Danske Bank August 2011 This presentation has been prepared solely - - PowerPoint PPT Presentation

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 presentation, 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 referred 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

    

Market position: Challenger Branches: 13 Market share: 6% Market rank: 5 Loan growth (Y/Y):**

• 11%

Lithuania

5.0 million customers 2.1 million active Internet customers 662 branches in 15 countries* 21,536 full-time employees

Market position: Challenger Branches: 17 Market share: 10% Market rank: 4 Loan growth (Y/Y):**

• 11%

Estonia Market position: Challenger Branches: 4 Market share: 2% Market rank: 12 Loan growth (Y/Y):**

• 11%

Latvia Market position: Challenger Branches: 49 Market share: 6% Market rank: 5 Loan growth (Y/Y):*** 5% Sweden Market position: Challenger Branches: 41 Market share: 5% Market rank: 3 Loan growth (Y/Y):*** 0% Norway Market position: Leader Branches: 120 Market share: 12% Market rank: 3 Loan growth (Y/Y): 6% Finland Market position: Leader Branches: 82 Market share: 18-30% Market rank: 1-2 Loan growth (Y/Y):***

• 2%

Northern Ireland Market position: Leader Branches: 309 Market share: 25% Market rank: 1 Loan growth (Y/Y):

• 2%

Denmark Market position: Challenger Branches: 28 Market share: 3% Market rank: 6 Loan growth (Y/Y):

• 8%

Ireland

Danske Bank is a strong Nordic franchise

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.

Lending divided by Banking Activity Q2 2011

Danmark 56% Finland 9% Sweden 11% Norway 8% Northern Ireland 3% Ireland 4% CIB 6% Baltics 1% Other 2% 4

Credit exposure

Credit exposure from lending activity, end-H1 2011

• DKK 2,272 bn

Central and local governments, 5% Subsidised housing companies, 5% Banks, 6% Diversified financials, 9% Other financials, 3% Energy and utilities, 2% Consumer, 9% Commercial property, 11% Construction, engineering and building products, 2% Transportation and shipping, 3% Other industrials, 7% Personal customers, 38% 5

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

Negative outlook Negative outlook Negative outlook

Danske Bank and it’s Covered Bond Viechle is rated by the three major international rating agencies

Danske Bank Rating: Covered Bond 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) 2010 2009 8

• 8

4

• 4
• 12

2011E

• 16

2012E

IR FI NO DK Eurozone BAL SE Gross public debt Budget balance Sovereign rating 2010 2011 & outlook (S&P) Denmark 43.7

• 4.0

AAA/Stable Sweden 39.7 0.0 AAA/Stable Norway 31.0 13.0 AAA/Stable Finland 48.4

• 1.4

AAA/Stable Ireland 94.2

• 10.5

BBB+/Stable Euroland 85.1

• 4.8
• 8

House prices

Danish house prices by region (%) House prices and consumption – Denmark (DKK) Property prices – Nordic countries (index 1996=100) Unemployment and foreclosures – Denmark (%)

* Leading indicator, based on monthly statistics from “home” (Danske Banks real estate agency) that cover about one-third of the market. Source: Danske Research and Realkreditforeningen.

5 10 200 400 600 2012 2004 1996 4,000 8,000 12,000 16,000 200 180 160 140 1996 2004 2012

Consumption, bn (rha) House price per sq m

100 200 300 400 2012 2004 1996

Finland Sweden Norway Denmark Region Prices Change Change in Preview* peaked since peak Q4 10 H1 11 Copenhagen Q3 2006

• 19.4

1.3 Zealand Q2 2007

• 24.1
• 3.9

South Denmark Q2 2008

• 9.8

0.3 Central Jutland Q2 2008

• 7.6
• 1.2

Northern Jutland Q2 2010

• 5.3
• 5.2

Nationwide Q2 2007

• 12.9
• 0.9
• 2.7

# of forced sales (rha) Unemployment 10Y swap rate 9

I. Overview of Danske Bank

• II. Macro Economy
• III. Financial Performance
• IV. Funding & Liquidity

10

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

Earnings improved because of higher NII and strong trading income but were limited by one-off expenses

11

NII improved in Q2 and trading income remained strong

Income statement & key figures (DKK m)

H1 2010 H1 2011 Index Q1 2011 Q2 2011 Index Net interest income 11,934 11,339 95 5,554 5,785 104 Net fee income 4,208 4,142 98 2,093 2,049 98 Net trading income 5,101 5,420 106 2,975 2,445 82 Other income 2,144 1,974 92 1,002 972 97 Net income from insurance business 756 328 43 67 261 390 Total income 24,143 23,203 96 11,691 11,512 98 Expenses 13,259 14,029 106 7,351 6,678 91 Profit bef. loan imp. charges 10,884 9,174 84 4,340 4,834 111 Loan impairment charges 7,752 5,594 72 2,841 2,753 97 Profit before tax 3,132 3,580 114 1,499 2,081 139 Tax 1,426 1,673 117 792 881 111 Net profit for the period 1,706 1,907 112 707 1,200 170 C/I ratio ex integr., gw, state & deposit guarantee fees (%) 48.3 53.6 111 53.2 54.0 101 Core tier 1 capital ratio (%) 9.1 12.3 135 10.0 12.3 123 Risk-weighted assets (DKK bn) 879 860 98 855 860 101 Total loans ex repos (DKK bn) 1,689 1,667 99 1,662 1,667 100 Deposits (ex repos) & issued RD bonds (DKK bn) 1,487 1,492 100 1,490 1,492 100 Total assets (DKK bn) 3,364 3,127 93 3,126 3,127 100 12

Net interest income up 4% Q/Q on increased deposit margins and one-offs

Quarterly net interest income (DKK m) Quarterly change in net interest income (DKK m) 5,927 5,840 6,069 5,554 5,785 Q1 11 +4% Q2 11 Q4 10 Q3 10 Q2 10

NII Cost of gov. hybrid

48 145 59 99 25 10

• No. of days

Equity Q2 11 Volume Other 64 5,785 One-offs RD Deposit margin Q1 11 5,554 71 Lending margin S-T interest rate sensitivity across all currencies: 25 bp = DKK 600 m

13

Value at risk and PIIGS exposure remains limited, trading income driven by derivatives activities in Q2

Breakdown of net trading income (DKK m)

* Q2 2011 include a market value adjustment of DKK 290 m on Nets. ** Interest rate risk (value at risk at 99% confidence level; 10-day horizon.) Calculated as an average of daily VaR values during the period.

Danske Markets income split (%) 23 34 55 38 39 18 31 8 21 22 Q2 11 7 2010 Q1 11 5

Bonds & DCM Equities Forex & money market Repo & deriviatives

Gross sovereign exposure, end-Q2 2011 (DKK bn) 38 28 20 18 14 9 11 1 1 1 1 7 Germany Ireland Portugal Greece Other Sweden Denmark France Norway Finland 7 Italy Spain US UK

H1 2010 H1 2011 Index Q1 2011 Q2 2011 Index Danske Markets 3,759 3,659 97 2,270 1,389 61 Group Treasury* 811 917 113 257 660 257 Total 4,570 4,576 100 2,527 2,049 81 BA Denmark 232 313 135 173 140 81 Other trading income 299 531 178 275 256 93 Net trading income 5,101 5,420 106 2,975 2,445 82 Value at Risk** 333 262 79 172 238 138 14

Continued focus on expenses

Expenses (DKK m) Quarterly trend in expenses (DKK m) 555 76 112 50 113 115 60 72 116 PPI, NIR 6,678 IT Q2 11 Others incl. holiday Marketing Severance pay Goodwill Nordania leasing 7,351

• Dep. guarantee

Q1 11

• Perf. based comp.

Q4 10 20,000 21,000 Q2 11

• 9%

23,000 24,000 22,000 Q4 08 Q4 09 Q4 07 Employees (number of FTEs)

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Expenses 6,423 6,836 6,294 6,457 7,351 6,678 Integration expenses 46 46 47 45 45 45 Amortisation of intangibles 127 126 127 127 127 127 Severance payments 26 64 19 87 144 29 State and deposits guarantee 625 625 625 850 295 Asset write-down 113 PPI, Northern Ireland 50 Underlying cost base 5,599 5,975 5,476 6,198 6,072 6,132 15

Q2 10 Q3 10 1,000 Q4 10 Q1 11 4,000 3,000 2,000 Q2 11

• 1,000

Impairment charges are improving, albeit slowly

Quarterly loan impairment charges (DKK m) Individual impairments – Group ex Baltics (DKK m) 3,000 Q2 11

• 3,000

Q1 11 Q4 10 Q2 10 Q3 10 6,000

Reversals Increased New Total impairments Collective impairment charges 71 bp 64 bp 62 bp 59 bp 56 bp 16

Impairment charges driven by SMEs and large corporates in Q2 2011

Impairments by customer segment (DKK bn) Net exposures in rating categories 10 and 11 (DKK bn) 0.1 1.0 2.1

• 1

1 2 3 4 Q310 Q410 Q111

• 0.4

Q210 2.8 Q211

Financials Large corporates SMEs Personal

40 Q310 25 20 Q111 Q410 30 35 Q211 Q210

Rating category 10 Rating category 11 17

Nordic impairments: Denmark is moving sideways

* Accumulated impairment charges (allowance account) at the end of period in DKK m and as basis points of total lending.

Denmark, 56% of Group’s lending (DKK m) 742 790 1,162 1,498 2,254 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 16 124 5 4 12 Q3 10 Q2 10 Q2 11 Q1 11 Q4 10 5 46 47 26

• 21

Q2 11 Q2 10 Q3 10 Q4 10 Q1 11

• 34

29 15 26 84 Q4 10 Q1 11 Q2 11 Q3 10 Q2 10 Finland, 9% of Group’s lending (DKK m) Sweden, 11% of Group’s lending (DKK m) Norway, 8% of Group’s lending (DKK m) Allowance* 16,660 m Individual 147 bp Collective 28 bp Allowance* 1,890 m Individual 117 bp Collective 12 bp Allowance* 1,161 m Individual 59 bp Collective 5 bp Allowance* 1,610 m Individual 119 bp Collective 4 bp 93 bp 62 bp 48 bp 33 bp 31 bp 4 bp 1 bp 2 bp 40 bp 5 bp

• 5 bp

6 bp 11 bp 10 bp 1 bp 24 bp 7 bp 4 bp 8 bp

• 9 bp

18

Other impairments: Northern Ireland and Ireland are still dragging on

606 329 464 409 254 Q4 10 Q1 11 Q2 11 Q2 10 Q3 10 1,850 1,283 1,213 1,020 1,647 Q2 11 Q2 10 Q3 10 Q4 10 Q1 11

• 93
• 40

36

• 18

51 Q4 10 Q1 11 Q2 10 Q3 10 Q2 11

• 20

146

• 1
• 111
• 77

Q2 10 Q3 10 Q2 11 Q1 11 Q4 10 Northern Ireland, 3% of Group’s lending (DKK m) Ireland, 4% of Group’s lending (DKK m) Baltics, 1% of Group’s lending (DKK m) CIB, 6% of Group’s lending (DKK m)

* Accumulated impairment charges (allowance account) at the end of period in DKK m and as basis points of total lending.

Allowance* 3,856 m Individual 730 bp Collective 59 bp Allowance* 12,555 m Individual 1,731 bp Collective 118 bp Allowance* 2,569 m Individual 972 bp Collective 180 bp Allowance* 1,085 m Individual 96 bp Collective 9 bp

• 27 bp
• 42 bp

0 bp 57 bp

• 8 bp

80 bp

• 29 bp

61 bp

• 69 bp
• 167 bp

883 bp 561 bp 690 bp 741 bp 1090 bp 185 bp 303 bp 356 bp 267 bp 496 bp

19

Strong capital position has been strengthened further by the share offering

Capital ratios: CRD/Basel II (%) Risk-weighted assets (DKK bn) 1 3 Change in lending 855 Q1 2011 1 Market risk 8 860 Other Exposure Q2 2011 16.6 Q2 11 12.3 18.8 17.4 10.0 Q1 11 14.6 Solvency need

 Total capital Tier 1 Core tier 1 20

Danske Bank passed the European stress test as one of the strongest of the 90 banks

9.4 9.0 Nordea BBVA 9.5 ABN Amro Hypo Real Estate Deka Allied Irish Nykredit KBC 9.4 Valletta Swedbank Dexia HSBC LB Berlin SEB 10.5 RBS West LB Popolare Norddeutsche LB HSH Nordbank 4.9 EFG Eurobank Bankinter ING 8.6 Handelsbanken Intesa Sanpaolo Credit Agricole DnB NOR Commerzbank SocGen 11.6 Irish Life & P Banca March Caisse d’Epargne Deutsche Barclays

13.0

BPI 13.6 Santander Bayerische LB Erste Alpha Raiffeisen BNP Paribas Bank of Ireland Unicredit Rabobank NL 23.5 PKO Bank Jyske Bank 12.8 Sydbank OTP

Danske Bank

Pohjola Bank

Core tier 1 ratio, adverse scenario end-2012 (%)

Note: Not all 90 participating banks are shown in the chart.

Nordic peers

21

22 Financial results for Q2 2011

Macroeconomic recovery continues; rising short-term rates and share offering will favour NII Central bank hikes and increasing margins in Denmark will raise NII by DKK 2.5 billion annually (500 million in H2 2011) Focus on costs will continue, but total expenses will increase 3% from 2010 level because

• f DKK 1.1 billion expense for the Danish Deposit Guarantee Fund and other one-offs

Danica’s income is likely to be lower because the full risk allowance will not be booked Danske Markets’ result is highly dependent on market developments, whereas Danske Capital’s result depends on its relative performance Impairments are likely to remain high in Ireland and Northern Ireland, but to be lower in 2011 than in 2010

Outlook for 2011: Tailwinds will increase net interest income; impairments will remain high but will be lower than in 2010

22

I. Overview of Danske Bank

• II. Macro Economy
• III. Financial Performance
• IV. Funding & Liquidity

23

2011 funding almost completed, with approximately DKK 10 bn left

Funding need (DKK bn) Issued funding, types and duration (DKK bn) 182 51 63 2009 2010 2011 10 11 11 20 19 Q2 11 2010 1 Q1 11

Covered bonds Senior Pre-funded

5-17 years 2-6 years 5-10 years 2-5 years

Estimated funding needed Issued funding 24

Liquid, highly rated bond portfolio

2 2 4 5 12 34 41 Quasi-government Commercial paper Swedish covered bonds Other covered bonds Credit bonds Danish mortgage bonds Governments & municipals Liquid Bond portfolio of DKK 459 bn (%) 6 mos 300 12 mos 100

• 100

3 mos 200 9 mos

Q4 2010 Q4 2008 Q2 2011

12-month liquidity,* end of period (DKK bn)

* Moody’s Financial Strength. Main assumptions: No access to capital markets; no refinancing of debt to credit institutions, issued bonds or subordinated capital; and moderate reduction

• f business activities.

25

Well-diversified funding position

Funding sources (%)

5 5 8 23 4 7 3 5 5 33 Central banks Subordinated debt Deposits Equity Banks, net S-T bonds Covered bonds L-T bonds Repos Match-funded DK mortgage bonds

Funding position (%) Mortgage finance (match funded) Deposits Repos 10

• Subord. debt

Central banks 20 Long-term bonds 40 Shareholders’ eq. 30

• Cov. bonds

Due to credit inst. (ex. CIB) Short-term bonds

Q2 11 Q4 08

Short-term funding Long-term funding Issued long-term bonds: DKK 173 bn Issued covered bonds: DKK 124 bn

26

Danske Bank Group Covered Bond Universe Legislation and history behind three business lines

• Covered Bond issuer since 2007
• Based on Danish legislation
• Loans from the Groups banking

activities in Denmark, Norway and Sweden

• Issued directly on the balance sheet
• Multiple Cover Pool set-up
• Full recourse to Danske Bank
• Follows the “General Balance

Principle”

• Funding through EUR benchmarks and

PP issues in multiple currencies

• € 25bn Global Covered Bond

Programme

• AAA programme rating
• Covered Bond issuer since 1851
• Based on Danish legislation
• Specialized Mortgage Bank
• Fully owned subsidiary in Danske Bank

Group

• Only loans from Denmark
• Follows the “Specific Balance

Principle”= Fully match funding

• Funding via daily tap issues in DKK

through the Danish Market

• AAA rating
• Sampo Housing Loan Bank (SHLB)
• Specialized Mortgage Bank
• Covered Bond issuer since 2005
• Based on Finnish Legislation
• Fully owned subsidiary in the Danske

Bank Group

• Support mechanism from Sampo Bank

plc

• Only residential loans from Finland
• Full recourse to SHLB
• Funding through benchmarks and PP

issues in EUR.

• € 5bn Medium Term Covered Note

Programme

• AAA programme rating
• Cover Pool D
• Cover Pool I
• Cover Pool C
• (Cover Pool R)

27

The three cover pools and Sampo

COMBINED RETAIL RETAIL RETAIL

Characteristics Cover Pool D Cover Pool I Cover Pool C SHLB Pool notional DKK 35.8bn (€ 4.8bn eqv) DKK 100bn (€13.4bn eqv) DKK 9.7 bn (€ 1.3bn eqv) DKK 25.5bn (€ 3.4bn eqv) Number of Loans 59,090 120,267 3,652 71,905 Substitution collateral DKK 6.59 bn (€ 0.87 bn equivalent) Number of Borrowers 58,553 74,553 2,403 71,905 Total Value of Properties DKK 125 bn (€ 16.7 bn eqv) DKK 223 bn (€ 29.7 bn eqv) DKK 27 bn (€ 3.6 bn eqv) N/A Number of Properties 58,742 82,366 2,340 62,039 Average Loan Size DKK 0.61 Mill. (€ 0.08 Mill. eqv) DKK 0.83 Mill (€ 0.11 Mill. eqv) DKK 2.66 Mill. (€ 0.36 Mill. eqv) DKK 0.35 Mill. (€ 0.05. eqv) Average Property Value DKK 2.12 Mill. (€ 0.28 Mill. eqv) DKK 2.70 Mill. (€ 0.36 Mill. eqv) DKK 11.53 Mill. (€ 1.54 Mill. eqv) N/A Property Type 100% owner-occupied 79.1% owner-occupied, 20.9% housing cooperatives 9.4% Agriculture, Forestry, Horticulture, 26.4% Industrial, 9.0% Cooperative Housing, 31.2% Rental Housing, 23.9% Retail 100% residential WA LTV 62.0% 60.0% 49.0% 42.3% WA Seasoning 4.1 years 3.1 years 3.8 years 4.5 years WA Remaining Term 25.7 years 32.5 years 20.9 years 15.8 years Rate type Floating rate Floating rate Floating rate Fixed (app 8.1), Floating (app 91.9) Geographical location 100% Denmark 49.5% Sweden, 50.5% Norway 100% Sweden 100% Finland Pct of loans in arrears (>30days) N/A Current balance in arrears DKK 0 Mill. DKK 0 Mill. DKK 0 Mill. N/A OC at cut-off date 22.70% 24.50% 30.20% 11.85% Cut-off date 29/07/2011 29/07/2011 29/07/2011 29/07/2011 Rating Aaa/AAA/AAA Aaa/AAA/AAA AAA/AAA Aaa

Danske Bank’s funding team

Peter Holm Tel.: + 45 45 12 84 85 Senior Vice President E-mail: holm@danskebank.dk Knud Erik Kristensen Tel.: +45 45 12 84 86 Chief Funding Manager E-mail: knkr@danskebank.dk Claus Jensen Tel.: +45 45 12 84 83 Chief Funding Manager E-mail: clauj@danskebank.dk Andreas Hammarbro Ligaard Tel: 45 14 88 81 Senior Funding Manager E-mail: alig@danskebank.dk Mads Holm Tel.: +45 45 13 09 85 Senior Funding Manager E-mail: madho@danskebank.dk Steen Blaafalk Tel.: + 45 45 14 63 60 Senior Executive Vice President E-mail: steen.blaafalk@danskebank.dk Mette Ingeman Pedersen Tel.: + 45 45 12 85 14 Chief Analyst E-mail: mepe@danskebank.dk 29

www.danskebank.com/ir

    

30

Appendix

Tax 32 NII and margin developments 33-35 Credit 36-44 Realkredit Danmark 45-47 Business areas 48-58

31

Adjusted tax rate close to normal, but actual rate fluctuates

• wing to Ireland and one-offs

Explanation of tax rate (DKK m)

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Pre-tax profit 1,741 1,870 1,448 1,499 2,081 Pre-tax loss, BA Ireland 1,553 942 1,119 1,204 1,780 Permanent nontaxable difference*

• 649
• 57
• 498

20

• 330

Adjusted pre-tax profit, Group 2,645 2,755 2,069 2,723 3,531 Tax according to P&L 804 983 377 792 881 Taxes from previous years**

• 103
• 314

162

• 88

31 Adjusted tax 701 669 539 704 912 Adjusted tax rate 26.5% 24.3% 26.0% 25.9% 25.8% Actual tax rate 46.2% 52.6% 26.0% 52.8% 42.3%

* Permanent nontaxable differences are due primarily to value adjustments and the dividend from Nets. ** Taxes from previous years are due primarily to adjustment to the tax booked in Denmark for 2010.

32

33 Financial results for Q2 2011

Net interest income development

Net interest income (DKK m) Net interest income in Realkredit Danmark (DKK m) 111 143 72 217 595 H1 11 11,339 Other Allocated funding 235 Equity One-offs Volume 277 Lending margin 569 Deposit margin RD H1 10 11,934 635 355 247 270 170 132 128 102 54 Q4 Q3 Q2 100 Q1

2011 2010 2009 33

Net interest margins by business unit

Net interest margins, NII/loan stock (%)

2009 figures are not comparable with figures for Q1 2010 and onwards because Corporate Banking was not a separate unit.

0.80 1.20 1.60 2.00 2.40 2.80

Q4 10 Q3 10 Q2 10 Q1 10 Q4 09 Q2 11 Q1 11 Q3 09 Q1 09 Q2 09

Group CIB Ireland Finland Baltics Sweden

• N. Ireland

Norway Denmark 34

*Includes Realkredit Danmark. Note: Margin change in Q1 2011 was affected by the change in transfer pricing.

Quarterly lending margins (%)

1.04 1.81 1.54 2.06 0.83 1.11 0.75 1.19 1.14 1.81 1.56 2.06 0.89 1.08 0.72 1.17 0.98 1.81 1.37 1.94 0.70 1.01 0.59 1.13 0.99 1.78 1.22 1.97 0.58 1.03 0.53 1.11

Northern Ireland Norway CIB Baltics Ireland Denmark* Finland Sweden

0.47

• 0.03

0.13 0.58 1.01 0.55 0.24 0.41 0.56

• 0.02

0.23 0.63 0.95 0.66 0.29 0.47 0.65

• 0.02

0.27 0.77 0.98 0.76 0.49 0.63 0.62 0.16 0.30 0.80 1.04 0.76 0.73 0.71

Q111 Q211 Q410 Q310

Quarterly deposit margins (%)

Deposit margins are benefitting from the increase in leading rates, and the pressure on lending margins is easing

35

Denmark is dominated by collective impairments against home loans and agriculture

Impairments at Retail Denmark, Q2 2011 (DKK m) Prices of pig feed and pork (index 1996=100) 2004 2000 1996 2006 1998 2002 200 400 600 800 2010 2008

Price of land Average debt per farm Individual Collective Total Bank Personal customers 255 493 748 Agriculture 146 300 446 Termination of contract

• 770
• 770

Other 158

• 119

39 Total

• 211

674 463 RD Private 147

• 1

146 Commercial 133 133 Total 280

• 1

279 Retail Denmark 69 673 742

Debt level and land prices (index 1996=100) 50 100 150 200 2006 2008 2010

Pork Pig feed

Arrears on retail loans with monthly payments (% of stock) 1.0 0.4 0.8 0.6 1.2 Q2 11 Q4 10 Q2 10 Q4 09 Q2 09 Q2 11

36

Impairments

Impairments distributed by segment (%) Impairments, reversals and write-offs (DKK m) 4,900 Allowance end-2007 20,643 Gross impairments 81,968 21,626 Write-offs Allowance end-Q2 2011 Reversals 44,599 37 30 69 29 4 16

• 14

17 4 8 2008 - Q1 2011 Q2 2011

SMEs Personal CRE Financials Large corp. 37

Commercial property exposure

Denmark (DKK bn) Ireland (DKK bn) Northern Ireland (DKK bn) Baltics (DKK bn)

Value of collateral is capped by size of loan and is after a haircut of at least 20%. * NPL (Nonperforming loans) are defined as categories 10 and 11 and are shown as a percentage of total loans.

6.3 3.3 12.4 2.8 0.1 77.1 35.0 2.8 Gross lending Impaired loans 115.1 8.3 5.4 4.9 2.6 7.6 Gross lending Impaired loans 20.9 7.6 0.1 15.6 6.7 1.7 1.5 Impaired loans Gross lending 3.8 0.2 2.0 10.4 2.0 2.0 0.1 0.4 1.1 0.6 Gross lending 2.7 0.1 0.6 Impaired loans NPL 11 % NPL 75 % NPL 36 % NPL 42 %

Value of collateral Unsecured Collective impairments Individual impairments 38

Credit exposure to commercial property and construction segments

Credit exposure broken down by business unit, Q2 2011 (DKK bn)

Commercial property Developer subsegment

• f commercial property

Construction and building materials Sector in total Denmark 114.0 0.7 6.1 120.1 Finland 13.0 0.5 3.0 16.0 Sweden 56.4 0.1 7.6 64.0 Norway 30.0 1.9 2.0 32.0 Northern Ireland 8.2 2.4 3.1 11.3 Ireland 13.4 4.2 3.1 16.5 BA Baltics 2.0 0.6 0.4 2.4 CIB 13.3 0.0 12.5 25.8 Other 2.6 0.0 2.1 4.7 Total 252.9 10.4 39.9 292.8 Gross exposure subject to individual impairment testing 35.8 6.8 42.6 Impairment charges 14.3 3.4 17.7 Portion from BA Ireland 9.1 39

Residential mortgage exposure

Note: Value of collateral is capped by size of loan and is after a haircut of at least 20%.

0.9 0.9 1.0 Impaired loans 414.1 90.0 6.3 0.9 4.5 Gross lending 506.0 4.6 0.2 0.2 0.1 20.3 1.2 0.2 0.9 Gross lending 25.1 Impaired loans 0.2 2.0 Impaired loans 12.3 14.2 Gross lending 1.0 0.6 1.1 0.6 0.1 Impaired loans 12.1 10.4 Gross lending 1.8 0.1

Collective impairments Individual impairments Value of collateral Unsecured

NPL 1 % NPL 5 % NPL 1 % NPL 15 % Denmark (DKK bn) Ireland (DKK bn) Northern Ireland (DKK bn) Baltics (DKK bn)

40

Danish agricultural sector

Agricultural exposure and allowance (DKK bn) Breakdown of loan portfolio (%) 6 16 24 13 22 Mixed operations Other Pig farming Grocery trade Cattle breeding Agriculture 20 Loan-to-value ratio at Realkredit Danmark (%)

Business unit Exposure Allowance Coverage Realkredit Danmark 44.7 0.1 0.1% Retail Banking Denmark 9.7 2.0 17.1% Other business units 14.6 0.3 2.0% Total exposure 69.0 2.3 3.3% End of quarter Q4 2008 46% Q4 2009 64% Q4 2010 73% Q1 2011 70% Q2 2011 70% Loan-to-value 41

Upgrades/rating changes ratio above 50 in the Nordic countries but lagging in Denmark

Relation between upgrades and total rating changes, corporates, 12-month rolling average (%) 2011 2010 2009 50 100 CIB Sweden Norway Denmark Finland Upgrades > downgrades Downgrades > upgrades

42

Gross exposure subject to individual impairment test

Gross exposure in rating categories 10 and 11 (bp) 593 776 287 1,924 3,861 1,364 403 165 362 454 2,000 3,000 4,000 1,000 Group Other Act. CIB Denmark Sweden Finland Baltics Norway Northern Ireland Ireland

Q3 10 Q4 10 Q1 11 Q2 11 43

Economic climate in Denmark is still lagging the other Nordics

Note: Indexes are seasonally adjusted. Source: EcoWin.

Bankruptcies (index 1996=100) Business confidence indicator (index 1996=100)

60 80 100 120 140 2000 2012 2008 1996 2004

Sweden Finland Denmark

400 100 500 200 300 2004 2011 1996

44

Mortgage bonds at Realkredit Danmark

Breakdown of loans by LTV and rating, end-Q2 2011 (%) Arrears and repossessed properties (number) 2005 2006 Q4 08 Q1 08 2002 2007 2003 Q3 09 2001 Q1 09 Q2 08 Q2 09 Q3 08 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 2,500 200 5,000 100 2004

LTV/rating 1-3 4-7 8-11 Total 0-20 8.1 23.4 4.3 35.8 20-40 5.4 19.7 3.9 29.0 40-60 3.1 14.3 3.1 20.5 60-80 1.4 7.4 1.9 10.8 >80 0.9 2.0 1.0 3.9 Total (DKK bn) 133 469 99 701 3 & 6-month arrears Repossessed properties (rha)

• 164 repossessed properties and 3,262 arrears out of

405,521 loans ( 0.8%)

• 1% of loans with LTV > 80 % and low rating
• Average LTV of 65 %

LTV on origination (legal requirement)

• private customers: max. 80 %
• commercial customers: max. 60 %

Facts, end-Q2 2011

45

Realkredit Danmark: Higher OC requirement from Moody’s sharp contrast to DKK 24.8 bn solvency

0.4 4.4 147.0 97.0 29.0 49.9 45.9 24.8 17.0 + senior unsecured Moody’s Q1 2010 OC 62.9 Capital base S&P current OC Solvency requirement* 33 years +34.1 +50.0 Net profit stress test** Impairments stress test** Moody’s downgrade Moody’s Q2 2011 OC Capitalisation, overcollateralisation (OC) and stress test, end-Q2 2011 (DKK bn)

* Solvency requirement under the transition rules (i.e. 80% of Basel I). ** FSA stress test, stress scenario, end-2012. Assumptions 2011/2012: GDP -1.6/-2.4% ; unemployment 5.6/8.3%; house prices -14.3/-14.6%; ST rate 2.0/2.4%; LT rate 5.1/6.1%.

46

Retail Banking Denmark: Drop in expenses more than compensates for 7 % decline in NII

Income statement (DKK m) Trend in lending volume (DKK bn) Margin trends – ex RD (%) Market shares – incl. CIB and repo lending*, ex RD (%)

Note: Margin change in Q1 2011 was affected by the change in transfer pricing. * From Danske Markets.

20 24 28 32 36 Q310 Q210 Q111 Q410 Q211

Deposits Lending

1 2 3 4 Q310 Q210 Q111 Q410 Q211

Lending Deposits

559 560 562 562 561 388 388 393 393 387 Q111 0% 0% Q211 Q410 Q210 Q310

Corporate Retail H1 2010 H1 2011 Index Net interest income 6,393 5,918 93 Net fee income 1,703 1,631 96 Other income 478 591 124 Total income 8,574 8,140 95 Total expenses 5,385 4,512 84 Profit bef. loan imp. charges 3,189 3,628 114 Loan impairment charges 4,989 1,532 31 Profit before tax

• 1,800

2,096

• Bank Package I (fees & imp.)

2,018

• Adj. profit before tax

218 2,096

• ROE before loan imp. charges

18.7 17.8 47

Retail Banking Finland: 3 % increase in total income more than offset by increasing expenses

Trend in lending volume (DKK bn) Margin trends (%) Market shares – incl. CIB (%)

Note: Margin change in Q1 2011 was affected by the change in transfer pricing.

10 12 14 Q310 Q211 Q111 Q210 Q410 0.0 0.3 0.6 0.9 Q211 Q111 Q410 Q310 Q210

Deposits Lending Lending Deposits

94 93 92 90 89 49 48 48 47 47 Q310 +3% Q211 +6% Q111 Q210 Q410

Corporate Retail H1 2010 H1 2011 Index Net interest income 1,006 1,002 100 Net fee income 495 501 101 Other income 211 263 125 Total income 1,712 1,766 103 Total integration expenses 265 264 100 Expenses ex total intgr. exp. 1,252 1,377 110 Profit bef. loan imp. charges 195 125 64 Loan impairment charges 50

• 5
• Profit before tax

145 130 90 ROE before loan imp. charges 8.2 4.2

Income statement (DKK m)

48

Retail Banking Sweden: 20 % increase in NII driven by higher deposit margins

Note: Margin change in Q1 2011 was affected by the change in transfer pricing.

Q210 6.0 5.5 5.0 4.5 Q211 Q111 Q410 Q310 1.5 1.0 0.5 0.0 Q211 Q111 Q410 Q310 Q210

Deposits Lending Lending Deposits

82 82 77 74 71 101 101 98 96 92 +9% Q111 +16% Q310 Q210 Q410 Q211

Corporate Retail

Trend in lending volume (DKK bn) Margin trends (%) Market shares – incl. CIB (%)

H1 2010 H1 2011 Index Net interest income 968 1,158 120 Net fee income 299 304 102 Other income 84 112 133 Total income 1,351 1,574 117 Expenses 729 860 118 Profit bef. loan imp. charges 622 714 115 Loan impairment charges 41 51 124 Profit before tax 581 663 114 ROE before loan imp. charges 18.8 15.1

Income statement (DKK m)

49

Retail Banking Norway: Profit before tax fell by half owing to high impairments in Q1 2011 and squeezed mortgage margins

Note: Margin change in Q1 2011 was affected by the change in transfer pricing.

Q410 Q310 Q210 Q111 6

5

4 Q211 Q310 Q210 Q111 Q410

1.2 0.8 0.4

Q211 69 68 66 65 64 58 56 54 58 59 Q111

• 3%

+9% Q310 Q211 Q210 Q410

Corporate Retail Lending Deposits Lending Deposits

Trend in lending volume (DKK bn) Margin trends (%) Market shares – incl. CIB (%)

H1 2010 H1 2011 Index Net interest income 856 760 89 Net fee income 155 130 84 Other income 330 369 112 Total income 1,341 1,259 94 Expenses 863 924 107 Profit bef. loan imp. charges 478 335 70 Loan impairment charges 85 140 165 Profit before tax 393 195 50 ROE before loan imp. charges 18.0 10.3

Income statement (DKK m)

50

Banking Activities Northern Ireland: Rise in loan impairment charges

Note: Margin change in Q1 2011 was affected by the change in transfer pricing. * Corporate lending volume excludes lending to public sector. In local currency the YoY movement is -2% for Retail and -8% for Corporate.

Q410

40

Q310 Q210 Q111 30 20 10 Q211

3

2 Q210 Q410 Q310 1 Q211 Q111 16 16 16 17 16 26 28 28 30 29 Q111 Q211 Q210

• 10%

Q310

• 5%

Q410

Retail Corporate Deposits Lending Retail Corporate

Trend in lending volume* (DKK bn) Margin trends (%) Market shares – incl. CIB (%)

H1 2010 H1 2011 Index Net interest income 602 548 91 Net fee income 150 151 101 Other income 54 72 133 Total income 806 771 96 Expenses 588 588 100 Profit bef. loan imp. charges 218 183 84 Loan impairment charges 374 935 250 Profit before tax

• 156
• 752
• ROE before loan imp. charges

23.1 17.5

Income statement (DKK m)

51

Banking Activities Ireland: Negative result driven by large loan impairment charges

Note: Margin change in Q1 2011 was affected by the change in transfer pricing.

27 28 28 29 29 40 41 43 44 45 Q210 Q410

• 6%

Q211

• 10%

Q310 Q111

Corporate Retail

Q310 Q210 Q111 Q410 Q211 1 2 2 Q111 3

4

1 Q210 Q410 Q310 Q211

Lending Deposits Deposits Lending

Trend in lending volume (DKK bn) Margin trends (%) Market shares – incl. CIB (%) Income statement (DKK m)

H1 2010 H1 2011 Index Net interest income 548 456 83 Net fee income 55 31 56 Other income 25 23 92 Total income 628 510 81 Expenses 437 361 83 Profit bef. loan imp. charges 191 149 78 Loan impairment charges 2,736 3,133 115 Profit before tax

• 2,545
• 2,984
• ROE before loan imp. charges

13.2 9.6 52

Banking Activities Baltics: Reversal of impairments compensates for declining profit

Market shares – Lending (%)

Note: Margin change in Q1 2011 was affected by the change in transfer pricing.

13 13 13 14 14 10 10 11 11 12 Q210 Q410 Q310 Q111

• 17%
• 8%

Q211

Corporate Retail

• 1

1 2 3 Q111 Q211 Q410 Q310 Q210 Q111 9 12 Q211 3 Q210 Q310 Q410 6

Lending Deposits Latvia Lithuania Estonia

Trend in lending volume (DKK bn) Margin trends (%)

H1 2010 H1 2011 Index Net interest income 249 240 96 Net fee income 76 71 93 Other income 56 48 86 Total income 381 359 94 Expenses 175 181 103 Profit bef. loan imp. charges 206 178 86 Loan impairment charges 189

• 133
• Profit before tax

17 311

• ROE before loan imp. charges

34.9 28.0

Income statement (DKK m)

53

Corporate & Institutional Banking: Pressure on lending margins is easing and profit trend is positive

Trend in lending volume, average (DKK bn) Geographical breakdown of lending, Q2 2011 (%)

Note: Margin change in Q1 2011 was affected by the change in transfer pricing.

102 101 103 107 111 Q111 Q410 Q310 Q210 Q211

• 8%

Q210 Q310 1.2 Q410 Q111 Q211 0.0 0.4 0.8

Deposits Lending

15 16 34 35 Norway Sweden Finland Denmark Margin trends (%)

H1 2010 H1 2011 Index Net interest income 921 952 103 Net fee income 528 437 83 Other income 37 56 151 Total income 1,486 1,445 97 Total integration expenses 61 61 100 Expenses ex total intgr. exp. 599 476 79 Profit bef. loan imp. charges 826 908 110 Loan impairment charges 137 126 92 Profit before tax 689 782 113 ROE before loan imp. charges 18.3 17.0

Income statement (DKK m)

54

Danske Markets: Strong first half of the year driven by high customer activity

H1 2010 H1 2011 Index Total income 4,570 4,576 100 Expenses 1,341 1,424 106 Profit bef. loan imp. charges 3,229 3,152 98 Loan impairment charges

• 904
• 231
• Profit before tax

4,133 3,383 82 ROE before loan imp. charges 146 88

Impairments, 3% of Group’s lending (DKK m)

* Accumulated impairment charges (allowance account) at the end of period in DKK m and as basis points of total lending. ** Shared position.

Allowance* 2,583 m Individual 563 bp Collective 70 bp

• 617 bp

216 bp 54 bp 155 bp

• 389 bp
• 807

165 221 Q2 11

• 396

Q1 11 Q4 10 66 Q3 10 Q2 10 Market position in the Nordics (rank)

Product area Denmark Sweden Norway Finland Fixed income 2 1 3 3* Forex 2 4 4 2* Derivatives 1* 1 3 2 Equities 1 5* n/a 3*

Income statement (DKK m) Trading activities – accumulated income (DKK bn) 7,000 14,000

2011 YTD Year 2009 Year 2010

Q4 Q3 Q2 Q1

55

Net insurance income: Risk allowance from three

• ut of four groups

Traditionel customers’ funds (%) Unit-linked insurance business (DKK) Net income from insurance business (DKK m) 5.4 1.1 1.9 2.2 H1 2011 H1 2010

Investment return Investments & liabilities

• 50

H1 09 60 80 H1 07 100 20 40 H1 10 200 H1 08 H1 11

Insurance result (m, rha) AUM (bn) Premiums (bn) H1 10 H1 11 Index Q1 11 Q2 11 Index Premiums (bn) 12 14 117 7 7 99 Traditional (insurance result) 555 547 99 264 283 107 Unit-linked (insurance result) 137 179 131 90 89 99 Health and accident (insurance result)

• 12

12

• 1

13

• Investment result

520 146 28 21 125 595 Financing result

• 67
• 78
• 33
• 45
• Special allotment
• 200
• 125

63

• 63
• 62
• Net income bef. postp. risk allowance

933 681 73 278 403 145 Postponed risk allowance

• 177
• 353
• 211
• 142
• Net income

756 328 43 67 261 390 56

57 Financial results for Q2 2011

Danske Capital: Rise in income and reversed impairments

• utweigh higher expenses

AuM – customer breakdown (DKK bn) AuM – asset breakdown (%)

* Retail includes Danske Invest. ** Margin for asset management is adjusted income, including performance fees/business volume, end of period.

27 29 30 31 31 Q211 66 3 Q111 66 3 Q410 67 3 Q310 67 4 Q210 69 4

Bonds Equities Cash

135 150 155 156 166 Q211 603 187 238 12 Q111 598 190 241 11 Q410 602 194 241 12 Q310 590 199 228 13 Q210 558 196 214 13

Life insurance Retail* Institutional Private equity

0.3 0.4 0.2 0.1 0.0 Q211 Q111 Q410 Q310 Q210 Margin trends (%)

H1 2010 H1 2011 Index Net interest income 69 55 80 Net fee income 714 830 116

• of which performance fees

19 1

• Other income

21 39 186 Total income 804 924 115 Expenses 480 550 115 Profit bef. loan imp. charges 324 374 115 Loan impairment charges 8

• 47
• Profit before tax

316 421 133

Income statement (DKK m)

57

Net insurance income: Risk allowance from three

• ut of four groups

Traditionel customers’ funds (%) Unit-linked insurance business (DKK) Net income from insurance business (DKK m) 5.4 1.1 1.9 2.2 H1 2010 H1 2011

Investment return Investments & liabilities

40 200 100 H1 10 20 H1 11

• 50

H1 08 80 H1 09 H1 07 60

Insurance result (m, rha) Premiums (bn) AUM (bn) H1 10 H1 11 Index Q1 11 Q2 11 Index Premiums (bn) 12 14 117 7 7 99 Traditional (insurance result) 555 547 99 264 283 107 Unit-linked (insurance result) 137 179 131 90 89 99 Health and accident (insurance result)

• 12

12

• 1

13

• Investment result

520 146 28 21 125 595 Financing result

• 67
• 78
• 33
• 45
• Special allotment
• 200
• 125

63

• 63
• 62
• Net income bef. postp. risk allowance

933 681 73 278 403 145 Postponed risk allowance

• 177
• 353
• 211
• 142
• Net income

756 328 43 67 261 390 58