[PPT] - apoBank The Leading Bank in the German Healthcare Sector. August PowerPoint Presentation

SLIDE 1

1 Investor-Update.

August 2018.

apoBank – The Leading Bank in the German Healthcare Sector.

SLIDE 2

2 Investor-Update.

Agenda

1 2 3

apoBank profile. Income statement, financial and risk position as at 30 June 2018. Funding.

SLIDE 3

3 Investor-Update.

apoBank – At a glance.

Close to our customers.

Our 2,532 employees at 84 locations cater to the needs of our customers.

84

Rating of apoBank:

AA-

S&P

Tier 1 ratio:

18.7 %

Total assets:

44.1

bn Euro

New lending business:

3.6

bn Euro

Net profit after tax:

31.4

mn Euro

Our mission.

We promote our members, in particluar 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.

448,300 customers, of which are 112,210 members of the bank, are convinced of our mission.

Stand Juni 2018

SLIDE 4

4 Investor-Update.

The healthcare sector is changing.

digitalisation employment cooperation industrialisation supply across sectors internationalisation capitalisation

SLIDE 5

5 Investor-Update.

Larger units with increasing importance.

Source: KBV 2017 19,877 50,479 19,174 51,240 2010 1,654 20,044 49,208 12,955 13,826 19,043 51,679 11,060 2016 2,490 15,362 2014 2,073 8,326 18,826 51,831 2015 2,156 2012 1,938

Number of medical care centres Doctors in professional associations Number of professional associations Doctors in medical care centres +5%

6%

+85% +51%

SLIDE 6

6 Investor-Update.

Accelerator digitalisation.

Structures and opportunities of

health cares services change fundamentally

Large volumes of medical data

change information processes and needs

New E-Health-Law leads to

systematic digitalisation in the healthcare market

Large health care companies,
nline and tec-companies betting
n economic potential of the digital

healthcare market

SLIDE 7

7 Investor-Update.

apoBank’s strategy at a glance.

C H A L L E N G E S

Decline in new start-up numbers
Generation Y: claim to be

independent, flexibility, feminisation

Trend towards being employed
Trend towards cooperations
New forms of medical services
New competitors
Change in customer behaviour

(digitalisation)

Growing industrialisation
Dissolution of separation between

inpatient and outpatient care: growth potential with healthcare companies M E A S U R E S

Programme Exi70+
Exi-eco system
Close networking with professional

associations

Intensifying investment business for

customers

Intensified support of employed

healthcare professionals and medical students

Moderate expansion of corporate

client business

Implementation of multi channel

strategy: digital-face/to/face services

More co operations with external

partners in cooperative group

Expansion of value added services

(seminars etc.)

A P O B A N K ’ S C O M P E T I T I V E A D V A N T A G E S

Market and customer know-

how

Specialist bank and

member of the healthcare sector

Market leader in

financing start-ups

Strong brand
Member of the

cooperative Group

! ☞

SLIDE 8

8 Investor-Update.

Strong brand in the healthcare sector.

AWARDS AS EMPLOYER THE BANK FOR HEALTHCARE

PROFESSIONALS

AWARDS FOR ITS ASSET MANAGEMENT cooperative members physicians infrastructure institutions specialised tax counselors clearence centres healthcare

rganisations

pharmacists

SLIDE 9

9 Investor-Update.

Agenda

1 2 3

apoBank profile. Income statement, financial and risk position as at 30 June 2018. Funding.

SLIDE 10

10 Investor-Update.

Income statement for first half 2018.

Euro million 1.1.- 30.6.2017 1.1.- 30.6.2018 ∆ in % Net interest income 325.3 339.7 4.4 Net commission income 88.0 87.1

1.0

General administrative expenses

258.4
288.1

11.5 Operating profit before risk provisioning 158.5 134.2

15.3

Risk provisioning from the operating business 6.8

2.8
Risk provisioning with reserve character
87.6
78.1
10.8

Operating result 77.7 53.3

31.4

Taxes

46.9
21.9
53.3

Net profit after tax 30.9 31.4 1.8

SLIDE 11

11 Investor-Update.

Good regulatory capital position.

9.4 9.2 2014 9.5 2017 6/2018 11.6 12.5 2016 2015 20.2% 2015 26.1% 22.0% 25.0% 2014 26.1% 6/2018 18.7% 20.6% 2017 19.5% 21.8% 2016 22.6% Risk weighted assets, Euro billion Regulatory capital ratios Total capital Common equity tier 1 ratio Regulatory capital, Euro million

839 936 450 383 324 275 235 2,340 1,051 2014 2,465 2,411 2,528 2015 1,124 1,017 1,092 1,154 2016 1,100 2,567 1,167 2017 1,166 6/2018 Cooperative shares Reserves and other Supplementary capital Total capital

SLIDE 12

12 Investor-Update.

RWA increase further in line with rising lending volumes.

294 12,492 Institutions Particpations 1,200 6,693 Other, incl. states Corporates Retail 2,847 804 654 Credit risk Market price and operational risk / CVA RWA as at 30.6.2018 11,292

RWA. Euro million

87

6

128 347 378 934

28

908

vs. 31.12.2017

SLIDE 13

13 Investor-Update.

Development of selected key figures.

Members, thds Customers, thds Customer deposits and loans, Euro billion 448 436 416 397 382 2017 2016 2014 6/2018 2015 111 110 108 106 112 2014 2015 2017 6/2018 2016 27.9 2015 27.0 25.8 23.6 2014 21.7 29.5 2016 26.0 32.0 2017 27.1 33.4 6/2018 Loans Deposits

SLIDE 14

14 Investor-Update.

Steady portfolio growth.

25.9 32.3 2014 25.2 31.2 37.2 29.7 6/2018 2017 28.7 36.2 2016 26.8 33.8 2015

Retail business, Euro billion

6.7 4.7 6/2018 2017 4.3 6.3 2016 3.6 5.4 2015 3.1 4.6 2014 2.8 4.0 7.3 6/2018 2017 6.2 2016 6.8 2015 6.3 2014 7.1 Utilitsation Credit line

Corporate business, Euro billion Volume of financial instruments, Euro billion

Brisk new business with retail as well

as corporate clients

Financial instruments portfolio with

focus on LCR compliant securities and money market products

SLIDE 15

15 Investor-Update.

Portfolio with good creditworthiness.

0,0%

hne Rating

1.2% 0.9% D 0% 0% BB-C 0% BBB 1.3% 0.7% A 11.4% 9.3% AAA-AA 86.1% 89.0% 30.06.2018 31.12.2017 D 0% 1.2% BB-C 9.6% 8.1% BBB 26.0% A 47.8% 50.8% 27.8% AAA-AA 14.5% 13.7%

Corporate business*

D 1.3% 1.4% BB-C 7.2% 5.3% BBB 15.4% 16.6% A 46.6% 42.1% AAA-AA 29.9% 34.5%

Retail business* Financial instruments*

*Mapping of internal apoBank rating classes (BVR-Masterskala) to external rating classes based on underlying default probabilities

Stable rating profile in good rating classes

SLIDE 16

16 Investor-Update.

Regulatory data.

in percent 31.12. 2017 30.6. 2018 EU-average (31.3.2018) Leverage ratio 5,2 5,0 5,1 Tier 1 capital in relation to overall risk, minimum

f 3% as of 2020 onwards, expectedly

Liquidity coverage ratio, LCR 132 137 147 Highly liquid assets in relation to liquidity outflow within the next 30 days, minimum of 100% as of 1.1.2018 Net stable funding ratio, NSFR 108 111

Stable funding means available in relation to

necessary funding means, minimum of 100% as

f 2020, expectedly

Asset encumbrance ratio 32,8 33,0 28,7 Share of pledged assets Non performing loans ratio, NPL 1,5 1,3 3,9 Share of non performing loans in relation to total credit volume Coverage ratio 36,6 35,1 46,3 Share of provisioned loans in relation to non performing loans Forbearance ratio 1,4 1,3 2,5 Share of restructured loans in relation to total credit volume

SLIDE 17

17 Investor-Update.

Agenda

1 2 3

apoBank profile. Income statement, financial and risk position as at 30 June 2018. Funding.

SLIDE 18

18 Investor-Update.

Very good credit assessments.

S&P Fitch Ratings (group rating)

Counterparty credit rating AA- Issuer Default Rating longterm AA- Short-term debt A-1+ Issuer Default Rating short-term F1+ Pfandbriefrating (covered bonds) AAA Outlook stable Senior unsecured (preferred) AA- Senior subordinated (non preferred) A+ Outlook stable

SLIDE 19

19 Investor-Update.

Broad product range.

Commercial paper
Promissory notes
Registered bonds
Registered covered bonds
Benchmark issues

D E B T I S S U A N C E P R O G R A M M E ( D I P ) :

apoObligationen (bearer bonds for

retail clients)

Bearer bonds
Covered bonds
Fixed coupon

 Step up / step down

Variable coupon

 With cap and floor (result: senior preferred)

Callable

 Single callable  Multi callable

Congruent refinancing of assets

ensuring liquidity at all times

Flexible funding activities by

extending the product range

Expanding investor base

supporting increasing capital market funding

Perception in the capital markets as

reliable and constant issuer

Rising share of covered bonds in

long-term capital market funding

TARGETS PRODUCTS PRODUCT DETAILS

SLIDE 20

20 Investor-Update.

Highly diversified customer base.

> 300 institutional investors
> 200 investors from cooperative

banking group

> 50 partner banks and capital

market participants (via dealer banks)

Refinancing via public loans from

KfW Bankengruppe and various

ther promotional banks
448,000 retail clients, organisations

and corporate clients

Stable base of less volatile

customer deposits growing steadily

RETAIL, ORGANISATIONS,

CORPORATE CLIENTS

INVESTORS PARTNER BANKS

SLIDE 21

21 Investor-Update.

Development of funding sources.

45.000 10,000 40,000 30,000 20,000 6/2018 2017 2016 2015 2014

Euro million

Public funding facilities Profit participation rights and subordinated capital, excl. property receipts Covered bonds Senior unsecured apoObligations (retail) Term and savings deposits incl. subordinated property receipts Demand deposits 1,247 1,632 3,190 3,674 4,929 Covered bonds 3,455 3,555 4,522 5,315 5.777 Cover assets* 1,992 1,872 1,214 1,641 848 Excess cover

* incl. stipulated liquid excess cover

SLIDE 22

22 Investor-Update.

Risk management in covered bonds business.

Solely mortgage backed covered bonds
Highly granular cover pool with very good quality, properties are situated only in Germany

 Loans are predominantly for residential properties and are below “small loan limit“; more over properties with small commercial enterprises or related to the healthcare sector (medical practices, pharmacies)

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 stronger than the requirements by law
Voluntary public commitment for an extended collateralisation for mortgage Pfandbriefe

SLIDE 23

23 Investor-Update.

Highly granular cover pool.

Cover assets with focus on high

quality residential mortgages

Commercial mortgages of less

importance

Cover pool, Euro million

5.592 255 519 582 4.236 300k - 1 mn Euro Total > 10 mn Euro up to 300k Euro 1 mn Euro - 10 mn Euro

5.777 5.315 31.12.2017 30.06.2018

5.592 1.189 512 2.592 1.299 Total Multi family houses Other, commercial Condominium One/two family houses

Incl. 175 million Euro (2017);

185 million Euro (6/2018) stipulated liquid excess cover

Cover pool by size Cover pool by type

SLIDE 24

24 Investor-Update.

Your contacts.

ALEXANDER VAN ECHELPOEL RAINER VOGEL BARBARA ZIERFUß Head of Treasury Liquidity management and funding Investor relations +49 211 5998 9750 +49 211 5998 8914 +49 211 5998 4687 alexander.vanechelpoel@apobank.de rainer.vogel@apobank.de barbara.zierfuss@apobank.de

SLIDE 25

25 Investor-Update.

Disclaimer

This document is for information purposes

nly.

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 liability 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 reflect the opinion of the author at the time of preparation, and may be outdated

r have changed in another way as a result of later

developments. The circumstances presented are for illustration purposes only and do not necessarily correspond to the actual facts. Any statements on future profit or loss are forecasts

r

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

f the individual case.

This draft may be neither reproduced nor passed on to third parties without the consent of Deutsche Apotheker- und Ärztebank. Deutsche Apotheker- und Ärztebank assumes no liability for direct or indirect damage arising from or related to the distribution and/or use of this document.