HYPO NOE
GROUP
Public Sector Pfandbriefe
September/2011
Tradition of Quality for over 120 Years
HYPO NOE Group is one of
Austria‘s largest regional banks.
We provide our customers with
innovative, quality services that
live up to our “Reliability and
Excellence” motto.
Founded in 1888, the bank’s sole
owner is the State of Lower
Austria. HYPO NOE Group
unveiled its new corporate design
and name in autumn 2010.
2
Our Principles
 Commitment to quality-oriented growth
 Tailor-made customer solutions in promising markets
 Centre of excellence – in-house skills combined with outside expertise
when necessary
 Pursuit of sustainable corporate earnings based on risk awareness
 Focus on strong customer relationships that live up to our core values:
sustainability, quality and stability
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Table of Contents
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Executive Summary
HYPO NOE Group
Financial Assets
Funding and Funding Strategy
Austrian Pfandbrief Law
Public Sector Pfandbrief Program
Substitution of Hungarian Exposure
Appendix
Contacts
5
6 – 10
11
12 – 13
14
15 – 17
18
19 – 24
25 – 26
4
Executive Summary
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A Young Bank with more than 120 Years of Tradition
Austrian Commercial Bank with a Focus on Public-Sector Financing
100% owned by the Province of Lower Austria (Aaa; stable)
Rebranding as of 23 October 2010: HYPO NOE Group
HYPO NOE Group:
 S&P Counterparty Rating: A/Stable/A-1
 Moody’s Public Sector Pfandbrief Rating: Aaa
 High Quality Cover Pool with a Clear Regional Focus
 Well Established Jurisdiction:
 Issuance under the Austrian Pfandbrief Law (1927, amended 2005)
5
History
1888
1992
1996
1999
2006
2007
2010
Establishment of a regional mortgage bank
for Lower Austria
Establishment of Niederösterreichische
Landesbank-Hypothekenbank AG (NÖ
HYPO-BANK). Sole owner: Lower Austria.
Partial privatisation – shareholders: 74%
Lower Austria, 26% ÖVAG (Austrian bank)
Change in shareholder structure –
shareholders: 59% Lower Austria, 41%
ÖVAG
ÖVAG decides to sell its shares in NÖ
HYPO-BANK back to Lower Austria
Transfer of ÖVAG shares to Lower Austria.
Split into HYPO Investmentbank AG and
NÖ HYPO-BANK for retail customers
Rebranding: HYPO NOE Gruppe Bank AG
(former HYPO Investmentbank AG), HYPO
NOE Landesbank AG (former
Niederösterreichische LandesbankHypothekenbank AG / NÖ HYPO-BANK)*
Map of Lower Austria
Vienna
* No governmental support was needed during the financial crisis. The 100% ownership of the Province of Lower Austria can be regarded as a long term,
strategic investment
6
Province of Lower Austria at a glance
Sole Shareholder of HYPO NOE Group:
 Moody’s long-term debt and issuer rating: Aaa (stable)*
 Lower Austria accounts for 15.8% of national GDP**
 Strong expected GDP growth: ***
 2011p:
+2.3%
 2012p:
+2.0%
 Low unemployment rate in comparison:
 Lower Austria:
 EU27:
6.0%**
9.5%****
Moody‘s Investors Service, 22 March 2011; Credit Analysis
** Statistik Austria (Source data: GDP 2008; Unemployment rate 2011)
*** ECONOMICA/IHS (Wirtschaftsprognose für NÖ 2010; p = prognosis)
**** Eurostat data for 2011
*
7
Group Structure
HYPO NOE Landesbank:
All-purpose bank with private and corporate
clients in Lower Austria and Vienna
HYPO NOE Group:
Regional market leader in the public
finance sector in combination with:
HYPO NOE Real Consult
HYPO NOE Leasing
8
HYPO NOE Group Financial Information (IFRS)
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Total Assets
Net Interest Income
Other Operating Result
General Administrative Expense
Risk Provisions
Pre-tax Profit
Tier I Ratio*
Equity Ratio*
Pre-tax Return on Equity
Cost Income Ratio
Average Number of Employees
* According to Austrian Banking Act
11.8bn
75.8mn
16.1mn
45.7mn
12.2mn
21.9mn
12.17%
17.63%
5.2%
57.2%
604
As of 30 June 2011
9
Group Loan Portfolio
By Industries
1.3%
Self Employed
16.7%
Private Customers
14.0%
Construction and
Housing*
50.0%
Public Sector
18.0%
Commerce
* Thereof more than 90% secured by guarantees of the State of Lower Austria (subsidised housing loans)
and/or by mortgages
Total EUR 8.735bn as of 30 June 2011
10
Financial Assets*
By Rating
17.9%
< A / not rated
40.56%
A
By Asset Class
35.05%
AAA
6.42%
AA
2.77%
Corporates
5.08%
ABS
22.43%
Government/Public
69.72%
Bank/Financial**
* Thereof, the top 5 countries Austria 43.8%, USA 5.4%, Netherlands 5.3%, Italy 4.6% and Poland 4.2%
** Thereof 44.0% Guaranteed by Federal States, 12.0% Covered Bonds 3.6% and Government Guaranteed
Total EUR 2.038bn as of 30 June 2011
11
Funding
8.0%
Others incl. Equity
1.7%
Subordinated
18.5%
Deposits from
Credit Institutions
52.2%
Debt securities in issue
(there of 67,6% Senior Bonds
with Deficiency Guarantee)
19.5%
Deposits from
Customers
Total EUR 11.801bn as of 30 June 2011
12
Funding Strategy
Public Sector Pfandbriefe
will be the Major Future Funding Source
3.500.000.000
3.000.000.000
2.500.000.000
2.000.000.000
1.500.000.000
1.000.000.000
500.000.000
0
Public Sector Cover Pool
Outstanding Public Sector
Over-Collateralisation Development as of 31 August 2011
13
Austrian Pfandbrief Law
The Austrian Pfandbrief Law is one of Austria‘s strong
Covered Bond Laws*
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Established 1927, Amended 2005
Maturity Matching Requirements
Mandatory 2% Over-collateralisation in High Liquid Cover Assets
Public Sector Cover Assets Limited to Austria, EEA and Switzerland**
The Trustee („Treuhänder“) is a Strong Supervisory Authority
Legal Protected Insolvency Remoteness
* The other Austrian Covered Bond Laws are the Gesetz für fundierte Bankschuldverschreibungen and the Hypothekenbankgesetz
** The maximum risk weighting according to the Directive 2000/12/EC for public sector entities eligible for the Cover Pool must not exceed 20% (this
excludes therefore regional governments or local authorities in Rumania, Bulgaria, Liechtenstein, Malta and the Baltics)
14
Public Sector Pfandbrief Program
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Moody‘s Rating:
Public Sector Cover Pool:
Public Sector Pfandbriefe:
Over-collateralisation on Nominal Basis:
Over-collateralisation on NPV Basis:
* Thereof € 94mn equivalent in CHF
** Thereof € 343mn equivalent in CHF
*** Net of the legally required minimum 2% over-collateralisation
Aaa
€ 3.027bn*
€ 1.967bn**
50.9 %***
46.0 %
As of 31 August 2011
15
Public Sector Cover Pool (1/2)
Borrowers and Guarantors
12.13%
Municipalities in Lower
Austria
Clear Regional Focus
7.9%
Rest Austria
5.2%
Hungary
5.25% Hungarian
Public Entities
5.86%
Other Austrian
Municipalities and
Provinces
2.03%
Republic of
Austria
74.74%
Province of Lower Austria
86.9%
Lower Austria
As of 30 June 2011
16
Public Sector Cover Pool (2/2)
More Than 1,100 Single Loans
Quality of Cover Assets
9.1%
A
4.7%
Aa
8.0%
Bonds
6.6%
<A
79.6%
Aaa
92.0%
Loans
As of 30 June 2011
17
Substitution of Hungarian Exposure
As of 7 September 2011
0.3%
SK
0.4%
CZ
0.8%
PL
98.5% Austria
As of 30 June 2011
5.2%
Hungary
94.8% Austria
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APPENDIX
19
Key Financial Figures
€ mn.
Q2 2011
Δ Q2 2010-11
Q2 2010
2010
2009
Statement of Financial Positions
Total Assets
Loans and advances to customers
Financial assets
Deposits from customers
Debt securities in issue
11.801
8.735
2.143
2.305
6.160
-0,5%
5,2%
-6,3%
-3,8%
16,3%
11.863
8.302
2.286
2.397
5.298
12.004
8.879
2.094
2.327
5.945
11.645
8.581
2.283
2.461
5.167
75,8
-12,2
3,8
1,1
-45,7
16,2
-17,1
-5,5
16,4
8,1%
24,5%
-17,4%
120,0%
10,1%
92,9%
-3520,0%
135,1
-17,7
7,2
16,1
-81,9
-47,6
-3,6
--0,5
7,1
138,6
-34,1
7,2
2,0
-76,7
4,1
-16,2
-32,9%
-33,3%
70,1
-9,8
4,6
0,5
-41,5
8,4
0,5
-8,2
24,6
-57,4
-76,6
-0,9
335,0%
335,0%
-573,8%
-13,2
-17,6
0,2
-28,6
-38,1
0,3
27,1
36,2
-0,1
452
3.718
12,17%
17,63%
5,2%
57,2%
2,4%
-2,9%
6,0%
2,2%
-35,0%
16,0%
442
3.831
11,48%
17,26%
8,0%
49,3%
452
3.943
11,47%
17,30%
1,9%
76,4%
438
3.938
11,11%
16,70%
6,8%
57,3%
Income Statement
Net interest income
Risk provisions for loans and advances
Net fee and commission income
Net trading income
General administrative expenses
Other operating result
Loss from financial assets and from hedging activities
Gains or losses on disposals of consolidated subsidaries
Income Tax
Net Profit
-4,8
20,1
Changes of Market Value Change in the positions of
Available For Sale net (after deferred taxes)
Available For Sale gross
Designated at Fair Value Through Profit and Loss
Key Figures
Eligible core capital (tier 1 capital)
Risk weighted assets
Core capital ratio
Equity ratio
Return on equity before tax
Cost income ratio
20
Group Outstanding Funding
€ `000
Money Markets and Debt Capital Markets Funding
Deposits from credit Institutions
thereof Austrian National Bank
thereof other banks
thereof Schuldscheindarlehen with deficiency guarantee
Deposits from customers
thereof saving deposits
thereof time and sight deposits
thereof Schuldscheindarlehen with deficiency guarantee
thereof Schuldscheindarlehen without deficiency guarantee
Debt securities in issue
thereof Pfandbriefe and Covered Bonds
thereof Public Sector Pfandbriefe
thereof Mortgage Backed Pfandbriefe
thereof Covered Bonds
thereof Senior Bonds (without profit participation rights)
thereof Senior Bonds with deficiency guarantee
thereof Senior Bonds without deficiency guarantee
Subordinated capital
Others incl. equity
Total liabilities and equity
30/06/2011
in %
2.183.778
650.023
1.533.755
18,5%
610.510
2.304.505
19,5%
766.845
1.537.660
605.720
40.835
6.159.804
1.993.656
52,2%
1.951.924
41.732
0
4.165.496
3.947.952
217.544
203.780
949.589
11.801.456
1,7%
8,0%
100%
21
Size of Cover Assets
< 300k
(Total 65mn; Nr. 786)
300k – 5mn
(Total 364mn; Nr. 303)
> 5mn
(Total 2,458mn: Nr. 79)
Public Sector Cover Pool as of 30 June 2011
22
Types of Debtors
and Guarantors
Others
1.9%
(Total 56mn; Nr. 12)
Guaranteed by Municipalities
4.5%
(Total 133mn; Nr. 104)
States
2.2%
(Total 64mn; Nr. 8)
Provincial States
17.7%
(Total 526mn; Nr. 85)
Municipalities
11.6%
(Total 346mn; Nr. 898)
Guaranteed by States
1.2%
Guaranteed by Provincial States
61.0%
(Total 37mn; Nr.8 )
(Total 1.814mn; Nr. 55)
Public Sector Cover Pool as of 30 June 2011
23
Maturity Structure
Public Sector Pfandbriefe
Cover Pool
409
more than 120 months
1.343
176
from 60 to 120 months
983
1.333
from 12 to 60 months
628
5
up to 12 months
23
0
200
400
600
800
1.000
1.200
1.400
As of 30 June 2011
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Investors – Contacts
Felix Diem
Ivo Minkov
Georg Lehman
Head of Team
Senior Manager
Financial Institutions & Sovereigns
Senior Analyst
Financial Institutions & Sovereigns
Tel: +43 (0)5 90 910 1560
Tel: +43 (0)5 90 910 1478
Tel: +43 (0)5 90 910 1557
felix.diem@hyponoe.at
ivo.minkov@hyponoe.at
georg.lehman@hyponoe.at
Rating & Investor Advisory
HYPO NOE Group, Wipplingerstrasse 4, A-1010 Wien
www.hyponoe.at
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Debt Capital Markets Funding - Contacts
Hermann Maschl
Alexandra Nitzlader
Herbert Pabisch
Head of Funding
Senior Funding Manager
Senior Funding Manager
Tel: +43 (0)5 90 910 1222
Tel: +43 (0)5 90 910 1252
Tel: +43 (0)5 90 910 1369
hermann.maschl@hyponoe.at
alexandra.nitzlader@hyponoe.at
herbert.pabisch@hyponoe.at
HYPO NOE Group, Wipplingerstrasse 4, A-1010 Wien
www.hyponoe.at
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Disclaimer
This document, which has been issued by HYPO NOE Group, comprises the written materials/slides for a presentation concerning a proposed offering of covered bonds (Pfandbriefe) (the
“Offering”). This document does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, any securities in HYPO NOE Group, 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 in relation thereto. Any such offers will only be made when a prospectus in relation to the
Offering is published in due course.
The contents of this presentation is to be kept confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any
purpose.
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 Group or the banks represented at 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 can 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 Group have not been and 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 Group in the
United States. The distribution of this document in 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.
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 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 Group 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 Group, 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.
By participating in this presentation or by accepting any copy of this document, you agree to be bound by the foregoing limitations.
NOT FOR DISTRIBUTION IN THE UNITED STATES, AUSTRALIA, CANADA AND JAPAN.
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