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Debt Investor Update Strong Result for H1/19 and Positive Outlook for FY 2019 Disclaimer

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Debt Investor Update Strong Result for H1/19 and Positive Outlook for FY 2019 Disclaimer Debt Investor Update Strong result for H1/19 and positive outlook for FY 2019 Disclaimer This presentation is not an offer or invitation to subscribe for or purchase any securities in any jurisdiction, including any jurisdiction of the United States. Securities may not be offered or sold in the United States absent registration or pursuant to an available exemption from registration under the U.S. Securities Act. Deutsche Pfandbriefbank AG does not intend to conduct a public offering of securities in the United States. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial condition of Deutsche Pfandbriefbank AG and its direct and indirect subsidiaries and their securities. Nothing in this presentation shall form the basis of any contract or commitment whatsoever. This presentation may only be made available, distributed or passed on to persons in the United Kingdom in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 does not apply. This presentation may only be made available, distributed or passed on to persons in Australia who qualify as 'wholesale clients' as defined in section 761G of the Australian Corporations Act. This presentation is furnished to you solely for your information. You may not reproduce it or redistribute to any other person. This presentation contains forward-looking statements based on calculations, estimates and assumptions made by the company’s top management and external advisors and are believed warranted. These statements may be identified by such words as ‘may’, ‘plans’, ‘expects’, ‘believes’ and similar expressions, or by their context and are made on the basis of current knowledge and assumptions. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. Such factors include general economic conditions, the conditions of the financial markets in Germany, in Europe, in the United States and elsewhere, the performance of pbb’s core markets and changes in laws and regulations. No obligation is assumed to update any forward-looking statements. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the noted limitations. Investor Update based on results Q2/H1 2019 (IFRS, pbb Group, unaudited, but reviewed), August 2019 2 Business model & strategy pbb is a leading commercial real estate lender with a complementary public investment finance business Real Estate Finance (REF) FUNDING LENDING Partner to professional national and international real estate investors One of the top commercial real estate finance banks in Germany and Europe Stable and well diversified Specialised Pfandbrief-eligible Strategic portfolio – moderate growth targeted funding base on-balance sheet lender senior loans Portfolio Pfandbrief (leading European franchise, Structuring expertise for 30/06/19: € 30.6 bn (EaD) issuer) complemented by the US complex/large transactions Other Hotel/Leisure 5% Mixed use/other 5% Senior unsecured bonds Nordics 5% High risk standards and ~200 deals p.a. CEE 6% 8% Logistics/ (preferred/non-preferred) storage 10% focus on risk management Ø deal size € 50-70 mn USA Office 8% 49% Germany 44% 18% Frequent benchmark issuer 12% Long standing client Retail France 13% 19% plus private placements relationships UK Residential Retail deposits (online) Key figures (IFRS) 30/06/19 Regional presence (10 offices) Public Investment Finance (PIF) Total assets € 60.1 bn USA Partner to public sector for project related Total equity € 3.2 bn infrastructure investments3 and ECA guaranteed RWA € 13.6 bn export financing CET1 ratio1 19.4% Contribution business (earnings stabilisation, Leverage ratio1 5.0% cost/capital synergies) RoE before taxes2 7.6% Debt Investors FTE 746 Strategic portfolio in “hold” mode Considerable MREL buffer Headquarter Portfolio Strong capital base Branches/Rep. Offices 30/06/19: € 7.6 bn (EaD) High quality cover pools Other 9% Other 2% Sov. Austria 4% PSE (incl. related) High portfolio quality and Spain 19% 26% 14% risk standards 52% France 21% Strong operating Germany 53% performance Reg. Gov. (incl. related) 1 Excl. interim result 2 Taking into account pro-rata AT1 coupon (2018: € 12 mn; 2019: € 17 mn) 3 incl. public housing, utilities and waste disposal, health care and nursing care properties, childcare and educational facilities Investor Update based on results Q2/H1 2019 (IFRS, pbb Group, unaudited, but reviewed), August 2019 3 Highlights Operating and financial overview New business Q4 Net interest and commission income General and admin. expenses € bn (commitments, incl. extensions >1 yr) Q3 € mn (IFRS) € mn (IFRS) Q2 47% 44% 42% Q1 CIR1 11.6 456 199 193 10.5 415 118 Q4 58 4.2 Q4 111 57 4.7 115 2.4 Q3 103 232 Q3 49 201848 93 4.6 2.1 2.6 Q2 101 115 115 Q2 47 44 47 2.0 2.6 2.4 1.8 2.0 Q1 100 108 117 Q1 45 44 46 2017 2018 H1/19 2017 2018 H1/19 2017 2018 H1/19 Portfolio VP PIF REF Net income from risk provisioning Pre-tax profit Q4 € bn (financing volumes) € mn (IFRS) € mn (IFRS) Q3 72% 73% 2 2 Q2 70% Share of 7.4% 7.1% 7.6% strategic RoE b.t. Q1 portfolio 215 45.7 46.4 46.4 204 44 13.2 12.3 50 13.8 8 201849 6.4 6.4 51 117 7.0 0 Strategic 56 74 69 24.9 26.8 27.7 portfolio -10 47 48 48 -14 2017 2018 H1/19 2017 H1/18 2018 H1/19 2017 2018 H1/19 Note: Figures may not add up due to rounding 1 New definition: CIR = (GAE + net income from write-downs and write-ups on non-financial assets)/operating income 2 Taking into account pro-rata AT1 coupon (2018: € 12 mn; 2019: € 17 mn) Investor Update based on results Q2/H1 2019 (IFRS, pbb Group, unaudited, but reviewed), August 2019 4 New business Solid new business volume – avg. REF gross margins increased in Q2/19, returning to FY/18 levels New business – REF & PIF REF new business € bn (commitments, incl. extensions >1 yr) H1/18 2018 H1/19 10.7 € bn 9.5 Total volume (€ bn) 3.6 9.5 4.4 11.6 Q4 3.8 thereof: 10.5 0.8 2.2 0.9 4.0 Extensions >1 year Q3 2.3 Q4 4.2 No. of deals 73 185 76 4.4 4.7 1.9 Ø maturity (years)1 ~4.7 ~4.7 ~4.9 Q2 2.6 2.5 1.9 Q3 2.4 Ø LTV (%)2 59 59 57 Q1 4.6 2.0 1.7 1.9 2.1 Ø gross interest >160 ~155 >140 Q2 2.6 margin (bp) 2017 2018 H1/19 2.0 2.6 Q1 2.4 1.8 2.0 Regions Property types 2017 2018 H1/19 H1/19: € 4.4 bn H1/19: € 4.4 bn Mixed use/ Key drivers Q2/H1 2019: Other 3 Logistics/ other CEE 2% storage 5% Nordics 6% 9% 8% New business volume on solid level in H1/19 (€ 4.6 bn – REF: € 4.4 bn, Retail Germany PIF: € 0.2 bn) despite continued selective approach and recently reduced UK 8% 43% 12% overall transaction volumes in the market 54% Office 15% 21% Newbusiness extensions extensions > 1year) US volume up as expected (H1/19: € 0.7 bn; H1/18: € 0.5 bn) (Commitments, incl. USA Higher extensions (H1/19: € 0.9 bn; H1/18: € 0.8 bn) 16% Residential REF – portfolio with moderate growth strategy France Regional and property mix back to previous levels Average REF gross interest margin returned to >150bp in Q2/19 after 30/06/19: € 30.6 bn 30/06/19: € 30.6 bn ~130bp in Q1/19 (H1/19: >140bp) Other Mixed use/other 5% 2 Hotel 5% Selective approach and conservative risk positioning, avg. LTV 57% Nordics 5% 8% Logistics/ CEE 6% PIF – portfolio on hold storage 10% Office , III) Basel USA 44% New business volume of € 0.2 bn on constant low level 8% 49% Germany Portfolio 18% Avg. gross interest margin slightly up EaD Retail ( 12% France 13% 19% UK Residential Note: Figures may not add up due to rounding 1 Legal maturities 2 New commitments; avg. LTV (extensions): H1/19: 48%; H1/18: 56% 3 Austria; Netherlands Investor Update based on results Q2/H1 2019 (IFRS, pbb Group, unaudited, but reviewed), August 2019 5 Portfolio High portfolio quality with 96% investment grade and avg. LTV of 54%; Non-performing loans further reduced – remain at historically low level Total portfolio: Internal ratings (EL classes) REF Portfolio: Avg. weighted LTVs 2 € bn (EaD, Basel III) 03/19 06/19 % (commitments) Non-investment grade1 Investment grade1 55% 54% 55% 54% 30.9 30.6 7.7 7.6 16.3 15.9 4.9 5.1 59.8 59.3 8% 7% 1% 1% 1% 1% 0% 0% 5% 4% 92% 93% 99% 99% 99% 99% 100% 100% 95% 96% REF PIF VP C&A Total 06/18 12/18 03/19 06/19 Non-performing loans € mn (EaD, Basel III) Workout3 Restructuring4 56% 58% 57% 56% 57% 0.6% 0.6% 54% 54% 55% 55% 54% 03/19: Ø 55% NPL ratio5 52% 52% 52% 51% 06/19: Ø 54% 0.4% 0.3% 348 347 16 16 226 205 16 16 332 332 03/19 210 189 06/19 06/18 12/18 03/19 06/19 Germany UK France Sweden Poland Rest of USA Europe Note: Figures may not add up due to rounding 1 EL classes 1-8 = Investment grade; EL classes 9-18 = Non-investment grade 2 Based on performing investment loans only 3 Internal PD class 30: No signs that the deal will recover soon, compulsory measures necessary 4 Internal PD class 28+29: Payments more than 90 days overdue or criteria acc.
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