Annual Accounts Press and Analyst Conference 2012

Frankfurt/Main, 8 March 2012

Annual Accounts Press and Analyst Conference 2012

Greece – Fear of the domino effect

Source: Photographer Matt Cardy/Getty Image

USA / Germany – Sovereign debt unsolved

Federal Government debt: Total Public Debt (GFDEBTN) [US$ bn]

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Source: U.S. Department of the Treasury, Financial Management Services Shaded areas indicate US recessions. 2012 research.stlouisfed.org

Development of sovereign debt (government, federal states and municipalities)

2,200

1,700

1,200

700

200

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: Statistisches Bundesamt, Schulden der öffentlichen Haushalte

[€ bn]

http://annexx51.files.wordpress.com/2010/09/us-flag.jpg

http://i116.photobucket.com/albums/o39/sizzlinup2005/German_Flag.jpg

Iran – Nuclear controversy causes oil price risks to rise

Source: Reuters / Hamed Jafarnejad / Fars News

Nigeria – Another risk for oil markets

Source: Reuters

Disclaimer

This presentation has been prepared by DVB Bank SE.

This presentation does not contain or constitute an offer, or the solicitation of an offer, to buy or subscribe for securities to any person. This document is not a prospectus.

The presentation is a short summary description of certain aspects in respect of DVB Bank SE. It may not contain all relevant information in respect of the topics covered. This presentation is therefore not a sufficient basis for any investment decision in respect of any securities of DVB Bank SE.

This presentation contains forward-looking statements which include statements about our beliefs and expectations as well as the assumptions underlying them. Such statements speak only as of the day they are made since they are based on plans, estimates and projections currently available to the management of DVB Bank SE. Forward-looking statements contain risks and uncertainties, and it cannot be guaranteed that they will turn out to be correct in light of future events or developments.

Information and opinions contained in this presentation have been compiled or arrived from sources believed by DVB Bank SE to be reliable. Any statements about DVB Bank SE’s market position are based on DVB Bank SE’s own estimates, unless explicitly stated otherwise herein. Although the information shown herein has been taken from sources which are believed to be reliable or is based on DVB Bank SE’s own estimates, no warranty or representation is made as to the correctness, completeness and accuracy of the information or the assessments made on its basis.

DVB Bank SE accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation.

Preliminary remarks

All statements made regarding net worth, financial position & results relate to DVB Group. All amounts are disclosed in euro and on the basis of IFRS/IAS if not stated otherwise. Unless indicated otherwise, all financial data apply to 31 December 2011, and are certified by auditors.

Agenda

1 Business development in 2011 1.1 | Key facts about the business development 1.2 | Details of the consolidated financial statements 2011 1.2.1 Income statement 1.2.2 Development of new business and customer lending volume 1.2.3 Capital and liquidity

2 Outlook 2012 2.1 | Key facts about the transport markets 2.2 | Details about the shipping markets 2.3 | Details about the aviation markets 2.4 | Operating environment and targets 2012

Key facts about the business development 2011

New peak of consolidated net income (before taxes): €147.7 million (2010: €131.1 million), a plus of 12.7% compared to the previous year and of 24.4% compared to 2007, the best pre-crisis year

Parameters of the business development:

Annual Accounts Press and Analyst Conference 2012 | 1.1 Key facts about the business development

Income (after allowance for credit losses) rose by 9.7% from €307.3 million to €337.1 million

Net interest income after allowance for credit losses was increased by 41.2% to €199.1 million Net interest income climbed by 33.8% to €258.3 million Allowance for credit losses stood at €-59.2 million (2010: €-52.0 million)

Still selective new business in Transport Finance: 184 new transactions; €5.6 billion (2010: 140 deals; €4.4 billion)

Net fee and commission income again on a high level (-6.6% from €124.4 million to €116.2 million).

Group management parameters reflected successful business development: ROE 14.0% (2010: 13.9%) and CIR 47.8% (2010: 49.0%)

DVB’s proactive risk management effective with a variety of measures

DVB’s strengths

DVB features a very clearly defined and cycle-neutral business model that offers a wide variety of business opportunities. We are acting on a global platform.

DVB is committed to a conservative business policy and to long-term sustainability – much to our clients’ benefit.

DVB offers a focused range of products and services – including complementary products that go beyond the typical scope of banking.

DVB works on the basis of a well renowned, award- winning and sophisticated Asset & Market Research. This enables us to be a professional partner to the transport industry.

DVB holds a credit portfolio that is diversified by multiple criteria and categories including asset types, vintage, manufacturers, regions, borrowers, users and in terms of the assets’ employment.

DVB tenders a balanced risk profile and a forward-thinking, consistent approach to risk management.

Annual Accounts Press and Analyst Conference 2012 | 1.1 Key facts about the business development

Agenda



At a glance – Income statement

[IFRS] 2011 2010 %

Net interest income

Allowance for credit losses

Net interest income after allowance for credit losses

Net fee and commission income

Net income from financial instruments in accordance with IAS 39

General administrative expenses

Consolidated net income (before taxes)

Consolidated net income (after taxes)

Return on equity (before taxes)

Cost-Income-Ratio

€258.3 mn

€-59.2 mn

€199.1 mn

€116.2 mn

€4.4 mn

€-189.4 mn

€147.7 mn

€110.4 mn

14.0%

47.8%

€193.0 mn

€-52.0 mn

€141.0 mn

€124.4 mn

€30.2 mn

€-176.2 mn

€131.1 mn

€104.0 mn

13.9%

49.0%

33.8%

13.8%

41.2%

-6.6%

-85.4%

7.5%

12.7%

6.2%

0.1 pp

-1.2 pp

Annual Accounts Press and Analyst Conference 2012 | 1.2 Consolidated financial statements – Income statement

Earnings development

266.1 256.7 243.1

307.3

337.1

118.7 100.2

86.6

131.1 147.7

0

100

200

300

400

2007 2008 2009 2010 2011

Total income (after allowance for credit losses) Consolidated net income before taxes

[€ mn]


Allowance for credit losses [€ mn]

Total

Shipping Finance

Aviation Finance

Land Transport Finance

Investment Management

ITF Suisse

Business no longer in line with the Bank’s strategy

Others

Total 2011

Total 2010

-36.3

-5.7

0.0

-8.3

–

-8.2

-0.7

-59.2

-52.0

-2.2

-1.1

0.0

–

–

-0.4

-0.6

-4.3

-1.3

Recoveries on loans and advances

previously written off

1.6

1.0

–

1.8

–

0.4

0.0

4.8

1.3

Direct write-offs

-0.3

–

–

–

–

-0.1

-0.2

-0.6

-10.9

Reversals

21.7

10.8

0.1

4.4

–

0.9

0.1

38.0

44.3

Additions

-57.1

-16.2

-0.1

-14.5

–

-9.0

0.0

-96.9

-86.0

–

-0.2

–

–

–

–

–

-0.2

0.6

Individual impairments Portfolio

impairments Provisions


Agenda



New business Transport Finance 2011

Shipping Finance

93

€2,662.4 mn

€132.7 mn

€2,529.7 mn

€28.6 mn

304 bp

79.6%

Aviation Finance

78

€2,864.0 mn

€183.3 mn

€2,680.7 mn

€36.7 mn

325 bp

72.2%

Land Transport Finance

13

€373.7 mn

---

€373.7 mn

€28.7 mn

280 bp

46.0%

New business Transport

Finance

184

€5,900.1 mn

€316.0 mn

€5,584.1 mn

€32.1 mn

313 bp

74.2%

No. of new deals Underwriting DVB Syndicated / to be syndicated Final take DVB Avg. deal size Avg. margin Leading role

Annual Accounts Press and Analyst Conference 2012 | 1.2 Consolidated financial statements – Lending volume

Customer lending volume

By business division

By region

Shipping Finance 52.1% (-1.5 pp)

Aviation Finance 31.8% (+2.6 pp)

Land Transport Finance 7.4% (-0.4 pp)

Business no longer in line with DVB’s strategy 1.4% (-0.2 pp)

Investment Management 3.2% (-1.0 pp)

ITF Suisse 4.1% (+0.5 pp)

Europe 41.2% (-3.8 pp)

North America 26.8% (+3.4 pp)

Asia 18.8% (-1.9 pp)

Australia / New Zealand 0.8% (+0.2 pp)

Middle East / Africa 4.8% (+0.4 pp)

Offshore 3.6% (+1.2 pp) South America

4.0% (+0.5 pp)

Shipping Finance 10.3 11.3 9.7

2010 2011

Aviation Finance 5.6 6.9 23.2 Land Transport Finance 1.5 1.6 6.7 Investment Management 0.8 0.7 -12.5 ITF Suisse 0.7 0.9 28.6 Business no longer in line with DVB’s strategy 0.3 0.3 0.0

Total 19.2 21.7 13.0

Shipping Finance 13.7 14.6 6.6 Aviation Finance 7.5 9.0 20.0 Land Transport Finance 2.0 2.1 5.0 Investment Management 1.0 0.9 -10.0 ITF Suisse 0.9 1.1 22.2 Business no longer in line with DVB’s strategy 0.5 0.4 -20.0

Total 25.6 28.1 9.8

[€ bn]

[US$ bn] 2010 2011 %

%


Shipping Finance portfolio by asset type

Total lending volume 31 Dec 2011: €11.3 bn Total lending volume 31 Dec 2010: €10.3 bn

Tankers 31.8% thereof: 12.7% Crude oil tankers 8.2% Chemical tankers 7.2% Product tankers 3.7% Gas tankers Cruise ships

5.0%

Container boxes 6.3%

Bulk carriers 17.7%

Container carriers 10.9%

Ferries, passenger vessels

2.1% F(P)SO

0.9%

Others 4.3%

Offshore 21.0% davon: 5.0% Anchor handlers 4.4% Platform supply vessels 4.1% Drillships 2.9% Rigs 4.6% Others


Tankers 29.8% thereof: 10.8% Crude oil tankers 8.5% Product tankers 7.7% Chemical tankers 2.8% Gas tankers

Cruise ships 6.3%

Container boxes 6.8%

Bulk carriers 18.1%

Container carriers 10.7%

Ferries, passenger

vessels 2.3%

F(P)SO 1.1%

Others 4.7%

Offshore 20.2% thereof: 14.3% Offshore support 5.9% Offshore drilling

Aviation Finance portfolio by asset type


Narrowbody pax 55.2% thereof: 29.5% Airbus 25.7% Boeing

Widebody pax 30.0% thereof: 15.2% Airbus 14.8% Boeing

Regional jets 6.9% thereof: 5.7% Embraer 1.1% Bombardier 0.1% Fokker

Freighters 7.9% (Boeing only)

Narrowbody pax 49.2% thereof: 31.5% Airbus 17.7% Boeing

Widebody pax 34.4% thereof: 19.7% Airbus 14.7% Boeing

Regional jets 9.2% thereof: 7.3% Embraer 1.6% Bombardier 0.3% Fokker

Freighters 7.2% thereof: 7.1% Boeing 0.1% Airbus


Land Transport Finance portfolio by asset type


Business no longer in line with DVB’s strategy: 1.3% Terminals / logistics property 0.3% Other immovable assets

On rail 86.5% thereof: 59.6% Freight cars 12.9% Locomotives 12.0% Regional passenger train sets 1.5% Passenger coaches 0.5% City / commuter traffic

On road 11.9% thereof: 11.1% Road tractors & trailers 0.8% Tank containers

Business no longer in line with DVB’s strategy: 2.4% Terminals / logistics property 0.6% Other immovable assets

On rail 86.3% thereof: 58.8% Freight cars 13.2% Locomotives 12.7% Regional passenger train sets 1.0% Passenger coaches 0.6% City / commuter traffic

On road 10.7% thereof: 9.7% Road tractors & trailers 1.0% Tank containers


Portfolio collateralisation

60.1

76.4 81.5

64.4

71.9 75.0 78.7

74.6 74.5 67.1

74.3 77.7

69.9 73.0

78.1

0

10

20

30

40

50

60

70

80

90

100

Shipping Finance Aviation Finance Land Transport Finance

2007 2008 2009 2010 2011

Loan-to-value ratio (%) – Relation between drawn loans and the market value of the assets financed

[%]


Agenda



Capital (KWG) and capital ratios

31 Dec 2010 31 Dec 2011

18.9% 22.4% 19.7% 21.8% Basel II

Capital ratios (following the confirmation of profits)

[€ mn]

1,179 1,304

Tier 1 capital Total capital

1,105

1,309

Tier 1 capital Total capital

Annual Accounts Press and Analyst Conference 2012 | 1.2 Consolidated financial statements – Capital and liquidity

Funding products – Maturity structure

Funding products 31 Dec 2010 Funding products 31 Dec 2011

Long-term funding 92.0%

Short-term funding 8.0% Short-term deposits banks / clients

davon: 55.7% Promissory notes / long-term deposits 31.8% Uncovered bearer bonds 2.9% Own funds in accordance with the KWG 1.6% Ship covered bond

Long-term funding 97.4%

Short-term funding 2.6% Short-term deposits banks / clients

thereof: 50.5% Uncovered bearer bonds 42.0% Promissory notes / long-term deposits 3.1% Ship covered bonds 1.8% Own funds in accordance with the KWG

Annual Accounts Press and Analyst Conference 2012 | 1.2 Consolidated financial statements – Capital and liquidity

Agenda



Shipping and aviation markets 2012

2012 While the shipping markets still have a supply issue, the aviation markets are rather affected on the demand side.

Pressure on asset prices, charter and leasing rates persists.

Increasing fuel prices elevate costs of operation.

Companies’ cash reserves are decreasing.

Access to funding is getting more difficult again.

Further defaults and consolidation are likely to occur.

Annual Accounts Press and Analyst Conference 2012 | 2.1 Transport markets

Agenda



Shipping – Backlog still high

Annual Accounts Press and Analyst Conference 2012 | 2.2 Shipping markets

Crude oil tankers (capacity

in 000’s dwt)

Ratio of capacity on order to aggregate existing fleet

62,990

368,488

Ordered

Current 17.1%

Source: DVB Shipping Research, December 2011

194,471

600,252

Ordered

Current Bulk carriers (capacity

in 000’s dwt)

32.4%

4,302,000

15,343,000

Ordered

Current Container vessels (capacity in TEU)

28.0%

Shipping – Outlook for the main sectors

Source: DVB Shipping Research

Bulk carriers

Container vessels

Crude oil tankers

Offshore ships LNG tanker


Bulk carriers – Newbuild prices still under pressure

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011e 2012f 2013f

Forecast

Source: MSI; DVB Research

Large Cape

Panamax

Handymax

Handysize

[US$ mn]


0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

Jan 2000 Jan 2001 Jan 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012

Bulk carriers – Freight rates declining

Source: Clarkson's Shipping Intelligence Network

[Baltic Dry Index, points]

24 February 2012: 718 points

20 May 2008: 11,793 points

5 December 2008: 663 points


14,000

12,000

10,000

8,000

6,000

4,000

2,000

Bulk carriers – Supply / demand mismatch is increasing

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011e 2012f 2013f

[DWT]

Demand Supply

Source: MSI Q3 2011; DVB Research


0

20

40

60

80

100

120

140

160

180

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Container vessels – Time charter rates decreasing

[Clarkson’s time charter rate index Basis: US$ per TEU 1993 = 100] -43%

year-on-year February 2011 February 2012

Source: Clarkson's Shipping Intelligence Network

71 40


Container vessels – Newbuild prices still under pressure

0

20

40

60

80

100

120

140

160

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

600 TEU 1,700 TEU 2,700 TEU 4,300 TEU 6,600 TEU 8,100 TEU

Source: MSI; DVB Research

[US$ mn]


Agenda



Aviation – Backlog still high

Source: Airclaims, 14 December 2011

Annual Accounts Press and Analyst Conference 2012 | 2.3 Aviation markets

8,778

21,092

Ordered

In service Aircraft

(western-built jets)

Ratio of capacity on order to aggregate

existing fleet

41.6%

Aviation – Orders rising again

0

500

1.000

1.500

2.000

2.500

3.000

3.500

Gross orders Net orders Deliveries

2011

Gross orders: 1,672 Cancellations: 175 Net orders: 1,497 Deliveries: 1,150

[Number of aircraft]


3,500

3,000

2,500

2,000

1,500

1,000

Source: Airclaims

17,609 16,450

8,607

3,218

10,451

4,425

451

5,878

1,261

4,573

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

0

50

100

150

200

250

300

350

400

450

500

A320 family

B737 NG A330 E-Jet B777 B787 CRJ A380 B767 B747

[Delivery value US$ mn]

[Number of aircraft]

Number of aircraft Delivery value US$ mn

Aviation – Higher funding requirements 2012

Aircraft delivieries (Western-built jets)

1,311 aircraft Total value = US$72.9 bn

Source: DVB Aviation Research


20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

Aviation – Increased pressure on older aircraft values

(constant age)

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

737-800 (3 years old) A320-200 (3 years old) A330-200 (3 years old) A340-300 (6 years old)

767-300ER (11 years old) 747-400 (11 years old) 757-200 (11 years old) 737-300 (15 years old)

Index: year 2000 = 100

Source: DVB Aviation Research, Ascend value matrices released January 2012


Aviation – Lease rate decline abate

(constant age)

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

737-800 (3 years old) A320-200 (3 years old) A330-200 (3 years old) A340-300 (6 years old) 767-300ER (11 years old) 747-400 (11 years old) 757-200 (11 years old) 737-300 (15 years old)

Index: year 2000 = 100

Source: DVB Aviation Research, Ascend value matrices released January 2012


Agenda



Operating environment and targets 2012

Furthermore, the fluctuating demand in the transport markets is still being met by significant newbuild capacity becoming available.

Macroeconomic outlook is mixed in most of the developing world. Asia seems to be insulated from the turbulences seen in the EU and US, for the time being. Employment and consumer spending continue to remain major risks for market growth.

Market volatility, especially due to the sovereign debt crisis, is here to stay and will continue to command our full attention.

We aim to continue the positive earnings trend (target ROE: 12–15%; CIR: below 50%).

We are attracting substantial third-party equity to expand our Investment Management activities (successful new Joint Venture between AIM and third-party investor Marubeni Corporation).

We intend to increase Aviation Finance’s portfolio proportion

Annual Accounts Press and Analyst Conference 2012 | 2.4 Operating environment and targets

Frankfurt/Main, 8 March 2012

Annual Accounts Press and Analyst Conference 2012

Contact

Manager Investor Relations Senior Vice President DVB Bank SE Phone: +49 69 9750 4329 Platz der Republik 6 Fax: +49 69 9750 4850 60325 Frankfurt/Main E-mail: [email protected]

Further information at www.dvbbank.com > Investor Relations

Contact person:

Elisabeth Winter

Annual Accounts Press and Analyst Conference 2012 | Contact

Annual Accounts Press and Analyst Conference 2012

Economy & Finance

Transcript of Annual Accounts Press and Analyst Conference 2012