Press conference Peter Straarup, CEO & Chairman of the - - PowerPoint PPT Presentation

Press conference

Peter Straarup, CEO & Chairman of the Executive Board

August 10, 2010 INTERIM REPORT – FIRST HALF 2010

Tonny Thierry Andersen, CFO & member of the Executive Board

DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwill impairment 1,417

• Profit bef. loan imp. charges

16,898 10,884 64 Loan impairment charges 14,531 7,752 53 Profit before tax 2,367 3,132 132 Tax 1,642 1,426 87 Net profit 725 1,706 235

Financial results for H1 2010: Earnings growth continues

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• 16
• 12
• 8
• 4

4 8 2009 2010E 2011E

Macroeconomic indicators improve, but growth is still fragile

%

Source: Danske Research (July 2010). GDP growth

Baltics Ireland Sweden Finland Denmark Euroland Norway 3

11.7% 10.8% 10.0% 14.1% 13.1% 12.1% Actual result End-2009 Adverse scenario End-2011 Adverse scenario + additional sovereign shock End-2011

Danske Bank did well in EU stress test, with capital far above the requirement

DKK 40 bn in excess capital

Tier 1 ratio

Minimum requirement Transitional CRD rules Full CRD implementation 6%

DKK 55 bn under full Basel II 4

Revised Basel III proposal is a step in the right direction, but there are still some issues

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• Revised proposal from the

Basel committee has addressed criticism from banks

• The proposal is favourable for

Danske Bank, but

• Key concerns around the

treatment of the unique Danish mortgage market have not been resolved

Danske Bank’s payments for Bank Package I

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Bank Package I

E x p e n s e s t h u s f a r Guarantee fees 4.4 Provisions made to Financial Stability 2.9 Total DKK 7.2 bn

Stronger customer focus and a more efficient bank

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Customers like the digital signature and adopt it very quickly

40% of digitalised agreements are signed

• nline

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Agreements with digital signature in eBanking (Denmark)

2,000 4,000 6,000 8,000 10,000 12,000 14,000 1.4.09 1.5.09 1.6.09 1.7.09 1.8.09 1.9.09 1.10.09 1.11.09 1.12.09 1.1.10 1.2.10 1.3.10 1.4.10 1.5.10 1.6.10

Business Direct: A new advisory programme for smaller enterprises

What is your opinion of Business Direct?

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Advisory services on 70 13 30 00 Mon-Wed 7.30-18.00 Thur 7.30-21.00 Fri 7.30-16.00

67% 25% 8%

Positive Neutral Negative

73.0 73.0 72.9 70.7 70.6 71.1 72.1 72.0 74.1 74.4 64 68 72 76

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10

Customer satisfaction on the rise and now above 2008 level

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Customer satisfaction in Denmark Index

DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwill impairment 1,417

• Profit bef. loan imp. charges

16,898 10,884 64 Loan impairment charges 14,531 7,752 53 Profit before tax 2,367 3,132 132 Tax 1,642 1,426 87 Net profit 725 1,706 235

Income declines 25%, as expected

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DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwill impairment 1,417

• Profit bef. loan imp. charges

16,898 10,884 64 Loan impairment charges 14,531 7,752 53 Profit before tax 2,367 3,132 132 Tax 1,642 1,426 87 Net profit 725 1,706 235

Trading income falls to a more normal level, although markets were volatile in Q2

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bp Spreads, Danske 30- year mortgage bond 15 20 25 30 35 40 45 30-12 30-01 28-02 31-03 30-04 31-05 30-06

DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwill impairment 1,417

• Profit bef. loan imp. charges

16,898 10,884 64 Loan impairment charges 14,531 7,752 53 Profit before tax 2,367 3,132 132 Tax 1,642 1,426 87 Net profit 725 1,706 235

Net interest income declines because of lower interest rates and higher funding costs

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% Danish central bank’s policy rate 0.0 0.5 1.0 1.5 2.0 30-06 31-08 31-10 31-12 28-02 30-04 30-06

DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwill impairment 1,417

• Profit bef. loan imp. charges

16,898 10,884 64 Loan impairment charges 14,531 7,752 53 Profit before tax 2,367 3,132 132 Tax 1,642 1,426 87 Net profit 725 1,706 235

Insurance: High premium growth and rising earnings despite difficult investment markets

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Income growth of DKK 200m Investment return of 5.4% (Traditionel) and 3.7% (Balance & Link ) Premium growth of 25%

DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwill impairment 1,417

• Profit bef. loan imp. charges

16,898 10,884 64 Loan impairment charges 14,531 7,752 53 Profit before tax 2,367 3,132 132 Tax 1,642 1,426 87 Net profit 725 1,706 235 10 12 14 16 H1 2009 H1 2010 Expenses

Large reduction of expenses more than offsets salary and price inflation

15

• 5%

DKK bn

Goodwill impairment charges

DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwill impairment 1,417

• Profit bef. loan imp. charges

16,898 10,884 64 Loan impairment charges 14,531 7,752 53 Profit before tax 2,367 3,132 132 Tax 1,642 1,426 87 Net profit 725 1,706 235

Loan impairment charges: Dominated by business customers, while personal customers manage fairly well

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5.1 1 2 3 4 5 6 7 8 9 Personal Business & financial DKK bn Impairment charges broken down by customer type

Distressed banks

2 4 6 8 10 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10

• 400
• 200

200 400 600 800 Ireland Baltics

• N. Ireland

Denmark Other Finland Sweden Norway Markets

Impairment charges are highest in Ireland, but are declining steadily from quarter to quarter

17 bp DKK bn

Impairmentcharges/ lending H1 2010 Impairmentcharges by quarter

Results for our primary markets show a profit in five of seven countries

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• 3,000
• 2,000
• 1,000

1,000 Norway Denmark Sweden Finland Baltics

• N. Ireland

Ireland

Profit before tax, H1 2010 Ex expenses for Bank Package I

DKK m

Lending is increasing again, mainly in the Nordic region; deposits continue underlying positive trend

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Finansielle Private Erhverv

1,000 1,200 1,400 1,600 1,800 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 DKK bn Lending DKK bn Deposits

Note: Drop in deposits in Q110 owing to release of large deposit account at Danske Markets.

200 400 600 800 1,000 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Banking Activities Danske Markets

Liquidity has improved further in 2010, and funding need for 2010 has already been met

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End of June 2010 Positive 36 mos. End-2008 End-2009 DKK bn

• 150

150 300 450 1 week 2 weeks 3 weeks 1 month 2 months 3 months 4 months 5 months 6 months 9 months 12 months

5 10 15 20 Tier 1 ratio Solvency ratio H1 09 H1 10

Capital and solvency ratios improved significantly

21

%

Capital ratios

DKK 62 bn buffer above ICAAP result

Outlook: Moderate economic growth, but 2010 will remain a challenging year

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Moderate economic growth Expiry of Danish state guarantee on October 1 reduces expenses by about DKK 1 bn per quarter Robust income from Banking Activities Lower income from Danske Markets and Danica Expenses expected to be lower than in 2009 Increased focus on customer service and continuing focus on costs Impairment charges lower than in 2009, but still high

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www.danskebank.com/ir

Please use the microphone at the side

• f your seat

Disclaimer

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 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 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.

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