Investor Presentation
Innsbruck, Juni 2018
Investor Presentation
Contents
12/31/2017 2
Hypo Tirol Bank 3
Our customers 5
Tirol & Austria 6
Rating 10
Core Capital Ratio according to CRR/CRD IV 11
Some Key Company Figures 12
Own Investments (Nostro) 14
Funding 15
Pfandbriefe 16
Public Pfandbriefe 17
Mortgage Pfandbriefe 26
Property Price Developments in Innsbruck & Austria 31
Why Hypo Tirol Bank 36
Your Contact Person 37
Appendix 39
The Pfandbrief Law 41
Real Estate � Cover Pool � Pfandbrief 44
Differences Pfandbriefe – Covered Bonds 45
Investor Presentation
About us
12/31/2017 3
Focus: Core Market Tirol. On the one hand, the strategic commitment as a universal bank lies
clearly in the core markets of Tirol and South Tirol. In addition, Hypo Tirol Bank is active in the
Vienna area with a selective customer and product focus.
Hypo Group encompasses 20 branches and a specialised unit for private banking and
professionals in Tirol, a branch in Bozen, as well as a branch in Vienna. In addition, business
customers are offered comprehensive advice throughout the Tirol from 3 locations.
Strong sole owner. Since its founding in 1901, Hypo Tirol Bank
is owned 100 % by the State of Tirol.
Investor Presentation
Hypo Tirol Bank. Our regional bank
12/31/2017 4
Local connectedness. Hypo Tirol Bank sees itself as a partner to the State of Tirol, at the centre
of which is the people of the region. This affinity which has grown since its formation in 1901 is
reflected not only in its business orientation, but also in its economic, social and cultural
commitment.
As a Tirolean tradition bank, Hypo Tirol Bank is particularly well positioned to help its clients:
• As a connoisseur of the domestic economy
• Close to customers and their everyday life
• Connected to the region, its people and its traditions
• Bound to the economic, social, cultural and scientific concerns and the successes of the
country and its people
Investor Presentation
Our customers
12/31/2017 5
� State of Tirol
� Municipalities and cities
� Country corporations
� Entities
� Non-profit housing developers
� Support in all financial
matters
� A balanced range of
investment products
� tailored range of insurance
products
� funding know-how for
private residential
construction and for
enterprises
� modern account solutions
� flexible financing options
Private clientsPrivate clients
Corporate clients
Corporate clients
Private banking &
liberal professions
Private banking &
liberal professions
Public Institutions
Public Institutions
Investor Presentation12/31/2017 6
Factbox: Tirol• Tirol is the third-largest state in Austria, with 85% of the
country's surface area more than 1,000 m above sea level.
• 12% of the total area of Tirol can be seBled. Around two-thirds of the land area is covered by the Alps and forests.
• Tourism. Tirol is Austria's most tourism-oriented state with 47.5 million overnight stays (in 2017). With 63 overnight stays per inhabitant, Tirol is tourism world champion.
• Science. The combination of good infrastructure, strategic location, scientific focus (universities, universities of applied science) and a wide range of leisure activities make Tirol an attractive region.
• Eight universities with over 47,000 students, more than 3,000 teachers and an annual budget of over 400 million euros.
• Expenses of the country for science and research 2015: 37.4 million euro. Research rate: 3.14 percent.
• Industry. Thanks to modern industrial settlements such as Swarovski, GE Jenbacher, Tyrolit, Adler Lacke, Plansee Group, Sandoz Kundl, Tirol is a sought-after location.
• Water kingdom. In Austria, which is blessed with water, around 2.5 billion cubic meters are consumed per year. This corresponds to about 3% of the quantity available per year.
• Renewable energy. By 2050, the entire energy supply will be covered by domestic, renewable resources.
• Family business. In Tirol, 85% of the companies are family-owned. (Location Tirol)
Investor Presentation
Short Profile: Tirol and Austria (1/2)
12/31/2017 7
Tirol Austria in %
Population/job market Inhabitants (12/31/2016) 746,153 8,772,865 8.5%
Unemployment rate (2016)
EU comparison
3.5% 6.0%
(EU28: 8.6%)
Gross added value at
manufacturing prices (2016)in EUR total 28.9 bn 353.3 bn 8.2%
primary sector (agriculture) 0.7% 1.2%
secondary sector (industry) 28.2% 27.7%
tertiary sector (services) 71.1% 71.0%
of which accommodation and catering 13.5% 4.9%
overnight stays winter (2014/15) 26.4 m 68.6 m 38.5 %
overnight stays summer (2015) 21.2 m 75.0 m 28.3 %
overnight stays per capita (2015) 63.8 16.1
Source: Statistik Austria, Eurostat
Investor Presentation
Short Profile: Tirol and Austria (2/2)
12/31/2017 8
All values in percentages, unless otherwise specified
Source: Austrian Chambers of Commerce, Statistik Austria, Eurostat
2010 2011 2012 2013 2014 2015 2016
Real Austrian GDP growth rate +1.9 +2.8 +0.8 +0.3 +0.4 +1.0 +1.5
Unemployment rate 1)
– Austria 4.8 4.6 4.9 5.4 5.6 5.7 6.0
– Tirol 3.2 2.7 2.8 3.1 3.2 3.0 3.5
Debt level Austria (as % of GDP) 82.4 82.2 81.6 80.8 84.4 85.5 84.6
Public deficit (as % of GDP)
– Austria -4.4 -2.6 -2.2 -1.3 -2.7 -1.2 -1,6
– Tirol -0.01 +0.05 +0.03 +0.02 +0.03 ±0.00 ±0,00
Inflation (HVPI Austria, 2015=100, in %) 1.7 3.6 2.6 2.1 1.5 0.8 1.0
1) Calculation of the unemployment rate by EUROSTAT according to the international definition (ILO)
Investor Presentation
Comparison of the federal states
12/31/2017 9
Federal State Moody's S&P
Vienna Aa1
Salzburg
Vorarlberg AA+
Tirol AA+
Upper Austria AA+
Austria Aa1 AA+
Styria AA
Carinthia A3
Lower Austria Aa1 AA
Burgenland AA
Regional GDP per capita
27.500
32.500
33.300
35.400
39.400
40.300
42.000
42.300
46.100
47.700
0k 10k 20k 30k 40k 50k 60k
Burgenland
Lower Austria
Carinthia
Styria
Austria
Upper Austria
Tirol
Vorarlberg
Salzburg
Vienna
year 2015, in EUR
Source: Austrian Chambers of Commerce, Statistik Austria
Investor Presentation
Rating of Hypo Tirol Bank
12/31/2017 10
Non-guaranteed debts S&P Moody‘s
long-term A- Baa2
short-term A-2
subordinated Ba2
outlook stable positive
Guaranteed debts 1) Moody‘s
long-term A3
subordinated Baa3
outlook positive
Pfandbriefe Moody‘s
Public Pfandbriefe Aa1
Mortgage Pfandbriefe Aa2
1) Liabilities of Hypo Tirol Bank that were made up until and including 04/02/2003 and liabilities of Hypo Tirol Bank, which were established between 04/03/2003 and 04/01/2007, provided their term does not exceed 30/09/2017.
Investor Presentation
Core Capital Ratio *
12/31/2017 11
* according to CRR/CRD IV as of 31 December 2014, respectively according to Basel II as of 31 December 2013
9.5010.00
10.80
12.21
13.7014,51 14.41 14.58 14.85
4.00 4.00
5.506.00
7.638.25
8.889.50 9.50
2012 2013 2014 2015 2016 2017 2018 2019 2020
core capital capital conservation buffer systemic capital buffer
core capital ratio * forecast according to business plan
Regulatory framework:
Hypo Tirol Bank AG:
Investor Presentation
Some Key Company Figures
12/31/2017 12
1) As of the 2016 financial year, Hypo Tirol Bank AG makes use of the option of IFRS 9.7.1.2, which is incorporated into EU law in November 2016, and directly reports the changes in its own creditworthiness risk in other comprehensive income. The operating result before changes in the creditworthiness risk of 2016 thus corresponds to earnings before taxes. The creditworthiness-induced fair value change in own liabilities in 2016 is -46,837 k EUR
2) According to CRR/CRD IV as of 31 December 2014, respectively according to Basel II as of 31 December 20133) According to CRR/CRD IV till 2014; according to delegated act EU/2015/61 since 2015
Capacity Figures in million Euro 2013 2014 2015 2016 2017Balance sheet total 8,902 8,255 7,502 7,632 7,058
Receivables from clients 5,584 5,367 5,290 5,214 5,346
Liabilities evidenced by certificate 4,695 3,896 2,931 3,006 2,102
Equity capital according to Banking Act 567 562 562 567 585
of which Tier 1 430 449 480 505 519
Sales Figures in k Euro 2013 2014 2015 2016 2017Net interest income after risk provision 71,269 45,698 69.898 104,284 65,889
Net commission income 28,996 25,572 26,980 26,338 26,367
Administrative expenses -82,883 -81,444 -79,561 -74,041 -72,673
Operative result prior to change of specific credit risk n.a. -2,105 20,243 n.a. 1) n.a. 1)
Consolidated result before taxation 18,016 -18,485 67,289 38,262 22,015
Company Ratios 2013 2014 2015 2016 2017Equity capital ratio under CRR/CRD IV 2) 13.2% 13.5% 14.3% 15.4% 16,3%
Core Capital Ratio under CRR/CRD IV 2) 10.3% 10.8% 12.2% 13.7% 14.5%
Number of employees - annual average 582 566 513 519 512
Liquidity Coverage Ratio (LCR) 3) n.a. 259% 159% 278% 259%
Net Stable Funding Ratio (NSFR) n.a. 99% 99% 84% 104%
Leverage Ratio gem. CRR/CRD IV (IFRS) n.a. 4.78 5.95 6.36 6.47
Investor Presentation
23,4 24,0 23,520,5 20,5 20,4
2014 2015 2016 2017 2018 2019 2020
23,2
An Overview of the Figures
12/31/2017 13
Balance sheet total 1)in million Euro
Interest & commission income 2)in million Euro
Number of employees 1) Material expenditure 2)in million Euro
1) 2018-2019 = forecast according to business planning
8.2557.502 7.632
7.058 7.200 7.300 7.400
2014 2015 2016 2017 2018 2019 2020
125 123112 109 111 116
2014 2015 2016 2017 2018 2019 2020
103
566
513 498 512 508 501 498
2014 2015 2016 2017 2018 2019 2020
Investor Presentation
Own Investments (Nostro)
12/31/2017 14
Werte sind Marktwerte in Mio. EUR, sofern nicht anders angegeben; as of 01/04/2018
• Over 99% are denominated in EUR an in the bond portfolio
• TOP 5 Countries: Austria, Germany, the Netherlands, Finland, Norway, France, Belgium – aggregated 76% of the portfolio
• Ø rating AA3
Portfolio Rating Share in %Market values in million EUR AAA 39.5
AA1 34.8
AA2 5.1
AA3 8.3
A1 2.5
A2 2.7
A3 2.5
BAA1 2.5
BAA2 1.4
BAA3 0.5
< BAA3 0.2
Covered Bonds
369
Financials 91Corporate Bonds
36
Others 19
Government
Bonds 698
Investor Presentation
Funding
12/31/2017 15
Anticipated issue volume Issue planning 2018
2018: 200 to 400 million EUR
2019: 400 to 600 million EUR
2020: 600 to 900 million EUR
Debt Maturity Profile (Issues)
Documentation
Secu
red
Un
secu
red
in million Euro
MTN Base Prospectus x x
PP: bearer notes, without prospectus x x
PP: registered notes, without prospectus x x
Schuldscheindarlehen x
Retail x x
Housing construction convertible bonds x
151
512
144
674
105152
2018 2019 2020 2021 2022 2023
75m
75m
100m
Private Placements
Mortgage Pfandbriefe
Retail
Investor Presentation12/31/2017 16
The Austrian Pfandbrief
Hypo Tirol Bank has
been an issuer of
Austrian mortgage
bonds for over 100
years.
Investor Presentation
Public Pfandbriefe
12/31/2017 17
all values in EUR; data as at 03/31/2018
Cover pool
Total value of cover pool in EUR equivalent: 621.404.548
Assets in EUR 620.943.084
Assets in CHF 461.464
Assets in USD
Assets in JPY
No derivatives may be dedicated to the cover pool.
Issues
in EUR 430.000.000
in CHF -
in USD -
in YEN -
Other currencies -
Investor Presentation
Maturity Structure
12/31/2017 18
all values in million EUR; data as at 03/31/2018
10
61
42
243
265
0
385
0
15
30
0 100 200 300 400 500
Remaining life up to 12 months
Remaining life > 12 to 36 months
Remaining life > 36 to 60 months
Remaining life > 60 to 120 months
Remaining life > 120 months
Issues
Cover pool
Investor Presentation
Distribution by Size
12/31/2017 19
all values in EUR; data as at 03/31/2018
Investor Presentation
Geographical Distribution
12/31/2017 20
all values in EUR; data as at 03/31/2018
Lower Austria (Aa1; AA) 5,8%
Styria (AA) 0,9%
Carinthia (A3) 0,9%
Upper Austria (AA+) 0,6%
Salzburg 0,4%
Burgenland (AA) 0,0%
Tirol (AA+)
91%Others
9%
Investor Presentation
Distribution by Type of Debtor
12/31/2017 21
all values in EUR; data as at 03/31/2018
Distribution by type of borrower/ guarantor in EUR in %
Direct claim against sovereign - 0,0%
Direct claim against region / federal state 201.881.905 32,5%
Direct claim against municipality 280.956.384 45,2%
Claim with guarantee of sovereign - 0,0%
Claim with guarantee of region / federal state 245.332 0,0%
Claim with guarantee of municipality 138.124.205 22,3%
Total 621.404.548 100,0%
Investor Presentation12/31/2017 22
Tirol has the lowest per capita debt in comparison with the federal states
Werte in EUR; Quelle: Statistik Austria
0 1000 2000 3000 4000 5000 6000 7000 8000
Tirol
Vorarlberg
Upper Austria
Salzburg
Vienna
Burgenland
Styria
Lower Austria
Carinthia
Federal states indebtedness p.c. (2017) Municipalities indebtedness p.c. (2016)
Investor Presentation
Austrian Fiscal Equalization Scheme
12/31/2017 23
Source: http://www.ris.bka.gv.at
• First step: Distribution of Revenue
• Second step: intergovernmental transfers
• Third step: other intergovernmental transfers
•shared federal taxestax sharing
• + exclusive federal taxes
• = federal profit shareFederation
• + exclusive provincial taxes
� Distribution to the provinces („Länder“)Provinces
• + exclusive municipal taxes
� Distribution to the municipalitiesMunicipalities
Ve
rtic
al
Fisc
alE
qu
ali
zati
on
Horizontal Fiscal Equalization
Investor Presentation
Figures
12/31/2017 24
Some Key Figures of the Cover Pool in EUR/No/%
Over-collateralisation nominal 45%
Committed over-collateralisation 9,5%
Over-collateralisation consistent with current rating 10,0%
Moody's covered bond rating Aa1
Number of assets 876
Number of borrowers 322
Average exposure per borrower in EUR 1.959.876
Average loan amount in EUR 720.411
Share of non-performing loans with at least 90 days past due 0,0%
Share of 10 largest loans 38,4%
Share of 10 largest exposures by borrower/ guarantor 14,0%
Share of bullet loans 2,4%
Share of loans in foreign currency 0,1%
Share of loans with fixed interest rate for longer than 1 year 38,2%
Some Key Figures of the Issues in EUR/No
Number of issues 9
Average issue size in EUR 47.777.778 data as at 03/31/2018
Investor Presentation
Public Cover Pool in Proportion to the Public Pfandbriefe
12/31/2017 25
0
100
200
300
400
500
600
700
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
in m
illi
on
EU
R
Public Cover Pool
Public Pfandbriefe
Public Cover Pool incl. new business according to strategic planning
Investor Presentation
Mortgage Pfandbriefe
12/31/2017 26
all values in EUR; data as at 03/31/2018
Cover pool
Total value of cover pool in EUR equivalent: 2.134.178.953
Assets in EUR 1.969.007.097
Assets in CHF 148.917.600
Assets in USD
Assets in JPY 16.254.255
Assets in other currencies
No derivatives may be dedicated to the cover pool.
Issues
in EUR 1.586.343.772
in CHF -
in USD -
in YEN -
Other currencies -
Investor Presentation
Share of loans in foreign currency in the cover pool
12/31/2017 27
• The reduction of the share of the mortgage cover pool in foreign currency is being continuously and actively worked on.
• No new customer requirements in foreign currencies are being included.
• Approx. 90% of the foreign currency share is made up of Swiss Francs.
• The appreciation of the CHF as a consequence of the deregulation of the exchange rate in January 2015 led to increased conversion activities from CHF to EUR.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Jun
20
12
De
c 2
01
2
Jun
20
13
De
c 2
01
3
Jun
20
14
De
c 2
01
4
Jun
20
15
De
c 2
01
5
Jun
20
16
De
c 2
01
6
Jun
20
17
De
c 2
01
7
Jun
20
18
De
c 2
01
8
Loans in Foreign Currency Forecast
8.1%
Investor Presentation
Maturity Structure
12/31/2017 28
all values in million EUR; data as at 03/31/2018
66
131
126
266
1.544
176
986
36
299
89
0 500 1.000 1.500 2.000
Remaining life up to 12 months
Remaining life > 12 to 36 months
Remaining life > 36 to 60 months
Remaining life > 60 to 120 months
Remaining life > 120 months
Issues
Cover pool
Investor Presentation
Distribution by Size
12/31/2017 29
all values in EUR; data as at 03/31/2018
Investor Presentation
Vienna (Aa1) 10,9%
Lower Austria (Aa1; AA) 2,0%
Burgenland (AA) 1,0%
Styria (AA) 0,8%
Salzburg 0,5%
Vorarlberg (AA+) 0,3%
Carinthia (A3) 0,1%
Upper Austria (AA+) 0,1%
Geographical Distribution
12/31/2017 30
all values in EUR; data as at 03/31/2018
Germany (Aaa;
AAA)
1%
Tirol (AA+)
83%
Others 16%
Investor Presentation
Property Price Developments in Innsbruck
12/31/2017 31
• Because of its topographical situation, Innsbruck has very limited land resources.
• From 2006 to 2017 the average price per m² for new housing developments increased by about 80% and for the resale of real estate by about 91%.
* Source: Property market report by prochecked Immobilien OG, Innsbruck (www.prochecked.at)
Statistics bases on actually achieved sales transactions and on actual contractually agreed prices
2,6002,785 2,762
2,935
3,289 3,3273,517
3,9444,187
4,468
4,803 4,689
2,0061,839
2,0412,221 2,198
2,370
2,703 2,7313,008
3,2063,432
3,835
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Prochecked Property Price Index *
Ø price per m² in EUR
First sale
Resale
Investor Presentation
Property Price Developments in Austria
12/31/2017 32
• Property prices in Austria increased by about 72% from 2006 to 2017.
• In the period stated, the price development without the Federal Capital of Vienna was +63%.
• Thus, the development in the Federal State of Tirol is above that of the Austrian average excluding Vienna.
Source: Austrian National Bank. Index calculated on the basis of the EURO price per square metre for new and second-hand owner-occupied
apartments and single-family houses.
100
120
140
160
180
200
220
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Austrian National Bank Residential Property
Price Index (base = year 2006)
Austria
Vienna
Austria ex Vienna
Investor Presentation
Distribution by Property Type
12/31/2017 33
all values in EUR; data as at 03/31/2018
Distribution by property type in EUR
Residential 1.451.684.027
thereof private use, incl. Multi-family housing 1.033.468.619
thereof non-profit housing association 335.472.324
thereof buy-to-let 82.743.083
Commercial real estate 682.494.927
thereof retail 102.945.020
thereof office 127.827.531
thereof tourism / hotel 207.869.476
thereof agriculture 19.319.184
thereof industrial 79.005.424
thereof mixed use 77.955.316
thereof others 67.572.977
Total 2.134.178.953
Investor Presentation
Figures
12/31/2017 34
all values in EUR; data as at 03/31/2018
Some Key Figures of the Cover Pool in EUR/No/%
Over-collateralisation nominal 35%
Committed over-collateralisation 2,0%
Over-collateralisation consistent with current rating 5,0%
Moody's covered bond rating Aa2
Number of assets 11.978
Number of borrowers 9.107
Average exposure per borrower in EUR 238.032
Average loan amount in EUR 180.978
Share of non-performing loans with at least 90 days past due 0,5%
Share of 10 largest loans 4,8%
Share of bullet loans 14,7%
Share of loans in foreign currency 7,7%
Share of loans with fixed interest rate for longer than 1 year 9,4%
Some Key Figures of the Issues in EUR/No
Number of issues 35
Average issue size in EUR 45.324.108
Investor Presentation
Mortgage Cover Pool in Proportion to the Mortgage Pfandbriefe
12/31/2017 35
0
500
1.000
1.500
2.000
2.500
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
in m
illi
on
EU
R
Mortgage Cover Pool Mortgage Pfandbriefe Mortgage Cover Pool incl. new business according to strategic planning
Investor Presentation
Why Hypo Tirol Bank?
12/31/2017 36
• Economically “healthy” and prosperous home market in Tirol
• Market dominating position with wealthy private customers, doctors, tourism operations and communities
• Stable ownership
• Bank of the State of Tirol since 1901
• Regional bank with short, efficient decision-making paths
• Many years’ experience as an issuer of mortgage and municipal bonds
• Issuance of mortgage and municipal bonds under the strict Austrian Mortgage Bond Act
• Over 80% of the mortgage cover pool is made up of properties in the core region of Tirol
Investor Presentation
Your Contact Person
12/31/2017 37
Chairman of the Board
Johann-Peter Hörtnagl tel.: +43 (0) 50700-2104 [email protected]
Treasury Divisional Director
Mag. Florian Weihs tel.: +43 (0) 50700-3200 [email protected]
Banking Book Management
Mag. Michael Blenke tel.: +43 (0) 50700-3210 [email protected]
Mag. Gernot Hackspiel tel.: +43 (0) 50700-3297 [email protected]
Robert Stern tel.: +43 (0) 50700-3296 [email protected]
Treasury Sales
Gernot Zimmermann tel.: +43 (0) 50700-3280 [email protected]
Markus Seeber tel.: +43 (0) 50700-3284 [email protected]
You can find more information on our website: www.hypotirol.com/ir
Investor Presentation
Disclaimer
12/31/2017 38
This presentation has been prepared by Hypo Tirol Bank AG. It is for informational purposes only and may
not be passed on to a third party without the express, written consent of Hypo Tirol Bank AG.
All information in this presentation is based on generally available sources, which Hypo Tirol Bank AG
regarded as reliable at the time of gathering the information.
Any liability or guarantee of Hypo Tirol Bank AG for the correctness, topicality and completeness of the
information presented here is excluded. Errors and misprints excepted.
APPENDIX
Investor Presentation
Hypo Tirol MTN Base Prospectus
12/31/2017 40
Volume: EUR 4.5 billion
Bonds: covered and senior unsecured
Currency: EUR
Stock market listing: Luxemburg, Vienna
Arranger: Deutsche Bank
Applicable law: German law
Investor Presentation
The Austrian Pfandbrief Law
12/31/2017 41
• The issuance of mortgage and public Pfandbriefe is regulated in Austria by the Pfandbrief Law 1927 or Mortgage Banking Act 1899.
• Only the regional mortgage banks, the Mortgage Bond Divisions of the regional mortgage banks and two financial institutions may issue mortgage and public Pfandbriefe .
• There are current attempts to revise the Pfandbrief Law and Mortgage Banking Act as well as the Law on Covered Bank Bonds and to mould them into one collective piece of legislation.
• In order to be able to issue securities of this type, a cover pool must be adhered to, which is compiled differently for the relevant category:
Investor Presentation
The Austrian Pfandbrief Law
12/31/2017 42
Mortgage Pfandbriefe Public Pfandbriefe
Ordinary cover Ordinary cover
• Through mortgages in Austria, EEA, Switzerland • Loans to public corporations, regional governments and local regional authorities in A, EEC and Switzerland
• Loans with guarantees by one of these bodies
• Bonds from public corporations, regional governments and local regional authorities in A, EEC and Switzerland
• Bonds with guarantees by one of these bodies
Mandatory over-securitisation Mandatory over-securitisation
Investor Presentation
Mandatory Over-securitisation
12/31/2017 43
Furthermore, a mandatory over-securitisation (of 2%) in assets eligible for substitute cover is to be maintained.
Assets eligible for substitute cover are:
• Bonds from states, regional governments and local regional authorities from the EEA zone and Switzerland
• Bonds from domestic public corporations
• Bonds must be traded domestically or in an EEA regulated market. Credit balances at OECD central banks or EEA financial institutions
• Money in the sense of means of payment having been issued for circulation as legal
The amount of the substitute cover is limited to 15% of the mortgage bonds circulating (mortgage and municipal bonds in total). Since a 2% cover is to be maintained in assets eligible for substitute cover, there are thus only another 13% of the total mortgage bonds in circulation that can be held in assets eligible for substitute cover.
Investor Presentation
Real Estate ���� Cover Pool ���� Mortgage Pfandbrief
12/31/2017 44
� 100 % = Estimated value of the real estate
� 40 % deduction as a “security cushion” for loss of value, etc.
� 60 % of the real estate value (= lending limit) less any prior charges; however, a maximum of the outstanding loan amount is dedicated to the cover pool
The 60% threshold is anchored both in the statutes of Hypo Tirol Bank and in the Mortgage Banking Act
� Over-securitisation for external rating
� Pfandbrief issuevolume
In addition, 2% of the outstanding Pfandbrief issue volume must be held in substitute cover assets (securities).
60 %
40 %
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cover pool Pfandbrief
Investor Presentation
Differences Mortgage Bonds – Covered Bond
12/31/2017 45
Pfandbriefe Covered Bonds
• No mortgage Pfandbriefe or covered bonds may be included in the mortgage cover pool
• For the mortgage cover pool, the mandatory over-securitisation is to be held in securities eligible for substitute cover
• Specialist bank principle for mortgage Pfandbriefe
• The bonds of a domestic public corporation, states, regional governments and local public authorities, as well as cash and credit balances in a central bank of Zone A or in financial institutions in accordance with Article 2 (20) of the Austrian Banking Act (BWG) are also possible for substitute cover for Pfandbriefe.
• Restrictions in respect of issues with a duration of more than 15 years for bonds.
• For the issues to be found in circulation, of the permissible cover values, in addition to the amount of the nominal value and bearing at least the same interest, the anticipated administration costs in the event of the bankruptcy of the issuing financial institution must be covered.
• Other covered bonds or bonds may be included in the covered bond cover pool.
• For covered bond cover pools, the mandatory over-securitisation is to be held in the permissible cover values.
• Covered bonds may be issued by every bank in Austria.
• Serving as substitute cover for covered bonds: cash and credit balances in a central bank of Zone A or in financial institutions in accordance with Article 2 (20) of the Austrian Banking Act (BWG)