Danske Bank August 2011
This presentation has been prepared solely for use at this presentation. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Danske Bank A/S (the “Company”), in any jurisdiction or an inducement to enter into investment activity. No part of this presentatio n, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation has been prepared solely for use in connection with the presentation of the Company. The information contained in this document is strictly confidential and is being provided to you solely for your information and cannot be distributed to any other person or published, in whole or in part, for any purpose. It may not be reproduced, redistributed, passed on or published, in whole or in part, to any other person for any purpose. You are required to return this document at the conclusion of this meeting. Failure to comply with this and the following restrictions may constitute a violation of applicable securities laws. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. This presentation is only for persons having professional experience in matters relating to investments and must not be acted or relied on by persons who are not Relevant Persons (as defined below). Solicitations resulting from this presentation will only be responded to if the person concerned is a Relevant Person. This presentation is not an offer of securities for sale in the United States. Neither the presentation nor any copy of it may be taken or transmitted into United States, its territories or possessions or distributed, directly or indirectly, in the United States, its territories or possessions, except to qualified institutional buyers as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or outside the United States in reliance on Regulation S under the Securities Act. Any failure to comply with this restriction may constitute a violation of the United States securities laws. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being refer red to as “relevant persons”). This document must not be acted upon by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Any recipient of this document who is not a relevant person should return it to the Underwriters immediately, not attend the presentation and take no other action. 2
I. Overview of Danske Bank II. Macro Economy III. Financial Performance IV. Funding & Liquidity 3
Danske Bank is a strong Nordic franchise Lending divided by Banking Activity Q2 2011 Danmark 56% 5.0 million customers Finland Finland 9% Market position: Leader 2.1 million active Internet customers Branches: 120 Market share: 12% Market rank: 3 662 branches in 15 countries * Loan growth (Y/Y): 6% Other Sweden 2% Baltics 11% 21,536 full-time employees CIB Norway Northern Ireland 1% 6% 8% Estonia Ireland 4% 3% Market position: Challenger Branches: 17 Northern Ireland Norway Sweden Market share: 10% Market position: Leader Market position: Challenger Market position: Challenger Market rank: 4 Loan growth (Y/Y): ** -11% Branches: 82 Branches: 41 Branches: 49 Market share: 18-30% Market share: 5% Market share: 6% Market rank: 1-2 Market rank: 3 Market rank: 5 Latvia Loan growth (Y/Y): *** -2% Loan growth (Y/Y): *** 0% Loan growth (Y/Y): *** 5% Market position: Challenger Branches: 4 Market share: 2% Ireland Denmark Market rank: 12 Market position: Challenger Market position: Leader Loan growth (Y/Y): ** -11% Branches: 28 Branches: 309 Market share: 3% Market share: 25% Lithuania Market rank: 6 Market rank: 1 Loan growth (Y/Y): -8% Loan growth (Y/Y): -2% Market position: Challenger Branches: 13 Market share: 6% Market rank: 5 Loan growth (Y/Y): ** -11% Note: Market share represents market share of lending. * Excluding agricultural centres in Denmark. ** Loan growth represents total loan growth for Baltic countries. 4 *** Loan growth is calculated in local currency.
Credit exposure Credit exposure from lending activity, end-H1 2011 - DKK 2,272 bn Subsidised housing Central and local companies, 5% governments, 5% Banks, 6% Personal customers, Diversified financials, 38% 9% Other financials, 3% Energy and utilities, 2% Consumer, 9% Other Commercial industrials, property, 11% 7% Construction, Transportation engineering and and shipping, 3% building products, 2% 5
Danske Bank and it’s Covered Bond Viechle is rated by the three major international rating agencies Negative outlook Negative outlook Negative outlook Short term Long term Short term Long term Short term Long term P-1 Aaa A-1+ AAA F1+ AAA P-2 Aa1 A-1 AA+ F1 AA+ P-3 Aa2 A-2 AA F2 AA Aa3 A-3 AA- F3 AA- A1 B A+ B A+ A2 C A C A A3 D A- D A- Baa1 BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB- … … … Ca D D Covered Bond Rating: Danske Bank Rating: 6
I. Overview of Danske Bank II. Macro Economy III. Financial Performance IV. Funding & Liquidity 7
Economic recovery is still modest GDP growth, Y/Y (%) Public finances (% of GDP) DK NO SE FI IR BAL Eurozone Gross public debt Budget balance Sovereign rating 8 2010 2011 & outlook (S&P) Denmark 43.7 -4.0 AAA/Stable Sweden 39.7 0.0 AAA/Stable 4 Norway 31.0 13.0 AAA/Stable Finland 48.4 -1.4 AAA/Stable Ireland 94.2 -10.5 BBB+/Stable 0 Euroland 85.1 -4.8 - -4 -8 -12 -16 2009 2010 2011E 2012E 8
House prices Danish house prices by region (%) House prices and consumption – Denmark (DKK) House price per sq m Consumption, bn (rha) Change Region Prices Change in Preview* 16,000 200 peaked since peak Q4 10 H1 11 Copenhagen Q3 2006 -19.4 1.3 12,000 180 Zealand Q2 2007 -24.1 -3.9 South Denmark Q2 2008 -9.8 0.3 Central Jutland Q2 2008 -7.6 -1.2 8,000 160 Northern Jutland Q2 2010 -5.3 -5.2 Nationwide Q2 2007 -12.9 -0.9 -2.7 4,000 140 1996 2004 2012 Property prices – Nordic countries (index 1996=100) Unemployment and foreclosures – Denmark (%) Denmark Norway Sweden Finland 10Y swap rate Unemployment # of forced sales (rha) 400 10 600 300 400 200 5 200 100 0 0 0 1996 2004 2012 1996 2004 2012 * Leading indicator, based on monthly statistics from “home” (Danske Bank s real estate agency) that cover about one-third of the market. 9 Source: Danske Research and Realkreditforeningen.
I. Overview of Danske Bank II. Macro Economy III. Financial Performance IV. Funding & Liquidity 10
Earnings improved because of higher NII and strong trading income but were limited by one-off expenses Net profit of DKK 1.9 billion in H1 2011 and DKK 1.2 billion in Q2 2011 in line with expectations Net interest income improved in Q2, mainly because of higher deposit margins Trading income remained strong in Q2, and insurance result at Danica improved Impairment charges declined slightly but remained high in Ireland and Northern Ireland Very limited remaining funding need for 2011 and strong capital position after rights offering Initiatives taken to improve earnings and more to come in H2 and 2012 11
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