Asia Investor Roadshow Henrik Ramlau-Hansen CFO & Member of the - - PowerPoint PPT Presentation
Danske Bank Investor Presentation Asia Investor Roadshow Henrik Ramlau-Hansen CFO & Member of the Executive Board Peter Holm Senior Vice President, Head of Funding and Cover Pool Management Hong Kong & Singapore, 10-11 September 2012
Danske Bank Investor Presentation Hong Kong & Singapore, 10-11 September 2012 Henrik Ramlau-Hansen CFO & Member of the Executive Board Peter Holm Senior Vice President, Head of Funding and Cover Pool Management
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Danske Bank Investor Presentation
Overview Financial results Rating , funding & liquidity New issue Appendix: Trends in focus areas & business units 3 28 25 24 29 5 18 Outlook for 2012
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Danske Bank Investor Presentation
Market position: Challenger Branches: 13 Market share: 6% Market rank: 5 Loan growth (Y/Y):**
Lithuania
5.0 million customers 2.2 million active internet customers 578 branches in 15 countries* 20,997 full-time employees
Market position: Challenger Branches: 14 Market share: 8% Market rank: 4 Loan growth (Y/Y):**
Estonia Market position: Challenger Branches: 3 Market share: 2% Market rank: 12 Loan growth (Y/Y):**
Latvia Market position: Challenger Branches: 46 Market share: 6% Market rank: 5 Loan growth (Y/Y):***
Sweden Market position: Challenger Branches: 37 Market share: 5% Market rank: 3 Loan growth (Y/Y):*** 4% Norway Market position: Leader Branches: 101 Market share: 12% Market rank: 3 Loan growth (Y/Y): 5% Finland Market position: Leader Branches: 66 Market share: 20-29% Market rank: 1-2 Loan growth (Y/Y):***
Northern Ireland Market position: Leader Branches: 271 Market share: 28% Market rank: 1 Loan growth (Y/Y): 1% Denmark Market position: Challenger Branches: 27 Market share: 3% Market rank: 6 Loan growth (Q/Q):
Ireland
Note: Market share represents market share of lending. * Excluding agricultural centres in Denmark. ** Loan growth represents total loan growth for Baltic countries. *** Loan growth is calculated in local currency.
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Danske Bank Investor Presentation
Income distribution, H1 2012 (%) Lending by business unit, H1 2012 (%) 3 6 11 9 3 8 55 Other 1 Markets CIB Baltics 1 Non-core Ireland 2 Ireland 1 Northern Ireland Norway Sweden Finland Denmark 5 6 4 7 8 37 22 8 Other Markets CIB Baltics 2 Ireland, non-core 1 Ireland 1 Northern Ireland Norway Sweden Finland Denmark
Total lending of DKK 1,704 bn Total income of DKK 24,604 mio
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Danske Bank Investor Presentation
Overview Financial results Rating , funding & liquidity New issue Appendix: Trends in focus areas & business units
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Danske Bank Investor Presentation
Net profit (DKK m) and ROE (%) 725 4.0 3.0 2.0 1.0 0.0 3,000 2,500 2,000 1,500 1,000 500 H1 12 2,286 H1 11 1,907 H1 10 1,706 H1 09 ROE (r.a.) Net profit
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Danske Bank Investor Presentation
H1 2012 H1 2011 Index Q2 2012 Q1 2012 Index Net interest income 12,390 11,339 109 6,218 6,172 101 Net fee income 4,013 4,142 97 2,026 1,987 102 Net trading income 5,684 5,420 105 2,462 3,222 76 Other income 1,634 1,974 83 846 788 107 Net income from insurance business 883 328 269 699 184 380 Total income 24,604 23,203 106 12,251 12,353 99 Expenses 13,482 14,029 96 6,632 6,850 97 Profit bef. loan imp. charges 11,122 9,174 121 5,619 5,503 102 Loan impairment charges 7,031 5,594 126 3,109 3,922 79 Profit before tax 4,091 3,580 114 2,510 1,581 159 Tax 1,805 1,673 108 1,007 798 126 Net profit 2,286 1,907 120 1,503 783 192 Net profit ex non-core Ireland 4,571
1,731 164 Return on avg. shareholders' equity (%) 3.6 3.3 109 4.7 2.5 189 C/I ratio (%) 54.8 60.5 91 54.1 55.5 98 Core tier 1 capital ratio (%) 12.1 12.3 98 12.1 12.0 101 Risk-weighted assets (bn) 893 860 104 893 900 99 Total loans ex repos (bn) 1,704 1,667 102 1,704 1,684 101 Deposits (ex repos) & RD bonds (bn) 1,486 1,492 100 1,486 1,536 97 Total assets (bn) 3,481 3,127 111 3,481 3,500 99 Loan loss ratio (%) 73 58 126 62 81 76
Income statement & key figures (DKK m) Key points H1
increase in net interest income and lower expenses
due to deterioration of the macro economic climate
Key points Q2
risk allowance for 3 out of 4 groups
programme on track
and Northern Ireland in particular
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Danske Bank Investor Presentation
Quarterly net interest income (DKK m) Net interest income drivers Positive
Negative
Sensitivity Short term interest rate sensitivity across all currencies + 25 bp = DKK +800 m – 25 bp = DKK – 800 m 6.218 6.172 6.182 6.016 5.785 +7% Q212 Q112 Q411 Q311 Q211
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Danske Bank Investor Presentation
Quarterly trading income (DKK m)
2.462 3.222 1.638 267 2.445 Q212 Q112 Q411 Q311 Q211
and derivatives trading
and DKK 396 m on pension plans Prospera Ranking
player in the Nordic bond and derivatives markets Interest rate sensitivity (group)
Trading income drivers Trading income split, Q2 2012 (%)
45 18 4 33
Repos & derivatives Equities Bonds & DCM FX & money market
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Danske Bank Investor Presentation
Total expenses (DKK bn)
900 700 500 578 21 24 22 20 18 6.226 6.179 5.944 6.221 5.572 Q212 6,632 Q112 6,850 Q411 6,459 Q311 5,499 Q211 6,678 2007 Q2 12 2013* 2007 2013* Q2 12
* Estimated.
Adjusted expenses Adjustments (bonus, severance, dep. guarantee, asset write down)
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Danske Bank Investor Presentation
Individual loan impairment charges, ex Baltics (DKK bn) Change in allowance account (DKK m)
4.900 Allowance end-Q2 2012 54,007 Write-offs 29,467 Reversals 25,507 Gross impairments 104,082 Allowance, end-2007 Q1 12 Q2 12 3.8 3.5 1.8 3.6 Q4 11 3.1 5.4
Q3 11 Q2 11 2.3
Reversals Increased New
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Danske Bank Investor Presentation
Impairments by customer segment (DKK bn)
Impairment drivers Q112 3.1 Q212 3.9 Q411 4.8 Q311 2.8 Q211 2.8
Financials Personal SMEs Large corp.
m in Q2
and Northern Ireland
in Ireland and shipping
geographies
rules from Danish FSA
from non-core Ireland
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Danske Bank Investor Presentation
Capital drivers Capital ratios, under CRD/Basel II (%)
Q2 12 12.1 16.2 17.7 Q4 11 11.8 16.0 17.9
Core tier 1 Tier 1 (including state hybrid) Total capital
with 2.7 percentage point of the Tier 1 and total capital ratios
Danmark repaid in May 2012 RWA 10 Q2 12 893 Other 3 Capital efficiency programme Q1 12 900
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Danske Bank Investor Presentation
Capital ratios, Q2 2012 (%) 12.1 DnB 9.6 10.9 Deutsche Bank 10.2 ING 11.1 Unicredit Barclays 10.3 10.9 Nordea Lloyds 11.8 11.3 BNP Paribas Danske Bank Core tier 1 ratio Total tier 1 ratio Solvency ratio 16.2 17.7 13.4 16.1 13.6 15.0 12.7 14.7 12.8 14.3 10.2 11.8 13.3 16.5 13.0 16.6 10.9 13.5
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Danske Bank Investor Presentation
Corporates & Institutions strategy Business Banking strategy Personal Banking strategy
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Danske Bank Investor Presentation
Property prices, Nordic countries (index 1996 = 100) Public finances
GDP growth, Nordic countries (%) 100 200 300 400
Denmark Norway Sweden Finland
1996 2000 2004 2008 2012 Affordability index for Danish housing prices, quarterly data from1985 - 2011
140 120 100 80 60
2010 2005 2000 1995 1990 1985
Average Mixed rate Fixed rate Above average = expensive
Gross public debt 2011 Budget balance 2012 Sovereign rating & outlook (S&P) Denmark 46.5 -3.7 AAA/Stable Sweden 38.4 -0.5 AAA/Stable Norway 49.5 13.6 AAA/Stable Finland 48.6 -1.0 AAA/Neg. Ireland 108.0 -4.7 BBB+/Neg. Euro Zone 88.0 -3.4
2010 2011 2012E 2013E Denmark 1.3 0.8 0.9 1.2 Sweden 6.2 3.9 0.3 1.0 Norway (Mainland) 1.8 2.5 3.3 3.5 Finland 3.3 2.7 0.5 1.5 Euro Zone 2.0 1.5
0.5
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Danske Bank Investor Presentation
Macro
Sluggish economic recovery and low interest rate environment Expenses Cost cutting on track with FTE reduction of 2,000 end 2013 Loan losses Expected to remain high for 2012, same level as 2011 Net profit Expected to remain low due to weak market conditions Strategy Strategic review to be completed in Q3 2012 NII Re-pricing continues, declining central bank rates create headwinds
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Danske Bank Investor Presentation
Overview Financial results Rating , funding & liquidity New issue Appendix: Trends in focus areas & business units
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Danske Bank Investor Presentation
Short term Long term P-1 Aaa P-2 Aa1 P-3 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 ... Ca Short term Long term A-1+ AAA* A-1 AA+ A-2 AA A-3 AA- B A+ C A D A- BBB+ BBB BBB- ... D Short term Long term F1+ AAA* F1 AA+ F2 AA F3 AA- B A+ C A D A- BBB+ BBB BBB- ... D Stable outlook Stable outlook Negative outlook
* Danske Bank’s covered bond rating
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Danske Bank Investor Presentation
Moody’s Baa1 A2 A2 A2 Standard & Poor’s A- A+ AA- A+ Fitch A A A+ A+ A1 A2 A2 Aa3 A+ A+ A AA- A+ A+ A AA-
Baa2 BBB+ A-
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Danske Bank Investor Presentation
Long term funding (DKK bn) Deposits, end of period (DKK bn) 102 97 97 86 59 57 Q2 12 629 69 Q4 11 Q1 12 616 72 795 736 620 774 792 Q2 11 68 621 69 Q3 11 789 624
BA, other Markets CIB
* End of July 2012.
28 51 21 23 51 2011 2012* 22 73 40 61 2010 Covered Senior
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Danske Bank Investor Presentation
Bond portfolio rating, DKK 484 bn (%) Key points 300 200 100 12 mos 9 mos 6 mos 3 mos
Q2 2012 Q4 2011 Q2 2011
12-month liquidity*, end of period (DKK bn) 84 5 11
Other ≥A AAA
DKK 125 bn
positive for more than 2½ years
DKK 300 bn
2012
* Moody’s Financial Strength. Main assumptions: No access to capital markets; no refinancing of debt to credit institutions, issued bonds or subordinated capital; moderate reduction of business activities.
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Danske Bank Investor Presentation
Loan portfolio and long-term funding, Q2 2012 (DKK bn)
153 381 736 598 115
Issued RD bonds RD mortgages Covered bonds Bank mortgages Deposits Bank loans Senior debt
Funding 1,754 750 Loans 1,704 725 2027 1 1 2 2024 1 1 9 2021 10 4 16 2018 26 34 51 2015 45 69 46 2012 11
Covered bonds Senior Subordinated T2 Hybrid T1
Maturing funding (DKK bn)
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Danske Bank Investor Presentation
Overview Financial results Rating , funding & liquidity New issue Appendix: Trends in focus areas & business units
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Danske Bank Investor Presentation
Issuer Danske Bank A/S Issuer’s Senior Ratings (M / S / F) Baa1 (Stable) / A- (Stable) / A (Neg) Instrument Rating Fitch: BBB (exp) Description USD [Benchmark] Dated Subordinated Tier 2 Fixed Rate Resettable Notes (the “Notes") Final Maturity [25 - 30 years] Optional Redemption [2017] (“First Call Date”) and any interest payment date thereafter Interest [ ]% p.a. payable semi-annually in arrear up to the First Call Date Thereafter reset to a new fixed rate, payable semi-annually in arrear, based on the underlying swap rate + the margin in [2017] and every [fifth] anniversary thereafter Interest Deferral Optional deferral at the Issuer’s discretion on a cumulative and compounding basis Arrears of Interest will become mandatorily due and payable upon a discretionary payment on, or repurchase of, ordinary shares or Junior or Parity Securities, subject to certain customary carve outs detailed in the terms and unless the Issuer is or would be in breach of its capital requirement under the Relevant Rules Status / Subordination The Notes will constitute direct, unsecured and subordinated obligations of the Issuer, rank pari passu without any preference among themselves, pari passu with Tier 2 Capital of the Issuer (including the existing subordinated capital), junior to other unsubordinated creditors and senior to all classes of share capital and obligations ranking or expressed to rank junior to the Notes Special Event Redemption The Issuer may redeem the Notes at par (i) at any time in case of a Tax Event (additional amounts or loss of deductibility) or a Capital Event (full exclusion from Tier 2 Capital), or (ii) after year 5 in case of a Rating Methodology Event (materially reduced equity credit following a change in methodology)
Note: The summary terms are qualified in their entirety in the full terms & conditions of the Notes
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Danske Bank Investor Presentation
Substitution & Variation The Issuer may at any time substitute or vary the Notes provided that substituted or varied notes are Qualifying Tier 2 Notes: Qualifying Tier 2 Notes must have terms that are not materially less favourable to an investor and (i) comply with the then current Tier 2 requirements, (ii) carry the same rate of interest, (iii) rank senior to or pari passu with the Notes, (iv) preserve existing rights to unpaid accrued/Arrears of Interest, (v) are not immediately subject to a Special Event Redemption, (vi) have the same Maturity Date as the Notes and a first call date no earlier than the First Call Date of the Notes, (vii) maintain listing and (viii) maintain the same or higher rating The Issuer may also, if not prohibited by the Relevant Rules for Tier 2 capital, prior to the fifth anniversary of the Issue Date, vary the terms to permit an early redemption at any time as a result of a Rating Methodology Event Loss Absorption The Notes include a write-down loss absorption feature (in respect of principal and Arrears of Interest) as required under the current Danish capital adequacy rules. The write-down feature may
resolved to reduce the share capital to zero, and (iii) provided that following such action either, sufficient new capital is raised so as to enable the Issuer to comply with the capital requirement under the Danish Financial Business Act or the Issuer discontinues its business without a loss to its non- subordinated creditors Such write-down may only occur following a write-down of Tier 1 Capital The Notes are subject to any existing (or future) statutory framework for resolution and recovery in force in Denmark. The current framework does not contain provisions for a write down or conversion to ordinary shares of subordinated bank liabilities such as the Notes. A future framework may provide such powers to the regulator, eg. implementation of the EU Crisis Management Directive, as proposed
Governing Law English Law, except subordination, reduction, interest deferral, special event redemption and enforcement events will be under Danish Law Denominations 200k+1k Listing Luxembourg
Note: The summary terms are qualified in their entirety in the full terms & conditions of the Notes
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Danske Bank Investor Presentation
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Danske Bank Investor Presentation
NII and margin developments 29 Credit 33 Covered bonds 40 Expenses 32 Business units 42
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Danske Bank Investor Presentation
Quarterly change in net interest income (DKK m) Net interest margins, NII/loan stock (%) 1,3 1,4 1,3 1,2 2,3 1,3 2,1 1,9 1,4 Group 1.5 CIB 2.0 Baltics 2.4 Ireland** 1.5
2.5 Norway 1.5 Sweden 1.4 Finland 1.4 Denmark 1.3 Q2 12 Q2 11 127 57 8 12 28 Q2 12 6,218 Other Lending margin* Deposit margin* Deposit volume Equity Funding 60 Lending volume 46 Q1 12 6,172
* Lending and deposit margin affected by change in base rate from Treasury (net effect -50 m). ** Margins for Q2 11 for Ireland is including non-core Ireland.
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Danske Bank Investor Presentation
* Includes Realkredit Danmark. ** Non-core Ireland is included in margins for Ireland prior to Q112.
Quarterly lending margins (%)
1,17 2,11 1,10 1,29 1,37 2,11 0,58 1,06 0,47 1,10 1,18 1,27 1,60 0,61 1,17 0,68 1,18 1,23 1,90 2,18 0,91 1,32 0,77 1,31 1,18 1,11 1,61 2,09 1,09 1,20 0,66 1,34
CIB Baltics Ireland** Northern Ireland Norway Sweden Finland Denmark*
0,77 0,69 0,75 0,27 0,73 1,08 0,83 0,66 0,79 0,65 0,75 0,19 1,05 0,75 0,36 0,60 0,60 0,67 0,05 0,75 0,77 0,57 0,16 0,29 0,69 0,73 0,16 0,86 0,65 0,72 0,38 0,33
Q2 12 Q1 12 Q4 11 Q3 11
Quarterly deposit margins (%)
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Danske Bank Investor Presentation
Quarterly net fee income (DKK m) 1.412 1.374 1.499 1.299 1.386 Q212 2,026 640 Q112 1,987 688 Q411 2,218 719 Q311 1,938 564 Q211 2,049 637
Activity fees Portfolio fees
Fee income drivers
Fee income split, Q2 2012 (%) 20 70 10
CIB Danske Capital Banking Activities ex CIB
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Danske Bank Investor Presentation
Expenses (DKK m) Quarterly change in expenses (DKK m)
113 162 463 Q2 12 6,634 Others 279 Severance etc. 243
Fjordbank Mors Asset write-down Q1 12 6,850
Employees (number of FTEs)
20.997 21.320 21.522 22.093 23.624
Q2 12 2011 2010 2009 2008
H1 12 H1 11 Index Q2 12 Q1 12 Index Expenses 13,482 14,029 96 6,632 6,850 97
457 372 123 172 285 60 Severance payments etc. 363 173 210 303 60 505 Deposit guarantee scheme 34 1,145
98
463 113 410 463
12,165 12,226 100 6,221 5,944 105
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Danske Bank Investor Presentation
Coverage, individual allowance /impairment-tested loans (%) Impairment-tested loans (%)
2.2 Finland 3.8 3.8 Denmark 5.8 5.7 Group 6.9 7.0 Non-core Ireland 68.1 66.3 CIB 3.2 Baltics 19.1 19.1 Ireland 13.9 12.8
18.9 17.8 Norway 3.2 3.2 Sweden 2.0 4.8
Q1 12 Q2 12
31 31 32 33 62 54 49 45 52 40 Group 40 Non-core Ireland 56 CIB 35 Baltics 47 Ireland 52
63 Norway 33 Sweden 34 Finland 31 Denmark 31
Q2 12 Q1 12
Note: Loans in rating categories 10 and 11 are subject to individual impairment testing. Rating category 10 contains exposures to customers who are not in default but for which evidence of impairment exists; rating category 11 contains exposures to customers in default.
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Danske Bank Investor Presentation
Impairments (DKK m)
Loan loss ratio (bp, annualised) 1.330 646 436 1.016 218
114 210 110
84 7 61 151 Sweden Finland Denmark 960 Group 3,109 3,922 Non-core Ireland 1,374 CIB 206 Baltics Ireland Northern Ireland 260 Norway
Q212 Q112 Q212 Q112 Denmark 40 54 Finland 39 29 Sweden 13 44 Norway 2 33 Northern Ireland 225 500 Ireland 137 698 Baltics
CIB 63 65 Non-core Ireland 2,329 1,587 Group 62 81
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Danske Bank Investor Presentation
Note: Value of collateral is capped by size of loan and reflects a haircut of at least 20%. Impaired loans are individually impairment tested (rating categories 10 and 11). Rating category 10 contains exposures to customers who are not in default but for which evidence of impairment exists; rating category 11 contains exposures to customers in default.
Impaired loans 9.9 5.7 1.4 2.8 Gross exposure 517.4 Impaired loans 0.5 0.4 0.1 Gross exposure 16.1
Value of collateral Individual impairments Dividend
Denmark (DKK bn) Northern Ireland (DKK bn) Denmark (DKK bn) Northern Ireland (DKK bn)
Collective impairments 0.2 bn Impaired 2% Collective impairments 0.0 bn Impaired 3% Collective impairments 0.3 bn Impaired 13% Collective impairments 0.1 bn Impaired 43%
Commercial property exposure Residential mortgage exposure Impaired loans 4.8 2.0 2.8 Gross exposure 10.3 4.7 Gross exposure 121.1 15.6 7.8 Impaired loans 3.1
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Danske Bank Investor Presentation
Note: Value of collateral is capped by size of loan and reflects a haircut of at least 20%. Impaired loans are individually impairment tested (rating categories 10 and 11). Rating category 10 contains exposures to customers which are not in default but for which evidence of impairment exists; rating category 11 contains exposures to customers in default. *Number of arrears, excluding buy-to-let financing. Collective impairments 0.3 bn Impaired 17%
Personal mortgages (DKK bn)
Collective impairments 0.2 bn Impaired 11%
Arrears*, private customers (%) Q2 12 3.4 10.2 Q4 11 Q2 11 Q4 10 Q2 10
Market 180+ days 91-180 days
Impaired loans 1.8 0.9 0.7 0.1 Gross exposure 16.1 Other (DKK bn) 10.7 Gross exposure 0.4 1.8 0.3 1.1 Impaired loans
Collective impairments 0.6 bn Impaired 13%
0.5 Gross exposure 26.8 Impaired loans 3.6 1.2 1.9 Total (DKK bn) Value of collateral Dividend Individual impairments
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Danske Bank Investor Presentation
Note: Value of collateral is capped by size of loan and reflects a haircut of at least 20%. Impaired loans are individually impairment tested (rating categories 10 and 11). Rating category 10 contains exposures to customers who are not in default but for which evidence of impairment exists; rating category 11 contains exposures to customers in default. * Consists primarily of consumer related industries.
Impaired loans 16.1 4.7 9.7 19.4 1.7 Gross exposure Impaired loans 1.9 0.8 1.0 9.0 0.1 Gross exposure 3.1 1.3 Gross exposure Impaired loans 9.7 6.4 2.0
Value of collateral Individual impairments Dividend
CRE (DKK bn) Personal mortgages (DKK bn) Other* (DKK bn)
Collective impairments 0.1 bn Impaired 83% Collective impairments 0.1 bn Impaired 21% Collective impairments 0.1 bn Impaired 65% Collective impairments 0.3 bn Impaired 64%
3.1 Gross exposure 38.1 Impaired loans 24.4 7.5 13.8 Total (DKK bn)
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Danske Bank Investor Presentation
Agriculture: breakdown of loan portfolio, Q2 2012 (%) Agricultural exposure and allowance, Q2 2012 (DKK bn) Shipping exposure and allowance, Q2 2012 (DKK bn) Shipping: breakdown of loan portfolio, Q2 2012 (%)
6 15 25 14 21 Other Mixed
Grocery trade Pig farming 20 Cattle breeding Agriculture
9 2 10 7 8 7 8 10 15 7 10 6 Other Product tanker Ro-Ro Offshore rig Offshore supply Gas tanker Dry bulk Cruise/Ferry Crude tanker Container Chemical tanker Car carriers Business unit Gross exposure Allowance Coverage CIB 44.7 1.1 2.5%
12.1 0.8 6.8%
13.4 0.0 0.2%
19.2 0.3 1.5% Other business units 3.1 0.6 21.1% Total exposure 47.8 1.8 3.7% Business unit Allowance Coverage Realkredit Danmark 45.6 0.3 0.7% Retail Banking Denmark 11.2 2.4 21.5%
3.2 1.1 33.6% Other business units 16.2 0.5 3.0% Total exposure 73.0 3.2 4.4% Gross exposure
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Danske Bank Investor Presentation
Total credit exposure
Credit exposure by industry, Q2 2012 (%) 4% 5% 5% 6% 9% 10% 11% 37% 3% 3% 3% Consumer Diversified financials Personal customers Commercial property
Banks Other Other industrials Other financials Central and local gov. Subsidised housing Energy and utilities 2% 2% Construction etc.
Danske Bank Investor Presentation
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activities in Denmark, Norway and Sweden
Principle”
PP issues in multiple currencies
Programme
Group
Principle”= Fully-matched funding
through the Danish Market
(SHLB) was merged into Sampo Pankki
Bank Group
Sampo Pankki
issues in EUR.
Covered Bond Programme
Danske Bank Investor Presentation
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COMBINED RESIDENTIAL RESIDENTIAL RESIDENTIAL
Characteristics Cover Pool D Cover Pool I Cover Pool C Sampo Bank Pool notional DKK 42.3bn (€ 5.7bn equivalent) DKK 117.6 bn (€15.8bn equivalent) DKK 26.0 bn (€ 3.5bn equivalent) DKK 37.0 bn (€ 5.0bn equivalent) Number of Loans 69,934 130,992 4,284 86,749 Substitution collateral DKK 6.7 bn (€ 900.4 Mill. equivalent) DKK 503 Mill. (€ 67.6 Mill. equivalent) Number of Borrowers 69,260 79,780 2,678 86,749 Total Value of Properties DKK 120.3 bn (€ 19.0 bn equivalent) DKK 267.6 bn (€ 35.9 bn equivalent) DKK 58.4 bn (€ 7.9 bn equivalent) N/A Number of Properties 69,758 88,632 4,009 74,582 Average Loan Size DKK 0.6 Mill. (€ 0.08 T. equivalent) DKK 0.89 Mill. (€ 120 T. equivalent) DKK 6.1 Mill. (€ 814 T. equivalent) DKK 0.43 Mill. (€ 57 T. equivalent) Average Property Value DKK 2.0 Mill. (€ 0.27 Mill. equivalent) DKK 3.02 Mill. (€ 0.41 Mill. equivalent) DKK 14.58 Mill. (€ 1.96 Mill. equivalent) N/A Property Type 100% owner-occupied 77.9% owner-occupied, 22.1% housing cooperatives 8.6% Agriculture, Forestry, Horticulture, 22.9% Industrial, 4.0% Cooperative Housing, 30.4% Rental Housing, 34.1% Retail N/A WA LTV 66.00% 60.0% 62.0% 49.1% WA Seasoning 4.6 years 3.3 years 4.2 years 4.0 years WA Remaining Term 25.2 years 37.5 years 27.3 years 16.7 years Rate type Floating rate Floating rate Floating rate Fixed (12.7%), Floating (87.3%) Geographical location 100% Denmark 54.6% Sweden, 45.4% Norway 100% Sweden 100 % Finland Number of loans in arrears (>30 days) N/A Current balance in arrears DKK 0 millions DKK 0 millions DKK 0 millions N/A OC at cut-off date 20.50% 15.7% 29.60% 22.12% Cut-off date 31-07-2012 31-07-2012 31-07-2012 31-07-2012 Rating (S&P, Fitch, Moodys) AAA/AAA/Aa1 AAA/AAA/Aa1 AAA/AAA/ -
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Danske Bank Investor Presentation
Income statement (DKK m) Trend in lending volume, average (DKK bn) Margin trends, ex RD (%) Market shares, incl. CIB and repo lending*, ex RD (%)
* Danske Markets.
20 24 28 32 36 Q212 Q112 Q411 Q311 Q211
Deposits Lending
1 2 3 4 Q212 Q112 Q411 Q311 Q211
Deposits Lending
550 555 558 559 559 385 386 390 391 388 Q212 Q112 Q411 Q311 Q211
Corporate Retail H1 2012 H1 2011 Index Net interest income 6,270 5,918 106 Net fee income 1,590 1,631 97 Other income 504 591 85 Total income 8,364 8,140 103 Total expenses 4,565 4,512 101 Profit bef. loan imp. charges 3,799 3,628 105 Loan impairment charges 2,290 1,532 149 Profit before tax 1,509 2,096 72 ROE before loan imp. charges 17.0 17.8
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Danske Bank Investor Presentation
Loans by LTV and rating, Realkredit Danmark, end-Q2 2012 (%) Portfolio facts, Realkredit Danmark, end-Q2 2012
398,671 loans (residential and commercial) 2,941 loans in 3- and 6-month arrears (0.7%) 186 repossessed properties DKK 11 bn of loans with LTV > 100%, including DKK 3bn with
public guarantee
Average LTV ratio of 70%
LTV ratio on origination (legal requirement)
Residential: max. 80% Commercial: max. 60%
Impairments at Retail Banking Denmark, Q2 2012 (DKK m) 0.6 Q409 1.2 1.0 0.4 0.8 0.6 Q212 Q211 Q410 Q210 Q411 1-month arrears, Realkredit Danmark (% of stock)
Rating 1-3 4-7 8-11 Total Public LTV ratio guarantee 0-20 7.6 22.3 4.0 33.8 0.4 20-40 5.1 19.1 3.6 27.9 0.4 40-60 3.3 14.4 3.0 20.8 0.4 60-80 1.8 8.5 1.8 12.1 0.4 80-100 0.7 2.6 0.7 4.0 0.4 >100 0.4 0.7 0.3 1.5 0.4 Total (DKK bn) 137 493 97 727 17 Individual Collective Total Bank Personal customers 325
254 Agriculture 128
Commercial property 211
201 Other 318
266 Total 982
685 RD Personal customers 110 12 122 Commercial 158
153 Total 268 7 275 Retail Banking Denmark 1,250
960
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Danske Bank Investor Presentation
Trend in lending volume, average (DKK bn) Margin trends (%) Market shares, incl. CIB (%) 10 12 14 Q212 Q112 Q411 Q311 Q211 0,0 0,3 0,6 0,9 Q212 Q112 Q411 Q311 Q211
Deposits Lending Deposits Lending
100 100 98 96 94 51 50 50 50 49 Q212 Q112 Q411 Q311 Q211
Corporate Retail
Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 1,122 1,002 112 Net fee income 532 501 106 Other income 193 263 73 Total income 1,847 1,766 105 Total integration expenses 211 264 80 Expenses ex total intgr. exp. 1,334 1,377 97 Profit bef. loan imp. charges 302 125 242 Loan impairment charges 261
41 130 32 320,996 ROE before loan imp. charges 8.5 4.2
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Danske Bank Investor Presentation
6.0 5.5 5.0 4.5 4.0 Q212 Q112 Q411 Q311 Q211 1.5 1.0 0.5 0.0 Q212 Q112 Q411 Q311 Q211
Deposits Lending Deposits Lending
86 86 83 82 82 99 100 101 100 101 Q212 Q112 Q411 Q311 Q211
Corporate Retail
Trend in lending volume, average (DKK bn) Margin trends (%) Market shares, incl. CIB (%) Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 1,384 1,158 120 Net fee income 265 304 87 Other income 96 112 86 Total income 1,745 1,574 111 Expenses 856 860 100 Profit bef. loan imp. charges 889 714 125 Loan impairment charges 271 51 531 Profit before tax 618 663 93 ROE before loan imp. charges 16.8 15.1
46
Danske Bank Investor Presentation
6
5
4 Q212 Q112 Q411 Q311 Q211
1.2 1.0 0.8 0.6 0.4 0.2 0.0
Q212 Q112 Q411 Q311 Q211 78 77 74 71 69 60 58 58 60 58 Q212 Q112 Q411 Q311 Q211
Corporate Retail Deposits Lending Deposits Lending
Trend in lending volume, average (DKK bn) Margin trends (%) Market shares, incl. CIB (%) Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 973 760 128 Net fee income 146 130 112 Other income 367 369 99 Total income 1,486 1,259 118 Expenses 922 924 100 Profit bef. loan imp. charges 564 335 168 Loan impairment charges 121 140 86 Profit before tax 443 195 227 ROE before loan imp. charges 14.6 10.3
47
Danske Bank Investor Presentation
* Corporate lending volume excludes lending to public sector.
40
30 20 10 Q212 Q112 Q411 Q311 Q211
3
2 1 Q212 Q112 Q411 Q311 Q211 17 17 16 16 16 25 25 25 25 26
+12% Q212 Q112 Q411 Q311 Q211
Corporate Retail Deposits Lending Retail Corporate
Trend in lending volume*, average (DKK bn) Margin trends (%) Market shares (%) Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 604 548 110 Net fee income 185 151 123 Other income 61 72 85 Total income 850 771 110 Expenses 535 588 91 Profit bef. loan imp. charges 315 183 172 Loan impairment charges 906 935 97 Profit before tax
30.7 17.5
48
Danske Bank Investor Presentation
17 17 27 27 27 9 9 37 40 41 Q212 Q112 Q411 Q311 Q211
Corporate Retail
2 1 Q212 Q112 Q411 Q311 Q211
4
3 2 1 Q212 Q112 Q411 Q311 Q211
Deposits Lending Lending Deposits
Trend in lending volume, end of period (DKK bn) Margin trends (%) Market shares (%) Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 207 456 45 Net fee income 39 31 126 Other income 23 23 100 Total income 269 510 53 Expenses 451 361 125 Profit bef. loan imp. charges
149
Loan impairment charges 520 3,133 17 Profit before tax
9.6
Note: Figures from Q4 2011 and back are not restated after non-core split-up from Banking Activities Ireland.
49
Danske Bank Investor Presentation
9 9 27 27 Q212 Q112 Q411 Q311 Q211
Corporate Retail
Trend in lending volume, end-of-period (DKK bn) Margin trends (%) Portfolio breakdown (%) Income statement (DKK m)
Note: Figures from Q4 2011 and back are not restated after non-core split-up from Banking Activities Ireland.
H1 2012 H1 2011 Index Net interest income 210
2
211
106
105
2,390
1,6 0,6 0,5 Q212 Q112 Q411 Q311 Q211
Deposits Lending
Included in BA Ireland Included in BA Ireland
26% 24% 51% Other Personal mortgages CRE
50
Danske Bank Investor Presentation
Market shares, lending (%) 11 12 12 12 12 8 8 8 9 10 Q212 Q112 Q411 Q311 Q211
Corporate Retail
1 2 3 Q212 Q112 Q411 Q311 Q211 12 9 6 3 Q212 Q112 Q411 Q311 Q211
Deposits Lending Lithuania Latvia Estonia
Trend in lending volume, average (DKK bn) Margin trends (%) Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 244 240 102 Net fee income 74 71 104 Other income 61 48 127 Total income 379 359 106 Expenses 183 181 101 Profit bef. loan imp. charges 196 178 110 Loan impairment charges
453 311 146 ROE before loan imp. charges 30.2 28.0
51
Danske Bank Investor Presentation
Trend in lending volume, average (DKK bn) Geographical breakdown of lending, Q2 2012 (%) 109 108 107 103 102 Q212 Q112 Q411 Q311 Q211 1.2 0.8 0.4 0.0 Q212 Q112 Q411 Q311 Q211
Deposits Lending
19 15 36 30 Sweden Finland Norway Denmark Margin trends (%) Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 1,059 952 111 Net fee income 384 437 88 Other income 39 56 70 Total income 1,482 1,445 103 Total integration expenses 12 61 20 Expenses ex total intgr. exp. 512 476 108 Profit bef. loan imp. charges 958 908 106 Loan impairment charges 424 126 337 Profit before tax 534 782 68 ROE before loan imp. charges 15.4 17.0
52
Danske Bank Investor Presentation
Impairments, 3% of Group lending (DKK m)
52
Q212 Q112 Q411
Q311 Q211 Trading income split, Q2 2012 Income statement (DKK m) Trading activities , accumulated income (DKK bn) 2.000 4.000 6.000 8.000
2012 2011 2010
Q4 Q3 Q2 Q1
H1 2012 H1 2011 Index Danske Markets 4,916 3,659 134 Group Treasury 73 917
4,989 4,576 109 Expenses 1,574 1,424 111 Profit bef. loan imp. charges 3,415 3,152 108 Loan impairment charges 25
3,390 3,383 100 ROE before loan imp. charges 55.7 87.5
45 18 4 33
Repos & derivatives Equities Bonds & DCM FX & money market
53
Danske Bank Investor Presentation
AuM – customer breakdown (DKK bn) AuM – asset breakdown (%)
* Retail includes Danske Invest. ** Margin for asset management is adjusted income, including performance fees, divided by business volume, end of period.
28 Q212 68 4 Q112 Q411 Q311 Q211
Bonds Equities Cash
187 Q212 188 245 16 Q112 Q411 Q311 Q211
Life insurance Retail* Institutional Private equity
0.4 0.3 0.2 0.1 0.0 Q212 Q112 Q411 Q311 Q211 Margin trends** (%) Income statement (DKK m)
H1 2012 H1 2011 Index Net interest income 60 55 109 Net fee income 783 830 94
1
16 39 41 Total income 859 924 93 Expenses 528 550 96 Profit bef. loan imp. charges 331 374 89 Loan impairment charges 12
319 421 76
54
Danske Bank Investor Presentation
Quarterly insurance income (DKK m)
699 184
261 976 Q212 Q112 Q411 Q311 Q211
Key points
liabilities with DKK 1.3 bn and improves the usable part of bonus potential of paid-up policies with DKK 1.1 bn
spread reduced, increasing liabilities with DKK 350 m
full year
intensified price competition in Denmark and Sweden
55
Danske Bank Investor Presentation
0% 25% 50%
0,00% 1,00% 2,00%
58 71 67 73 17 5 8 High 9 15 3 Medium 9 16 Low 10 14 New schemes 12 13 Investment allocation for Danica Traditionel, end-Q2 2012 (%)
Property Credit bonds Bonds Equities
Income statement (DKK m) Possibility of booking risk allowance in 2012*, end-Q2 2012 (%) No risk allowance Partial risk allowance Full risk allowance % change in equities % point change in interest rate
H1 12 H1 11 Index Premiums (bn) 12.6 14.2 89 Danica Traditionel (insurance result) 615 547 112 Unit-linked (insurance result) 177 179 99 Health and accident (ins. result)
12
303 146 208 Financing result
951 681 140 Change in shadow account
883 328 269
* Under assumption of a rolling yield spread of 0 between Danish and German government bonds at the end of 2012.
56
Danske Bank Investor Presentation
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
enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied
not been, and will not be, registered under the Securities Act of 1933, as amended, and may not be offered, exercised or sold in the United States absent registration or an applicable exemption from registration requirements. References to a potential share offering by Danske Bank are included herein pursuant to Rule 135c of the Securities Act of 1933, as amended. 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.