36
1 Investor-Update. apoBank – The Leading Bank in the German Healthcare Market. April 2020
1Investor-Update.
apoBank – The Leading Bank in
the German Healthcare Market.
April 2020
2Investor-Update.
Overv iew
Bus iness mode l and s t ra tegy.
Bus iness pe r formance.
1
3
4
The changing hea l thcare marke t .2
Agenda.
Risk management , c red i t qua l i t y, f und ing .5
3Investor-Update.
apoBank – At a glance.
Close to our customers.Our 2,448 employees at 85 locations cater to the
needs of our customers.
85
Our mission
We promote our members, in particular professionals
in the healthcare sector, and their organisations as
well as corporations active in the healthcare sector.
Largest cooperative bank.
We are member of the National Association of
Germen cooperative Banks (BVR) and part of the
BVR deposit insurance system.
A captivating idea.481,070 customers, of which are 115,884
members of the bank, are convinced of our
mission.
Market leader
We are market leader In payments services and
lending business, our market share in start-up
financing reaches 60 percent
Rating of
apoBank:
AA-S&P
Tier 1
ratio:
15.2 %
Total
assets:
49.6 bn Euro
New lending
business:
7.6bn Euro
Net prof it
after tax:
64.1mn Euro
December 2019
4Investor-Update.
Overv iew
Bus iness mode l and s t ra tegy.
Bus iness pe r formance.
1
3
4
The changing hea l thcare marke t .2
Agenda.
Risk management , c red i t qua l i t y, f und ing .5
5Investor-Update.
Background.
Future supply needs and thus growing expenses enlarge health care market sustainably.
Technical progress: Usage of medical-technical innovations.
Demographic development: Significant ageing of society increases weight of morbidity.
Increasing health care expenses, growing health awareness.
6Investor-Update.
The German health economy – an overview (2018).
Further sectors
Industrial health economyMedical supply
195.8 bn Euro84.2 bn Euro
89.9 bn Euro
Every 8th Euro gross value added is
generated in the health economy.
Every 6th job is located in the health
economy.
369.8 bn Euro
gross value added
7.6 mn employees
Source: Gesundheitswirtschaft, Fakten & Zahlen, Ausgabe 2018,
Bundesministerium für Wirtschaft und Energie (BMWi)
Sectors of value creation
In comparison: The total automotive sector
counts 2 mn employees
7Investor-Update.
Health care market as a growth engine.
291
357
415
166
216242
2010 2016 2020
Health care expenditures, bn Euro thereof statutory health care expendutiures, bn Euro
+ 3.6 % p.a.
Main growth engine is the so called secondary health care market.
Share of GDP
2018:
12.1* % p.a.
Source: Statistisches Bundesamt, Gesundheitsausgabenrechnung: 2015, 2017 and 2020 estimates and forecasts, respectively.
*Forecast BMWi, Gesundheitswirtschaftliche Gesamtrechnung 2018
8Investor-Update.
Health care market turns more female.
Men Women Men Women
29 %71 % 39 % 61 %
1975 2017
Source: Statistisches Bundesamt
Share of medical students Share of business founders
Source: apoBank / Zi
9Investor-Update.
Feminisation leading to new working models.
Appropr ia te ch i ldcare oppor tun i t i es and f l ex ib le wo rk ing t ime mode ls a re mos t impor tan t i ssues to
improve work ing cond i t ions .
Appropriate childcare opportunities92 %Flexible working time
& part-time models90 %Alleviation through
delegation and digitisation76 %Job sharing in leading
positions70 %
What needs to be changed in order to reconcile family and work for health care professionals?
Source: Kind und Kittel. Eine Studie zur Vereinbarkeit von Familie und Beruf in den Heilberufen (2019), apoBank
10Investor-Update.
Investors discover health care market as investment target.
Investors are looking for new
investment opportunities…
The fragmented healthcare market
in Germany is prone to active
consolidation.
Current focus is on
outpatient care.
Capital and technology intensive
disciplines offer huge industrialising
potential.
They are looking for stable,
cycle independent market
segments.!
1 2
34
5 6
…discovering healthcare as a global
growth market.
11Investor-Update.
Overv iew
Bus iness mode l and s t ra tegy.
Bus iness pe r formance.
1
3
4
The changing hea l thcare marke t .2
Agenda.
Risk management , c red i t qua l i t y, f und ing .5
12Investor-Update.
Leading bank in German healthcare market.
Client base.
Corporate clients
Professional associations &
clearing centres
Institutional
investors
Retail clients
Self-employed &
employed healthcare
professionals
Students of
medical professions
Promotion
of healthPrevention Diagnosis Curation
Reha-
bilitationNursing
Patient
13Investor-Update.
apoBank: Deeply rooted in the health care market.
Unique cooperation and client
access
Historically grown access to
health care professionals,
intensive cooperation with
chambers, pension funds and
professional organisations
High reputation in particular in
financing issues
Deep knowledge of the health care
market and of health care
professionals
Profound knowledge of cash flows
and needs of health care
professionals
Better risk assessment than
competitors
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
DNA
14Investor-Update.
apoBank‘s strategic focus.
Expansion of private wealth management
Differentiated customer services via new sales model
Upgrading digital customer experiences
Private
clients
Larger product range, i.e. arranger for financings
Differentiated and individual product offerings: standard, when sufficient;
tailor-made, when advisable
Corporate
clients
Close networking to jointly shape the health care market
Management of payment transactions, investment consulting, interest and
currency management, structured financings, telematics infrastructure
Professional
associations
Tapping new customer groups, i.e. charity funds, churches
More cooperation to enlarge product offerings
Custody services, investment consulting, risk management
Institutional
investors
Efficiency improvements to support growth strategy
New IT-platform, end-to-end digitisation, implementation of a data
warehouse
Optimisation of lending and securities processes
15Investor-Update.
Expansion of an integrated service spectrum.
Start-up
consulting
Practice
optimisation
Platform for
health care
professionals
Services
Banking/non-banking
Non-banking
services
Zahnpraxis der ZukunftRental of fully equipped dental practice
and support in all start-up phases
Practice optimisationHolistic analysis of practices to identify
additional potential as well as
optimisation possibilities
univivaBroad range of seminar and event
offerings
MARKOM – Marketing solutions for
health care professionals
Further development and
sales activities of non-
banking services
Integration in sales concept,
accompanying health care
professionals throughout
their life
16Investor-Update.
Overv iew
Bus iness mode l and s t ra tegy.
Bus iness pe r formance.
1
3
4
The changing hea l thcare marke t .2
Agenda.
Risk management , c red i t qua l i t y, f und ing .5
17Investor-Update.
Stable revenue basis.
Risk provisioning with reserve
character, in mn Euro
Operating expenditures,
in mn EuroOperating revenues,
in mn Euro
11295 103
88
57
20162015 2017 2018 2019
854 810 817 869 919
20162015 20192017 2018
550 561 594 635701
201820172015 2016 2019
39
-6-12
3244
2015 20192016 2017 2018
59 61 62 63 64
2015 20172016 2018 2019
Risk provisioning from the
operating business, in mn Euro
Net prof it after tax,
in mn Euro
2016 and 2017 net re lease
153 160133
113 117
2015 2016 2017 20192018
Operating result,
in mn Euro
Risk provisioning with reserve character
diminishes net profit, but serves for taxed capital accumulation
18Investor-Update.
Sustainable growth strategy in the customer business.
Lending volumes,
in bn EuroNew lending business,
in bn Euro
6.46.3
20192015 20182016 2017
6.8 7.17.6
2015
6.9
201920172016 2018
7.2 8.0 7.8
9.7
Volume securit ies accounts,
private clients, in bn Euro 14,1 15,6 17,319,1
6,36,6
7,17,54,9
4,84,7
4,6
2,63,1
3,8
4,3
20172015
2.1
5.1
2019
6.2
20182016
12.7
26.127.9
30.1
32.9
35.5
Corporate clients
Real-estate loansInvestment and private loans
Start-up loans
19Investor-Update.
Overv iew
Bus iness mode l and s t ra tegy.
Bus iness pe r formance.
1
3
4
The changing hea l thcare marke t .2
Agenda.
Risk management , c red i t qua l i t y, f und ing .5
20Investor-Update.
Very good portfolio quality.
Mapping o f in terna l apoBank rat ing c lasses (BVR-Mas terska la ) to externa l ra t ing c lasses
based on under ly ing defau l t p robabi l i t ies , drawdowns (c la ims to cus tomers , gross , secur i t ies ,
o f f -ba lance sheet i tems)
9.2%
46.8%
23.3%
19.4% 1.3%
Retail clients
32.8 bn Euro
19.3%
1.9%0.4%
78.4%
Not rated
Financial instruments
6.3 bn Euro
Professional assoc.,
large corporates
5.4 bn Euro0.7%
13.8%
43.8%31.0%
10.7%
A
AAA-AA BBB
BB-C
Steady portfolio growth, focus on retail clients as well as
professional associations and large corporates
Volume of financial instruments stable on low level
90% of retail exposure and 86% of exposure to professional
associations and large corporates are investment-grade rated
At 1.2% NPL-Ratio is at low level (2018: 1.3%)
Forbearance Ratio: 1.1%
Coverage Ratio: 39.9%
D
21Investor-Update.
Satisfying regulatory capital position.
18.3%
26.1%26.1%
22.0%
2015
19.5%
15.2
22.6%
2016
21.8%
2017
16.7%
2018
16.5
2019
Regulatory capital ratiosRegulatory capital, in mn Euro
Equity ratio Common equity tier 1 ratio
936
383 324 275 233
1,017
2015
1,092 1,154
1,100
1,181
2016
1,124
2017
1,129
2018
1942,411
1,103
1,222
2019
2,465 2,528 2,543 2.519
Supplementary capital
Reserves, other
Members’ capital contributions
Total capital
2019 2020
CET1 Equity ratio CET1 Equity ratio
Overall capital
requirement8.26% 11.78% 8.5% 12.0%
Anticycl. buffer 0.03% 0.25%
Capital conser-
vation buffer2.5% 2.5%
Total SREP
capital requirem.5.75% 9.25% 5.75% 9.25%
Pillar 2 requirem, 1.25% 1.25%
Rillar 1 requirem. 4.5% 8.0% 4.5% 8.0%
Capital ratios will be dampened in future due to
further business expansion as well as Basle IV related
increase in RWA
Continued capital increase via further allocation to
reserves
Leverage ratio: 4.4% (31.12.2018: 4.8%)
Liquidity coverage ratio: 140% (31.12.2018: 144%)
Net stable funding ratio: 113% (31.12.2018: 111%)
22Investor-Update.
Credit risks predominant.
11.6
20172015 2016 2018 2019
9.2 9.513.9 15.3
Risk weighted assets, in bn Euro
8,556
3,421
957
889300
1,172
Retail
Participations
Institutions
Cororates
Other incl. states
Op Risk
Distribution of RWA, in bn Euro
Continued business growth, in particular in retail
and in corporate sector
Market risks in banking book only
23Investor-Update.
Diversified funding.
Commercial paper
Promissory notes
Registered bonds
Registered covered bonds
Benchmark bonds
Debt Issuance Programme (DIP):
apoObligationen (retail)
Bearer bonds
Covered bonds
Fixed coupon
ascending / descending
Variable coupon
with collar
callable
single right to cancel
multiple rights to cancel
Congruent funding of lending business
Expansion of product range provides
funding flexibility
Growing investor base
Perception in the capital markets as
reliable and regular issuer
Increasing share of covered bonds
FEATURESPRODUCTSTARGETS
> 300 institutional client
> 200 investors from the Geno-
Finanzgruppe
> 50 Partner banks
Funding of promotional loans via
KfW-Group and regional
promotional banks
> 480,000 retail clients,
associations and large corporates
Stable base of less volatile and
steadily growing deposits from
customers
PARTNER BANKSINVESTORSCUSTOMERS
24Investor-Update.
Part 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.
Fur ther in format ion:
www.bvr .de/SE
www.bvr - ins t i t u tss icherung .de
25Investor-Update.
Excellent 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
26Investor-Update.
Stable funding sources.
10,000
0
50.000
30,000
20,000
40,000
20162015 2017 2018 2019
in mn Euro
apoObligations (retail)
Demand deposits
Term and savings deposits incl.
subordinated property receipts
Senior unsecured
Covered bonds
Profit participation rights and
subordinated capital,
excl. property receiptsefe)
Public funding facilities
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 Excess cover
* inc l . s t ipu la ted l iqu id excess cover
27Investor-Update.
Increased capital markets funding.
Overall, constant share in capital markets funding to
total funding from 22% (end of 2019) to 18% (end of
2024)
in bn Euro
2020
1.1
2022
0.5 0.3
3.3
5.8 6.2
3.5
2019
0.5
3.2
6.8
0.20.20.2
3.2
0.2
6.7
20232021
0.20.2
10.3
6.2
0.2
10.7
3.4
2024
0.2
3.4
6.6
10.9
10.0 9.910.3
Capital markets, unsecured, long-term
Capital markets, short-term
ECB tender
Capital markets, secured, long-term
28Investor-Update.
Highly granular cover pool.
Focus on high quality, residential
mortgages
Very granular cover pool, only domestic
exposure
Non-performing loans (debt in arrears,
cancelled, impaired) and customers, which
do not meet the required rating, are not
included in the cover pool according to
internal rules and are automatically
excluded from the cover pool in agreement
with the trustee
Internal apoBank rules regarding the
matching cover are stricter than the
requirements by law
Voluntary public commitment for an
extended collateralisation for mortgage
Pfandbriefe
Cover pool, in mn Euro
767
701
321
Total
300k - 1 mn Euro
up to 300k Euro
1 mn Euro - 10 mn Euro
> 10 mn Euro
5,177
6,966
7,151
31.12.2018 31.12.2019
6,218
1.669
Single/two family houses
Apartments
3,229
Multi family houses
Total
Other, commercial
589
1,479
6,966
Incl. 185 mil l ion Euro (12/2019);
265 mil l ion Euro (12/2018)
st ipulated l iquid excess cover
Cover pool by size
Cover pool by type
29Investor-Update.
High quality cover pool.
15 70
540
20
1.045
623
165
352 338 294420
743 715 727864
4 < 5 Y2 < 3 Y< 6 M
1,112
3 < 4 Y6 < 12 M 5 < 10 Y > 10 Y18 M < 2 Y12 < 18 M
2,736 2,698
Outstanding covered bonds Cover pool
§ 28 PfandBG3 1 . 1 2 .
2 0 1 9
3 1 . 1 2 .
2 0 1 8
Seasoning 4.7 years 4.6 years
Average weighted
loan-to-value55.4% 55.3%
S&P analysis
(AAA rating)
3 0 . 9 .
2 0 1 9
3 1 . 1 2 .
2 0 1 8
Available over-
collateralisation15.24% 17.21%
Overcoll. consistent with
current (AAA) rating4.96% 5.39%
Unused notches 5 5
Maturity structure and f ixed-interest period,
in mn Euro, 31.12.2019 (§28 PfandBG)
30Investor-Update.
Covered bonds (Pfandbriefe).
Maturity prof ile, in mn Euro (31.12.2019)
0
200
400
600
800
1.000
1.200
20212020 20242022 2023 2025 2026 2027 2028 2029 2030 > 2030
Covered bonds LCR 2A Covered bonds PP (non-LCR) Covered bonds LCR 1B
31Investor-Update.
Contact.
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
32Investor-Update.
Annex.
33Investor-Update.
Development of P&L.
Risk provis ioning f rom the operat ing
business, in mn Euro
Net commission income, in mn EuroNet interest income, in mn Euro
39.2
2015 2016
-5.7
2017 2018 2019
-12.1
31.943.5
2016
675.2
20172015
625.6
2018 2019
606.2 632.4691.1
2015
133.0
20182016 2017 2019
156.3139.0
164.9 175.3
2018
304.8
20162015
217.7249.2
2017
223.7
2019
233.6112.2
201920162015 2017 2018
95.3 103.088.3
57.1
Operat ing prof i t before r isk provis ions,
in mn EuroRisk provis ioning with reserve
character, in mn Euro
2015 2016 2017
530.1496.0
2018
516.4
2019
597.6683.9
Admin. expenses, in mn Euro
Taxes, in mn Euro
94.3
2015 20182016 2017 2019
70.9
98.6
50.4 53.0153.4
20182016 20172015 2019
132.8159.6
113.4 117.1
20192015 20182016 2017
59.1 61.0 61.9 62.9 64.1
Operat ing result , in mn Euro Net prof i t af ter tax, in mn Euro
2016 / 2017 net reversal
34Investor-Update.
Continuously growing customer business.
Members (in thsd)Customers (in thsd)Total assets, in bn Euro
397 416 436 459 481
2019201820162015 2017
108 110 111 113 116
2015 201920172016 2018
41.4
2018
38.6
20172015
36.4
20192016
45.449.6
35Investor-Update.
Customer loans and deposits dominate balance sheet.
2.131 2.381 3.017
211 222 222 233 247531 450 403 412 470
2017
29.492
2019
27.893
2015
4.520
34.652
5.796 5.800
32.013
5.681 5.714
20182016
37.291
5.5586.058
Bank balances Loans to customers Securities OtherFixed assets and participations
7.214 6.930
4.2025.876
7.396
1.124 1.144
1.783 1.799 1.257 1.291 1.467
2019
29.237
8.9508.105
2.739
2015
23.588
9.636
1.868
25.797
1.8102.934
20172016
26.037
1.165
27.449
2018
OtherLiabilities to banks Liabilities to customers Securitised liabilities Balance sheet equity
Assets, in bn Euro
Liabi l i t ies , in bn Euro
36Investor-Update.
Disclaimer
This document is for information purposes only. The
information contained in this presentation has been
thoroughly researched by Deutsche Apotheker- und
Ärztebank using exclusively sources that are considered
reliable. Nevertheless, Deutsche Apotheker- und
Ärztebank provides no assurance or guarantee that this
information is up-to-date, accurate or complete, accepts
no liabil ity for any damage or loss caused by or related
to the use of this information, and points out that this
information may be subject to change.
The estimates and evaluations ref lect 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 il lustration
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
individual consultation by a lawyer, auditor or tax adviser
that may be necessary in the light of the circumstances
of the individual case.
This draft may be neither reproduced nor passed on to
third part ies without the consent of Deutsche Apotheker-
und Ärztebank. Deutsche Apotheker- und Ärztebank
assumes no liabil ity for direct or indirect damage arising
from or related to the distribution and/or use of this
document.
