Press conference Interim report 2007 - Earnings better than - - PowerPoint PPT Presentation

Copenhagen, 9 August 2007

Press conference

Interim report 2007

• Earnings better than expected

Upgrade of guidance for 2007 as a whole

2 6.9

7.6

5.0 6.0 7.0 8.0

First half of 2007 in brief

– Net profit rose 11 per cent, exceeding expectations

FIRST HALF OF H1 2007 IN BRIEF

DKr bn

H1 2006 H1 2007

11% Profit after tax

For 2006, Sampo Bank is consolidated on a pro forma basis from 1 February.

• • Net profit better than expected

• Healthy demand for loans • Good macroeconomic conditions

3

Financial accounts, H1 2007

– Net profit growth of 11 procent

FIRST HALF OF H1 2007 IN BRIEF

• Income growth drivers: • Rising net interest income,

despite margin pressure

• Heavy volume at Danske

Markets

• Good equity returns at Danica • Modest credit loss expenses • Lower corporation tax in Denmark

• Income statement

Pro forma DKr m H1 2006 H1 2007 Index Net interest income 10,631 11,777 111 Net fee income 4,469 4,396 98 Net trading income 3,780 4,203 111 Other income 1,332 1,552 117 Net income from insurance business 33 669

• Total income

20,245 22,597 112 Expenses 11,131 12,530 113 Profit bef. credit loss exp. 9,114 10,067 110 Credit loss expenses

• 477

5

• Profit before tax

9,591 10,062 105 Tax 2,716 2,433 90 Net profit for the period 6,875 7,629 111

4

Net interest income on the rise

– Good activity level and succesful introduction of new products

BUSINESS TRENDS

• Irland: +31%

Nordirland: +10% Norge: +17% Sverige: +21%

Sweden

Finland: +6% Baltikum: +63% Danmark: +9%

5

Sampo Bank group

– Integration proceeding according to plan

BUSINESS TRENDS

November: Acquisition announced February: Purchase completed Easter: Finland to be converted Easter: Baltics to be converted

• IT development and

testing period 2007 2008 2006 2009

6

Danske Bank and BG Bank merger

– Merger of branches ahead of schedule

FORRETNINGSUDVIKLING

7

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 05-Jun 12-Jun 19-Jun 26-Jun 03-Jul 10-Jul 17-Jul 24-Jul 31-Jul

Customer influx tops expectations

• Since May 15, 2007

Customer influx – number of new customers

New customers New exclusive customers BUSINESS TRENDS

8

Fee reductions in Denmark

– Six reductions in 18 months

1.

• Jan. 2006: commissions reduced

2.

• Feb. 2006: fee check – fees discontinued

3.

• Oct. 2006: trading commissions reduced

4.

• Oct. 2006: trading commissions reduced

5.

• Feb. 2007: fee check – more fees discontinued
• 6.

May 2007: introduction of 24/7

BUSINESS TRENDS

9

Personalised fee summary in Netbank

BUSINESS TRENDS

10,000 20,000 30,000 40,000 50,000 6 8 10 12 14 16 18 20 22 24 26 28 30

Unique users per week, Netbank/fees

Week, 2007 Number

10

Many irons in the fire

• investing in the future

24/7

FORRETNINGSUDVIKLING

11

17% 26% 30% 42% 0% 30% 60% 2004 2005 2006 ex Sampo Bank H1 2007

Financial accounts, H1 2007

– Profit growth and higher income from outside Denmark

BUSINESS TRENDS

Income from banking activities

• utside Denmark

Share of total income from banking and mortgage finance

Income statement and lending summary

DKr m H1 2006 H1 2007 Index Net interest income 10,631 11,777 111 Net fee income 4,469 4,396 98 Net trading income 3,780 4,203 111 Other income 1,332 1,552 117 Net income from insurance business 33 669

• Total income

20,245 22,597 112 Expenses 11,131 12,530 113 Profit bef. credit loss exp. 9,114 10,067 110 Credit loss expenses

• 477

5

• Profit before tax

9,591 10,062 105 Tax 2,716 2,433 90 Net profit for the period 6,875 7,629 111 DKr bn H1 2006 H1 2007 Index Lending, domestic 912 986 108 Lending, foreign 510 605 119 Deposits, domestic 431 501 116 Deposits, foreign 265 302 114

12

Banking Activities Denmark

– Good activity and successful introduction of new products

BUSINESS AREA HIGHLIGHTS

• Lending

↑ 16 %

• Net interest income

↑ 9 %

• Income

↑ 3 %

• Profit before tax

↓ 3 %

• Profit before tax

DKr 3,909m

13

• Lending

↑ 9 %

• Net interest income

↑ 6 %

• Income

↑ 4 %

• Profit before tax

↓ 44 %

• Profit before tax

DKr 495m

Banking Activities Finland

– Rising activity and earnings higher than expected

BUSINESS AREA HIGHLIGHTS

14

Sweden

• Lending

↑ 15 %

• Net interest income

↑ 21 %

• Income

↑ 19 %

• Profit before tax

↑ 27 %

• Profit before tax

DKr 558m

Banking Activities Sweden

– Large advance in earnings and succesful launch of Sparkonto XL

BUSINESS AREA HIGHLIGHTS

Sweden

16% 16% 20% 14% 2004 2005 2006 H1 2007

Return on equity before credit loss expenses & tax

15

• Lending

↑ 22 %

• Net interest income

↑ 17 %

• Income

↑ 18 %

• Profit before tax

↑ 15 %

• Profit before tax

DKr 527m

Banking Activities Norway

– High growth while profitability continues to rise

BUSINESS AREA HIGHLIGHTS

11% 17% 21% 13% 2004 2005 2006 H1 2007

Return on equity before credit loss expenses & tax

16

• Lending

↑ 15 %

• Net interest income

↑ 10 %

• Income

↑ 9 %

• Profit before tax

↑ DKr 186m

• Profit before tax

DKr -18m

Banking Activities Northern Ireland

– Large earnings gains despite integration costs

BUSINESS AREA HIGHLIGHTS

• 3%

0% 38%

• 2%

2005 2006 H1 2007 H1 2007 ex total integration costs

Return on equity before credit loss expenses & tax

17

• Lending

↑ 51 %

• Net interest income

↑ 31 %

• Income

↑ 33 %

• Profit before tax

↑ DKr 224m

• Profit before tax

DKr 95m

Banking Activities Ireland

– Strong growth and rising profit

BUSINESS AREA HIGHLIGHTS

• 9%

18%

• 8%

1% 2005 2006 H1 2007 H1 2007 ex total integration costs

Return on equity before credit loss expenses & tax

18

• Lending

↑ 56 %

• Net interest income

↑ 63 %

• Income

↑ 47 %

• Profit before tax

↑137 %

• Profit before tax

DKr 100m

Banking Activities Baltics

– High growth and sharp advance in earnings

BUSINESS AREA HIGHLIGHTS

19

• Nominal lending

↑ 7 %

• Gross lending

↓ 17 %

• Net interest income

↑ 7 %

• Income

↓ 5 %

• Profit before tax

↑ 2 %

• Profit before tax

DKr 1,293m

Realkredit Danmark

– Activity lower, but earnings up

BUSINESS AREA HIGHLIGHTS

20

Danske Markets

– Earnings better than expected on increased customer activity

• Income

↑ 7 %

• Trading activities

↑ 12 %

• Investment portfolio

↓ 26 %

• Profit before tax

↓ 1 %

• Profit before tax

DKr 2,006m

BUSINESS AREA HIGHLIGHTS

21

Danske Capital

– Rising activity and earnings

• Assets under mgt

↑ 8 %

• Income

↑ 15 %

• Profit before tax

↑ 12 %

• Profit before tax

DKr 536m

BUSINESS AREA HIGHLIGHTS

22

Danica Pension

– Earnings exceed expectations

• Gross premiums

↑ 4 %

• Return on invest.

• 0.4

%

• Profit before tax

↑ DKr 636m

• Profit before tax

DKr 669m

BUSINESS AREA HIGHLIGHTS

23

Outlook for 2007 as a whole

– Upgrade of earnings guidance

OUTLOOK

2007 will be another satisfactory year Net interest income up Net trading income up Income from insurance down slightly Expenses rise 8%-9% 0%-1% rise in underlying cost base Profit before credit loss expenses slightly higher than 2006 Modest credit loss expenses Tax rate declines from 27% to 25% Profit after tax in line with 2006 ! Economic growth in principal markets slightly above eurozone average ! Double-digit lending growth ! Two interest rate hikes in H2 2007 ! Uncertainty about trend in capital markets ! Profit after tax incl. Sampo Bank (pro forma) was DKr 15.4bn in 2006

Expectations

Assumptions

24

www.danskebank.com

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