Chairmans report Ole Andersen Chairman, Board of Directors 18 - - PowerPoint PPT Presentation

18 March 2015 Ole Andersen Chairman, Board of Directors

Chairman’s report

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Word of the Year 2014

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Reporting in both Danish and English

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Improvement in the economy, but also headwinds

Source: Danske Bank and Nasdaq OMX.

GDP growth (%) Interest rates and yields (%) 0.9

• 0.2

2.4 7.4 2.6 1.8 0.9

2014

• 2.5

0.0 2.5 5.0 7.5 10.0 12.5 15.0 1990 1995 2000 2005 2010 2015 10-year government bond 3-month CIBOR Certificate of deposit

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Best financial results since 2007

Net profit before goodwill impairments rose 82%, from DKK 7.1 to 12.9 billion

Income rose 10% Expenses fell 5% Return on equity of 8.5% Impairment charges fell 32%

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Increase in top line despite weak macroeconomic conditions

5,799 6,562 Net fee income 9,468 10,491 Net interest income 22,077 23,107 Total income 39,740 43,866 Insurance 1,088 2,362 Other income 1,308 1,344 Net trading income

2013 2014

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Impairment charges remain low

• 1. The impairment ratio is defined as the Group’s annual impairment charges as a percentage of loans and guarantees.

Loan impairment charges,1 2008–14 (DKK billions) 0.8 0.0 5 0.2 20 30 10 25 15 0.6 1.0 0.4 1.4 1.2 12 2014 0.2 4 2013 0.3 5 2012 0.6 2010 2011 13 0.7 13 26 0.7 14 2009 1.4 0.6 2008

Impairment charges Impairment ratio1 (rhs)

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

2013 2,899 +60% 2014 4,648 +1% 2014 16,686 2013 16,524

• 9%

2014 10,626 2013 11,738 1,412

• 25%

2014 2013 1,887

Personal Banking

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

+18% 2014 5,733 2013 4,838 +1% 2014 12,213 2013 12,071 2014 5,473 2013 5,482 1,007

• 42%

2014 2013 1,751

Business Banking

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Expenses (DKK millions) Customer-driven income (DKK billions) Impairment charges (DKK millions) Profit before tax (DKK millions)

+23% 2014 4,135 2013 3,374 +17% 2014 8 2013 7 2014 4,614 2013 4,588 +1% 372

• 21%

2014 2013 473

Corporates & Institutions

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

+24% 2014 1,406 2013 1,131 +11% 2014 2,405 2013 2,164

• 3%

2014 999 2013 1,033 795 +9% 2014 2013 727

Danske Capital

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Danica Pension

Insurance result (DKK millions) Net income (DKK millions)

+117% 2014 2,362 2013 1,088 1,508 0% 2014 2013 1,511

Premiums (DKK millions)

2014 26,822 0% 2013 26,808

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Danske Bank is solid and well-capitalised

Common equity tier 1 capital ratio in the EBA’s severe stress test scenario

11.7% Requirement: 5.5% Danske Bank: 11.7%

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Proposal for dividend Dividend and share buy- back DKK 5.5 per share, or 43%

• f net profit before goodwill

impairments Share buy-back programme for DKK 5 billion in 2015

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Improved ratings in 2014

2013 2014

A-

Stable outlook

Baa1

Positive outlook

A

Stable outlook

A

Negative outlook

A3

Stable outlook

A

Stable outlook

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Status of our strategy

VISION

Recognised as the most trusted financial partner Financial results Customer satisfaction Advisory services Trust & transparency Digitalisation

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Return on equity of at least 12.5% by 2018

1Based on our ROE target of 9% adjusted for goodwill impairments of DKK 9.1 billion.

ROE after tax, before goodwill impairments (%) ‘15E ‘18E Over 12.5 9.51 ‘14 8.5 ‘13 5.0 ‘12 3.6 ‘11 2.1

Key elements

Rising income Improved ratings and lower funding costs Gradual gains in efficiency Business volume growth Lower impairment charges/Non- core Capital structure

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Customer satisfaction ratings are moving in the right direction

Personal Banking On target in 1 of 5 markets Business Banking On target in 4 of 5 markets Corporates & Institutions On target in 57 of 84 surveys

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A strong Nordic bank

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Regulations

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Board of Directors matters

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Management changes

2005–2014: OCBC Bank, Singapore 1996–2005: CIBC World Markets, London, Singapore & New York 1988–1996: Royal Bank of Canada

Gilbert Kohnke Chief Risk Officer

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Remuneration of the Executive Board

Fixed salaries unchanged Closer alignment of interest with

shareholders

Long-term incentive programme

based on “total shareholder return”

Variable remuneration linked to

shares

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Outlook for 2015

Continuation of fragile economic growth and low interest rates

Income Expected to be in line with 2014 level Expenses Reduced to less than DKK 22 billion Net profit Net profit of more than DKK 14 billion Impairment charges Expected to remain low

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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.