Board of Directors report Ole Andersen Chairman of the Board of - - PowerPoint PPT Presentation

18 March 2014

Board of Directors’ report

Ole Andersen Chairman of the Board of Directors

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Management changes

Thomas F. Borgen Glenn Söderholm

2013 2012– 2013 1997 CEO Head of Corporates & Institutions Joined Danske Bank 2013 2013 1998 Head of Corporates & Institutions Global Head of CIB (Corp. & Inst. Banking) Joined Danske Bank

Jim Ditmore

2014 2013 2008 Chief Operating Officer Allstate Insurance, Chicago Barclays, London

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Economic climate of low interest rates and weak growth

Annual GDP growth (%) Central bank policy rates (%)

• 0,4
• 1,3

2,0 1,5 1,3 0,7 2,4 3,0 1,5 2014 (est.) 2013

2011 2012 2013 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0.00

• 0.25

Norway Sweden Eurozone Denmark

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Highlights from Annual Report 2013 Net profit rose 51% from DKK 4.7 billion to DKK 7.1 billion Income Expenses

Total income was DKK 40 billion, a

decline of 12%

Expenses fell 1%

Impairment charges Return on equity

Impairment charges declined 45% Return on equity was 5%

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Expenses declined in 2013

2013 2014 (est.)

• 5%

About 23

• 1%

24,3 2012 24,6

Trend in expenses, 2012-14 (DKK billions)

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Personal Banking

• 30%

1.935 2.749

Impairment charges (DKK millions)

• 1%

2013 16.736 2012 16.829

Total income (DKK millions)

• 3%

12.103 12.430

Expenses (DKK millions)

2.698 1.650 +64%

Profit before tax (DKK millions)

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Business Banking

Impairment charges DKK millions) Total income (DKK millions) Expenses DKK millions) Profit before tax DKK millions)

• 53%

1.779 3.825

• 2%

2013 12.105 2012 12.352 +2% 5.574 5.466 +55% 4.752 3.061

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Corporates & Institutions

Impairment charges DKK millions) Total income (DKK millions) Expenses DKK millions) Profit before tax DKK millions)

• 59%

473 1.160

• 26%

2013 8.435 2012 11.396 +7% 4.588 4.307

• 43%

3.374 5.929

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Danske Capital

Profit before tax DKK millions) Total income (DKK millions) Expenses DKK millions) Assets under mgt (DKK bn.)

+21% 1.131 935 +13% 2013 2.164 2012 1.917 +5% 1.033 982 +6% 727 687

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Danica Pension

Insurance business (DKK millions) Premiums (DKK millions) Profit before tax DKK millions)

+4% 1.511 1.453 +9% 2013 26.808 2012 24.649 1.088

• 50%

2.171

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Impairment charges , 2008-14 (DKK billions and basis points)

Loan impairment charges normalised

Note: Loss percentage is defined as the Group’s quarterly loan impairment charges (annualised) as a percentage of loans and guarantees.

30 60 90 120 150 180 10 9 8 7 6 5 4 3 2 1 Q2 2013 33 11 23 Q2 2009 Q2 2008 Q2 2012 Q2 2011 Q2 2010

Loan impairment charges (left scale) Loss percentage in basis points (right scale)

100 bp =1%

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Winding up of Non-core Ireland proceeding as planned

* Excluding the allowance account.

13,6 15,9 17,6 17,0

• 23%

Q4 Q3 Q2 Q1 40 106 95 707 95 886 293 Sold For sale 1,423

Credit exposure, 2013* (DKK billions) Status, property sales, 2013 (No. properties)

Q1 Q2 Q4 Q3

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Strong capital base and dividend proposal

2,4 2,4 21,4 State hybrid 2013 14,7 2,8 1,5 2012 21,3 14,5 4,4

Core tier 1 Tier 2 Hybrid tier 1 (incl. state hybrid)

Capital base1 (%)

• 1. CRD/Basel II.

Proposal for dividend payment

• f DKK 2 per share, or 28% of

net profit for the year

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Allocation of profit

Net profit for Danske Bank Group Adjustment to Danish rules DKK 7,115 million 687 million Distribution of dividend of DKK 2 per share Transfer to share capital:

• Transfer to the equity method reserve
• Transfer to retained earnings

DKK 2,017 million 613 million 5,172 million Net profit for parent company DKK 7,802 million The Board of Directors proposes that the profit be allocated as follows: Total DKK 7,802 million

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Share price

NB: Share price history vs MSCI Euro Bank Index (end-2012=95.65) .

Trend in Danske Bank’s share price in comparison with other European banks

80 90 100 110 120 130 140 150 +23% Dec 2013 Jun 2013 Dec 2012 Danske Bank MSCI Europe Bank Index Mar 2014

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Stable ratings, with a positive underlying trend

2012 2013

A-

Positive outlook

A-

Stable outlook

Baa1

Stable outlook

Baa1

Positive outlook

A

Negative outlook

A

Stable outlook

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Regulations in 2013

Apr Sep Oct Dec

Rangvid Committee report released Agreement on CRR/CRD IV in EU Agreement on deposit guarantee and crisis management in the EU Political agreement on SIFI rules announced

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The strategy is firm

“Recognised as the most trusted financial partner” Customer satisfaction Financial results Mission “Setting new standards in financial services” Advisory services Transparency and openness Digitalisation Vision

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Composition of the Board of Directors

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.

Remuneration policy

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Focus areas for the Board of Directors in 2014

ROE of 9% in 2015 and eventually 12% Improvement of ratings by at least one notch as soon as possible Improvement of customer satisfaction

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Outlook for 2014 Slightly improving but fragile economic growth and continuation of low interest rates Income Expenses

Total income expected to be higher than in 2013 Expenses reduced to about DKK 23

billion

Impairment charges Net profit

Expected to be in line with 2013

level

Net profit of DKK 9 billion to

DKK 12 billion

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THANK YOU FOR YOUR ATTENTION

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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, 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.