[PPT] - Results for Q2 2016 Webcast presentation 25 August 2016 G R O U P PowerPoint Presentation

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Banking | Insurance | Pension

Results for Q2 2016

Webcast presentation 25 August 2016

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Financial highlights of Q2 2016 Pre-tax profit: DKK 249m

Forward-looking activities: Pre-tax profit: DKK 249m

Winding-up activities: Pre-tax profit: DKK 0

Writedowns: DKK 13m

G R O U P

Non-life Insurance

Pre-tax profit: DKK 221m

CR: 86.2
Expense ratio: 17.5
Premium growth: -1.2%

Life and Pension

Pre-tax profit: DKK 26m

Growth in regular

premiums: 4.4%

Bonus rate: 18.4%

Banking

Pre-tax profit: DKK 15m

Writedowns: Reversal of

DKK 3m

Growth in retail lending and

in full-service customers

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Comments on Q2

More customers in banking, insurance and pension

But prices are under pressure, especially in

insurance Positive investment results in the quarter despite

f financial turmoil and Brexit

G R O U P

Financial highlights, H1 Group Pre-tax profit: DKK 483m

Non-life Insurance Pre-tax profit: DKK 426m

CR: 84.0
Expense ratio: 16.7

Life and Pension Pre-tax profit: DKK 55m Banking Pre-tax profit: DKK 23m Winding-up activities Pre-tax profit: DKK 6m

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Customers First

Customer satisfaction measured by NPS reached a new high in Q2 New CRM system will be fully commissioned for private customers in H2

First feedback from

customers is very positive Very satisfactory retention rate

Improving for private

customers

Positive effect from customer

loyalty programmes

G R O U P

Group NPS

18 18 22 23 23 26 27 24 29 30 31 30 33 35 36 34 36 37

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016

4

Retention rate – Non-life Insurance

86% 87% 88% 89% 90% 91% 92% Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Commercial Private

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NON-LIFE INSURANCE Highlights

Pre-tax profit of DKK 221m in Q2

Positive investment return
Significantly lower interest rates in

combination with Danish bond yields falling more than euro yields

Lower technical result but still better than

expected

N O N - L I F E I N S U R A N C E

Pre-tax profit

DKKm

5

Note: Figures for 2013 and 2014 based on previous accounting principles

198 222 226 172 455 398 31

10
38

49

35

28 229 212 188 221 420 426 2013 2014 2015 2016 2015 2016 Q2 H1 Investment return after technical interest Technical result

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Combined ratio

Combined ratio of 86.2

Better than expected + Run-off gains improved CR by 8.5 ppts excl. run-off gains on risk margin + Weather-related claims lower than expected ÷ Major claims higher than expected ÷ Lower average premiums

Underlying combined ratio of 83.3

Significant increase in claims in June

– The level normalised again in July and is expected to remain at a normal level for the rest of 2016

Lower average claims expenses partly offset increase in

number of claims Expense ratio up Y/Y

Higher expenses related to internal projects
The level is as expected

N O N - L I F E I N S U R A N C E

Combined ratio

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Underlying combined ratio

Note: Figures for 2013 and 2014 based on previous accounting principles 68.1 66.7 66.2 68.8 65.8 67.3 16.4 15.9 16.0 17.5 16.1 16.8 84.5 82.6 82.2 86.2 81.8 84.0 2013 2014 2015 2016 2015 2016 Q2 H1 Claims ratio incl. reinsurance Gross expense ratio 83.6 76.8 79.1 83.3 80.1 81.4 2013 2014 2015 2016 2015 2016 Q2 H1

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Weather-related and major claims

N O N - L I F E I N S U R A N C E

Major claims ratio Major claims up by 0.7 ppt Y/Y Above expected range of 7-8%

More major claims than expected on commercial

customers

Claims impacted by three large fire incidents
Major claims totalled DKK 106m

Weather-related claims excl. reinstatement up by 1.6 ppts Y/Y Below normal expectation of 3-4%

Impacted by a period with heavy rains and minor

cloudbursts

Level still below normal expectation
Net expenses totalled DKK 31m

Weather-related claims ratio

7

Note: Figures for 2013 and 2014 based on previous accounting principles 6.0 3.7 7.8 8.5 7.7 2013 2014 2015 2016 2016 Q2 H1 Major claims ratio Average expectation (7-8%) 1.7 6.6 0.9 2.5 1.6 0.3 0.1

0.1

2013 2014 2015 2016 2016 Q2 H1 Reinstatement Weather-related claims ratio Average expectation (3-4%)

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Premiums impacted by intensified competition

Premium income down by 1.2% Y/Y Private down by 1.2%

Highly competitive market
More insurances sold
But at lower average prices
Price pressure primarily on motor insurances
Increased use of price differentiation
Improved retention rate again in Q2 2016

Commercial down by 1.2%

Commercial market very competitive
Sales higher than expected
Lower average premiums on agricultural and

motor insurances in particular

Customer retention still at a high level

N O N - L I F E I N S U R A N C E

Premium income

DKKm

8

Note: Figures for 2013 and 2014 based on previous accounting principles 658 660 654 646 600 606 609 601

1,258 1,266 1,263 1,247

2013 2014 2015 2016 Q2 Private Commercial

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Private

Very satisfactory results

Combined ratio of 85.7

Worsened by 0.7 ppt Y/Y

Lower weather-related and major claims

Impacted CR by 2.8 ppts (down by 1.3 ppts Y/Y)

Higher run-off gains on claims

Improved CR by 6.0 ppts

Underlying business deteriorated in Q2

Higher claims frequency in June particularly

– Especially on travel, property and contents insurance

Trend partly offset by lower average claims expenses
Expense ratio up by 1.3 ppts

N O N - L I F E I N S U R A N C E

Combined ratio

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Note: Figures for 2013 and 2014 based on previous accounting principles 68.1 64.1 67.6 67.0 68.3 63.9 18.5 18.1 17.4 18.7 17.2 17.8 86.6 82.2 85.0 85.7 85.5 81.7 2013 2014 2015 2016 2015 2016 Q2 H1 Gross expense ratio Claims ratio incl. reinsurance

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Commercial

Very satisfactory results

Combined ratio of 86.7

Worsened by 7.5 ppts Y/Y Higher run-off gains on claims

Run-off improved CR by 11.2 ppts (up by 2.8 ppts Y/Y)

Weather-related and major claims up by 6.1 ppts Y/Y

Heavy rains and higher number of claims
More major claims, also impacted by three large fire

incidents – Impacted CR by 16.1 ppts (up by 3.2 ppts Y/Y) Underlying business

Underlying business deteriorated Y/Y
Higher claims frequency in June particularly
Higher average claims expenses on property and contents

insurances

N O N - L I F E I N S U R A N C E

Combined ratio

10

Note: Figures for 2013 and 2014 based on previous accounting principles 67.9 69.3 64.7 70.6 63.1 70.9 14.1 13.6 14.5 16.1 14.9 15.6 82.0 82.9 79.2 86.7 78.0 86.5 2013 2014 2015 2016 2015 2016 Q2 H1 Gross expense ratio Claims ratio incl. reinsurance

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LIFE AND PENSION Highlights

Pre-tax profit of DKK 26m Up by DKK 12m Y/Y

Satisfactory underwriting profit
Up by DKK 5m Y/Y
Return on investments allocated to equity

favourably impacted by lower interest rate level

Bonus rate

Bonus rate is now calculated based on both

collective and individual bonus potentials

Bonus rate of 18.4%

L I F E A N D P E N S I O N

Pre-tax profit

DKKm

11

22 26 19 24 38 50 1

5

2 2 5 22 27 14 26 40 55 2013 2014 2015 2016 2015 2016 Q2 H1 Return on investments allocated to equity Underwriting profit/loss

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Pension contributions

Pension contributions up by 2.3%

From a very high level

Pension premiums up by 4.9% Y/Y

Single premiums up by 5.4%
Increased fee when making single payments
Regular premiums up by 4.4%
Target of 5% growth for FY2016

Unguaranteed investment schemes in the bank down by 4.7%

Typically negatively impacted by financial market

turmoil

Development not fully satisfactory

L I F E A N D P E N S I O N

Total pension contributions

DKKm

12

135 139 146 152 56 139 152 161 110 117 114 108 301 395 412 421 2013 2014 2015 2016 Q2 Regular premiums Single premiums Investment schemes

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Strong risk result in Q2

Expense, risk and group life results

Very satisfactory risk result up by DKK 4m
Includes part of group life results in 2016
Negative expense result as expected
But improved by DKK 6m Y/Y

Interest result up by DKK 1m Y/Y

Principles for estimating interest result adjusted in

2016

Lifted by 5 bps to 20 bps

Return on investments allocated to equity

Favourably impacted by lower interest rate level in

Q2 2016

L I F E A N D P E N S I O N

Profit split*

DKKm

13

* Profit before tax of Life and Pension, which includes post-tax return on investment in the EMD Local Currency investment fund

20 25 10 18 3 4 4 5 0 0 4 1 0 1

5

2

Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Expense, risk and group life results Interest result Result of portfolios without bonus entitlement Return on investments allocated to equity

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BANKING Highlights

Pre-tax profit of DKK 15m

Up by DKK 23m Y/Y

Continued growth in full-service customers and

lending – 13% more full-service customers Y/Y

Profit as expected

– Expectations for H2 adjusted due to lower prices on investment products and continued low/negative interest rates

Reversal of writedowns again in Q2 2016

– Normal underlying loss ratio of 0.6% p.a.

B A N K I N G

Pre-tax profit

DKKm

14

8

8 27 7 12

5
10

1 3

8

3 17 8 15

Q2 Q3 Q4 Q1 Q2 2015 2016

Profit before writedowns Writedowns

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More customers in all segments

B A N K I N G

Profit before writedowns

DKKm

15

Private

Results down by DKK 3m Y/Y

– Impacted by reduced funding requirement for winding-up activities

Gross lending up by DKK 54m in Q2

Leasing

Profit tripled Y/Y
Continued growth in number of leased cars

– Portfolio increased by DKK 29m in Q2 – But lower growth level due to increased competition Financial Markets

Positive value adjustments improved results Y/Y

– 2015 negatively impacted by losses on the investment portfolio

More customers and assets under management in Q2

2016 Other

Results negatively impacted by low/negative interest rates

in combination with excess liquidity

Note: Other excluding effects from Alm. Brand Formue

11
3
1
4
2

2 2 6 20 18 1 15

4

12

10
5

Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Private Leasing Financial Markets Other

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WINDING-UP ACTIVITIES Highlights

Pre-tax profit of DKK 0

Better than expected Writedowns of DKK 13m

Reversals on commercial lending

Profit before writedowns of DKK 13m

Improved in Q2 by non-recurring positive value

adjustment on shares taken over Loan portfolio reduced by DKK 36m adjusted for writedowns

B A N K I N G

Pre-tax profit

DKKm

16

16
8
8

5 13

62
74
107

1

13
78
82
115

6

Q2 Q3 Q4 Q1 Q2 2015 2016 Profit before writedowns Writedowns

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Writedowns

Writedowns of DKK 13m

Agriculture

Writedowns unchanged from Q1
Conditions still strained
Settlement prices on dairy dropped again in Q2
Pork prices have increased and are expected to increase

further in H2

Lending reduced by DKK 3m adjusted for writedowns

Commercial lending

Still reversal of writedowns in Q2 but at a lower level
Lending reduced by DKK 29m adjusted for writedowns

Mortgage deeds

Writedowns still at a low level
DKK 2m on the bank’s portfolio of mortgage deeds
Writedowns on credit exposure in line with expectations
Lending reduced by DKK 4m adjusted for writedowns
Credit exposure reduced by DKK 32m

B A N K I N G

Writedowns

DKKm

17

Mortgage deeds include credit exposure from option agreement 68 89 9 10

6
19
13
6

12 37 3 9 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Agriculture Commercial lending Mortgage deeds

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CAPITAL MODEL

Excess capital DKK 342m higher in Q2 Profit in Q2 contributed significantly to capital development Excess capital increased by utilisation of tax asset and lower capital target

Lower capital target in the bank

G R O U P

18

Development in excess capital

DKKm 326 668 194 50 101

3

Excess capital Q1 '15 Profit after tax Q2'16 Change in tax asset Change in capital target Other Excess capital Q2'16

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Outlook for FY2016

Raised by DKK 100m

DKK 700-800m

Pre-tax profit

Forward-looking activities: Pre-tax profit of DKK 750-825m

Winding-up activities: Loss at the level of DKK 25-50m Improved by DKK 25m

G R O U P

Non-life Insurance

Pre-tax profit: DKK 700m Raised by DKK 100m

CR at the level of 87
Expense ratio at the level of 16.5
Premiums down by 1%

Life and Pension

Pre-tax profit: DKK 90m Raised by DKK 15m

Improved by better risk result
5% increase in regular

premiums

Banking

Pre-tax profit: DKK 50m Lowered by DKK 20m

Negative impact from low

interest rate level and lower fees on investment products

Lending expected to increase

by 5%

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Non-life Insurance: Higher investment results. Technical results adversely impacted by higher major claims and higher claims frequency in June, being offset by high run-off gains Life and Pension: Very satisfactory results and growth in regular premiums in line with expectations Banking: Increase in lending and continued growth in full-service customers Outlook for H2 2016 adversely impacted by continued low/negative interest rates and lower fees on investment products Winding-up activities: Overall performance better than expected Outlook FY2016 profit of DKK 700-800m

G R O U P

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Highlights

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“The statements made in this presentation are based on current expectations, estimates and projections made by management. All statements about future financial performance are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by the

statements. All statements about future financial performance made in this

presentation are solely based on information known at the time of the preparation of the last published financial report, and the company assumes no

bligation to update these statements, whether as a result of new information,

future events, or otherwise.”

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Banking | Insurance | Pension Webcast presentation 25 August 2016