NORD/LB Group Presentation May 2019 1
Agenda. NORD/LB at a glance 3 Financials 9 Segments 18 Outlook 30 Appendix 38 2
NORD/LB at a glance Ownership structure and regional network. Ownership Structure 1,2 Headquarters and ownership region Special Purpose Holding Association of the Mecklenburg-Western Saxony-Anhalt Savings Pomerania Savings Banks Banks Holding Association 3,7% Hanover 5,3% Brunswick Magdeburg Lower Saxony Savings Banks and Giro 26,4% Association 59,1% 5,6% State of Saxony-Anhalt State of Lower Saxony 1) Total differences are rounding differences 2) As at 31 December 2018 3
NORD/LB at a glance Represented in important financial and trade centres worldwide. � Head offices Hanover, Brunswick, Magdeburg � Branches worldwide London, New York, Singapore, New York Shanghai � German branches Bremen, Duesseldorf, Hamburg, Munich, Oldenburg, Schwerin, Stuttgart and approx. 100 branches of Braunschweigische Landessparkasse � Subsidiaries and bank holdings Deutsche Hypothekenbank, NORD/LB Hamburg London Schwerin Oldenburg Luxembourg Covered Bond Bank Bremen Amsterdam Brunswick Hanover Magdeburg Warsaw Düsseldorf Luxembourg Paris Nuernberg Frankfurt Stuttgart Munich Shanghai Singapore Addresses and more details: www.nordlb.com/nordlb/about-us/locations-worldwide 4
NORD/LB at a glance Our business segments 2018. Private and Corporate Savings Bank Markets Commercial Customers Network Customers Customers � Private customer business � Corporate customer � Savings Bank Network/ Business with business extended network � Private Banking � Institutional customers � Agricultural Banking � Corporate customers/ � Commercial customer � Savings banks/ financial syndication loans � Finance with public and business institutions � Municipal customers cooperative housing � Insurance services for � Public-sector customers associations private customers in � Corporate Finance cooperation with public insurances in Lower Saxony � Leasing Energy and Real Estate Banking Ship Customers Aircraft Customers Infrastructure Customers Customers Ship finance Aircraft finance � Renewable energy finance � Commercial real estate � Container vessels � Narrow-/Wide-bodies finance � Infrastructure finance � Bulker � Freighters � International social care � Tanker � Regional Jets property finance � Multi purpose vessels � Turboprops � Offshore Oil & Gas � Helicopter � Cruise ships / Ferries � Spare Engines � Finance/Operating Lease 5
NORD/LB at a glance Holding structure and brands 1,2 . � Private Banking � Private and Commercial Customers � Corporate Customers � Markets � Ship, Aircraft, Energy/Infrastructure, Real Estate Banking � Leasing � Savings Bank Network 4 100% 3 100% 3 � Loans � Commercial real estate finance Private and commercial customers Financial Markets & Sales 1) As at 31 December 2018 2) For more information about subsidiaries and affiliated companies please consult https://www.nordlb.com/nordlb/about-us/investments/ or our Group Annual Reports 2018, note (80) 3) NORD/LB ensures that the companies mentioned in the Group Annual Report 2018, Note (73) are able to meet their obligations 4) Incorporated under public law with partial legal capacity 6
NORD/LB at a glance Our ratings. NORD/LB Credit Ratings Baa2 2 A- 4 A 5 Senior unsecured preferred debt Baa2 2 /P-2 A-/F1 4 A 5 /R-1 (low) 5 Deposits (long-term/short-term) Counterparty Risk Rating/Derivate counterparty rating Baa2(cr) 2 /P-2(cr) A-(dcr) 4 /- - (long-term/short-term) Ba1 2 A- 4 A (low) 5 Senior unsecured non-preferred debt B1 2 B+ 4 Subordinate/Tier 2 BBB (high) Intrinsic financial strength 1 ba3 2 f BBB (low) 5 Tier 1 Caa1 (hyb) 3 - - Aa1 2 / Aa1 2 / A3 2 Public-Sector / Mortgage / Aircraft Pfandbriefe - - 6 7 7 NORD/LB Nachhaltigkeits-Ratings Corporate Rating / Sustainability Rating C+ Prime 62 of 100 points Positive B Public-Sector Pfandbriefe - - Positive BBB Mortgage Pfandbriefe - - Positive BB Ship Pfandbriefe - - Positive B 1) Adjusted Baseline Credit Assessment / Viability Rating / Intrinsic Assessment 4) Rating Watch Negative 7) March 2019 2) Review for Upgrade 5) Rating Under Review - Negative Implications 3) Review Direction Uncertain 6) April 2018 7
Agenda. NORD/LB at a glance 3 Financials 9 Segments 18 Outlook 30 Appendix 38 8
Financials Positive first quarter result 2019 1 . 1 Jan – 31 Mar 1 Jan – 31 Mar 2018 2 Explanation 2019 Change in % in €m Loan and securities portfolios Net interest income 258 353 - 27 decreased Increase due to one-off interim- Net commission income servicing fee for sale of Big Ben 34 17 +100 portfolio Net reversals in Energy & Risk provisioning Infrastructure, Ships, Private & Comm. 38 28 +36 Customers and Savings Banks Network Personnel expenses (€-6m) and Administrative expenses 265 291 -9 advisory expenses (€-15m) dropped Earnings before 75 68 +10 reorganisation and taxes Restructuring and Only reorganisation expenses 10 - - reorganisation expenses Consolidated profit 54 43 +26 1) Extract from financial statements 2) Some previous year figures were adjusted 9
Financials Key financial figures. Explanation 31 Mar 2019 31 Dec 2018¹ Change in % Focus on core business areas, Group total assets €148.2bn €154.0bn -4 reduction of interbank business RWA Asset reduction with low RWA €45.3bn €45.5bn -0 Interest-driven adjustment of CET1 ratio revaluation reserve; capital 6.7 % 6.8 % -1 strengthening measures initiated Target is an NPL ratio below NPL ratio 4.1 % 4.0 % +2 2 per cent 2 Large buffer to regulatory requirement MREL 20.37 % 19.89 % - of 9.13 per cent Requirement of 100 per cent clearly LCR exceeded; 150 % 150 % - distance to Illiquidity: 224 days Target is a leverage ratio Leverage Ratio 2.1 % 2.1 % - of above 4 per cent 1) Some previous year figures were adjusted 2) NPL ratio after sale of Big Ben: approx. 2.6 percent (figures as at 31 March 2019 excluding Big Ben exposure (€2.55bn)) 10
Financials Profitable 1Q 2019 for NORD/LB. Consolidated Consolidated earnings before restructuring and taxes amounted to € 75 million as at 31 March 2019. Consolidated profit after restructuring and taxes amounted to € 54 million as at 31 March 2019 profit Group NPL ratio almost unchanged at 4.1 per cent (31 March 2019); reduction of non-performing ship De-risking of financing (NPL) continues: a portfolio of ship NPLs in the amount of € 2.6 billion was sold in the first quarter loan portfolio of 2019, but booked at the beginning of April. Therefore, the results have not yet been included in the figures as at 31 March 2019 Programme continued as planned; administrative expenses fell by 9 per cent; balance sheet total further reduced to € 148.2 billion (€ 154.0 billion as at 31 December 2018). Transformation Programme New strategy programme ("NORD/LB 2024") bundles efficiency enhancement and capital-strengthening programmes and implements future business model adjustments Common Equity Capital ratio of 6.7 per cent (CET1) as at 31 March 2019 significantly below regulatory requirements (SREP 10.57 per cent); countermeasures already initiated and discussed with supervisory authorities Tier 1 ratio 1) Some previous year figures were adjusted 11
Financials NORD/LB starts the new year with a profit. � N et interest income: Loan and securities portfolios decreased 1 Jan - 1 Jan - Income statement (in €m) Change in % 31 Mar 2018 1 31 Mar 2019 � Net commission income : Increase due to receipt of an interim servicing fee of for the Big Ben portfolio Net interest income 258 353 -27 Net commission income 34 17 +100 � Fair-value result : Lower interest-rate levels and tighter credit Profit/loss from financial assets spreads let profits rise at fair value (incl. Hedge 43 3 >100 � Risk provisioning : Net reversals in Energy & Infrastructure Accounting) Customers, Ship Customers, Private & Commercial Customers Risk provisioning 38 28 +36 and Savings Banks Network Disposal profit/loss from financial -2 -6 -67 � Disposal result includes net gains from the disposal of assets not measured at fair value securities and asset/liability loans Profit/loss from shares in - -3 -100 companies � Administrative expenses : Decline in personnel expenses (€ -6 Profit/loss from investments million) and consulting expenses (€ -15 million) accounted for using the equity 10 5 +100 � Other operating result influenced in particular by the 2019 method annual contribution to the bank levy of € 54 million Administrative expenses (-) 265 291 -9 � Restructuring result from the transformation programme due Other operating profit/loss -41 -38 +8 to restructuring provisions, not yet incurred in the first quarter Earnings before reorganisation, 75 68 +10 of 2019 restructuring and taxes Reorganisation expense is a one-time expense for future- Restructuring result and oriented applications (consulting services) 10 - - reorganisation expenses Earnings before taxes 65 68 -4 Income taxes (-) 11 25 -56 Consolidated profit/loss 54 43 +26 1) Some previous year figures were adjusted 12
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