eib investor presentation h1 09
TRANSCRIPT
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European Investment BankThe Bank Promoting European Objectives
June 2009
This presentation has been prepared for information purposes only and should not be taken as investmentadvice. It constitutes neither an offer to sell nor an invitation to purchase securities, nor is it intended to serveas a basis for any kind of obligation, contractual or otherwise. Securities of the European Investment Bank
may not be offered or sold in the United States nor to U.S. persons outside the United States unless theoffering or sale is registered under US securities laws. Similar restrictions may apply in other countries.
Certain sections of this presentation contain forward-looking statements that are based on expectations,estimates, projections and assumptions. These statements are not guarantees of future performance andinvolve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results andtrends may differ materially from what is forecast in such forward-looking statements. This presentationspeaks only as of its date. The Bank does not undertake any obligation to update or publicly release anyrevisions to this presentation to reflect events, circumstances or changes in expectations after the date ofthis presentation.
European Investment Bank
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Table of contents
1. EUs Premier Financial Institution for 50 years2. EIB support to EU-economy3. Shareholders: strength and diversification
4. Strong capital base5. Capital and Gearing6. Geographical distribution European focus7. Geographic breakdown of lending focus on EU8. Outstanding asset quality
9. Largest supranational borrower10. Benchmark focus11. USD issuance: a leading non-U.S. issuer12. EUR issuance: EU-Sovereign proxy13. GBP issuance: Leading Gilt alternative14. Wide variety of Tailor-made Issuance15. Non-core currency borrowing16. Executive summary
Annexes:- Treasury activities- Funding background information)
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EUs Premier Financial Institution for 50 Years
Very strongly capitalised
Sole and 100% ownership by 27 member countries of the EU
Board of Governors consisting of Ministers of the EU Member States
Total subscribed capital is EUR 232.4bn (since 1st April 2009)
Entire capital is Tier I and capital adequacy ratio (BIS II ratio) is 33%. Includingcallable capital, the ratio is around 240%
Only supra to have access to a Central Banks liquidity management system (ECB)
Stable net profit in 2008: EUR 1.65bn vs. 1.63 in 2007 Triple-A rated by Moodys, S&Ps and Fitch with stable outlook
Page 3European Investment Bank
Outstanding quality of Loan Book
Lending Criteria: only lending to economically viable projects
Non performing loans are close to 0% of loan portfolio
Watch-listed (loans under special monitoring) well below 0.5% of total loan portfolio
Unless stated, data is as of end Q2 2009
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EIB loans to support stimulus for EU-economyLending and Funding
Lending increase
Initially fixed at around 30% increase over 2009-2010 (i.e. around EUR 15 billion
p.a.). Semi-annual review increased 2009 lending target by EUR 10 billion.
Sectoral Focus: SMEs and mid-caps; energy, climate change and infrastructure
including clean transport and R&D; convergence lending
Funding impact
2009 funding programme: EUR 80bn increase vs. 2008 (EUR 60 bn)
Funds raised at end Q2 2009: EUR 64 bn, 80% of annual programme:
EUR 38bn USD 20.2bn/EUR 15.2bn
GBP 5.5bn/EUR 6.2bn
Other EUR 4.6bn
Page 4European Investment Bank
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Source: S&P / Moodys ratings;Bloomberg, as of 29 June 2009
EIB Shareholder Structure by Rating(Best rating) 16.17%AAAAAAGermany
0.04%AAMalta
0.07%AAA+Estonia
0.09%BB+BBB-Latvia
0.11%A+AA-Cyprus
0.11%AAAAAALuxembourg
0.15%BBBA-Lithuania
0.18%BBB-BBBBulgaria
0.24%AAAASlovenia
0.26%A+A+Slovakia
0.52%BB+BBB-Romania
0.57%AA+AAAIreland
0.72%BBB-BBB+Hungary
0.76%AA+Czech Republic
0.78%A+AAPortugal
1.22%A-A+Greece
1.28%AAAAAAFinland
2.07%A-APoland
2.22%AAAAAAAustria
2.27%AAAAAADenmark
2.97%AAAAAASweden
4.48%AAAAAANetherlands
4.48%AA+AA+Belgium
9.70%AA+AAASpain
16.17%AAAAAAUnited Kingdom
16.17%A+AAItaly
16.17%AAAAAAFrance
Shareholders: Strength & Diversification
ShareholderBest
ratingLowestRating
Share ofsubscribed
capital
Page 5European Investment Bank
AAA
72.1%
AA
21.9%
BBB
1.5%A
4.5%
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Strong Capital Base
Balance sheet total EUR 357bnAs of 30 June 2009
Page 6European Investment Bank
Subscribed enlarged Capital and Reserves account for over EUR 250bn, i.e.
- around 70% of the Banks Balance Sheet
- around 150% of non-sovereign/public loan book
EUR
bn
0
100
200
300
400
500
600
Assets Liabilities
Other
EUR 4.5bn
DisbursedLoans
EUR 307.6bn
Liquidity
EUR 45.1bn
Borrowings
EUR 308.3bn
Other
EUR 11.7bn
Undisbursed Loans
EUR 66.3bn
Capital & Reserves
EUR 37.2bn
Callable Capital
EUR 220.8bn
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Strong capital cover
Strong cover of risk weighted assets: RWA of around EUR 108 billion vs. EUR 232billion subscribed capital
Paid-in Capital: 5%
Callable Capital: 95% (EUR 221 billion), of which EUR 159bn (72%) from AAA EUsovereigns
Can be called for Bank to meet debt obligations
Member States are liable up to the amount of capital subscribed
Legally binding obligation under Treaty establishing the European Community
Page 7European Investment Bank
Capital increase
The increase in the lending volume for 2009/10 as well as longer term needs (up to 2015)explain increase of subscribed capital by EUR 67.6 billion to EUR 232 billion
Unless stated, data is as of end Q2 2009
Capital & Gearing
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* As of 31 December 2008
** EFTA Countries: Iceland, Norway and Switzerland
EUR 11.7bn
EUR 13.3bn
EUR 1.9bn
EUR 1.5bn
EUR 2.6bnEuropean Union & EFTA countries**
Candidate Countries
Africa/Caribbean/Pacific
Mediterranean/Balkans
Asia and Latin America
Russian Federation & Western NewlyIndependent States
EUR 0.5bn
EUR 319bn(91%)
Geographical Distribution: European Focus
European Investment Bank Page 8
Geographical Distribution of Loans Signed*
Total granted loans outstanding: EUR 350bn at end 2008- of which new signatures in 2008: EUR 57.6bn
Total disbursed outstanding: EUR 291bn or 83% (end 08)
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Geographic breakdown of lending focus on EU (signed loans)
Data as of 31 December 2008
Poland 3.84%
Czech Republic 2.26%
Hungary 2.18%
Romania 1.45%
Slovenia 0.65%
Bulgaria 0.65%
Cyprus 0.36%
Latvia 0.31%
Slovakia 0.30%Estonia 0.06%
Malta 0.06%
Lithuania 0.05%
Spain
15%
Germany
14%
Italy
13%
France
10%
Portugal
5%
New Member
States
12%
United Kingdom6% Greece
4%Austria
2%
Ireland
1%
Loans outside
the EU
9%
Scandinavia
4%
Benelux
4%
New Member States (NMS) -Central Eastern & Southern
countries
(% of total loan book)
Share of total outstanding: EUR 350bn- of which new in 2008: EUR 57.6bn
European Investment Bank Page 9
Obligor structure
NMS obligors account for 66.6% of obligors in NMS loan book- 55.2% sovereign, 6% public sector, 5.4% corp/bank
EC Budget accounts for 10.6% of the obligors
W European (EU 15) obligor share in NMS loans: 14.4% (mainly banks)
Other: 8.4% (including those to be defined before disbursement)
Disbursed portion relatively low, no watch-listed loans
Disbursed portion: 68%
NMS (EU 12) loans: mainly sovereign/public sector obligors over 70%
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Ultimate Obligors of EIB Loans
As of 31 December 2008*
The EU Member States and Public Institutions
are ultimate obligors for 54% of the loans
76% of EIB loans are backed by a formal
guarantee or other form of security
Outstanding Asset Quality
European Investment Bank Page 10
EU Public
Institutions
26%
Banks
23%
Corporates
22%
EU Budget
7%
EU Member States
22%
Breakdown of IndividualLoans by Sector in 2008*
Loans via banks
21%
Water Mgmt,
Sewage
6%
Health,
Education
6%
Telecoms
3%Services
3%
Transport
27%
Misc. Infrastructure
7%
Industry
11%
Energy
16%
* As of 31 December 2008
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0
20
40
60
80
100
EIB IBRD -
World
Bank*
IADB ADB NIB IFC* EBRD AfDB
2008
2009 (e)
0
2
4
6
8
10
12
FNMA FHLMC EIB KfW FHLB 0
2
4
6
8
10
12
FNMA FHLMC EIB FHLB KfW
0
2
4
6
8
10
12
FNMA FHLMC EIB KfW FHLB
Source: Barclays Capital research/ best efforts estimates as of 15 June 2009
Page 11European Investment Bank
*Fiscal years from July to June
Largest Supranational BorrowerMeaningful weight in Indices
Barclays Capital GlobalAggregate Index
Merrill Lynch Global BroadMarket Quasi-Govt. Index
Citi AAA BIG Index
Source: Barclays Capital, Merrill Lynch, Citigroup, 30 June 2009
% % %
USD bn
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The cornerstone of the EIBs funding strategy continues to be the combination
of benchmark issuance in the three core currencies, offering exceptionally
comprehensive and carefully maintained yield curves.
Benchmark Focus
* As of 30 June 2009
Page 12European Investment Bank
No. of bonds Maturity rangeTotal Outstanding*Currency
2010-203627USD 79 billionUSD
2010-203719EUR 101 billionEUR
24 2009-2054GBP 44 billionGBP
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EUR Issuance: EU-Sovereign Proxy
Largest source of funding in 2009 (59%) and key source of duration
Complement to Eurozone-Sovereigns with regular supply of benchmark issues in
highly liquid size out to 30-years
Large initial size and liquidity injections over time ECB-eligibility, active repo, Euro-MTS Trading
Secondary turnover comparable to Eurozone-Sovereigns
Yield pick-up to core Eurozone-Sovereigns
Page 13European Investment Bank
Results in 2009 Issuance across curve (3 15 years)Issued total of EUR 37 billion including :
5 new Euro Area Reference Notes (EARNTM)
- EUR 5 billion EARN due 15 Apr 2012
- EUR 8.25 billion EARN due 15 Apr 2014
- EUR 5 billion EARN due 15 Apr 2016
- EUR 3.25 billion EARN due 15 Apr 2019
- EUR 5 billion EARN due 15 Oct 2025
4 x increases of existing EARNs (15 Oct 2011 and 15 Apr 2024 for a total of EUR 5 billion)
Non-benchmark issues: EUR 5.5 billion
As of 26 June 2009
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USD Issuance: A leading non-U.S. issuer
Among largest non-U.S. issuers of Global benchmarks
Consistent benchmark issuance, sizes catering for liquidity
Treasury benchmark maturities
Steady volumes, regular presence and frequently refreshed curve
Performance sensitive pricing
Continuous monitoring and focus on after-market dynamics
Page 14European Investment Bank
Results in 2009
Issued a total of USD 20.2 billion (EUR 15.15 bn) including 5 Global benchmarks:
- USD 4.5 billion due 10 February 2012
- USD 2 billion FRN due 5 March 2012
- USD 2 billion due 14 March 2014
- USD 3.5 billion due 8 April 2014
- USD 4.5 billion due 4 June 2014
- Non-benchmark issues: USD 3.7 billion
As of 26 June 2009
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GBP Issuance: Leading Gilt Alternative
Largest issuer in non-Gilt market: 10% of non-gilt index at end June2009*
Eligible for repo at Bank of England and sterling stock liquidity
Dedicated dealer group and repo arrangements
Combination of taps and bookbuilt trades
Page 15European Investment Bank
Issued a total of GBP 5.5 billion (EUR 6.2bn) including 5 new lines with strong demand/exceptional size:
- GBP 1,185 million FRN due 6 August 2010
- GBP 1,425 million due 7 March 2013 (record initial size of GBP 1bn)- GBP 1,100 million due 8 September 2014- GBP 500 million due 7 December 2017- GBP 600 million due 7 June 2029
5 taps (GBP 725 million) of existing issues(Aug 2010; Dec 2010; Apr 2014; July 2015; Oct 2018)
Results in 2009
As of 26 June 2009* Source: Barclays
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Wide Variety of Tailor-made Issuance
Frequent tailor-made issuance in plain vanilla or structured format, withflexible approach in terms of product, currency and size
Larger transactions have exceeded USD 1bn
Diverse and continuously changing array of structures, including
Notably USD, EURCallables
JPYPRDC
EUR, JPYInterest Rate Linked (e.g. TARNs)
AUD, CHF, EUR, GBP, JPY, SEKInflation Linked
BRL, BWP, EGP, GHD. IDR, MUR, NAD, PHP, ZMKCurrency Linked (synthetic format)
EUR, USDSwap Rate Linked (e.g. CMS)
Main CurrenciesStructure Group
Page 16European Investment Bank
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0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
J
PY
AUD
NZD
C
HF
T
RY
SEK
Syn
th.
N
OK
Z
AR
H
UF
ISK
CAD
D
KK
P
LN
H
KD
BGN
MXN
RUB
RON
C
ZK
M
TL
SIT
SKK
8,785
7,817
4,3694,406
2,045
1,667
945
1,428
852
417 359364167 125 58
1,636
GHS15
MUR
23
TRL
85EGP
107
IDR
148
BWP
115
RUB
125
BRL
1,333
PHP
33
NAD
33 ZMK
28
2,141
7
4,596
21423
32517
(inEUR
millionequivalent)
Issuance in synthetic format in 2004 2009*
(in EUR million equivalent)
Non-Core Currency BorrowingVolumes issued in 2004 2009*
* As of 26 June 2009
Page 17European Investment Bank
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100% EU Sovereign Ownership & Support
Very well capitalised and financial self-sufficiency
Strong loan book, majority of public sector risk androbust guarantees
Conservative risk management principles
Leading global issuer of fixed income product
Leading Sovereign complement in EUR & GBP
One of the largest non-U.S. issuers of USD debt
globally
Robust funding programme spread historically overmore than 30 different currencies
EIB: The Worlds Largest Multilateral Lending Institution
European Investment Bank Page 18
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European Investment Bank Page 19
Annexes
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European Investment Bank Page 20
Funding BackgroundInformation
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Annual issuance & redemptions (EUR bn)*
* As of 26 June 2009
2008 Bonds Outstanding:EUR 253bn
Funding Evolution and Currency Diversification
As of 31 Dec 2008, excl. Commercial Paper
2008 funding programme : EUR 59.5bn
2009 funding programme: EUR 80 billion - EUR 64bn raised ytd*
Final redemptions in 2009: EUR 30bn equiv.
GBP
19%
EUR
42%
Other13%
USD
26%
-60
-40
-20
0
20
40
60
80
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
EUR GBP USD Other Projected Redemptions (all currencies)
Page 21European Investment Bank
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Source: BNP Paribas, as at 30 June 2009
Page 22European Investment Bank
EIB EUR performance in the Secondary Markets
EIB performance ASW
EIB performance vs GermanyEIB performance vs France
-60
-40
-20
0
20
40
60
80
100
Jan-
07
Mar-
07
May-
07
Jul-
07
Sep-
07
Nov-
07
Jan-
08
Mar-
08
May-
08
Jul-
08
Sep-
08
Nov-
08
Jan-
09
Mar-
09
May-
09
bp
EIB 3.625 15/10/11 EIB 4 10/2037 EIB 3.625 15/10/13
-20
0
20
40
60
80
Jan-07
Mar-07
M
ay-07
Jul-07
S
ep-07
Nov-07
Jan-08
Mar-08
M
ay-08
Jul-08
S
ep-08
Nov-08
Jan-09
Mar-09
M
ay-09
bp
EIB vs France 3y EIB vs France 30y EIB vs France 5y
-5
15
35
55
75
95
115
Jan-
07
Mar-
07
May-
07
Jul-
07
Sep-
07
Nov-
07
Jan-
08
Mar-
08
May-
08
Jul-
08
Sep-
08
Nov-
08
Jan-
09
Mar-
09
May-
09
bp
EIB vs DBR - 5y EIB vs DBR - 30 y EIB vs DBR - 3 y
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Stable performanceLow volatility
Page 23European Investment Bank
NB: Issues maturing 2017 in EUR are included in the chart
Mid-spread ASW, rebased at 0 since 26 June 2007.0 : under-performance
bp
ASW: standarddeviation since26 June 2007
EARN due 2017 evolution of ASW spreads since 26 June 2007
31.5Italy
14.2Germany
77.4Greece
19.1France
31.8Belgium
30.8Spain
27.2EIB
Source: BNP Paribas, as at 30 June 2009
-60
-40
-20
0
20
40
6080
100
120
140
160
180
200
220240
260
280
26-Jun 26-Aug 26-Oct 26-Dec 26-Feb 26-Apr 26-Jun 26-Aug 26-Oct 26-Dec 26-Feb 26-Apr 26-Jun
EIB Italy Greece Spain Belgium Germany France
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Generic EIB USD bond and GSE spreads to Libor
Page 24
3yr
5yr
10yr
* Source: JPMorgan as of 2 June 2009
European Investment Bank
-70
-50-30
-10
10
3050
70
2001 2002 2003 2004 2005 2006 2007 2008 2009
Generic GSE Libor Spd Generic EIB Libor Spd
-50
0
50
100
2001 2002 2003 2004 2005 2006 2007 2008 2009
Generic GSE Libor Spd Generic EIB Libor Spd
-40
-20
0
2040
60
80
100
Nov Dec Mar Apr
-20
0
20
40
60
80
100
Nov Dec Feb Apr
-100
-50
0
50
100
150
200
2003 2004 2005 2006 2007 2008
Generic GSE Libor Spd Generic EIB Libor Spd
0
50
100
150
200
Nov Dec Feb Apr2009
Jun
Jun
Jun
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EIB GBP performance in the Secondary Markets
Spread to Swap Spread to Gilt
Source: Barclays Capital Research as of 2nd July 2009
Page 25European Investment Bank
-100
-80
-60
-40
-20
0
20
40
60
80
100
120
Jan-07 Jun-07 Nov-07 Apr-08 Sep-08 Feb-09
spre
adtoswaps(bp)
EIB 4.25% Dec 10 EIB 4.75% Jun 12EIB 4.75% Oct 18 EIB 5.625% Jun 32
10
30
50
70
90
110
130
Jan-07 Jun-07 Nov-07 Apr-08 Sep-08 Feb-09
spre
adtoGilt(bp)
EIB 4.25% Dec 10 EIB 4.75% Jun 12EIB 4.75% Oct 18 EIB 5.625% Jun 32
Note: Spreads are mid-market
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33%
32%
34%
1%
81%
7%
12%
Central Bank /Public Institutions
Fund Mgr/Insur./Other
Bank
Corporates
By type of investor
By Geography
Europe & ME
Americas / Other
Asia
59%25%
14%2%
64%12%
24%
Investor distribution of new EARNsin 2007 to 2009*
2008 2007
Page 26European Investment Bank
* As of 30 June 2009
15%
43%
42%
85%
1%
14%
2009ytd
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Investor Distribution of USD Global Bondsin 2007 to 2009*
56%32%
10%2%
43%
27%
30%
15%
3%
21%
61%
51%
26%
23%
Central Bank /Public Institutions
Fund Mgr/Insur./Other
Bank
Corporates
By type of investor
By Geography
Europe & ME
Americas
Asia
* As of 30 June 2009
2008 2007
Page 27European Investment Bank
22%
5%
2%
31%
26%
51%
23%
2009ytd
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Central Bank /Public Institutions
Fund Mgr/Insur./Other
Bank
By type of investor
By Geography
Europe (excl. UK),ME and Africa
Americas
Asia
Investor distribution of sterling benchmark issuesin 2007 to H1-2009
2008 2007
UK (incl. Ch. Islands)
Page 28European Investment Bank
* As of 30 June 2009
H1-2009
24%
64%
12%23%
52%
25%
16%
47%
37%
65%
13%
19%
3%
64%11%
23%
2%
73%
15%
12%
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EIB Commercial Paper Programme Features
Ratings A1+ / P-1
Euro Dealers Banc of America Securities, Barclays Bank, Citibank, Credit Suisse,Deutsche Bank, EIB, Goldman Sachs, UBS
US Dealers Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank, EIB,
Goldman Sachs & Co
Amount EUR 25 billion
Currencies EUR, USD, GBP, JPY and all other permissible
Maturities From 1 day to 364 days
From 1 day to 270 days for USCP
Yield - Discounted
- Fixed
- Coupon bearing
Format Global format for USCP and ECP
STEP compliant, ECB eligible NGN Format
Back up line available for USCP outstandings
EIBs EUR 25bn global ECP and USCP multi-currency programme
Page 29European Investment Bank
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Price Sources
Further information can be found at www.eib.org/investor_relations
EIB bonds main: EIB
EIB EUR bonds: EIB1
EIB GBP bonds: EIB2
EIB USD bonds: EIB3 For quotes, type ALLQ
EIB bonds main: EIBBENCH
EIB EUR bonds: EIBEARN
EIB GBP bonds: EIBGBP
EIB USD bonds: EIBUSD
ReutersBloomberg
Page 30European Investment Bank
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European Investment Bank
The Way to Buy Europe