Dnb Bank Asa · OSL:DNB
Dnb Bank Asa — Debt Investor Presentation (December 2019)
25 slides from Dnb Bank Asa's debt investor presentation, Dec 23, 2019
Slide 1: DNB Capital - AT1, Tier 2, MREL
DNB Capital - AT1 - Tier 2 - MREL 23 December 2019
Slide 2: Amendments to Norwegian capital requirements
Amendments to Norwegian capital requirements Core Tier 1 (Ministry of Finance, 11 December 2019) • With the final implementation of CRR/CRD IV in Norway, the Basel I floor will be removed and the SME discount will be introduced from 31 December 2019. • The systemic risk buffer will increase from 3.0
Slide 3: DNB's Outstanding Additional Tier 1 Instruments
DNB’s Outstanding Additional Tier 1 Instruments USD denominated: Issue Date Type Amount Coupon First Call Date 26.03.2015 PerpNC5 USD 750 mn 5.75% 26.03.2020 18.10.2016 PerpNC5.5 USD 750 mn 6.50% 26.03.2022 12.11.2019 PerpNC5 USD 850 mn 4.875% 12.11.2024 NOK denominated: Issue Date Type Amount Coupo
Slide 4: DNB's Outstanding Dated Tier 2 Instruments
DNB’s Outstanding Dated Tier 2 Instruments Currency Issue Date Type Amount First Call Date EUR 01.03.2017 10NC5 650 mn 01.03.2022 EUR 20.03.2018 10NC5 600 mn 20.03.2023 JPY 04.11.2016 10NC5 10,000 mn 04.11.2021 JPY 19.01.2017 10NC5 11,500 mn 19.01.2022 JPY 24.01.2018 10NC5 25,000 mn 24.01.2023 NOK 1
Slide 5: DNB – Group Structure and Capital Ratios
DNB – Group Structure and Capital Ratios DNB has to meet all capital requirements on DNB ASA group level (“DNB”), DNB Bank Group level (“DNB Bank Group” ) and DNB Bank ASA solo level (“DNB Bank”) DNB ASA DNB Bank ASA DNB Life and Asset Management Aa2/AA- DNB Boligkreditt AS (Covered Bonds: AAA/Aaa)
Slide 6: DNB Delivers Solid Profit
Total income split as per Q319 (YTD) DNB Delivers Solid Profit Net gains on financial Other income instruments 5% at fair value 9% Net commission and fees 17% Pre-tax operating profit before impairment NOK billion Net interest income 69% 35 34.1 30.8 30 28.7 28.5 28.3 24.6 25 20 18.7 15 10 7.7 7.4 5
Slide 7: DNB Earnings in the Context of Nordic Peers
DNB Earnings in the Context of Nordic Peers Balance Sheet Size (Q3 2019, EUR bn eqv) Pre-Tax Operating Profit (EUR bn eqv)1 Pre-Tax Operating Profit / Avg. Total Assets (%) Bank1 DNB Bank 2 Bank 3 586 0.67 1.02 0.78 1.12 0.70 1.12 0.75 1.16 0.19 0.90 0.52 0.79 4.0 4.0 3.0 294 297 2.8 2.5 2.6 2.5 234
Slide 8: DNB – A Very Strong Capital Position
DNB – A Very Strong Capital Position CET1 capital ratio – transitional rules CET1 capital ratios and leverage ratio Per cent, as of 30 September 2019 (Basel I Floor) Per cent 18.3% 16.9 16.9% 16.0 16.4 16.4 14.4 12.7 11.8 10.7 9.2 9.4 7.1% 2010 11 12 13 14 15 16 17 18 3Q19 CET1 transitional rules CE
Slide 9: DNB – A Very Strong Capital Position
DNB – A Very Strong Capital Position Leverage ratio versus Nordic Peers Per cent, as of 30 September 2019 7.1 DNB’s leverage ratio requirement 1) 6.0 5.0 5.1 4.5 4.6 4.4 DNB Nordea SEB Swedbank SHB Danske Bank 1) The Norwegian leverage ratio requirement for banks is 5% effective as from 30 June 2017
Slide 10: DNB – A Very Strong Capital Position
DNB – A Very Strong Capital Position S&P RAC Ratios for Top 50 Rated Western European Banks Per Cent, 31 Dec 2018 13.8 12.4 11.9 S&P RAC Ratio versus Nordic Peers 10.4 10.6 Per Cent, 31 Dec 2018 9.7 DNB Swedbank Nordea Danske Bank SEB SHB 10
Slide 11: CET1 Capital Requirements
CET1 Capital Requirements - and Capital generation • SREP includes Pillar 2 requirements, but they are not included in the MDA trigger level1) • Management buffer must be seen in connection with DNB’s capital generation abilities • A systemic risk buffer of 4.5% will be imposed on Norwegian exposure
Slide 12: CET1 ratios and expected CET1 ratio effects in 2019
CET1 ratios and expected CET ratio effects in 2019 CET1 capital ratios and leverage ratio DNB’s current capital level as of 30 September 2019 Per cent 18.3% 18.3% ~0.3% ~18.6% 16.9% 7.1% CET1 transitional rules CET1 without Leverage Ratio CET1 ratio Basel III SME supporting Adjusted CET1 ratio trans
Slide 13: MDA – DNB well above CET1 MDA Trigger Level
MDA – DNB well above CET1 MDA Trigger Level • Pillar 2 requirements in Norway are currently not included in the MDA trigger level • FSA has proposed to include Pillar 2 in MDA trigger level, but no final decision is taken1) • MDA buffer must be seen in connection with DNB’s capital generation abilit
Slide 14: DNB's Solid Profitability Should Ensure AT1 Coupon Payments
DNB’s Solid Profitability Should Ensure AT1 Coupon Payments Profit Before Tax Dividend Share buy-back AT1 Coupon Payments 40 35 31.9 29.0 30 26.9 25 23.4 20 17.1* 15.2 15 3.9 3.8 10 9.3 7.3 11.4 13.2 5 2.9 0.1 0.5 1.0 1.0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 DNB will give due consider
Slide 15: Implementation of CRR/CRD IV
Implementation of CRR/CRD IV • Announced by Ministry of Finance 11 December 2019. • Basel I floor will be removed and the SME discount will be introduced from 31 December 2019. • The systemic risk buffer will increase from 3.0% to 4.5% on Norwegian exposures from 31 December 2020. • For countries th
Slide 16: MREL Regulation entered into force 1 January 2019
MREL Regulation entered into force 1 January 2019 • Loss absorption requirement to be covered by existing own funds requirement • Recapitalisation requirement to be covered by any excess capital and non-preferred senior debt, contractually subordinated to conventional senior debt. • DNB’s MREL requi
Slide 17: Overall Capital Requirements under SREP
Overall Capital Requirements under SREP • Pillar 1 capital requirements in Norway consist of minimum requirements and combined buffer requirements. • As a result of the SREP, the supervisors may decide on additional capital add-on (Pillar 2), which together with the Pillar 1 requirements form the Ov
Slide 18: Pillar 2 requirements in Norway not included in the MDA Trigger Level
Pillar 2 requirements in Norway not included in the MDA Trigger Level • MDA restrictions will only apply if there is a breach of the Pillar 1 requirements (Minimum capital requirements + Combined buffer requirements) • Pillar 2 requirements in Norway currently do not influence the MDA trigger level
Slide 19: ADI – Available Distributable Items
ADI – Available Distributable Items • Items available for distribution is defined in the Norwegian Public Limited Liability Companies Act:* Following this definition, the ADI level is calculated as follows: ADI = total equity – share capital – fund for unrealized gains • For 2018, DNB has decided al
Slide 20: Implementation of BRRD and change in creditor hierarchy
Implementation of BRRD and change in creditor hierarchy • The legislation implementing BRRD in Norway, entered into force 1 January 2019. • The legislation sets forth that the resolution authorities shall establish a resolution plan for each institution with specific description of the tools availab
Slide 21: IFRS 9 / Basel IV / Risk Weighted Density
IFRS 9 / Basel IV / Risk Weighted Density - DNB is well positioned for future regulatory requirements • IFRS 9 • IFRS 9 was implemented from 1 January 2018 and reduced the common equity Tier 1 capital ratio by approximately 28 basis points in Q12018 as a one off effect. • IFRS 9 is now fully impleme
Slide 22: Leverage Ratio Requirement
Leverage Ratio Requirement • Norwegian leverage ratio requirement effective as from 30 June 2017: • Minimum leverage ratio 3%1) • Bank requirement 2% • SIFI requirement 1% Total SIFI/DNB requirement 6% • As at 30 September 2019, DNB Group reported a leverage ratio of 7.1% Well above regulatory r
Slide 23: Funding Contacts
Funding Contacts Long Term Funding: Short Term Funding: • Thor Tellefsen • Åsmund Midttun Senior Vice President, Head of Long Term Funding Senior Dealer, Rates, FICC Phone direct: + 47 24 16 91 22 Phone direct: +47 24 16 90 28 Mobile: + 47 915 44 385 Mobile: +47 901 13 559 E-mail: thor.tellefsen@dnb
Slide 24: Disclaimer (1/2)
Disclaimer (1/2) NOT FOR DISTRIBUTION IN THE UNITED STATES, EXCEPT PURSUANT TO APPLICABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT OF 1933. This presentation (hereinafter referred to as the “Presentation”) has been prepared by DNB Bank ASA (the “Company” or the “Issue
Slide 25: Disclaimer (2/2)
Disclaimer (2/2) To the best of the knowledge of the Issuer, the information contained in this Presentation is in all material respect in accordance with the facts as of the date hereof. However, no independent verifications have been made. No representation or warranty (express or implied) is made