Investor Presentation All data as of June 30 th 2020 if not marked differently 14 October 2020
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Investor PresentationAll data as of June 30th 2020 if not marked differently
14 October 2020
Berlin Hyp – Brief Overview
2
Integration into Savings Banks Finance Group
Institutional Protection Scheme; 0% risk-weighted for savings banks
Exclusively owned by savings banks
Green Bond as an important expansion of the bank’s funding mix
Issuer of the first Green Pfandbrief
Most active European bank issuer of Green Bonds
Early achievement of the stratigic goal for 2020 and definition of new sustainability goals
Founded 1868
One of Germany‘s leading commercial real estate financiers
Main refinancing instrument: Mortgage Pfandbrief
Internal efficiency improvement through new technology & digitised processes
One of the first German banks with a single unified IT system
Extension of the value chain (new digital business models & innovative product ideas)
HY1/2020 2019 2018
Total Assets (EUR bn) 31.7 27.0 27.2
Allocation to the fund for general banking risks (EUR mn) 20.0 90.0 105.0
Pre-tax profit (EUR mn) 5.8 61.6 116.4
CET1 Ratio 13.1% 13.3% 13.5%
Ratings Senior Non-Preferred Senior Preferred Pfandbriefe
Moody’s A2 Aa2 Aaa
Fitch A+ AA- --
Agenda
01 Business Model
02 Financial Figures
03 Funding
04 Mortgage Pfandbrief
05 Green Bonds
06 Appendix
3
01
Business Model
Profit &
Loss
Transfer
Ownership Structure
100 %
100 %Profit &
Loss
Transfer
100 %
Sparkassen
(via Erwerbsgesellschaft der Sparkassen-Finanzgruppe mbH & Co. KG
und Beteiligungsgesellschaft der Sparkassen-Finanzgruppe mbH & Co. KG)
Landesbank Berlin Holding AG
5
No. of German savings banks 379
Branches 17,000
Employees 293,700
Total assets EUR 1,301 bn
Loans to customers EUR 861.0 bn
Deposits from customers EUR 955.0 bn
No. of private customers 50mn (3/4 of Germany's population)
No. of business customers 2mn (3/4 of all businesses)
RatingFitch A+ (Group-Rating)
Moody's Aa2 (Floor Rating)
Germany’s Savings Banks Group – a National Champion
As of 31 December 2019
Main advantages for Berlin Hyp
• Member of the Savings Banks Finance Group’s joint liability scheme (institutional protection)
• 0% risk-weighting for our Pfandbrief/Senior Unsecured within Savings Banks Finance Group
• Access to customer deposits via savings banks
6
One of Germany’s Leading Commercial Real Estate Banks
• Berlin Hyp‘s core business segment is commercial
real estate finance with focus on the economically
sound metropolitan areas in Germany which is
predominantly refinanced by the issuance of
Mortgage Pfandbrief.
• In addition, Berlin Hyp increasingly acts as
an arranger: e.g. arranging of club deals / leading
syndicates, placing out, ImmoSchuldschein
• Selective foreign business (~ 30% of real
estate portfolio) in order to diversify risk
(considerably stricter lending standards)
• Lower LTVs, higher requirements
concerning rating and risk classes
• Limitation concerning property types
• Concentration on capital regions
7
46%
23%
15%
14%
2%
New Mortgage Business
Germany - A Cities
Germany - B Cities
BeNeLux
Germany - Rest
France
02
Financial Figures
Key Figures & Business Development
9
5.46.0
8.1
6.1
7.3
2.5
2015 2016 2017 2018 2019 HY1/2020
New lending in € bn, incl. extension
50.3
44.0
51.2
45.2
52.9
48.5
9.1
11.8
16.918.2
11.6
3.8
2015 2016 2017 2018 2019 HY1/2020
ProfitabilityCost-Income-Ratio (%)
Return on Equity (%)
18.3 18.520.5
23.125.5 25.5
7.6 7.99.1 9.2 9.9 10.2
2015 2016 2017 2018 2019 HY1/2020
Loan Portfolio Development, RWAin € bn
Loan Portfolio(incl. irrevocable loan commitments)
RWA
20 50 70 105 90 20
17.4
15.516.0
15.6
13.312.5
13.3 13.1
3.54.0
4.64.0
2015 2016 2017 2018 2019 HY1/2020
Equity Allocation to the fund for general banking risks (€ mn)Total Capital Ratio (%)CET 1 -Ratio (%)Leverage Ratio (%)
Statement of Profit and Loss
EUR mn 2019 2018 2017 2016 2015
Interest / Commission income 327.5 338.6 310.0 298.4 254.1
Interest income 309.7 315.4 270.9 255.9 223.3
Commission income 17.8 23.2 39.1 42.5 30.8
General operating expenditure 172.3 151.2 134.8 122.3 123.8
Staff expenditure 92.4 83.8 73.6 62.6 76.5
Other operating expenditure 67.5 61.5 55.9 55.3 43.2
of which expenditure for bank levy 12.0 10.6 10,1 10.9 -
Depreciation of tangible assets 12,4 5.9 5.3 4.4 4.1
Other operating earnings / expenditure -1.6 -4.4 -47.0 -20.3 14.6
Operating income before risk provisioning 153.6 183.0 128.2 155.8 144.9
Risk provisioning 2.2 37.4 56.2 -35.7 -18.8
Provisioning loans -7.5 15.5 33.5 -51.3 13.1
Provisioning bonds 9.7 21.9 22.7 15.6 -31.9
Operating income after risk provisioning 155.8 220.4 184.4 120.1 126.1
Income of financial assets -4.0 1.2 3.2 2.8 0.6
Expenditure for bank levy - - - - 11.4
Allocation to the fund for general banking risks 90.0 105.0 70.0 50.0 20.0
Extraordinary expenditures 0.0 0.0 0.0 0.0 2.1
Other taxes 0.2 0.2 0.2 0.2 0.2
Profit before income tax and profit transfer 61.6 116.4 117.4 72.7 93.0
Income tax 0.6 0.0 0.4 -0.3 1.0
Expenditure from profit transfer 61.0 116.4 117.0 73.0 92.0
Net income of the year 0.0 0.0 0.0 0.0 0.0
10
Statement of Profit and Loss
EUR mn H1/2020 H1/2019 ∆ Difference
Interest / Commission income 178,5 163,8 14,7
Net interest income 167,8 155,4 12,4
Net commission income 10,7 8,4 2,3
Operating expenditure 86,8 86,1 0,8
Staff expenditure 35,1 45,9 -10,8
Other operating expenditure 39,6 37,0 2,6
of which expenditure for bank levy 13,4 12,0 1,4
Depreciation of tangible assets 12,1 3,2 8,9
Other operating earnings/expenditure 0,7 -2,4 3,1
Operating result before risk provisioning 92,4 75,3 17,1
Risk provisioning 65,4 -5,4 70,8
Operating result after risk provisioning 27,0 80,7 -53,7
Net income from financial investments -1,1 0,5 -1,6
Allocation to the fund for general banking risks 20,0 55,0 -35,0
Other taxes 0,1 0,0 0,1
Pre-tax profit 5,8 26,2 -20,4
Income tax 0,1 0,3 -0,2
Expenditure from profit transfer 5,7 25,9 -20,2
Net income 0,0 0,0 0,0
❗
❗
❗
11
Protection of Senior Unsecured Investors / Insolvency
Hierarchy*
Paid in Capital
EUR 753.4mn
§ 340g HGB (local GAAP)
EUR 418.0mn
Provisions
EUR 182.5mn CET 1
EUR
1,338.2mn
T2 Instruments
Senior Unsecured (Registered Bonds, Bearer Bonds, Promissionary Notes (SSD))
EUR 8,037.8mn
Business modell with conservative credit policy
Average LTV (portfolio): 54.6% (30.06.2020)
Balance Sheet Profit
EUR 0.0mn
Subordinated Liabilities
EUR 316.8 mn
§ 340g HGB (during 2020)
EUR 20.0 mnE
qu
ity
Buffer before potential
senior losses:
EUR 1,690.7bn
5.3% of Liabilities
16.6% of RWA
* All Data as of 30.06.2020; financial figures
** Note: MREL ratio = Equity + T2-Instruments + Senior Unsecured
BISTA Total assets incl. Zerobonds (nominal)
For the MREL ratio only the regulatory senior debt EUR 4,828.6mn is accounted
MREL-Ratio**:
19.4% (based on nominals)
63.3% (based on RWA)
Berlin Hyp is a member of the Institutional Protection Scheme of the Savings Banks Finance Group.
Deduction
EUR 0.mn
12
Loan Portfolio
• High quality loan portfolio
• Current crisis has main impact on hotels & retail
properties limited exposure
• Transaction volume and new business expected to
decrease notably
• Close monitoring and stress testing of loan portfolio NPLs€ 166mn
0.66%
Ø LTV54.6% 13
71%
12%
8%
6% 2%
1%
Geographical distribution of
mortgage portfolio
Germany
BeNeLux
France
Poland / CzechRepublicOthers
UK
0.1
0.8
2.6
96.5
without rating class
Rating Classes 13-18
Rating Classes 8-12
Rating Classes 1-7
%
Rating Classes
10
5
16
25
44
Other
Logistics
Retail
Residential
Office
%Type of Use
Commercial Real Estate Market Overview: Germany (I)
Source: RIWIS / bulwiengesa, Berlin Hyp Research, CBRE ab 2017, BNPPRE, RCA
1st half of 2020
• The current year started with a strong first quarter, which was
mainly characterised by company participations, such as
Aroundtown's investment in TLG
• The second quarter was marked by a sharp drop in
transactions as deals were postponed or cancelled due to the
corona virus
• Nevertheless, a 24% increase in transaction volume to a total
of EUR 41.8 billion was achieved in the first half of the year
Forecast 2020
• For the upcoming six months a significant decline in activity
on the commercial property market is expected as a result of
the corona pandemic
• On the other hand, the relative importance of the German
commercial real estate market as a safe haven is increasing
14
1215
17
2624
2832
40
12 13
8
910
18
13
1411
10
57
3
3
5
4
4
8 7
7
2
4
5
4
9
7
12
7 11
11
4
6
11
16
13
23
11
15
17
17
7
12
39.1
46.8
53.9
79.2
64.2
72.6
77.4
84.8
30.3
41.8
2012 2013 2014 2015 2016 2017* 2018* 2019* HY1/19* HY1/20*
Transaction Volume in Germany (in EUR bn)
Residential (<50 units)
Other (Hotel)
Logistics
Retail
Office
• Initial yields in all segments almost stable at previous
year's level
• Yields tending to rise
• Current widening of yield spreads due to declining 10-
year Bunds
• Price index for commercial real estate declines for the
first time since 2009, residential index continues to rise
• Corona pandemic amplifies structural change in the
retail sector and thus price decreases
Source: Berlin Hyp Research, vdp
Source: Berlin Hyp Research, RIWIS/bulwiengesa, Macrobond
-2
0
2
4
6
8
2008 2010 2012 2014 2016 2018 H1/2020
Logistics
Office
Retail
10y Bunds
Ø Top Yields in German A-Cities (Initial Net Yields, weighted
average acc. to inhabitants, in %)
Commercial Real Estate Market Overview: Germany (II)
1595
110
125
140
155
170
2007 2011 2015 Q1/2019 Q1/2020
vdp-Property-Price-Index (2010=100)
Residential
Overall Index
Commercial
03
Funding
Berlin Hyp’s Ratings
RatingOutlook/
WatchRating
Outlook/
Watch
Mortgage Pfandbrief Aaa Stable - -
Senior Preferred Aa2 Stable AA- Negative
Senior Non-Preferred A2 - A+ Negative
Short Term P-1 - F1+ Stable
Adj. BCA / Viability a3 - bbb Stable
Last rating actions
April 2020: Fitch upgrades Berlin Hyp‘s senior preferred rating by one notch and confirms the rating for senior-
non-preferred. The status under criteria observation (UCO) is removed.
March 2020: As a result of the world wide coronavirus disruption Fitch changes the outlook on Berlin Hyp‘s IDR
from stable to negative which impacts both, senior preffered and senior non-preferred ratings. The revision of
the outlook follows a similar rating action on Berlin Hyp‘s ultimate parent Sparkassen-Finanzgruppe to negative.
March 2020: On 4 March Fitch places the rating for Berlin Hyp‘s senior preferred bonds under criteria
observation (UCO) reflecting a possible upgrade under Fitch‘s revised rating methodology for banks.
January 2020: Fitch confirms Berlin Hyp‘s ratings and maintains the stable outlook.
17
Sustainability Ratings 2020
Social Rating B- „Prime“
Environmental Rating B „Prime“
Total: B- „Prime“
Ranked 2nd out of 79 banks in the peergroup Financials/Mortgage & Public Sector(July 2019)
Ranked 6th out of 340 diversified banks worldwide (September 2019)
ESG-Report 87/100
ESG Risk Report 12.4 of 100 Low
Sustainability Rating(November 2019)
A
18
19
Berlin Hyp – a stable Credit
• Secondary market spreads of Berlin Hyp‘s
Pfandbriefe and senior unsecured bonds more
stable than the total market
• Quicker and stronger spread tightening
compared to peers following corona virus
induced awidening
Spreads Berlin Hyp vs. Covered Bonds (bp/mid swaps); Source: LBBW Credit Research, iBoxx, 2 October 2020
I-Spreads Berlin Hyp vs. Comparables (bp); Source: Commerzbank, 2 October 2020
Asset-Swap Spreads Berlin Hyp (bp); Source: Commerzbank, 2 October 2020
-20
0
20
40
60
80
100
120
140
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
bpCredit Curve
Senior Non Preferred (A2/-/A+)
Senior Preferred (Aa2/-/A+)
Covered Bonds (Aaa/-/WD)
0
50
100
150
200
250
Aug - 18 Jan - 19 Jun - 19 Nov - 19 Apr - 20
bp Senior Unsecured
iBoxxprBNKsnE7y10y
Berlin Hyp SNP Index (created out of iBoxx)
Berlin Hyp SP Index (created out of iBoxx)
-20
0
20
40
60
80
100
2015 2016 2017 2018 2019 2020
bp CoverediBoxx € Italy Covered iBoxx € UK Covered
iBoxx € Spain Covered iBoxx € France Covered
iBoxx € Sweden Covered iBoxx € Hypothekenpfandbriefe
BHH Benchmarks
61%13%
24%
0.3
10.1
3.0
2.2
0.7
3.6
1.5 0.2
Berlin Hyp’s Capital Market Funding Mix
PPs1.4
Benchmarks1.5
PPs2.7
Benchmarks10.4
PPs2.3
Benchmarks2.8
EUR 21.6 bn
Subordinated
Public
Pfandbrief
Mortgage
Pfandbrief
Senior Preferred
Senior Non-
Preferred
Capital market funding as of 14 October 2020: all data in EUR bn
20
As of 14 October 2020; EUR mn
Berlin Hyp’s Maturity Profile
587
1,410
2,1151,938
1,2481,121
520
1,239
607 515626
1,210
50
35
98 50
125
846
86565
138
840
105
500
545
5087
1,184
105
305 405
638
140
500
133
505
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 >2030
Senior Preferred
Senior Non-Preferred
Public Pfandbrief
Mortgage Pfandbrief
21
Maturity Profile Benchmark Pfandbrief and Senior Unsecured
As of 14 October 2020; EUR mn
22
IFR Covered Bond
of the Year
August 2019
0.01% / MS -2Mortgage Pfandbrief
Due 08/2022
EUR 1.000mn
July 2019
0.01% / MS -3Green Pfandbrief
Due 07/2027
EUR 500mn
May 2019
0.375% / MS -2MortgagePfandbrief
Due 05/2029
EUR 500mn
February 2019
1.00% / MS +60Senior Preferred
Due 02/2026
EUR 500mn
November 2019
0.50% / MS +50Green Senior
PreferredDue 11/2029
EUR 500mn
February 2020
EUR 500mn0.01% / MS -1
MortgagePfandbrief
Due 02/2027
0.01% / MS +5Green Pfandbrief
Due 07/2028
EUR 500mn
July 2020
0.01% / MS +6Green Pfandbrief
Due 09/2030
EUR 500mn
August 2020
Core Deal of
the Year
500 500 500
741
500
841
633
500
732
500 500 500 500 500
750
500 500 500 500 500 500 500 500 500 500 500 500
HyPfe10/20
HyPfe04/21
Senior10/21
HyPfe11/21
GrünerPfandbrief
05/22
HyPfe08/22
HyPfe10/22
HyPfe02/23
HyPfe05/23
SeniorPreferred
08/23
GrüneSenior09/23
GrünerPfandbrief
10/23
Hypfe01/24
HyPfe05/24
Senior01/25
Hypfe02/25
GrünerPfandbrief
10/25
SeniorPreferred
02/26
Hypfe02/26
HyPfe02/27
GrünerPfandbrief
07/27
GrüneSenior10/27
GrüneSenior04/28
GrünerPfandbrief
07/28
Hypfe05/29
GrüneSenior
Preferred11/29
GrünerPfandbrief
09/30
Allocation Policy
No Preferred Allocation
• Trading Accounts
• Obviously inflated orders
• Late participation in the deal
• Opportunistic Investors
Preferred Allocation
• Savings Banks (Berlin Hyp’s owners)
• Early participation in the deal
• Real money / buy-and-hold
• Green / SRI Investors
• Investors from abroad
• Investors which we met on roadshows
• New Investors
• Full allocation of small orders
(up to € 2mn)
23
04
Mortgage Pfandbrief
15.4
13.4
16.7
14.7
17.7
15.615.8
14.0
17.3
15.5
18.1
16.2
Mortgage Pfandbrief
Cover Pool
EUR bn
Overview as of 30 September 2020
*The static approach was used for currencies, the dynamic approach for interest when calculating the risk-adjusted net present value.
nominal value net present value risk-adjusted net present value*
EUR mn 30.09.2020 30.09.2019 30.09.2020 30.09.2019 30.09.2020 30.09.2019
Mortgage Pfandbrief 15,366.1 13,351.7 16,662.8 14,701.1 17,654.7 15,640.2
Cover Pool 15,767.3 14,019.2 17,315.1 15,514.9 18,086.7 16,220.0
Over-collateralisation (OC) 401.1 667.5 652.3 813.8 432.0 579.8
OC in % 2.6% 5.0% 3.9% 5.5% --- ---
25
Composition of Mortgage Cover Pool
Cover pool volume: EUR 15,767.9mn, of which original mortgage cover assets: EUR 14,439.3mn;
Share of foreign countries: EUR 4,729.9mn
Data as of 30 September 2020
41%
30%
18%
6%2%3%
International Distribution
The Netherlands France
Poland Czech Republic
United Kingdom Belgium
38%
30%
21%
9%1%1%
Type of Use
Office buildings Multi-family dwellings
Retail buildings Others commercially usedbuildings
Industrial buildings Single-family houses
26
34%
16%16%
10%
7%
7%
4%3% 3%
Overall Distribution
Abroad
Berlin
North Rhine-Westphalia
Other states from former West Germany
Hesse
Bavaria
Saxony
Other states from former East Germany
Lower Saxony
Cover pool volume: EUR 15,767.3 mn, of which further cover assets: EUR 1,328.0 mn
Composition of Mortgage Cover Pool – Further
Cover Assets
Data as of 30 September 2020
83%
17%
Debtors
Central Bank
Banks (Guaranteed, Covered Bonds, Senior Unsecured)
3%10%
1%1%2%
83%
External Ratings
AAA AA+ AA+ AA AA- A not rated
27
95%
4%1%
Geographic Composition
Germany Canada Norway
Deviation of the Market Value from the Mortgage
Lending Value by Asset Class
• The charts on the left side show by what
percentage the market value of Berlin Hyp’s
domestic and international portfolio exceeds the
mortgage lending value (MLV)
• The MLV is a conservative value of a property that
can be expected to be realised at any point during
the term of the loan, irrespective of temporary
fluctuations in the property value
• According to the Pfandbrief Act, only 60% of the
MLV are eligible for the cover pool 20%
40%
60%
80%
Dec 16 Dec 17 Dec 18 Dec 19 Jun 20
Germany
Management
Office
Residential
Logistics
Retail
20%
40%
60%
80%
Dec 16 Dec 17 Dec 18 Dec 19 Jun 20
Abroad
Management
Retail
Office
Residential
Logistics
28
05
Green Bonds
Transaction Highlights
Issuer Berlin Hyp AG
ISIN DE000BHY0GX9
Issue Ratings Aaa (Moody's)
Second Party Opinion good (oekom research AG)
Coupon 0.01%
Re-Offer-Spread MS +6bp
Re-Offer-Price 101.329%
Issuance/
Settlement Date
25.08.2020/
02.09.2020
Maturity 02.09.2030
Issue Size € 500mn
Denominations € 1,000
ListingBerlin Stock Exchange
Luxembourg Stock Exchange
Lead Managers
Credit Agricole, DZ Bank, HSBC, JPM
LBBW;
Co-Lead: Bankhaus Lampe
Indices
Barclays MSCI Green Bond Index
Index S&P Green Bond Index
Solactive Green Bond Index
Issuer Berlin Hyp AG
ISIN DE000BHY0GA7
Issue Ratings A+ (Fitch), Aa2 (Moody's)
Second Party Opinion good (oekom research AG)
Coupon 0.5%
Re-Offer-Spread MS +50bp
Re-Offer-Price 99.157
Issuance/
Settlement Date
28.10.2019/
04.11.2019
Maturity 05.11.2029
Issue Size € 500mn
Denominations € 100,000
Listing Berlin Stock Exchange
Lead Managers
Credit Agricole, DZ Bank, HSBC,
LBBW, UniCredit;
Co-Lead: Bankhaus Lampe
Indices
Barclays MSCI Green Bond Index
Index S&P Green Bond Index
Solactive Green Bond Index
Green Senior Preferred (10/2019)
Order book reached a final size of more than EUR 1.2bn
with 110 investors
Berlin Hyp allocated 55% to SRI investors
34% share of foreign investors
23 new investors
Green Pfandbrief (08/2020)
Order book reached a final size of more than EUR 2.15bn with
more than 100 investors
Berlin Hyp allocated more than 40% to SRI investors
44% share of foreign investors
Banks45%
Asset Manager
39%
Central Banks13%
Others3%
Germany56%
Nordics16%
UK10%
BeNeLux6%
France4%
Southern Europe3%
AUT/CHE3%
Asia2%
Germany66%
France10%
Southern Europe
7%
AUT/CHE6%
Nordics5%
UK4%
Others2%
Banks43%
Fund Managers37%
Insurance12%
CBs and Ols8%
30
• First Issuance of Green Private Placements
• New strategic sustainability goals: climate neutral by 2050, 1/3 green by 2025,
complete CO2-transparence by 2023 and launch of transformation credit
First Issuance of Geen Bond in foreign currency (CHF 125mn)
Additionality
• Issuance of the first Green Pfandbrief
Establishing a Green Building Commission
Introduction of standardized processes
2015
2016
• Sales promotion: pricing incentives for loans for Green Bulidings
• Publication of first annual reporting
• Development of a Green Bond Program
• Issuance of Berlin Hyp’s first green Senior Unsecured
2017
• Strategic objective: 20% of the loan portfolio to be green by 2020
• Largest Green Bond issuer in the financial institution-segment
2018
• Further strengthening of eligibility criteria in
Berlin Hyp’s Green Bond Framework
• Participation in EeMAP pilot scheme
2019
• Transfer of the brand rights “Green Pfandbrief” to the Association of German
Pfandbrief Banks (vdp)
• Update of impact reporting methodology
• Development of minimum standards for Green Pfandbriefe on national level
(vdp)
• Early achievement of the stratigic goal for 2020:
20% of the loan portfolio green until the end of 2020
September 2019:Best Green/ SRI Issuer
for Impact Reporting
September 2019:Most Impressive Green/
SRI Covered Bond Issuer
September 2019:Most Impressive Bank
Green/ SRI Bond Issuer
September 2017:Most Impressive Bank
Green/SRI Bond Issuer
September 2017:Best Green/ SRI Issuer
for Impact Reporting
September 2018:Best Green/ SRI Issuer
for Impact Reporting
2020
31
• Incentivising and financing of energy-efficiency related
refurbisments
New Sustainability Agenda
Commitment to the Paris Climate
Agreement and the German Climate Path
1/3 of Portfolio
Green until 2025
Portfolio Transparency
until 2023
New Sustainability Product:
Transformation loan
• Sustainable development on an ecological, economic and social
level based on the objectives of the Paris Climate Agreement and
the Climate Path of the Federal Republic of Germany
• Goal: Climate neutral by 2050; including a 40% reduction in CO2
emissions between 2020 and 2030 ( Climate path)
• Even stronger consideration of energy efficiency in future
lending decisions
• Green new business continues to grow in importance
• Goal: 1/3 of all financing in Berlin Hyp's loan portfolio green by
2025
• Systematic determination of energy values, CO2 emissions and
climate risks
• Expansion of the data base at portfolio level by obtaining,
analysing and recording energy performance certificates for
all loans financed by us
• Goal: Achieving transparency across the entire portfolio
1.
3.
2.
4.
32
The Green Bond Program
The issuance of all Green Bonds takes place under a unified Green Bond Program. Under the
program, both Green Pfandbriefe and green Senior Unsecured bonds can be issued.
The program covers...
… the requirements for the issuance of new Green Bonds including the excess of 10 per cent of all eligible assets
compared to the Green Bonds,
… the alignment with the Green Bond Principles (Use of Proceeds, Process of Evaluation and Selection,
Management of Proceeds, Reporting),
… Berlin Hyp‘s eligibility criteria for Green Buildings with a focus on energy efficiency,
… the bank‘s commitment, to make its best effort to invest an amount equivalent to the net proceeds in new eligible
assets.
© Masterfile Royalty Free
Green Bond
Program
Green Pfandbrief
Refinancing of loans collateralized with Green
Buildings which form a part of the mortgage cover pool
Mortgage Pfandbrief as definedin section 1 para. 1 (1)
Pfandbrief Act and cover assetsaccording to paras 13 to 18
Pfandbrief Act
Green Pfandbrief holders rank pari-passu with all other
Mortgage Pfandbrief holders
Green Senior Unsecured
Refinancing of loans collateralized with Green
Buildings which are on Berlin Hyp‘s balance sheet
Investors in Berlin Hyp's Green Senior rank pari-passu with
investors in other senior unsecured notes of the bank
33
• The bank shall report on the development of this sub-portfolio
on an annual basis
• Berlin Hyp has established a website which is exclusively used
for providing information about its green bonds at
www.berlinhyp.de/en/investors/green-bonds
Implementation of the Green Bond Principles
Use of ProceedsProcess of Evaluation
and Selection
Management of
ProceedsReporting
• Refinancing eligible assets on Berlin Hyp’s balance sheet
• Eligible assets include loans for:
(i) acquisition or (ii) construction or (iii)
refurbishment of Green Buildings as defined in the
eligibility criteria
• These Green Buildings serve as collateral for loans granted by or to
be granted by Berlin Hyp. If they are used for Green Pfandbriefe the
loans have to be eligible for and included in or to be included in the
bank's mortgage cover pool
• Berlin Hyp has established a Green Building Commission
(GBC) which is comprised of one representative from each of
the following divisions of the bank: Corporate Strategy,
Origination, Credit, Appraisal and Treasury
• GBC discusses whether eligibility criteria are still in line with
market best practices of Green Building definition
• Eligible assets already exist on Berlin Hyp's balance sheet (and in
the case of a Green Pfandbrief in its mortgage cover pool) at
issuance of a new Green Bond
• They form a sub-portfolio within the bank’s overall mortgage loan
portfolio
34
1. Use of Proceeds – Portfolio Development
Typ
e o
f U
seC
ou
ntr
ies
Ce
rtif
icat
es
35
Green Finance Portfolio
35
2020 Green Bonds
• April: Green PPs EUR 62mn
• June: Green Pfandbrief EUR 500mn due July 2028
• August: Green Pfandbrief EUR 500mn due September 2030
• August: Green Senior Preferred CHF 125mn due September 2028
2. Process of Evaluation and Selection (I) – Organisation
Green Building Commission
One representative from each of the following divisions of the
bank: Corporate Development, Origination, Credit, Appraisal
and Treasury
Responsible for defining eligibility criteria and keeping them in
line with market best practices. Also responsible for processes
Green Building Commision
Corporate Strategy
Origination
TreasuryCredit
Appraisal
Origination
Appraisal
yes no
Credit
Origination
Green Building eligible?
Price incentive up to
10 basis points
Fowards EPC/Sustainabilty Certificate
Departments(e.g. Risk Controlling, Green Building
Commission, Treasury)
Documentation of energy efficiency data
36
2. Process of Evaluation and Selection (II) – Criteria
LEED Gold or above
BREEAM Very Good or above
DGNB Gold or above
HQE High Level or above
1) LEED, BREEAM, DGNB and HQE are providers of sustainability certificates for buildings. Buildings financed by Berlin Hyp after issuance of its inaugural Green Pfandbrief
on 27 April 2015 have to score at least 50 per cent in the energy efficiency component of the Green Building certificate if the building does not qualify already by its energy
demand or consumption as defined above.
Eligible assets shall also meet other environmental and/or social criteria. These assets are not to be used for the production of
arms, pesticides, tobacco, pornography, nuclear power, coal, oil and fossil fuels:
Property type
Framework
Energy demand heating
kWh/(m²*a)
Energy demand electricity
kWh/(m²*a)Total kWh/(m²*a)
Residential 60 - 60
Office 80 60 140
Retail 60 75 135
Hotels 95 60 155
Logistics buildings (use: storage) 30 35 65
Light industrial (use: production) 105 65 170
In addition/alternatively eligibility criteria include the following external sustainability certifications1:
Green Buildings means energy efficient commercial real estate buildings with an energy demand or consumption that should
not exceed:
37
3. Management of Proceeds
• Eligible assets are already on the bank‘s balance sheet at issuance (in case of a Green Pfandbrief in its mortgage cover
pool, too)
• No interim allocation of the proceeds necessary
• Eligible assets > outstanding Green Bonds at any time
• As Berlin Hyp flags loans for Green Buildings in its loan monitoring system, they cannot be used for more than one
Green Bond
Assets Liabilities
As
se
t p
ort
foli
o
Loans for
Green
Buildings
Standard
loans
Lia
bilit
ies
Green
Bonds
Standard
funding
Loan
Interest, repayment
mortgage
An amount equivalent to the proceeds of
the issuance is invested in new loans for
Green Buildings
Proceeds of the
issuance
… …
Interest, repaymentInvestorBorrower
38
4. Reporting (I)
Berlin Hyp provides information on its Green Bond activities
on its website. Among others, the following information is
available:
Reporting (annually):
• Nominal amount and term structure of the Green
Bonds and assets
• Loan amount, regional distribution, object type/use,
certificates
• New business in eligible assets since the last report
on a loan-by-loan basis
Impact reporting (annually):
• Carbon emissions avoidance (impact reporting)
evaluated in comparison to one or more appropriate
baselines and documentation of methodology
External review:
• Second Party Opinion of ISS ESG
• ISS ESG assesses the Green Bonds’ sustainability
on an annual basis. Berlin Hyp publishes this re-
verification.www.berlinhyp.de/en/investors/green-bonds
39
4. Impact Reporting (II)
Avoided tCO2 / € mn / year(as of 29.02.2020)
100% allocated to Berlin Hyp
financing
Proportionally allocated to Berlin
Hyp’s initial financing share
against EnEV standards (heating
energy and electricity)39.89 (PY 38.81) 22.58 (PY 21.58)
against the European average (heating
energy only)24.77 (PY 22.20) 13.93 (PY 12.57)
&
savings in kWhi ∗ m2i ∗ conversion factori
σoutstanding issuance in €
savings in kWhi ∗ m2i ∗ conversion factori ∗
𝐥𝐨𝐚𝐧 𝐨𝐟 𝐁𝐞𝐫𝐥𝐢𝐧 𝐇𝐲𝐩𝐦𝐚𝐫𝐤𝐞𝐭 𝐯𝐚𝐥𝐮𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠
σoutstanding issuance in €
3.
Benchmark
Energy demand (acc. to EPC)
1.
=Energy savings (kWh)
2.
Heating
based on individual heating source
Electricity
Country-specific emission factors
based on energy mix
Conversion factor (kWh in CO2)
Source: "Icon made by Pixel perfect from www.flaticon.com"
1 2
40
4. Reporting (III) – Second Party Opinion by ISS ESG
Part I
Part II
Part III
The Green Bond Programme’s formal concept is in line with the Green Bond Principles.
The overall sustainability quality of the asset pool in terms of sustainability benefits, risk avoidance and
minimisation is positive
The issuer itself shows a very good sustainability performance and has been rated as “Prime”.
Berlin Hyp AG (Berlin Hyp) commissioned ISS ESG to assist with its Green Bond re-verification by assessing three
core elements:
41
Your Contacts at Berlin Hyp
• Ratings• Green Bonds
• Framework• Reportings
• Financial Reportings• Base Prospectus / Final Terms• §28 Pfandbrief Act / HTT• Euro Commercial Paper Programme • Awards
Bodo WinklerHead ofFunding & Investor Relations
Tel.: +49 30 2599 [email protected]
Felix ZillmannFunding & Investor Relations
Tel.: +49 30 2599 [email protected]
You will find further information on Berlin Hypif you visit our website www.berlinhyp.de:
42
Disclaimer
This presentation was produced by Berlin Hyp AG (hereinafter “Berlin Hyp”) for information purposes only. It is not investment advice.
The prior consent of Berlin Hyp is required for the copying of information or data, in particular for the use of texts, parts of text or picture
material. To the best of our knowledge, the facts and information contained in this presentation are correct at the time of production and
are subject to change in future. Neither Berlin Hyp nor members of its Board of Management, management staff, employees, advisors or
other persons furnish any warranty or guarantee, explicit or implied, in relation to the correctness or completeness of the information
contained in this presentation. All liability by Berlin Hyp, members of its Board of Management, management staff, employees, advisors
or other persons for losses incurred, directly or indirectly, in whatever way by the use of this presentation or its contents or otherwise in
connection therewith is excluded.
Every reasonable care has been taken to ensure that the facts contained in this presentation are correct at the time they were collected,
and that the views expressed are fair and reasonable. However, this document contains selected information and is merely an
introduction to and overview of the business activities of Berlin Hyp. Opinions expressed in this document can change at any time.
Neither Berlin Hyp nor any other person is obliged to correct, update or keep updated the information contained herein, or inform you
about this. A significant proportion of the information contained in this document, including market data and information about trends, is
based on estimates or expectations of Berlin Hyp and there is no guarantee that these estimates or expectations will be proved correct
in future.
This presentation may contain future-oriented statements which reflect our present view with regard to future developments. These
statements can be identified as such by words like “expectation” or “target” or “forecast” and similar expressions, or by their context.
These statements are made on the basis of current knowledge and current assumptions in each case at the time they are made. They
harbour risks and uncertainties including but not limited to changes in interest rates or exchange rates. If these risks or uncertainties
materialise, or if the knowledge or assumptions forming the basis of our future-oriented statements prove incorrect, actual future results,
performance or events in the future could differ from those described in these statements. There is no obligation to update future-
oriented statements or to inform you about this.
This document does not constitute an offer for the sale of securities. Securities of Berlin Hyp may not be offered or sold in the United
States if they are not registered there or are not exempt from the obligation of registration according to the U.S. Securities Act 1993 in its
current applicable version.
43
06
Appendix
Appendix – Balance Sheet as of 30 June 2020
45
0.4
0.6
2.9
6.0
21.9
Public sector loans
Other Claims
Remaining assets
Debentures
Morgage loans
in EUR Mrd.
Assets
0.9
1.5
4.3
8.9
16.2
Equity
Others
Liabilities to customers
Liabilities to banks
Securitised liabilities
Liabilities
Appendix – Development of Capital Ratios
Allocation to the fund for general banking risks: 2017 EUR 70mn, 2018 EUR 105mn, 2019 EUR 90.0mn
Corporate actions in 2009 (EUR 88.1mn), 2010 (EUR 97.5mn) and 2014 (EUR 105.0mn – equity transfer from
Berliner Sparkasse)
Reduction of total assets from 2012 - 2019: EUR 34.2bn to EUR 27.0bn
Data in %
46
5.5 5.8 5.36.5
7.68.7 8.6
9.410.6 11.3
13.3 13.512.5
13.5 13.3 13.1
10.1 9.8 9.7
11.7
13.3
12 12.112.7
14
15.7
17.4 17.5
15.5
16.816
15.6
2005 2008 2011 2014 2017 06/2020
Core Tier 1 capital ratio
Total capital ratio
Appendix – Composition of Mortgage Portfolio
According to Rating Classes
According to Property Types
97
91
95
91
99
98
97
9
5
9
1
2
3
2014
2015
2016
2017
2018
2019
06/2020
New Business
Rating classes 1-7 Rating classes 8-12 Rating classes 13-18
in %
23
38
51
44
49
49
30
46
18
17
21
28
24
26
19
28
17
25
9
14
14
12
10
5
6
7
3
20
6
17
4
7
10
10
2014
2015
2016
2017
2018
2019
06/2020
New Business
Office Residential Retail Other Logstics
in %
86
87
90
94
95
96
96
8
9
7
5
4
3
3
5
3
2014
2015
2016
2017
2018
2019
06/2020
Portfolio
Rating classes 1-7 Rating classes 8-12 Rating classes 13-18
in %
36
36
35
40
41
44
44
37
34
30
27
27
26
25
18
22
23
21
20
16
16
18
22
23
21
20
16
16
5
4
3
5
5
2014
2015
2016
2017
2018
2019
06/2020
Portfolio
Office Residential Retail Management Real Estate/Other Logstics
in %
Appendix – Security Holdings Composition
Data as of 30 June 2020
48
EUR mn
Germany 2,905
Scandinavia (N, S, FIN) 859
France 426
Canada 390
BE/NE/LUX 147
UK 140
Supranational 839
Austria 121
Spain 90
Eastern Europe (CZ, LT, PL, SK, SLO) 59
Total 5,976
266
130
Thereof Use ofProceeds Bonds
Green
Social
49%
14%
7%
7%
2%2%
14%
2%
2%
1%
according to Countries
Germany
Scandinavia
France
Canda
BE/NE/LUX
UK
Supranational
Austria
Spain
Eastern Europe (CZ, LT, PL, SK, SLO)
33%
33%
15%
13%
4% 2%
according toDebtors
Covered
Sovereign
SeniorUnsecured
Governmentguaranteed
Corporate
Supras
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