and guidelines
Group on capital requirements
12Danske Hypotek Q1 2021
Danske Hypotek Cover pool characteristics
As of end December 2020
Characteristics Assets Loan volumes by Region, %
Collateral type 100% Swedish retail residential mortgages
Loans in cover pool SEK 113.8bn
Number of Loans 109 050 17%
Number of Borrowers 52 323
Number of Properties 54 069
4%
Average Loan Size SEK 1.044 m 47%
Property Type 42% Tenant Owner Rights, 58% Single-Family Housing 5…
WA LTV 58%*
WA Seasoning 4.2 years 7%
Rate type 37% Floating rate, 63% Fixed rate
7%
Repayment type 58% Amortizing, 42% Interest Only
13%
Issuance notional 90 936
OC 26%
Greater Stockholm Greater Gothenburg
Geographical location 100% Sweden. Greater Malmoe South Sweden
Pool type Dynamic North Sweden West Sweden
Pool Cut Date 31-12-2020
East Sweden
Volumes by seasoning, month
Loan volumes in LTV buckets
34 28%
25 20% 32
SEK Bn
SEK Bn
19% 30
17% 28 23%
20 26
15% 24
12% 22 17%
15 20 15% 15%
18
9% 16
10 14
6% 12
10
5 8
2% 6
4
0 2
0
< 10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-75%
0-12 M 12-24 M 24-36 M 36-60 M 60 M -
*Based on priority distribution of mortgage. When joint collateral Danske Hypotek has first priority over Danske Bank.
13Danske Hypotek Q1 2021
Effect of house price sensitivity on LTV and eligible assets
House price sensitivity*
Stressed house prices
Key points 120
SEK Bn
Moderate effects 100
• A 20 pct. fall in house prices implies that
7.5% of todays eligible assets becomes
80
non-eligible.
• A 40 pct. fall in house prices implies that 60
22% of todays eligible assets becomes
non-eligible. 40
• Danske Hypotek can withstand a large 20
decline in the market without breaching
any OC requirements.
0
0pct -5% -10% -15% -20% -25% -30% -35% -40%
Eligible volume Non-eligible volume due to simulated high LTV
*
Effect of simulated market value declines. Pool cut date 31-12-2020
14Danske Hypotek Q1 2021
Danske Hypotek: Available assets for future cover pool —
Overview
The relevant aggregate Swedish mortgage assets currently available on the Danske Bank Group balance sheet including mortgages of SEK 114bn already
transferred into Danske Hypotek (as of 31 December 2020) is shown below. The timing of each transfer to Danske Hypotek will be determined close to the
actual relevant transfer dates. Key determinants will be demand from investors and development in the Swedish loan book
Characterist ics Personal Banking loans Business Banking loans Total loan book
Potential assets in phase one (including mortgages of Potential assets in phase two Potential assets in total
SEK 114bn already transferred into Danske Hypotek)
100pct residential mortgages to private individuals (retail) 100pct residential mortgages to owners of multi- 82pct retail, 18pct Multi-Family
Collateral type
family properties
Pool notional SEK 128.3bn SEK 28.4bn SEK 156,6bn
Number of loans 119,609 2,465 122,074
Number of borrowers 57.929 1.444 59.373
Number of properties 58,637 2,836 61,473
Average loan size SEK 1.072m SEK 11.5m SEK 1.283m
44% tenant owner rights, 56% single family housing 38% cooperative housing, 62% rental housing 45% Retail, 43% cooperative housing and
Property type
12% rental housing
WA LTV (Indexed) 60% 49% 58%
WA seasoning 4.2 years 1.7 years 3.7 years
WA remaining term 30.8 years 2.2 years 24.8 years
Pool type Dynamic Dynamic Dynamic
Rate type 37% floating rate, 63% fixed rate 58% floating rate, 42% fixed rate 40% floating rate, 60% Fixed rate
Geographical location 100% Sweden 100% Sweden 100% Sweden
Pool cut date 31-12-2020 31-12-2020 31-12-2020
• 1. For more details on the cover pool currently within Danske Hypotek, please refer to www.danskehypotek.se.
15Danske Hypotek - Funding www.danskehypotek.se
Danske Hypotek Q1 2021
Danske Hypotek and the Swedish benchmark market
Our ambition is to be recognized by investors as an established benchmark issuer
Our tools: Our targets:
Market maker agreements with all major • Continue to build liquid benchmark curve during
participants the coming years. This will take priority over
Repo facility that allows market makers to cover private placements in other formats
short positions – as a lender of last resort • All benchmark bonds to be LCR level 1 at launch
Included in OMRX and SHB index • Continue to approach the market in a consistent,
The ability to tap the bonds when we see demand transparent and predictable manner
based on daily quotes on our bonds
The ability to buy-back when the bonds are
approaching maturity
Long term commitment to the Swedish market
17Danske Hypotek Q1 2021
Danske Hypotek – Covered bond funding
• Mortgage asset volume amounts to SEK 117bn as per 31 DH2212 DH2112 DH2312 DH2412 DH2512
December
100
Billion SEK
• Established a benchmark curve with five outstanding bonds Outstanding amount as of
80 31 Dec 2020 (SEK)
• All bonds rated AAA by S&P and NCR DH2112: 13.2bn
60 DH2212: 24.9bn
• As per 31 December 2021 total outstanding covered bonds DH2312: 17.9bn
40 DH2412: 20.5bn
of SEK 90.3bn DH2512: 13.8bn
20 Tot:al : 90.3bn
• Buy-backs of SEK 5,4bn in DH2112 during 2020
0
• Daily quoting of prices and ongoing issuance of bonds -20
-40
2017 2018 2019 2020 2021 2022 2023 2024 2025
Spreads and bond issuance
18Danske Hypotek Q1 2021
Danske Hypotek – Plans going forward - 2021
• Continue to maintain liquidity in our outstanding bonds with daily quotes The Swedish benchmark curve
via our market makers Danske Hypotek LF Hypotek Nordea Hypotek SCBC
SEB Swedbank Hypotek Stadshypotek
• Target funding volume of around SEK 30bn during 2021 (SEK 5bn 20
Basis points
executed as of 31 January 2021) 15
10 DH2512
• Intention to issue 1–2 benchmark bonds per year the coming years
5
• Intention to increase volume to approximately SEK 130bn in the loan 0
portfolio by end of 2021
-5
• Will be available for buy-backs well in due time before maturity (buy- -10
backs in DH2112 started in September 2020) -15
Actual issuance Funding plan Indicative volumes DH2212 DH2112 DH2312 Cover pool assets
Indicative Funding Plan, monthly
DH2412 DH2512 Expected asset transfers
Billion SEK
40
Billion SEK
160
35
140
30 120
25 100
20 80
36
15 30 32 60
27.9
25.6
22.7 40
10 19.7
5 20
0
0
2017 2018 2019 2020 2021 2022 2023
19Danske Hypotek Q1 2021
Key takeaways on Danske Hypotek
Danske Hypotek is a wholly-owned subsidiary of Danske Bank
Swedish Credit Market Company, (Kreditmarknadsbolag), supervised by Finansinspektionen (SFSA) resembling the setup from
other Swedish Benchmark issuers
100% Swedish mortgages. Sufficient asset volume available to enable building of liquid benchmark curve
Transparent and predictable issuer behaviour in the Swedish Benchmark Market i.e., taps, buybacks, dedicated market makers
Five Benchmark bonds issued since 2017 with a total outstanding of SEK 90.3bn
20Danske Hypotek Q1 2021
Appendix
- Nordic macroDanske Hypotek Q1 2021
Nordic macroeconomics
Denmark Sweden Norway Finland EU
Real GDP, constant prices (index 2005 = 100) Inflation (%)
150
6
5
140
4
130
3
120
2
1
110
0
100
-1
90
-2
2006 2008 2010 2012 2014 2016 2018 2020
2006 2008 2010 2012 2014 2016 2018 2020
2005
2006 2007
2008 2009
201020112012
2013 2014
2015 2016
2017 2018
2019 2005
2006 2007
2008 2009
20102011 20132014
2012 2015 2016
2017 2018
2019
Interest rates, leading (%) Unemployment (%)
6
12
11
5
10
4
9
8
3
7
2
6
1 5
4
0
3
-1
2
2006 2008 2010 2012 2014 2016 2018 2020
2006 2008 2010 2012 2014 2016 2018 2020
2005
2006 2007
2008 2009
201020112012
2013 2014
2015 2016
2017 2019
2018 2005
2006 2007
2008 2009
201020112012
2013 2014
2015 2016
2017 2019
2018
22Danske Hypotek Q1 2021
Nordic housing markets
Denmark Sweden Norway Finland
Property prices (index 2005 = 100) House prices/nom. GDP (index 2005 = 100)
Real Estate Prices, Index, Residential, Price Index 140
275
130
250
120
225
200
110
175
100
150
125
90
100
80
75
2006 2008 2010 2012 2014 2016 2018 2020
2006 2008 2010 2012 2014 2016 2018 2020
2005
2006 2007
2008 2009 20112012
2010 2013 2014
2015 2017
2016 2019
2018 2005
2006 2007
2008 2009
2010 2011
201220132014
2015 2016
2017 2018
2019
Apartment prices (index 2005 = 100) Apartment prices/nom. GDP (index 2005 = 100)
Real Estate Prices, Index, Residential
180
325
160
275
140
225
120
175
100
125
80
75
2006 2008 2010 2012 2014 2016 2018 2020
2006 2008 2010 2012 2014 2016 2018 2020
2005
2006 2007
2008 2009
20102011 20132014
2012 2015 2016
2017 2019
2018 2005
2006 2007
2008 2009
2010 2011
201220132014
2015 2016
2017 2018
2019
23Danske Hypotek - Contacts www.danskehypotek.se
Danske Hypotek Q1 2021
Contacts
Kimberly Bauner Per Tunestam
Head of Group Treasury Managing Director, Danske Hypotek
Mobile: +45 24 80 72 88 Direct: +46 856 88 06 53
E-mail: tagg@danskebank.dk Mobile: +46 708 74 48 41
E-mail: per.tunestam@danskebank.se
Bent Callisen
Head of Group Funding, Group Treasury Tomas Renger, Danske Hypotek
Direct: +45 45 12 84 08 Chief Funding Manager
Mobile: +45 30 10 23 05 Direct: +46 856 88 06 54
E-mail: call@danskebank.dk Mobile: +46 708 34 72 64
E-mail: tomas.renger@danskebank.se
Rasmus Sejer Broch
Senior Funding Manager, Group Treasury Jonas Wikfeldt, Danske Hypotek
Direct: +45 45 12 81 05 Senior Funding Manager
Mobile: +45 40 28 09 97 Direct: +46 856 88 06 52
E-mail: rasb@danskebank.dk Mobile: +46 767 21 60 80
E-mail: jonas.wikfeldt@danskebank.se
Thomas Halkjær Jørgensen, Group Treasury
Chief Funding Manager Claus Ingar Jensen
Direct: +45 45 12 83 94 Head of IR
Mobile: +45 25 42 53 03 Direct: +45 45 12 84 83
E-mail: thjr@danskebank.dk Mobile: +45 25 42 43 70
E-mail: clauj@danskebank.dk
25Danske Hypotek Q1 2021
Disclaimer
Important Not ice
This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation
of an offer to buy or acquire securities of Danske Bank Group including Danske Hypotek in any jurisdiction, including the United
States, or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should
form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The
securities referred to herein have not been, and will not be, registered under the Securities Act of 1933, as amended
(“Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the
registration requirements of the Securities Act.
This presentation contains forward-looking statements that reflect management’s current views with respect to certain future
events and potential financial performance. Although Danske Bank including Danske Hypotek believes that the expectations
reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to
have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result
of various factors many of which are beyond Danske Bank’s control.
This presentation does not imply that Danske Bank including Danske Hypotek has undertaken to revise these forward-looking
statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances
arise that will lead to changes compared to the date when these statements were provided.
26You can also read
