A unique opportunity with strong value creation Conference call 14 - - PowerPoint PPT Presentation

Danica Pension to acquire SEB Pension Denmark — A unique opportunity with strong value creation

Conference call – 14 December 2017 Jacob Aarup-Andersen, Group CFO Tonny Thierry Andersen, Head of Wealth Management Per Klitgård, CEO of Danica Claus Ingar Jensen, Head of IR

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A unique opportunity to increase presence in core Danish pension market – SEB Pension DK strong fit for Danica Strong capital efficiency and attractive value creation Significant strengthening of Wealth Management Accelerates innovation in unique digital customer offerings

Acquisition of SEB Pension DK: Strong value creation for Danica & Danske Bank Group

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Strategic rationale

A unique opportunity to increase presence in core Danish market

• Cross-selling potential plus

potential from leveraging on stronger distribution

• Attractive customer base — High

net worth with strong customer satisfaction

• Significantly stronger position in

the Nordic pension market

• SEB leading on front end

IT-development

• SEB very strong customer

satisfaction

• Post retirement segment is an

attractive customer base with strong business potential

• Return enhancing – SEB Pension

DK pre-tax profit (before goodwill) expected at DKK 600-650m upon fully phased-in synergies

• Earnings neutral in 2018E
• Significant scale benefits for

combined entity

• Limited capital impact —

substantial buffers in traditional portfolio

Supports Wealth Management strategy in Life & Pensions Financially attractive Enhance our Wealth Management Offering

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Financial impact

Strong capital efficiency and attractive value creation

• Pro Forma Solvency II of 200%
• Short term CET1 impact of 40-60

bps at closing

• Final CET1 impact of <10 bps upon
• ptimal capital structure
• We expect the transaction to be

rating neutral

• Senior debt issued at Danske Bank
• Optimal mix of funding instruments

to be aligned with overall Group capital planning

• Valuing operations of SEB Pension

DK at DKK 5.0 bn ~11x normalised PE

• Excess capital of 1.5 bn paid out to

SEB Group pre closing

• Goodwill on transaction expected at

DKK 3.8 bn. Limited CET1 impact upon optimal capital structure

Low impact on capital Purchase price DKK 5.0 bn. Funding via different instruments to optimise the pro forma Solvency 2 capital

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Attractive value creation

• Merger benefits are expected to be

minimum DKK 150m per annum (pre-tax) − Phasing 2019E, 2020E full year impact

• Integration costs are

expected to be approx. DKK 300- 350m (pre-tax) expensed in 2018 and 2019

• Merger benefits will primarily be

derived from IT integration, premises relocation, and reduction

• f overlaps
• Further reduction in cost will be

delivered across the combined entity, including from natural attrition

• On-boarding of SEB Pension’s AuM

will enhance scale of overall asset management

• Center of excellence within

alternative investments

• Strong investment return for SEB

customers in recent years

• We expect some capital synergies

at Danica through the increased scale of the insurance liabilities

• Contribution of healthy policyholder

buffer of around DKK 7 bn

• Additional information on capital

synergies will be provided in due course

Merger benefits Capital synergies Asset Management synergies

Significant merger benefits and synergies

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SEB Pension DK - Attractive customers and a strong capital base

SEB Pension DK at a glance

6th largest player in the

Danish pension market, 4th largest in commercial market

No.1 on customer

satisfaction (Aalund) in 7 out of last 9 years

Multiple channel

distribution

Strong setup within

risk management

Advanced,

customer focused digital platforms Total AuM of

DKK100 bn Traditional lifebook

has substantial buffers

Pre-tax profit

expected at DKK 600- 650m upon fully phased-in synergies [before goodwill]

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Q&A session

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*. Excludes Accident & Health Premiums; 2. Total premiums including Accident &Health; 3. Accident & Health and Shareholders’ equity

Overview of SEB Pension Denmark

5 5 6 8 10 20 5 10 15 20 Danica Pension 14 Danica/SEB 19 PFA Pension Industriens Pension SEB Pension Denmark Sam- pension Pension Denmark Nordea Liv 49% 34% 25% 49% 18% 17% 8% 0% 25% 50% 75% 100% Gross premiums* AUM

2014 2015 2016 H1 2017 Gross premiums* 8,796 8,682 8,486 4,315 Profit before tax 567 526 640 286 Net profit 448 430 537 258 Reserves 90,020 90,082 95,809 97,819 Equity 4,477 4,836 4,428 3,564 Unrestricted Tier 1 n/a 4,855 4,142 4,323 Solvency capital requirement n/a 1,358 1,262 1,340

Comments and key products

• SEB Pension Denmark is the 6th largest Life insurer in

Denmark, with around 200,000 policyholders

• Total AuM of DKK 100 bn (FY 2016)
• Products are distributed through multiple channels
• The Time Pension (“Tidspension”) product is unit-linked with
• min. return guaranteed for certain policies

Key financials of SEB Pension Denmark (DKKm)

AUM and Gross premiums split by product (FY 2016) Market shares (%, FY 2016)²

Traditional Tidspension Unit-linked Other³

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Disclaimer

Important Notice This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation

• f an offer to buy or acquire securities of Danske Bank A/S in any jurisdiction, including the United States, or an inducement to

enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied

• n in connection with, any contract or commitment or investment decision whatsoever. The securities referred to herein have

not been, and will not be, registered under the Securities Act of 1933, as amended (“Securities Act”), and may not be offered

• r sold in the United States absent registration or an applicable exemption from the registration requirements of the

Securities Act. This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Danske Bank believes that the expectations reflected in such forward- looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors many of which are beyond Danske Bank’s control. This presentation does not imply that Danske Bank has undertaken to revise these forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided.