Volvofinans Bank - Green Bond Presentation - 8 May, 2017
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Volvofinans Bank - Green Bond Presentation
8 May, 2017
1
Volvofinans in brief
2
Ägarmöte – Svensk Volvohandel
THE MOBILITY BANK
3
Ägarmöte – Svensk Volvohandel
Balance
230.000 Rating
Sheet
11th Largest financial A3
Turnover
Swedish Bank contracts (Moodys)
35 Bilion SEK
4
THE OWNERS
5
5
VOLVOFINANS BANK AB
50% 50%
Ab VOLVERKINVEST Volvo car CORPORATION
The swedish Volvo dealers
6
Ägarmöte – Svensk Volvohandel
Our areas of business
7
The Volvo Card
8
Sales Financing Cars
9
Fleet operations
10Sales Financing Trucks
11STRATEGY
12
12How to make difference?
13OUR VISION
THE MOBILity BANK
14
14Our Environment
15THE PROMISE
SmartER CAR ECONOMY
16
16230 000
172016 Financial Statements
• Profit before appropriations
and taxes: 379.0 M (363.0)
• Return on Equity: 8.7 % (8.9)
• Lending as per 31 december: 31.2 bn (27.4)
• Credit losses, net: 13.5 M (11.9)
• CET1 ratio: 21.3 % (21.8)
18Profit before appropriations and taxes
400 379 Stable income,
363
even during the
331 financial crisis,
350
304 2008-09
300 273 276
267 262
234
250 220
200
150
100
50
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
19Income
Statement
2016-01-01 – 2016-12-31
20B a l a n c e s h e e t – To t a l a s s e t s
21B a l a n c e s h e e t - To t a l l i a b i l i t i e s a n d e q u i t y
22Development within Business Areas
Market VFB Income Operating profit
Neutral Increased +8% 55’’
market share
Slight Increased + 27 % 15’’
Increase market share
Neutral Increase in Fuel sales -6% 83’’
All other down
Increasing Increased + 22 % 226’’
market share
23Funding facilities YE2016
Sources of funds - Utilised excl Equity Sources of funds - Market Borrowing & Bank
25%
42%
53%
75%
Market Borrowing
Bank < 1 year
5% Deposits MT/LT
24Volvofinans’ Bank Savings Account
• SEK 13,980 million (+9%)
• 60,500 Customers
• Approx 60% of the savings volume is
deposited by relationship customers
25Funding facilities YE2016
Sources of funds - Utilised excl Equity Sources of funds - Market Borrowing & Bank
25%
42%
53%
75%
Market Borrowing
Bank < 1 year
5% Deposits MT/LT
26Capital base
4 000
Capital Base: SEK 3,497 million 3 500
3 000
Total Capital Ratio: 21.3 % 2 500
SEK M
FSA requirement: 14.2% 2 000 T2 capital
CET1 capital
1 500
CET1 capital ratio: 21.3% 1 000
FSA requirement: 10.0% 500
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2728
Our Sustainability Work
29The development of our commitment
2015 2016 2017 2018
• Adding business value
• New products
• Green Bonds
• Annual sustainability report
• GAP analysis ISO26000
• Stakeholder Analysis
• Part of the NPAP
Economy Social
• Defining Sustainability for VFB
• Sustainability Policy
• Sustainability in Annual Report
Ecology
for the first time
30Sustainability policy
”The basic strategy is to combine profitability with being a sound
institution within a sound market.“
ECOLOGY SOCIAL ECONOMY
VFB shall take a long VFB shall act to be a Financial stability is a
term environmental sound institution foundation for a
responsibility aiming within a sound sustainable business,
to reduce our market. VFB shall be especially for a bank.
ecological footprint as recognised as a In order to gain trust
long as it is modern and attractive and to fulfil
technically possible employer who takes regulations the bank
and economically responsibility follows capital
reasonable externally as well as requirements and has
internally. correct risk and
control functions.
31ISO26000 – Gap Analysis
Strengths
• Labour pratices
• Human rights
• Organisational governance
• Fair operating pratices
• Consumer issues
Areas of improvment
• The environment
• Comunity involvment and development
32Work in progress and sustainability focus areas
ECOLOGY SOCIAL ECONOMY
• Trainee-program • Financial stability
• New products • AML
• Green bonds • Regulatory issues
• Anti-Corruption • Green bonds
• Electricity savings • Business ethics
• Paper savings • New products
• Background check
of suppliers
• Childhood
foundation
33Finalist in the category ”Störst
förändringsresa”
34Dra av från nästa tvätt
Skänk till Childhood
Donate to charity?
Climate
compensation?
3536
Green Bonds
Framework
- Prepared in accordance with
Green Bond Principles
37Eligible Projects
mean a selected pool of loans and leases to vehicles that are funded, in whole or in part, by Volvofinans Bank and that
promote the transition to low carbon and climate resilient growth, as determined by Volvofinans Bank
• Environmental Friendly Cars (Sw. Miljöbilar)*, that can;
• be powered entirely or partially by non-fossil fuels, i e:
– electric vehicles
– fuel cell vehicles
– electric/petrol hybrid vehicles
– electric/diesel hybrid vehicles
– ethanol/petrol hybrid vehicles
– biogas/natural gas vehicles
– biogas/natural gas/petrol vehicles
*) Passenger vehicles that meet the criteria as specified by Paragraph 11 a of Chapter 2 of the 38
Swedish Road Traffic Tax Act (Sw. Vägtrafikskattelag (2006:227))Selection Process
Input
• Eligible Projects will be selected in consensus with the
Head of Treasury and the Head of Sustainability
Departments
• Approved loans and leases will be included in Volvofinans
Initial screening of
Bank’s Green Loan Portfolio projects in accordance
with the
Green Bond
Selection according criteria
to the Framework
defined Eligible
Projects The Head of
Sustainability has a Green Loan
Portfolio
veto
Green Bond
39Selection Process
Input
• Green bond proceeds will be used for the refinancing of
loans and leasing contracts raised at the car purchase.
• The customers have already signed contracts at the time
of allocation of proceeds.
Initial screening of
• The average LTV is approx. 80% projects in accordance
with the
• Cars that meet the criteria and are included in the Green Green Bond
criteria
Loan Portfolio can be both new and used.
Our ambition is that
the Green Loan Green Loan
Portfolio at all times The investor will Portfolio
will be larger than the finance a share and a
amount of outstanding cross section of the Green Bond
Green Bonds Green Loan Portfolio
40Transparency & Reporting
Based on the
framework, Volvofinans
Volvofinans Bank will provide an annual Green Bond investor letter
Bank lives up to the
which will include the following items: requirements of the
A description of the Green Loan Portfolio including: Green Bond Principles
• impact reporting at portfolio level;
• information about the maturity profile of the Green Loan Portfolio;
• information about the average share of the total value of the vehicles in the Green Loan Portfolio that has
been financed by Volvofinans Bank; and
• information about the share of Green Bond financing of the Green Loan Portfolio
A selection of Eligible Project examples
A summary of Volvofinans Bank’s Green Bond development
The investor letter as well as
the whole Green Bonds
process will be checked and
certified by Volvofinans Bank’s
compliance function
41Vo l v o f i n a n s B a n k ’s G r e e n L o a n P o r t f o l i o
As of 28 February, 2017, a total of SEK 864 million has been identified as eligible projects
Balance (SEK M) Balance development
1 000
1
900
51 800
700
180
600
SEK M
500
400
245 300
200 2016-02-28
100 2017-02-28
0
217
171
Electric Electric/Diesel hybrids Electric/Petrol hybrids
E85/Petrol hybrids Petrol/Natural Gas/Bio Gas Natural Gas/Bio Gas
42Examples of Environmental Friendly Cars
in the Green Portfolio
43Expected environmental impact and impact reporting
VFB’s Green Loan portfolio VFB Green Loan Expected CO2- Annual impact reporting
2017-02-28 portfolio reduction • Estimated CO2 reduction
Gram CO2 per km • Reference value:
45 78
Comparison with
Vehicles (N) 7 778 Swedish average
Balance (SEK M) 864 emissions of new cars
CO2-emission Tons/Year 4 229 7 251 sold
Based upon following assumptions:
• Average annual driving 12,000 km
• Average emission for a new Swedish car: 123g CO2
44Second Opinion
45Shading
• Dark green for projects and solutions that are realizations today
of the long-term vision of a low carbon and climate resilient
future. Typically, this will entail zero emission solutions and
governance structures that integrate environmental concerns
into all activities.
• Medium green for projects and solutions that represent steps
towards the long-term vision, but are not quite there yet. “Volvofinans Bank AB’s Green Bond
• Light green for projects and solutions that are environmentally
Framework gets a Light Green shading”
friendly but do not by themselves represent or a part of the long-
term vision (e.g. energy efficiency in fossil-based processes).
• Brown for projects that are irrelevant or in opposition to the
long-term vision of a low carbon and climate resilient future.
*) A copy of a full Second Opinion on Volvofinans Bank’s Green Bond Framework can be found on www.volvofinans.se 46Conclusion “Overall, Volvofinans Bank AB’s Green Bond Framework provides a clear and sound framework for climate-friendly investments. The framework lists eligible categories of projects that are supportive of the objective of promoting a transition to low-carbon growth and is supported by a good governance structure. Proceeds will be allocated to financing and refinancing more environmental friendly cars in Sweden. Volvofinans developed an overarching sustainability policy including on environment in 2015, but has no clear climate ambition or targets for its overall activities.” “Based on the overall assessment of the project type that will be financed by the green bond and governance and transparency considerations, Volvofinans Bank AB’s Green Bond Framework gets a Light Green shading. A darker shading would have required clearer guarantees that only best available technologies will be selected under the Green Bond Framework. Hybrid solutions qualify as bridging technologies and hence a medium green shading is within reach. However, since battery capacity of most of these hybrids is still limited, and because hybrids (ethanol and biogas hybrids as well) also could run on petrol alone, and because there will be no tracking of real emissions these types of cars are graded light/medium green projects. According to the issuer the majority of the existing car fleet is ethanol/petrol hybrids and biogas/natural gas/petrol vehicles.” *) A copy of a full Second Opinion on Volvofinans Bank’s Green Bond Framework can be found on www.volvofinans.se 47
Conclusion
Strengths & Weaknesses
• Volvofinans Bank AB’s green bonds proceeds will be • “There are no obvious weaknesses in Volvofinans
allocated to more environmental friendly cars. It is a Bank AB’s green bond framework.”
strength that the vehicles in order to be eligible need
to be powered entirely or partially by non-fossil fuels.
The definition is aligned with the EU’s objective of
achieving 95 g/km of CO2 by 2021.
• Impact reporting is an important tool to enhance
transparency in regard to the projects economic risk
from climate change and the environmental
effectiveness of the projects. We are encouraged to
see that the framework includes impact reporting.
*) A copy of a full Second Opinion on Volvofinans Bank’s Green Bond Framework can be found on www.volvofinans.se 48omtanke
OUR COMPANY IMPACTS THE IMPACT OF OUR PRODUCTS OUR ROLE IN SOCIETY
RESOURCE EFFICIENT BUSINESS LIFE-CYCLE PERFORMANCE PARTNER IN SUSTAINABLE
Climate neutral operations by 2025 1 million electrified vehicles sold by 2025 DEVELOPMENT CLEAN
Engage in corporate partnerships
SUSTAINABLE WORK LIFE REAL-LIFE SAFETY SAFER BY SHARING
No fatalities or serious injuries at Volvo Cars Our vision is that by 2020, no one should be Knowledge sharing to improve traffic safety SAFE
killed or seriously injured in a new Volvo car
DIVERSE & INCLUSIVE CULTURE CUSTOMER EXPERIENCE EMBODYING ETHICS AND
35% internationally diverse leaders and 35% CleanZone leadership HUMAN RIGHTS RESPONSIBLE
female leaders by 2020 Ethical leadership for responsible business
SUSTAINABLE PROFITABILITY AND
GROWTH
UN SUSTAINABLE DEVELOPMENT GOALS
The UN Sustainable Development Goals (SDGs) are a series of 17 goals agreed on by world leaders in 2015 which aim to help end all forms of
poverty, reduce inequality and tackle climate change. Governments, civil society and business will work towards meeting them over the next 15
years. The SDGs act as our guide, with 12 out of the 17 directly relevant to our sustainability work.
49• Committed to selling a total of 1m electrified
cars – including fully electric cars and hybrids –
by 2025
• First fully electric car to be launched in 2019
• Will offer plug-in hybrid versions of every model
50Contacts
Hans Jörgen Möller Lars Norland Gunnar Ekeroth
CFO Treasurer Head of Sustainability
Tel: +46 31 838886 Tel: +46 31 838888 Tel: +46 31 839049
Hans-jorgen.moller@volvofinans.se Lars.norland@volvofinans.se Gunnar.ekeroth@volvofinans.se
51You can also read
