DnB NOR Funding update Presentation for Arctic Securities 12 - - PowerPoint PPT Presentation

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DnB NOR – Funding update

Presentation for Arctic Securities 12 October 2011 Øyvind Birkeland – CEO DnB NOR Boligkreditt Per Sagbakken – Head of IR/ LT Funding DnB NOR

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• Increased share of long-term funding and lengthened maturity

Share of stable long-term funding* Average life of long term funding ( Senior debt and covered bonds)

* Deposits from customers, subordinated debt, covered bonds and senior debt > 12 months residual maturity * * Internal target for stable long-term funding increased from 88% to 90% in 2009 2

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DnB NOR – Stable access to short term funding -

Outstanding USCP - YCD - ECP/ CD

2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 20.000 jan.07 apr.07 jul.07

• kt.07

jan.08 apr.08 jul.08

• kt.08

jan.09 apr.09 jul.09

• kt.09

jan.10 apr.10 jul.10

• kt.10

jan.11 apr.11 jul.11 USD mio USCP ECP/CD YCD

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High uncertainty in current funding markets

• Senior Unsecured:
• Only a few new transactions after the summer:
• Deutsche Bank: EUR 1.5mrd 2y FRN 3mE+ 98 (29 Sep)
• ABN: EUR 500m 2y FRN 3mE+ 130 (30 Sep)
• Rabobank: EUR 1.5mrd ms+ 125 (10 Okt)
• Significant spread widening in general
• Significant new issue premium
• Covered Bonds
• There have been several new issues in the CB market

after the summer

• Spreads have so far increased with 20 – 30 bps for DnB

NOR Boligkreditt

• DnB NOR issued 5y EUR 2bn yesterday

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DnB NOR outstanding 4 and 10 year Senior Unsecured

• Significant spread widening

Performance of the DnB NOR 4.5% May 2014s and 4.375% Feb 2021s

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Spread widening also for Spread for Covered Bonds – but (so far) much less widening than for Senior Unsecured

Performance of the DnB NOR 2.625% Jan 2016s and 3.875% Jun 2021s

DnB NOR Boligkreditt 1 0 år DnB NOR Boligkreditt 5 år

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DnB NOR Boligkreditt issued EUR 2bn 5 year maturity 11 Oct 2011

• DnB NOR showed strength and good access to long term funding in a very

challenging market

• Raised EUR 2 bn at a Re-offer spread of m s+ 5 8 ( equivalent to 3 m

Nibor + 9 5 )

• 26 bps above what DnB NOR paid in January for a similar transaction in

January

• 133 investors
• Most important markets were Germany&Austria (35% ), Nordics (23% )

and UK&Ireland (17% )

• Sold to banks (41% ), asset managers (34% ), Central Bank/ Supra/ Official

9% ), in addition Pension & Insurance, Corporate and other.

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DnB NOR is in an excellent position in relation to our funding needs

• Planned long term funding for 2011 is NOK 130bn
• So far NOK 118bn
• We are funding more than what is redeeming
• Adjusting to future NSFR requirements
• DnB NOR has de latest years increased the average maturity on
• utsanding long term bonds significantly
• The large funding needs going forward according to NSFR means that

new long term funding must have tenors of 5 years or longer

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DnB NOR

• Issuance of Long Term Funding

2011 2011 NOK bn Tenor Euribor spread EURO bn OMF 90,8 6,4 52 11,5 Vanlig senior obligasjonslån 26,9 8,8 105 3,4 Sum OMF + senior 117,7 6,9 64 14,9 2010 2010 NOK bn Tenor Euribor spread EURO bn OMF 84,4 7,5 49 10,6 Vanlig senior obligasjonslån 32,3 7,3 84 4,0 Sum OMF + senior 116,6 7,5 59 14,6 2009 2009 NOK bn Tenor Euribor spread EURO bn OMF 10,7 12,1 1,3 OMF (NORGES BANK) 90,3 4,2 10,7 Vanlig senior obligasjonslån 38,0 4,6 4,5 Sum OMF + senior 139,1 4,9 50 16,5 2008 2008 NOK bn Tenor Euribor spread EURO bn OMF 57,5 5,9 5,9 OMF (NORGES BANK) 29,1 2,8 3,0 Vanlig senior obligasjonslån 100,5 3,7 10,2 Sum OMF + senior 187,2 4,3 46 19,1

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DnB NOR is a well established international borrower

• but with strong focus on further diversification of funding sources
• DnB NOR Bank is a well established international borrower:
• EMTN program of

EUR 4 5 billion

• JPY Sam urai program under establishm ent
• 1 4 4 A USD Senior program to be established spring 2 0 1 2
• USCP program of

USD 18 billion

• Yankee CD program of

USD 12 billion

• ECP/ CD program of

EUR 10 billion

• Covered Bonds form an important part of the funding profile:
• Covered Bond program of EUR 5 5 billion

Established 2 0 0 7

• Covered Bond program of USD 1 2 billion

Established 2 0 1 0

• Covered Bond program of AUD 4 billion

Established 2 0 1 1

Basel III – capital structure

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• 4.5 %

Common Equity Tier 1

• 1.5 % Tier 1
• Minimum Tier 1

capital = 6 %

• Minimum

Common Equity Tier 1 capital = 4,5 %

• 2.5 %
• conservation

buffer

• 2.0 % Tier 2
• Minimum total

capital = 8 %

• 0 – 2.5 %

counter- cyclical buffer

• 1.0 – 2.5%

buffer for SIFIs

• 11.5 – 15.5 %
• 19.10.2011
• 1

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DnB NOR Boligkreditt AS – Portfolio characteristics

Rating AAA / Aaa / AAA Cover pool size 436.097 MNOK Outstanding Covered Bonds 329.535 MNOK Nominal O/ C 32,3 % WA LTV Indexed 57,2 % Floating rate loans 94,4 % Fixed rate loans 5,6 %

Pool statistics as of 31 August 2011

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100 % Norwegian residential mortgages

Property types

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Geographical distribution

Akershus 82,503,743,700 18.9 % Buskerud 28,375,641,322 6.5 % Hedm ark 9,861,413,476 2.3 % Oppland 16,097,575,642 3.7 % Oslo 90,735,324,112 20.8 % Østfold 28,732,259,875 6.6 % Vestfold 33,539,567,410 7.7 % 289,845,525,537 66.5 % Hordaland 33,762,117,026 7.7 % Møre og Rom sdal 7,161,216,277 1.6 % Rogaland 27,819,628,622 6.4 % Sogn og Fjordane 1,656,408,707 0.4 % 70,399,370,633 16.1 % Nord-Trøndelag 6,048,134,380 1.4 % Sør-Trøndelag 15,075,529,425 3.5 % 21,123,663,805 4.8 % Finnm ark 6,701,180,965 1.5 % Nordland 11,487,532,275 2.6 % Trom s 11,223,796,418 2.6 % 29,412,509,657 6.7 % Aust-Agder 7,660,404,563 1.8 % Telem ark 10,244,847,012 2.3 % Vest-Agder 7,410,703,757 1.7 % 25,315,955,331 5.8 %