Regionality, customer proximity & sustainability
Solid core earnings based on sustainable business model
'HETA solution' positively impacts 2016 financial profitability
Substantial profit retention further strengthens already sound capitalisation
Continued significant growth in customer deposits
E | May 2017
HYPO NOE Investor Presentation
2
Section Slide
I. Group Business Strategy 3
II. Business Outlook for 2017 14
III. Financial Figures 15
IV. Funding 19
V. Contacts 26
Appendix Key Financial Statements and Further Details 27
Content
3
State of
Lower Austria
Vienna
I. Group Business Strategy HYPO NOE at a Glance
HYPO NOE Group: more than 125 years of track record and expertise
Regional market leader in Public Finance
Local banking partner for retail customers in Lower Austria and Vienna
Fully integrated service chain in the real estate business
Focused on Austria, Germany and on a selective basis EU-countries
in the neighbouring Danube region
Strong ratings
Issuer Rating: 'A/A-1' from Standard & Poor’s with stable outlook
Public Sector Covered Bonds: 'Aa1' from Moody’s
Mortgage Covered Bonds: 'Aa1' from Moody’s
Sustainability: 'C' from oekom research with status 'Prime'
Committed and reliable shareholder: State of Lower Austria owns 100 %
Leading issuer of Pfandbriefe in Austria
4
I. Group Business Strategy Recent Developments
Proposed Merger of HYPO NOE Landesbank AG and HYPO NOE Gruppe Bank AG
Schedule
June 29, 2016: Supervisory Board of HYPO NOE Gruppe Bank AG initiated a project to prepare a merger
with its 100 % subsidiary HYPO NOE Landesbank AG
Merger is scheduled for completion by autumn 2017 with retroactive effect from January 1st, 2017
Objective
Reintegration of the retail and housing finance businesses into the core universal bank
Primary purpose is an increase in efficiency of the banking group by lowering complexity of the
organisation and realising operational synergies
Process
Preparatory measures were started in 2016, and the merger progress is proceeding on schedule
Change management process has been initiated – with employee involvement and participation at the
heart of overall project success
5
I. Group Business Strategy Core Market: Competitive Economy
Austria
Positive GDP development
2016e + 1.5 % (EU19: 1.7 %)
2017f + 1.8 % (EU19: 1.6 %)
GDP per capita1 above average
2016e EUR 46,822 (EU19: EUR 38,986)
2017f EUR 48,617 (EU19: EUR 40,398)
One of the lowest unemployment rates within the EU
2016e 6.0 % (EU19: 9.9 %)
2017f 5.8 % (EU19: 9.4 %)
Public debt below EU average
2016e 84.6 % (EU19: 91.7 %)
2017f 82.4 % (EU19: 90.6 %)
Level of corporate and household indebtedness substantially
below Euro-zone average
Attractive yield spreads relative to Germany
Housing market: no oversized construction sector and low level of
household indebtedness
Lower Austria / Vienna
40 % of Austria‘s population live and work in
Lower Austria and Vienna
Region with highest population growth potential
2015-2075
41 % of Austrian GDP is generated in Lower Austria and Vienna
Highest gross income from employment
Lower Austria (# 1) EUR 33,118
Vienna (# 3) EUR 31,330
Highest purchase power per inhabitant
Lower Austria (# 1) EUR 21,048
Vienna (# 3) EUR 20,870
Fiscal equalisation scheme secures strong and prudent
framework for investors
Privileged access to international financial markets through
Federal Financing Agency (ÖBFA)
1 EIU, GDP per capita at purchase price parity; 03/2017
6
Issuer rating 'A/A-1' with stable outlook confirmed by Standard & Poor’s in August 2016
Strong capital position, GRE status, strong link to and important role for the State of Lower Austria as reliable owner
Public Sector Covered Bonds and Mortgage Covered Bonds both rated 'Aa1' by Moody’s – confirmed in October 2016
Credit strength of the issuer, credit quality of the assets, strength of the Austrian legal framework and OC level
On October 14th, 2016 Moody's Investors Service confirmed the 'Aa1' ratings for both mortgage covered bonds and public sector covered bonds issued by HYPO NOE
Gruppe Bank AG. Following the announcement by Kärntner Ausgleichszahlungs-Fonds ("KAF") on October 10th, 2016 that the required two-third acceptance rate for its tender
offer for Heta Asset Resolution AG's ("HETA") debt obligations was comfortably met (acceptance overall was 98.71%, of which 99.55% for senior debt and 89.42% for
subordinated debt), the rating agency has concluded the various rating reviews-of-Austrian-regional-mortgage-banks. On October 14th, 2016 the over-collateralisation can be
displayed as follows:
HYPO NOE Group’s public sector covered bonds have an over-collateralisation (OC) of 33.0% with a minimum OC level of 20.0%, of which 0% is on a "committed" basis.
HYPO NOE Group’s mortgage covered bonds have an over-collateralisation (OC) of 68.0% with a minimum OC level of 12.0%, of which 0% is on a "committed" basis.
In August 2016 Moody's upgraded the outlook for the Austrian banking system from negative to stable for the first time since 2009.
1 Unsolicited Rating
Issuer Type of Rating Standard & Poor’s Moody’s
Issuer Credit Rating 'A/A-1' (stable) -
Public Sector Covered Bond - 'Aa1'
Mortage Covered Bond - 'Aa1'
State of Lower Austria Issuer Credit Rating 'AA' (stable)1 'Aa1' (stable)
Republic of Austria Issuer Credit Rating 'AA+' (stable) 'Aa1' (stable)
I. Group Business Strategy Strong and Stable Credit Ratings
7
Sustainability ratings are an important evaluation with regards to corporate social responsibility performance and as such for a
holistic and future-orientated corporate governance. Therefore, sustainability ratings become an increasingly important aspect of
socially responsible investment decisions.
The corporate social responsibility performance of HYPO NOE Group is currently assessed by the sustainability rating agencies
oekom research, imug and rfu.
As part of a successful sustainability programme HYPO NOE Group was in 2015 awarded for
the first time a 'C' rating with the status of 'Prime' .
'Prime' is awarded for an above-average commitment in the areas of environmental and social
responsibility.
HYPO NOE Group was rated in 2016 by the Austrian rating agency rfu and awarded with the
status of "rfu qualified" (rating result: ba ). rfu is an Austrian company specialising in
sustainable investment and in particular sustainability analysis .
The best performing companies are awared with the status "rfu qualified“ and added to the rfu
sustainable investment universe.
I. Group Business Strategy Top Sustainability Ratings from oekom & rfu
8
HYPO NOE Group is in the upper quarter of all rated issuers of Public Pfandbriefe (Public Sector
Covered Bonds) .
HYPO NOE Group is the best of all rated issuers of Public Pfandbriefe in the savings bank
sector .1
1 As an issuer HYPO NOE is assigned to the savings bank sector (incl. Landesbanks and mortgage banks).
HYPO NOE Group is in the upper quarter of all rated issuers of mortgage bonds (Mortgage
Covered Bonds).
HYPO NOE Group is the best of all rated issuers in the savings bank sector.1
HYPO NOE Group is in the upper quarter of all rated financial institutions (including development
banks).
HYPO NOE Group is the best of all rated issuers in the savings bank sector.1
I. Group Business Strategy Top Sustainability Ratings from imug
9
Public Finance
Corporate & Structured Finance
Religious Communities,
Special Interest
Groups & Agriculture
Real Estate Finance
Real Estate Services
Retail Customers
I. Group Business Strategy Competence and Experience Drive Business Focus
Strategic Business Units
Public Finance
Financing and leasing solutions for the public sector
Corporate & Structured Finance
Corporate and structured finance solutions
Project and infrastructure finance
Local SMEs
Religious Communities, Special Interest Groups &
Agriculture
Financing solutions
Ethical investments
Property & facility management
Real Estate Finance
Financing of commercial projects and housing developers
Real Estate Services
Project development and management
Property management
Facility management
Retail Customers
Experts on mortgages and housing for private customers
and special services for professionals
10
Business position
Partner of local and regional authorities, public agencies and
infrastructure companies
Public construction projects including leasing solutions and PPP
(Public-private-partnership)
Focus on Lower Austria and Vienna, active in selected countries
of Danube region
Long-standing cooperation with EIB, KfW, EBRD
Recent developments
Key revenue generator
Reference project Mistelbach-Gänserndorf State Hospital:
design-build general contractor solution that brought the project
in on budget and on schedule
Strategy
Remaining core business of HYPO NOE Gruppe
Reduction and diversification of Public Finance portfolio actively
promoted – resulting in a lower balance sheet total
Expanding market share in Austria
Syndications
1 Pro-forma analytical breakdown over all IFRS segments 2 Fee income + interest income
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2015 2014 2013
Retail customers
Real Estate Finance
Corporate & Structured Finance
Public Finance
HYPO NOE Group – Total Assets1
29%
16% 29%
26% Public Finance
Corporate & Structured Finance
Real Estate Finance
Retail customers
HYPO NOE Group – Total Revenues2
I. Group Business Strategy Public Finance
11
Business position
Corporate and structured corporate finance solutions for the mid-cap
and large corporate segments
Regional focus Austria, Germany and defined markets of the Danube
region
International business focus on infrastructure and corporates of
strategic relevance.
Specialized team for target group religious communities, interest
groups and agriculture
Recent developments
Intense competition and subdued credit demand
Focus on SME business in core markets
Financing of the renovation of sacral buildings
Selective financing of renewable energy projects
Strategy
Structured corporate lending will remain a high priority
Drive Danube strategy forward by partnering with Austrian and local
businesses in the region
Build up a range of ethical investment products
1 SME business (33% of corporate portfolio) is part of HYPO NOE Landesbank
2 Pro-forma analytical breakdown over all IFRS segments 3 Fee income + interest income
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2015 2014 2013
Retail customers
Real Estate Finance
Corporate & Structured Finance
Public Finance
HYPO NOE Group – Total Assets1
29%
16% 29%
26% Public Finance
Corporate & Structured Finance
Real Estate Finance
Retail customers
HYPO NOE Group – Total Revenues2
I. Group Business Strategy Corporate & Structured Finance1
12
Business position
Financing solutions for the asset classes:
office, logistics, warehouse and residential property, shopping
centers, retail parks, hotels, rental apartment properties/portfolios
Active in Austria, Germany and Danube region
Promoted housing developers (Wohnbaugenossenschaften) – low
risk business
Recent developments
Rising demand across all real estate categories due to low interest
rates
A number of early repayments, mainly as a result of early refinancing
or property disposals by customers
Strategy
Growth in Austria and Germany
Close watch on regional real estate trends
in Danube region
Maintaining strong relationships with
promoted housing developers in Austria
1 Promoted housing business (45% of real estate portfolio) is part of HYPO NOE Landesbank
2 Pro-forma analytical breakdown over all IFRS segments 3 Fee income + interest income
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2015 2014 2013
Retail customers
Real Estate Finance
Corporate & Structured Finance
Public Finance
HYPO NOE Group – Total Assets1
29%
16%
29%
26% Public Finance
Corporate & Structured Finance
Real Estate Finance
Retail customers
HYPO NOE Group – Total Revenues2
I. Group Business Strategy Real Estate Finance and Promoted Housing1
13
Business position
Universal banking services for 70,000 customers
Branches in Lower Austria and Vienna
Strategic focus on finance & housing, saving & investment and
accounts & cards
Specialized services for professionals like doctors, pharmacists or
lawyers
Recent developments
Increases of retail deposits
Customer-focused efforts led to significant cut in the number of foreign
currency loans
Improved reachability via service centers
Roll out of user friendly homepage including new mobile services
Strategy
Focus on growth of the customer base and retail deposits
Efforts in the area of digitalisation will be further enhanced and
developed
1 Pro-forma analytical breakdown over all IFRS segments 2 Fee income + interest income
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2015 2014 2013
Retail customers
Real Estate Finance
Corporate & Structured Finance
Public Finance
HYPO NOE Group – Total Assets1
29%
16% 29%
26% Public Finance
Corporate & Structured Finance
Real Estate Finance
Retail customers
HYPO NOE Group – Total Revenues2
I. Group Business Strategy Retail Customers and Professionals
14
Public Finance will remain core business
Reduction and diversification of the Public Finance portfolio actively promoted in coming years
Continued focus on real estate and infrastructure financing
in Lower Austria, Vienna and on a selective basis in the neighbouring Danube Region
Business in fee and commission based services is intended to be strengthened
in particular in the light of low interest rate environment
Diversification of available funding instruments
Customer deposits intended to remain a sustainable source of refinancing
Efforts in the area of digitalisation will be further enhanced and developed
Proposed merger with 100 % subsidiary HYPO NOE Landesbank AG
scheduled for completion in autumn 2017
II. Business Outlook for 2017
15
Key Facts (in EUR '000s) 2016 2015 2014 2013 2012
Total assets 15,392,051 15,895,645 15,926,960 14,209,746 14,861,697
Loans and advances to customers 10,854,932 11,557,287 11,194,066 10,590,574 10,735,077
Deposits from customers1 3,847,855 3,260,856 2,305,056 2,149,698 2,717,286
Financial assets 1,987,488 2,108,456 2,249,653 1,805,667 1,840,271
Net interest income 124,439 130,840 129,9092 122,0522 131,6852
Net fee and commission income 13,458 13,850 13,979 13,294 11,985
Profit (+)/ Loss (-) before tax 93,430 11,659 -39,810 75,021 30,226
Profit (+)/ Loss (-) after tax 69,998 6,404 -30,988 53,695 22,808
Notes on major one-off effects:
2016: Significant non-recurring income from the sale of Carinthian Compensation
Payment Fund (KAF) zero-coupon bonds received under the swap for HETA
securities incl. unwinding: EUR 59.5 mn
2014-2015: Cumulated write-down (HETA): EUR 87.1 mn including impairment hedge
adjustment (35.85 % of face value EUR 225 mn)
2013: Reimbursement of penalty interests by FMA from 2010
based on Austrian Banking Act (EUR 58 mn)
Key Ratios (%) 2016 2015
Return on equity before tax 15.2 % 2.0 %
Return on equity before tax (operating)3 18.5 % 5.6 %
Cost income ratio 56.0 % 92.5 %
Cost income ratio (operating)4 46.3 % 77.3 %
Core Capital Ratio (CRR) 16.34 % 13.45 %
Equity Ratio (total, CRR) 17.10 % 15.16 %
Levies in respect of public authorities
Financial stability contribution (“bank tax”)
2016: EUR 14.9 mn (2015: EUR 14.7 mn)
Deposit insurance contribution and resolution fund
2016: EUR 8.1 mn
First-time endowment in 2015: EUR 6.6 mn
1 Including promissory notes placed with customers (2016: 521 EUR mn)
2 Adjusted net gains & losses on investments accounted for using the equity method disclosed in a separate line (Appendix:
Consolidated Statement of Comprehensive Income (I))
3 ROE before tax excl. financial stability contribution, contributions to resolution and deposit insurance funds, and regulatory costs/ave.
equity adjusted for financial stability contribution, contributions to resolution and deposit insurance funds, and regulatory costs
4 Cost/income ratio excl. financial stability contribution, contributions to resolution and deposit insurance funds, and regulatory costs
III. Financial Figures Key Facts and Ratios
16
Capitalisation
LCR > 100 %
Leverage ratio 4.48 %1
NSFR (indicative) 103 %
Equity Ratios phased-in vs. fully-loaded (CRR/CRD IV)
Difference between phased-in and fully loaded CET Ratios
predominantly due to 100% eligibility of AfS-reserve
Regulatory required core and total capital ratio of 4.5 % and
8.0 % again considerably exceeded
13.45% 14.05%
III. Financial Figures Solid Capitalisation
Basel III (CRR/CRD IV) Basel II (BWG)
17.10%
16.34%
phased-in
Capital base (EUR '000s) 2016 2015
Total eligible core capital 632,730 597,675
Capital requirement (CRR/CRD IV) 295,994 315,497
Surplus capital 336,736 282,178
1 with consideration of the approval by FMA (without consideration of IC transactions)
17.53%
16.78%
fully-loaded
Equity ratio (total)
Tier 1 capital ratio
17
90%
10 % <1%
EUR CHF GBP
Volume (in EUR '000s) 2016 NPL
Public sector customers 5,150,341 0.15 %
Business customers 1,778,604 8.19 %
Housing associations 1,540,216 0.02 %
Retail customers 2,325,131 2.30 %
Professionals 60,640 4.90 %
Total 10,854,932 1.94 %
III. Financial Figures Loan Portfolio and Risk Provisions
Industries
Leasing / Insurance companies 70 %
Retail 18 %
Corporates 12 %
States / Municipalities <1 %
Internal rating
1A-2E 78 %
3A-4E 20 %
5A-5E 2 %
Details on CHF loan portfolio
Breakdown of loans and advances to customers
89%
7% 4% <1%
Austria EU & CH
Germany Others
Waterfall of risk provisions in 2016
Breakdown by country Breakdown by currency
in E
UR
'0
00s
18
By Sectors
Banks 712,260,000
Sovereigns 796,105,010
International Organisations 55,000,000
Corporates 12,185,342
Sub-sovereigns and municipalities 83,000,000
Supranational banks 19,000,000
Insurance companies 4,000,000
Total 1,681,550,352
1 Based on nominal values (31.12.2016)
Regional Distribution
TOP 5 sovereign exposures in Austria, France, Poland, UK and
Belgium: approx. 60 %
100 % EUR denominated
Rest of portfolio well diversified within 21 countries
Average portfolio rating 'A1'
By Rating
52%
26%
21%
1% < 1%
Aaa - Aa2
A1 - A3
Baa1 - Baa3
Ba1
B1
43%
47%
3% 1%
5% 1% < 1% Banks
Sovereigns
International Organisations
Corporates
Sub-sovereigns and municipalities
Supranational banks
Insurance companies
III. Financial Figures Securities Portfolio1
19
IV. Funding Diversified Funding Base
Money Markets and Debt Capital Markets Funding
(as of December 2016, in EUR '000s)
Covered bonds 4,268,363 31 %
Senior unsecured bonds 3,430,202 25 %
Subordinated debt 202,647 1 %
Deposits from customers1 3,847,855 28 %
Deposits from banks 1,462,298 11 %
Promissory notes placed with banks 546,047 4 %
Repo / GC-Pooling 0 0 %
Total 13,757,412 100 %
1 including promissory notes placed with customers of EUR 521,249
Funding Strategy
Regular use of all available funding instruments
Solid track record as top tier Pfandbrief issuer
Frequent issuer of senior unsecured debt and promissory
notes
“tailor-made” private placements for institutional clients
HYPO NOE Landesbank generates retail deposits
through their branch network in Lower Austria and
Vienna
Highlights 2016
CHF 100 mn, senior unsecured benchmark
EUR 100 mn public sector covered bond private placement
Significant increase in customer deposits (+ ~ EUR 590 mn year-on-year)
Increased repurchase of own issues with final maturity 2017
Outlook 2017
Planned funding volume of around EUR 1,150 mn
Focus on public sector covered bond benchmark – EUR 500 mn public sector covered bond benchmark very successfully issued
on March 28, 2017 (first soft-bullet repayment structure in Austria)
Complementing senior unsecured funding
Continuous geographical expansion of investor base
20
Public Sector Pfandbrief
Volume of outstanding bonds EUR 3,456mn
Cover pool EUR 4,347mn
Rating (Moody’s) 'Aa1'
Minimum Overcollateralisation1 20.0 %
Effective Overcollateralisation (PV)2 33.0 %
Bloomberg HYNOE <Corp>
Outstanding HYPO NOE Pfandbrief benchmark issues
EUR 500 mn 1.625% Pfandbrief 2012-19 due September 2019 XS0829215838
EUR 500 mn 1.75% Pfandbrief 2013-20 due October 2020 XS0981808933
EUR 500 mn 3.00% Pfandbrief 2012-22 due May 2022 XS0780267406
EUR 500 mn 0.375% Pfandbrief 2017-23 due May 2023 XS1590565112
Tenor: 5-30 years
HYPO NOE Group among leading Austrian issuers of Public Sector Pfandbriefe
1 Last Moody’s performance overview based on data as of December 30, 2016
2 Effective overcollateralisation: PV total cover pool / PV of total outstanding bonds (%)
IV. Funding HYPO NOE Public Sector Covered Bond (as of 31.03.2017)
21
Loans vs. Bonds (in EUR mn)
Loans 4,210 96.9 %
Bonds 137 3.1%
Total 4,347 100.0 %
Cover Pool by Geography (in EUR mn)
Austria 4,294 98.8 %
Slovakia 20 0.5 %
Poland 20 0.5 %
Czech Republic 13 0.2 %
Total 4,347 100 %
Average Size Cover Asset
EUR 9.5mn per debtor
EUR 3.4mn per loan
Types of Debtors and Guarantors (in EUR mn)
Guaranteed by federal states 2,118 49 %
Federal states 1,553 36 %
Municipalities 315 7 %
Guaranteed by municipalities 216 5 %
States 92 2 %
Guaranteed by states 53 1 %
Total 4,347 100 %
by Rating (in EUR mn)
Aaa 3,630 83.5 %
Aa 511 11.8 %
A 157 3.6 %
< A 49 1.1 %
Gesamt 4,347 100.0 %
IV. Funding HYPO NOE Public Sector Covered Bond (as of 31.03.2017)
49%
36%
7%
5% 2% 1%
Guaranteed by Federal States
Federal States
Municipalities
Guaranteed by Municipalities
States
Guaranteed by States
22
Research centre for cancer treatment
Client: EBG MedAustron
Facility: EIB-Loan
Amount: 100 mn Euro
Role: Arranger
Location: Wiener Neustadt, Lower Austria
Boat Terminal & World Heritage Centre
Client: Kremser Immobiliengesellschaft (KIG)
Facility: Loan
Amount: 2 mn Euro
Role: Lender & Project Manager
Location: Krems-Stein, Lower Austria
Copyright: Welterbezentrum
IV. Funding Examples: Classic and Social Infrastructure
Mortgage Covered Bonds
Volume of outstanding bonds EUR 885 mn
Cover pool EUR 1,491 mn
Rating (Moody’s) 'Aa1'
Minimum Overcollateralisation1 12.0 %
Effective Overcollateralisation2 68.0 %
Bloomberg HYNOE <Corp>
Outstanding HYPO NOE Pfandbrief benchmark issues
EUR 500 mn 0.75% Pfandbrief 2014-21 due September 2021 XS1112184715
EUR 300 mn 0.50% Pfandbrief 2015-20 due November 2020 XS1290200325
Cover Pool by Currencies (in EUR mn)
EUR 1,439 96.5 %
CHF 50 3.4%
JPY und USD 1 > 1.0 %
Gesamt 1,491 100.0 %
Cover Pool by Countries (in EUR mn)
Austria 1,191 79.9 %
Germany 283 19.0 %
Netherlands 17 1.1 %
Gesamt 1,491 100.0 %
1 Last Moody’s performance overview based on data as of December 30, 2016
2 Effective overcollateralisation: nominal value total cover pool / volume of bonds outstanding (%)
IV. Funding HYPO NOE Mortgage Covered Bond (as of 31.03.2017)
23
24
Distribution by Asset Type Regional Distribution
Cover Pool by Maturities (in years)
Seasoning 5.9
Remaining average life – total 8.4
Remaining average life – residential 10.9
Remaining average life – commercial 3.5
Cover Pool by Loan Size (in EUR mn) # of Loans
< 100,000 193 4,552
100,000 - 300,000 273 1,730
300,000 - 500,000 97 246
500,000 - 1,000,000 190 267
1,000,000 - 5,000,000 338 198
> 5,000,000 400 30
Total 1,491 7,023
LTV Distribution1
LTV 0-40 15.0 %
LTV 40-50 22.0 %
LTV 50-60 15.0 %
LTV 60-70 17.0 %
LTV 70-80 28.0 %
LTV >80 3.0 %
Average LTV (acc. Moody's)1 59.1 %
Average LTV (acc. to Austrian definition)2 52.4 %
IV. Funding HYPO NOE Mortgage Covered Bond (as of 31.03.2017)
59%
16%
7%
3%
3%
5% 7% Lower Austria
Vienna
North Rhine-Westphalia
Bavaria
Berlin
Other Austrian Federal States
Other German Federal States
1 LTV Austria Definition: (amount covered per receivable (including subtracted total of prior encumbrances))
÷ current property value 2 LTV based on rating agency definition: (total receivables per borrower group + total prior encumbrances) ÷
total current property values
34%
32%
14%
19%
1% Austrian promoted housing loans
Austrian residential loans
Austrian commercial loans
German commercial loans
Dutch commercial loans
25
Werderscher Markt
Client: Quartier am Auswärtigen Amt
Amount: 37 mn Euro
Size: 19,470 m²
Tenants: Arcotel (53%), Office + Retail (37%),
Residential (8%)
Location: Berlin, Germany
Promoted Housing in Lower Austria
Client: Siedlungsgenossenschaft Neunkirchen
Amount: 5.75 mn Euro
Size: 4,033 m²
Location: Neunkirchen, Lower Austria
Winner of the Lower Austrian Housing award 2011
IV. Funding Examples: Commercial and Promoted Housing
26
Treasury & ALM Investor Relations / Financial Institutions
Thomas Fendrich
Head of Group Treasury & ALM
+43 (0) 590 910 1233
Polina Christova
Head of Group Financial Institutions
& Business Support
+43 (0) 590 910 1225
Markus Payrits
Head of Liquidity Management
+43 (0) 590 910 1222
Martin Leppin
Head of Financial Institutions & Sovereigns
+43 (0) 590 910 1054
Peter Olsacher
Treasury Solutions Team
+43 (0) 590 910 1597
Agnieszka Feiler
Investor Relations Manager
+43 (0) 590 910 1489
Harald Klimt
Treasury Solutions Team
+43 (0) 590 910 1581
V. Contacts
27
Appendix
28
in EUR '000s 12/2016 12/2015 2015/2016
Δ absolut
Cash and balances at central banks 164,587 68,986 95,601
Loans and advances to banks 998,347 922,091 76,256
Loans and advances to customers 10,854,932 11,557,287 -702,355
Risk provisions -97,462 -100,423 2,961
Assets held for trading 555,293 586,811 -31,518
Positive fair value of hedges (hedge accounting) 483,215 509,458 -26,243
Available-for-sale financial assets 1,967,148 2,104,338 -137,190
Financial assets designated as at fair value through profit or loss 20,340 4,118 16,222
Investments accounted for using the equity method 29,922 20,937 8,985
Investment property 54,117 68,704 -14,587
Intangible assets 918 1,411 -493
Property, plant and equipment 77,525 80,159 -2,634
Current tax assets 20,333 19,653 680
Deferred tax assets 1,443 2,105 -662
Other assets 261,393 50,010 211,383
Total assets 15,392,051 15,895,645 -503,594
Appendix HYPO NOE Group Balance Sheet – Assets (consolidated)
29
in EUR '000s 12/2016 12/2015 2015/2016
Δ absolut
Deposits from banks 1,462,298 2,217,495 -755,197
Deposits from customers 3,847,855 3,260,856 586,999
Debts evidenced by certificates 7,698,831 8,165,837 -467,006
Liabilities held for trading 502,954 516,969 -14,015
Negative fair value of hedges (hedge accounting) 793,697 740,962 52,735
Provisions 50,155 55,794 -5,639
Current tax liabilities 20,127 10,073 10,054
Deferred tax liabilities 36,955 34,434 2,521
Other liabilities 129,429 106,297 23,132
Subordinated capital 202,381 205,449 -3,068
Equity (including minority interests) 647,369 581,479 65,890
Owners‘ equity 638,950 572,855 66,095
Non-controlling interests 8,419 8,624 -205
Total equity and liabilities 15,392,051 15,895,645 -503,594
Appendix HYPO NOE Group Balance Sheet – Liabilities (consolidated)
30
in EUR '000s 12/2016 12/2015 2015/2016
Δ absolut
Interest and similar income 565,645 583,757 -18,112
Interest and similar expense -441,206 -452,917 11,711
Net interest income 124,439 130,840 -6,401
Credit provisions -7,789 1,171 -8,960
Net interest income after risk provisions 116,650 132,011 -15,361
Fee and commission income 16,534 16,638 -104
Fee and commission expense -3,076 -2,788 -288
Net fee and commission income 13,458 13,850 -392
Net trading income 665 3,242 -2,577
General administrative expenses -128,937 -129,111 174
Net other operating expenses 31,787 25,000 6,787
Results from deconsolidation 8,384 0 8,384
Income from investments accounted for using the equity method -4,813 -4,744 -69
Net gains or losses on available-for-sale financial assets 56,989 -27,825 84,814
Net gains or losses on financial assets designated as at fair value through profit or loss 249 -126 375
Net gains or losses on hedges -1,224 -1,887 663
Net gains or losses on other financial investments 222 1,249 -1,027
Profit (+)/ Loss (-) before tax 93,430 11,659 81,771
Income tax expense -23,432 -5,255 -18,177
Profit (+)/ Loss (-) after tax 69,998 6,404 63,594
Non-controlling interests -178 -252 74
Profit (+)/ Loss (-) for the year 69,820 6,152 63,668
Appendix Consolidated Statement of Comprehensive Income (I)
31
Other comprehensive income (in EUR '000s) 12/2016 12/2015 2015/2016
Δ absolut
Profit (+)/ Loss (-) for the year 69,820 6,152 63,668
Items not to be reclassified to profit or loss
Change in actuarial gains or losses (before tax) -1,455 824 -631
Other changes (before tax) 1 0 1
Change in deferred tax 364 -206 158
Items to be reclassified to profit or loss
Change in available-for-sale financial instruments (before tax) 1,407 4,987 -3,580
Exchange differences on translating foreign operations accounted for using the equity
method (before tax) 23 -13 10
Change in deferred tax -358 -1,243 885
Total other comprehensive income -18 4,348 -4,366
Total comprehensive income attributable to owners of the parent 69,802 10,500 59,302
Appendix Consolidated Statement of Comprehensive Income (II)
32
1.1.-31.12.2016 (in EUR '000s) Gruppe
Bank
Landes-
bank Leasing Other
Consoli-
dation Total 2016
Interest and similar income 89,268 39,307 4,815 -678 -8,274 124,439
Credit provisions -11,128 3,376 0 -37 0 -7,789
Net interest income after risk provisions 78,140 42,683 4,815 -715 -8,274 116,650
Net fee and commission income/expense 680 12,832 -14 -39 -1 13,458
Net trading expense 737 -72 0 0 0 665
Administrative expenses -72,688 -47,987 -4,327 -20,460 16,525 -128,937
Net other operating expense/income 21,620 4,931 3,341 16,736 -14,841 31,787
Net gains or losses on other financial investments 49,436 7,841 36 -21 -53 57,238
Net gains or losses on hedges -1,109 -115 0 0 0 -1,224
Net gains or losses on other financial assets 117 0 51 1,691 -1,637 222
Result from deconsolidation 0 0 0 8,384 0 8,384
Net gains or losses on investments accounted for using the equity method -5,063 0 -57 307 0 -4,813
Profit (+) / Loss (-) before tax 71,870 20,113 3,845 5,883 -8,280 93,430
Income tax -23,432
Profit for the year 69,998
Appendix Breakdown of Earnings Power by Segments
Highlights
Highest net interest income by segment Gruppe Bank
Highest profit before tax by segment Gruppe Bank
Significant positive profit contributions by all segments,
despite high statutory contributions
‘HETA solution’ achieved in 2016
October 2016: 98.71 % of HETA creditors accepted repurchase offer of
Carinthian Compensation Fund (KAF)
Creditors had the choice between a cash payment totalling around EUR
7.8bn or zero-coupon notes with a total nominal value of EUR 10.4bn
HYPO NOE Group accepted the exchange for a zero-coupon
bond with an abstract, explicit, unconditional and irrevocable
guarantee by the Federal Republic of Austria upon first demand
33
Pfandbriefe Fundierte
Bankschuldverschreibungen
Hypothekenbankgesetz
(Mortgage Banking Act 1899)
Pfandbriefgesetz
(Pfandbrief Act 1927)
Gesetz betreffend Fundierte
Bankschuldverschreibungen
(Covered Bond Act 1905)
Erste Group Bank Bank Austria
Österreichische Landes-Hypothekenbanken
HYPO NOE Gruppe
BAWAG P.S.K Kommunalkredit Raiffeisenbanken
VOLKSBANK WIEN
Appendix Austrian Legal Framework for Covered Bonds
34
Austria Germany
Pfandbrief law in place YES YES
Mortgage and public sector collateral assets in separate pools YES YES
Cover register YES YES
Collateral assets limited to EEA, CH YES NO
Legally required minimum overcollateralisation YES YES
Cover pool monitoring (Trustee) YES YES
Special proceedings in case of insolvency YES YES
Pfandbriefe remain outstanding in case of issuers‘s bankruptcy YES YES
NPV matching YES1 YES
Austrian Pfandbrief law was initially based on German legislation
Important changes to the German Pfandbrief law were followed by Austrian legislation
Main differences: Germany allows collateral from non-European countries; NPV matching is compulsory in Germany and voluntary
in Austria (self-commitment by issuing bank in Articles of Association)
1 if included in the Articles of Association of the respective credit institution
Appendix Comparison of Austrian vs. German Pfandbrief Law
35
Deficiency guarantee by the State of Lower Austria
WITHOUT time limitation:
All liabilities originated before 03/04/2003
Deficiency guarantee by the State of Lower Austria
WITH time limitation:
All liabilities originated after 03/04/2003 and before 01/04/2007 and maturing before 30/09/2017
NO deficiency guarantee by the State of Lower Austria:
All liabilities originated between 03/04/2003 and 01/04/2007 and maturing after 30/09/2017
All liabilities originated after 01/04/2007
Guarantee WITHOUT Limitation Guarantee WITH Limitation NO Guarantee
Originated < 03/04/2003 > 03/04/2003
< 01/04/2007 > 01/04/2007
Maturity > 30/09/2017 < 30/09/2017 n/a
Appendix Deficiency Guarantee by the State of Lower Austria
36
HETA moratorium directly
Moratorium on HETA debt repayments imposed by the Austrian
Financial Market Authority on March 1, 2015
HYPO NOE held EUR 225mn of HETA debt securities on its own
portfolio
Cumulated write-down in 2014-2015 based on model calculations:
EUR 87.1 mn including impairment hedge adjustment
(35.85 % of face value EUR 225 mn)
Significant non-recurring income in 2016 from the sale of Carinthian
Compensation Payment Fund (KAF) zero-coupon bonds received
under the exchange for HETA securities incl. unwinding: EUR 59.5 mn
Pfandbriefbank (Österreich) AG – formerly Pfandbriefstelle
All eight member banks and their guarantors –
Austria’s federal states – bear joint and several liability
All members agreed on providing sufficient liquidity,
i.e. 1/8 each (= 12.5 % or approx. EUR 155mn)
HYPO NOE received explicit backing of the State of Lower Austria for
its part of joint and several liability for “Pfandbriefstelle“ issues,
therefore was no risk provisioning nor regulatory capital required
Appendix HETA moratorium – credit risk dimensions
37
Financial Market Authority (FMA)
The FMA issued a special notice imposing a moratorium on debt repayments by HETA until 31 May 2016.
By decision of 10 April 2016 a haircut was imposed by the FMA .
Tender & exchange offer and buy back offer
Tender offer for repurchase of HETA bonds at an envisaged discounted value (75% of face value) by Carinthian Compensation
Payment Fund (KAF) was denied by the creditors and did not reach a necessary two-third majority in March 2016.
On 18 May 2016, the Republic of Austria and a majority of HETA creditors underwent a MoU to create an out-of-court
settlement. A new tender offer of approx. 90% of the nominal value was expected to be disclosed in autumn 2016, which
required a significantly lower depreciation compared to the FMA haircut mentioned above.
Under the new tender offer which was announced by KAF on 6 September 2016, and which was valid until 7 October, creditors
had a choice between a cash payment totalling around EUR 7.8bn and an or zero-coupon notes with a total nominal value of
EUR 10.4bn.
Following the announcement by KAF on 10 October 2016 that the required two-third acceptance rate for its tender offer for
HETA Asset Resolution AG's debt obligations was comfortably met (acceptance overall was 98.71%, of which 99.55% for
senior debt and 89.42% for subordinated debt).
HYPO NOE Group accepted the exchange for a zero-coupon bond with an abstract, explicit, unconditional and irrevocable
guarantee by the Federal Republic of Austria upon first demand.
In December 2016, the zero-coupon bond was sold back to KAF for net proceeds of EUR 59.5 mn incl. unwinding.
HYPO NOE Group no longer holds any HETA or KAF bonds. Therefore, HYPO NOE Group is no longer subject to any
exposure-related risks with regards to HETA or KAF.
Appendix HETA moratorium – legal implications
38
This document does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, any securities, investments or any other financial instruments, in or of HYPO
NOE Gruppe Bank AG, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. This
document does not constitute an investment analysis or a recommendation to buy or to sell and is not intended to substitute any individual investment advice. Any such offers will
only be made when a prospectus in relation to the Offering is published in due course. This presentation will only be part of an offer, when it is explicitly referenced in the respective
offer.
No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, expressed or implied,
is given by or on behalf of HYPO NOE Gruppe Bank AG or the banks represented in this presentation or any of such institutions’ affiliates, directors, officers or employees, advisors
or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability whatsoever is accepted for any such information or
opinions or any use which may be made of them.
This document is intended for distribution in the United Kingdom only to persons who have professional experience in matters relating to investments falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or to those persons to whom it may otherwise lawfully be distributed. Neither this document
nor any copy of it may be taken or transmitted in or into the United States or to any US person (as defined by Regulation S of the US Securities Act of 1933 (the “Securities Act”)) or
transmitted in or into Australia, Canada or Japan or to Australian, Canadian or Japanese persons. Securities of HYPO NOE Gruppe Bank AG have not been and – as of the date of
this presentation – will not be registered under the Securities Act and may not be offered or sold in the United States absent registration under the Securities Act or exemption from
the registration requirements thereof. There will be no public offer of securities of HYPO NOE Gruppe Bank AG in the United States. The distribution of this document in or into other
jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about and observe, any such restrictions. Any failure to
comply with this restriction may constitute a violation of applicable securities law and regulations.
Certain market data and financial and other figures (including percentages) in this document were rounded in accordance with commercial principles. Figures rounded in this manner
may not in any and all cases add up to the stated totals or the statements made in the underlying sources. For the calculation of percentages used in the text, the actual figures,
rather than the commercially rounded figures, were used. Accordingly, in some cases, the percentages provided in the text may deviate from percentages based on rounded figures.
Certain statements in this presentation are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that
could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could
adversely affect the outcome and financial effects of the plans and events described herein. HYPO NOE Gruppe Bank AG does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak as
only of the date of this presentation. Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities
will continue in the future.
Although due care has been taken in compiling this document it cannot be excluded that it is incomplete or contains errors.
HYPO NOE Gruppe Bank AG, its shareholders, advisors and employees are not liable for the accuracy and completeness of the statements, estimations and the conclusions
contained in this document. Possible errors or incompleteness do not constitute any grounds for liability, neither with regard to indirect nor direct damages. For the avoidance of
doubt HYPO NOE Gruppe Bank AG points out that it is not liable for any losses, damages or disadvantages including direct, indirect, financial, immaterial, special or consequential
loss or damage (whether for loss of profit or otherwise) due to this document or any of the statements contained therein.
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