FOCUSED. DIVERSIFIED. COMPETENT. TRUSTWORTHY. GROUP ANNUAL REPORT 2016 DVB in Key figures at a glance € mn 2016 2015 % Earnings data Net interest income 209.0 183.7 13.8 ABOUT US Allowance for credit losses –381.4 –141.5 – THE SPECIALIST Net interest income after allowance for credit losses –172.4 42.2 – Net fee and commission income 119.2 103.3 15.4 IN INTERNATIONAL Results from investments in companies accounted for using the equity method 9.6 3.9 – Net other operating income/expenses 99.6 14.7 – TRANSPORT FINANCE Total income 56.0 164.1 –69.9 General administrative expenses –177.5 –180.9 –1.9 Net result from financial instruments in accordance with IAS 39 –2.7 70.8 – Consolidated net income/loss before bank levy, BVR1 Deposit Guarantee Scheme and taxes –124.2 54.0 – Consolidated net income/loss before taxes –135.3 46.1 – Consolidated net income/loss –138.7 45.6 – Key financial indicators Return on equity (before taxes, %) –10.8 0.8 – Cost/income ratio (%) 44.3 55.3 –10.0 pp Economic Value Added (€ million) –249.0 –86.8 – FOCUSED. GROUP MANAGEMENT REPORT Key items from the statement of financial position Business volume 29,187.0 28,207.6 3.5 Customer lending volume 25,876.4 25,272.5 2.4 Total assets 27,713.3 26,610.5 4.1 Loans and advances to customers 23,686.7 22,975.5 3.1 Deposits from customers 7,839.6 7,510.8 4.4 DIVERSIFIED. Securitised liabilities 12,722.3 13,141.9 –3.2 Subordinated liabilities 951.2 742.7 28.1 Equity 1,275.7 1,429.5 –10.8 Total capital in accordance with the Capital Requirements Regulation Common equity tier 1 1,012.0 1,147.3 –11.8 Tier 2 capital 584.0 432.0 35.2 COMPETENT. Modified available capital 1,596.0 1,579.3 1.1 FINANCIAL STATEMENTS CONSOLIDATED Capital ratios – Basel III (%) Common equity tier 1 ratio 13.2 16.3 –3.1 pp Total capital ratio 20.7 22.4 –1.7 pp Staff by business division TRUSTWORTHY. Transport Finance/Investment Management 324 314 3.2 Service areas 242 235 3.0 LogPay Financial Services 58 60 –3.3 AUDIT OPINION Total active staff 624 609 2.5 Rating € mn 2016 2015 2014 Standard & Poor’s Long-term counterparty credit rating A+ A+ A+ Short-term credit rating A-1 A-1 A-1 Outlook negative stable stable Fitch Ratings2 Long-term issuer default rating AA- AA- A+ Short-term issuer default rating F1+ F1+ F1+ 1 National Association of German Cooperative Banks 2 Within the scope of the German Cooperative Financial Services Network's rating FURTHER INFORMATION DVB BANK SE GROUP ANNUAL REPORT 2016 CONTENTS DVB in Key figures at a glance € mn 2016 2015 % 18 ABOUT US 220 CONSOLIDATED Earnings data Net interest income 209.0 183.7 13.8 ABOUT US 20 BOARD OF FINANCIAL Allowance for credit losses –381.4 –141.5 – THE SPECIALIST MANAGING DIRECTORS STATEMENTS Net interest income after allowance for credit losses –172.4 42.2 – FOCUSED 24 LETTER TO OUR SHAREHOLDERS 221 INCOME STATEMENT Net fee and commission income 119.2 103.3 15.4 IN INTERNATIONAL AND BUSINESS PARTNERS Results from investments in companies accounted for using the equity method 9.6 3.9 – DVB consistently pursues its strategic 221 APPROPRIATION OF PROFITS Net other operating income/expenses 99.6 14.7 – TRANSPORT focus on theFINANCE transportation industry. 28 HIGHLIGHTS 2016 Total income 56.0 164.1 –69.9 222 STATEMENT OF COMPREHENSIVE _ 02 30 SUPERVISORY BOARD INCOME General administrative expenses –177.5 –180.9 –1.9 Net result from financial instruments in accordance with IAS 39 –2.7 70.8 – 34 REPORT OF THE SUPERVISORY BOARD 223 STATEMENT OF FINANCIAL POSITION Consolidated net income/loss before bank levy, BVR1 Deposit Guarantee Scheme and taxes –124.2 54.0 – 40 CORPORATE GOVERNANCE REPORT Consolidated net income/loss before taxes –135.3 46.1 – 224 STATEMENT OF CHANGES IN EQUITY Consolidated net income/loss –138.7 45.6 – 52 SUSTAINABILITY REPORT 224 CASH FLOW STATEMENT 52 Developing a sustainability programme Key financial indicators 54 Responsible corporate governance 226 SEGMENT REPORT 58 Social responsibility vis-à-vis our staff Return on equity (before taxes, %) –10.8 0.8 – 66 Social responsibility vis-à-vis society 229 NOTES Cost/income ratio (%) 44.3 55.3 –10.0 pp (corporate citizenship) Economic Value Added (€ million) –249.0 –86.8 – FOCUSED. 68 Environmental responsibility DIVERSIFIED GROUP MANAGEMENT REPORT 290 RESPONSIBILITY STATEMENT 72 DVB SHARE Key items from the statement of financial position DVB’s high level of diversification is a 72 Equity markets and the DVB share Business volume 29,187.0 28,207.6 3.5 key pillar of the Bank. 291 AUDIT OPINION Customer lending volume 25,876.4 25,272.5 2.4 Total assets 27,713.3 26,610.5 4.1 _ 06 76 GROUP MANAGE- Loans and advances to customers 23,686.7 22,975.5 3.1 292 FURTHER Deposits from customers 7,839.6 7,510.8 4.4 DIVERSIFIED. MENT REPORT INFORMATION Securitised liabilities 12,722.3 13,141.9 –3.2 77 FUNDAMENTAL INFORMATION Subordinated liabilities 951.2 742.7 28.1 ABOUT THE GROUP 294 DVB WORLDWIDE Equity 1,275.7 1,429.5 –10.8 77 Components of the unique business model 296 GLOSSARY 81 Competitive strengths setting DVB apart Total capital in accordance with the Capital Requirements Regulation 81 Strategic goals and implementation 300 ABBREVIATIONS Common equity tier 1 1,012.0 1,147.3 –11.8 83 Commercial planning and Tier 2 capital 584.0 432.0 35.2 COMPETENT. management system 302 INDEX OF TABLES AND CHARTS Modified available capital 1,596.0 1,579.3 1.1 COMPETENT FINANCIAL STATEMENTS CONSOLIDATED 86 REPORT ON THE ECONOMIC POSITION 305 IMPRINT 86 Macroeconomic environment Capital ratios – Basel III (%) DVB’s core strength is our 90 Financial position and performance 306 FINANCIAL CALENDAR 2017 Common equity tier 1 ratio 13.2 16.3 –3.1 pp specialised teams. 106 Remuneration Total capital ratio 20.7 22.4 –1.7 pp _ 10 112 DEVELOPMENT OF THE BUSINESS DIVISIONS Staff by business division TRUSTWORTHY. 112 Shipping Finance Transport Finance/Investment Management 324 314 3.2 124 Aviation Finance 140 Offshore Finance Service areas 242 235 3.0 152 Land Transport Finance LogPay Financial Services 58 60 –3.3 164 Important Deals 2016 AUDIT OPINION Total active staff 624 609 2.5 166 Financial Institutions and Syndications 170 DVB Corporate Finance 178 Investment Management Rating € mn 2016 2015 2014 186 REPORT ON EXPECTED DEVELOP- TRUSTWORTHY MENTS, OPPORTUNITIES AND RISKS Standard & Poor’s 186 Report on expected developments Long-term counterparty credit rating A+ A+ A+ 190 Report on opportunities and risks Short-term credit rating A-1 A-1 A-1 DVB’s goal is to maintain trusting relationships on numerous levels. 219 EXPLANATORY DISCLOSURES UNDER Outlook negative stable stable TAKEOVER LAW _ 14 Fitch Ratings2 219 REPORT OF THE BOARD OF MANAGING Long-term issuer default rating AA- AA- A+ DIRECTORS ON RELATIONS WITH AFFILIATED COMPANIES Short-term issuer default rating F1+ F1+ F1+ 1 National Association of German Cooperative Banks 2 Within the scope of the German Cooperative Financial Services Network's rating FURTHER INFORMATION CONTENTS DVB BANK SE GROUP ANNUAL REPORT 2016 CONTENTS 18 ABOUT US 220 CONSOLIDATED ABOUT US 20 BOARD OF FINANCIAL THE SPECIALISTFOCUSED MANAGING DIRECTORS STATEMENTS 24 LETTER TO OUR SHAREHOLDERS 221 INCOME STATEMENT IN INTERNATIONAL AND BUSINESS PARTNERS DVB consistently pursues its strategic 221 APPROPRIATION OF PROFITS TRANSPORT focus on theFINANCE transportation industry. 28 HIGHLIGHTS 2016 222 STATEMENT OF COMPREHENSIVE _ 02 30 SUPERVISORY BOARD INCOME 34 REPORT OF THE SUPERVISORY BOARD 223 STATEMENT OF FINANCIAL POSITION 40 CORPORATE GOVERNANCE REPORT 224 STATEMENT OF CHANGES IN EQUITY 52 SUSTAINABILITY REPORT 224 CASH FLOW STATEMENT 52 Developing a sustainability programme 54 Responsible corporate governance 226 SEGMENT REPORT 58 Social responsibility vis-à-vis our staff 66 Social responsibility vis-à-vis society 229 NOTES FOCUSED. (corporate citizenship) 68 Environmental responsibility DIVERSIFIED GROUP MANAGEMENT REPORT 290 RESPONSIBILITY STATEMENT 72 DVB SHARE DVB’s high level of diversification is a 72 Equity markets and the DVB share key pillar of the Bank. 291 AUDIT OPINION _ 06 76 GROUP MANAGE- DIVERSIFIED. MENT REPORT 292 FURTHER INFORMATION 77 FUNDAMENTAL INFORMATION ABOUT THE GROUP 294 DVB WORLDWIDE 77 Components of the unique business model 296 GLOSSARY 81 Competitive strengths setting DVB apart 81 Strategic goals and implementation 300 ABBREVIATIONS 83 Commercial planning and COMPETENT. management system 302 INDEX OF TABLES AND CHARTS COMPETENT FINANCIAL STATEMENTS CONSOLIDATED 86 REPORT ON THE ECONOMIC POSITION 305 IMPRINT 86 Macroeconomic environment DVB’s core strength is our 90 Financial position and performance 306 FINANCIAL CALENDAR 2017 specialised teams. 106 Remuneration _ 10 112 DEVELOPMENT OF THE BUSINESS DIVISIONS TRUSTWORTHY. 112 Shipping Finance 124 Aviation Finance 140 Offshore Finance 152 Land Transport Finance 164 Important Deals 2016 AUDIT OPINION 166 Financial Institutions and Syndications 170 DVB Corporate Finance 178 Investment Management 186 REPORT ON EXPECTED DEVELOP- TRUSTWORTHY MENTS, OPPORTUNITIES AND RISKS 186 Report on expected developments 190 Report on opportunities and risks DVB’s goal is to maintain trusting relationships on numerous levels. 219 EXPLANATORY DISCLOSURES UNDER TAKEOVER LAW _ 14 219 REPORT OF THE BOARD OF MANAGING DIRECTORS ON RELATIONS WITH AFFILIATED COMPANIES FURTHER INFORMATION CONTENTS DVB BANK SE GROUP ANNUAL REPORT 2016 CONTENTS 18 ABOUT US 220 CONSOLIDATED ABOUT US 20 BOARD OF FINANCIAL THE SPECIALISTFOCUSED MANAGING DIRECTORS STATEMENTS 24 LETTER TO OUR SHAREHOLDERS 221 INCOME STATEMENT IN INTERNATIONAL AND BUSINESS PARTNERS DVB consistently pursues its strategic 221 APPROPRIATION OF PROFITS TRANSPORT focus on theFINANCE transportation industry.