DNB Bank ASA · OSL:DNB
DNB Bank ASA — Debt Investor Presentation (November 2024)
30 slides from DNB Bank ASA's debt investor presentation, Nov 8, 2024
Slide 1: Capital – AT1, Tier 2, MREL
Capital - AT1 - Tier 2 - MREL 8 November 2024
Slide 2: DNB's Outstanding Additional Tier 1 Instruments
DNB’s Outstanding Additional Tier 1 Instruments*) USD denominated: Issue Date Type Amount Coupon First Call Date 30.05.2024 PerpNC5.5 USD 700 mn 7.375% 30.05.2029 26.03.2015 PerpNC5 USD 750 mn 5.75% 26.03.2020 (Redeemed) 18.10.2016 PerpNC5.5 USD 750 mn 6.50% 26.03.2022 (Redeemed) 12.11.2019 PerpNC5
Slide 3: DNB's Outstanding Dated Tier 2 Instruments
DNB’s Outstanding Dated Tier 2 Instruments Currency Issue Date Type Amount First Call Date EUR 28.11.2022 10.25NC5.25 750 mn 28.02.2028*) EUR 13.06.2023 10.25NC5.25 500 mn 13.09.2028*) JPY 25.08.2022 10.5NC5.5 9,000 mn 25.02.2028*) JPY 24.02.2023 10.25NC5.25 12,500 mn 24.05.2028*) JPY 12.05.2023 10.
Slide 4: DNB Senior Non-Preferred Benchmark Bonds
DNB Senior Non-Preferred Benchmark Bonds Volume Tenor Call Date Maturity USD 1 000 mn 6NC5 2025 – Sep 2026 – Sep USD 900 mn 4NC3 2025 – Oct 2026 – Oct USD 1 000 mn 6NC5 2026 – May 2027 – May USD 750 mn 6.5NC5.5 2027 – Mar 2028 – Mar EUR 1 000 mn (Green) 4NC3 2026 – Feb 2027 – Feb EUR 1 000 mn (Green
Slide 5: Capital Instruments previously issued by Sbanken
Capital Instruments previously issued by Sbanken - Assumed by DNB Bank ASA following the merger between DNB and Sbanken effective 2 May 2023 AT1 Instruments: Issue Date Type Amount Coupon First Call Date 19.12.2019 PerpNC5 NOK 100 mill 3M NIBOR + 3.15% 19.12.2024 17.06.2020 PerpNC5 NOK 300 mill 3M N
Slide 6: DNB Group Structure
DNB Group Structure DNB Bank ASA Aa2/AA- DNB DNB Life Insurance DNB Asset Management Boligkreditt AS (Covered Bonds) AAA/Aaa DNB Boligkreditt ✓ 100% owned by DNB Bank and functionally an integrated part of the parent ✓ Mortgages originated within DNB Bank’s distribution network in accordance with th
Slide 7: DNB – Capital Ratios
DNB – Capital Ratios • DNB has to meet all capital requirements on DNB Bank Group level (“DNB Group”) and DNB Bank ASA solo level (“DNB Bank”) • DNB’s total capital consists of CET1 capital, AT1 capital and Tier 2 capital. As per the 2024 SREP, DNB Group’s total capital requirement will be ~20.9% pe
Slide 8: DNB Delivers Resilient and Solid Earnings
DNB Delivers Resilient and Solid Earnings Total income split Jan - Sept 2024 Net gains on financial Other instruments income 7% at fair value 6% Net Pre-tax operating profit before impairment commission Net interest NOK billion and fees income 73% 14% 55 53.1 45 42.6 40.3 34.1 35 33 31.7 31.9 30.8 2
Slide 9: A Very Strong Capital Position - well above capital requirements
A Very Strong Capital Position - well above capital requirements • CET1 ratio of 19.0% per 30 September 2024, versus regulatory expectation of 16.8% • The acquisition of Carnegie announced in October 2024 will have a ~120bps negative effect on the CET1 ratio upon closing (expected 1H 2025) • SREP 20
Slide 10: A Very Strong Capital Position - Leverage ratio versus Peers
A Very Strong Capital Position - Leverage ratio versus Peers As per 30 September 2024 7.1%2) 6.3%1) 6.4% 5.0% 5.0% 5.0% 4.7% DNB Swedbank Nordea SEB Danske Bank SHB Rabobank 1) Leverage ratio 30 September 2024 excluding central bank deposits = 7.5% 2) As per 30 June 2024 10
Slide 11: The rating agencies' view of DNB's capital
A Very Strong Capital Position The rating agencies’ view of DNB’s capital Moody’s Moody’s assigns DNB a Capital Score of ‘aa1’ As per 30 June 2024 Moody’s Capital Score1) vs Peers DNB Swedbank2) Rabobank SHB3) SEB2) Danske Bank2) Nordea2) aa1 aa2 aa2 aa3 aa3 aa3 a1 1) Tangible Common Equity / Risk-W
Slide 12: CET1 Capital Requirements
CET1 Capital Requirements • SREP 2024, effective from year-end 2024: • P2R reduced from 2.0% to 1.7% (to be fulfilled with minimum ~1.0% CET1), P2G to remain unchanged at 1.25% • The implementation of Basel IV is expected to have minor negative impacts for DNB, after mitigating actions • The acquisi
Slide 13: MDA – DNB well above CET1 MDA Trigger Level
MDA – DNB well above CET1 MDA Trigger Level • Pillar 2 Requirement included in the MDA trigger level with effect from Q2 2022 • SREP 2024 (effective YE 2024): P2R set to 1.7%, to be fulfilled with ~1.0% CET1 (minimum), ~0.3% AT1 and ~0.4% Tier 2 19.4% 18.7% 19.0%1) 2) 18.3% 18.6% 18.2% • MDA buffer
Slide 14: AT1 and Tier 2 Capital
AT1 and Tier 2 Capital • SREP 2024 (effective YE 2024): P2R set to 1.7%, to be fulfilled with ~1.0% CET1 (minimum), ~0.3% AT1 and ~0.4% Tier 2 • Thus, DNB’s capital requirements can be met with AT1 capital of ~1.8% and Tier 2 capital of ~2.4%. AT1 and Tier 2 Maximum utilization of AT1 and Tier 2 to
Slide 15: DNB's Solid Profitability Should Ensure AT1 Coupon Payments
DNB’s Solid Profitability Should Ensure AT1 Coupon Payments NOK billion 50.4 50 Profit Before Tax Dividend Share buy-back AT1 Coupon Payments 40.6 40 34.81) 31.9 32.7 31.2 30 29.0 10.6 26.9 23.4 23.8 20.8 20 1.4 17.1 17.8 15.2 15.1 3.9 4.8 14.0 3.8 9.3 23.9 10 7.3 19.4 11.4 14.0 15.1 13.2 13.0 0.4 0
Slide 16: EBA's 2023 EU-wide Stress Test – DNB Performs very well
EBA’s 2023 EU-wide Stress Test – DNB Performs very well - DNB amongst best performing banks across Nordic and International peers • Under the 2023 EU stress test1) DNB’s CET1 ratio was reduced by • In the Adverse Scenario, DNB’s CET1 ratio is always above the MDA 212 bps2) (294 bps in the 2021 EU st
Slide 17: Basel IV | Risk Weighted Density
Basel IV | Risk Weighted Density - DNB is well positioned for future regulatory requirements1) • Basel IV • DNB is well positioned due to already high risk weights • The implementation of Basel IV is expected to have minor negative impacts for DNB, after mitigating actions • Risk Weighted Density Ri
Slide 18: DNB fulfills the MREL Requirement with a solid buffer
DNB fulfills the MREL Requirement with a solid buffer • DNB’s MREL requirement1) is ~38% of adjusted REA2) – leading to an estimated need for MREL eligible debt of total EUR ~14 bn as per end Q3 2024. • As per Q3 2024 figures, the requirement can be fulfilled with EUR ~7.5 bn in Senior Non-Preferred
Slide 19: MREL fulfillment as of 30 September 2024
MREL fulfillment as of 30 September 2024 MREL per Q3 2024 Reported Requirement1) Own funds and eligible liabilities as precentage of REA ~40.4% ~37.7% - Of which own funds and subordinated libabilities ~32.9% 30.0% Adjusted Risk Exposure Amount2) (NOK mill) 983 206 1) The MREL requirement will vary
Slide 20: Further details on DNB's Capital Requirements
Further details on DNB’s Capital Requirements Counter-Cyclical Buffer (CCyB) • CCyB in Norway increased to 2% with effect from 31 December 2022 and increased further to 2.5% with effect from 31 March 2023. • Taking into account countercyclical buffers in other countries, DNB’s effective CCyB was ~2.
Slide 21: Implementation of CRR/CRD IV
Implementation of CRR/CRD IV • Announced by Ministry of Finance December 2019. • With the final implementation of CRR/CRD IV in Norway from 31 December 2019, the Basel I floor was removed and the capital requirements for exposures to Small and Medium sized enterprises were reduced (SME discount). •
Slide 22: ADI – Available Distributable Items
ADI – Available Distributable Items • Items available for distribution is defined in the Norwegian Public Limited Liability Companies Act1): Following this definition, the ADI level is calculated as follows: ADI = total equity – share capital – fund for unrealised gains • From 1 January 2019, DNB de
Slide 23: Regulatory Framework - EU law in Norway and future changes
Regulatory Framework - EU law in Norway and future changes Implementation of EU Directives/Regulations in Norwegian Law: • EU Directives and Regulations do not have direct effect in Norway • First step: Implementation of relevant rules in the EEC agreement • Second step: Implementation into Norwegia
Slide 24: 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 25: DNB's Legacy Perpetual Bonds (discos)
DNB’s Legacy Perpetual Bonds (discos) • On 16 November 2023, DNB announced, with reference to the legislative proposal published by the Ministry of Finance of Norway on 10 November 2023 regarding the implementation of BRRD Article 48(7) in Norway, its intention to redeem its outstanding legacy perpe
Slide 26: Temporary Write-down/Conversion of AT1
Temporary Write-down/Conversion of AT1 • The CET1 trigger for temporary write-down in DNB’s AT1 instruments is 5.125%. • DNB’s CET1 ratio was 19.0% as of 30 September 2024. • Separately, Norwegian Statutory Point of Non-Viability Rules (the Norwegian Financial Institutions Act § 20-14) are in line w
Slide 27: DNB is among the best rated banks globally
DNB is among the best rated banks globally Moody’s Investors Service S&P Global Ratings DNB Bank ASA1) DNB Bank ASA2) • Counterparty Risk / Deposit Rating (LT): Aa13) • Resolution Counterparty Rating (LT): AA- • Senior Preferred Rating: Aa2 • Senior Preferred Rating: AA- • Outlook: Stable • Outlook:
Slide 28: Funding Contacts
Funding Contacts Long Term Funding: Short Term Funding: • Thor Tellefsen • Kristoffer Vilbo Hansen Senior Vice President, Head of Long Term Funding Head of Liquidity Mgt. (Short Term Funding), Group Treasury Phone direct: + 47 24 16 91 22 Phone direct: +47 24 16 90 86 Mobile: + 47 915 44 385 Mobile:
Slide 29: Disclaimer (1/2)
Disclaimer (1/2) THIS PRESENTATION AND ITS CONTENTS ARE NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA) (THE "UNIT
Slide 30: Disclaimer (2/2)
Disclaimer (2/2) AN INVESTMENT IN THE ISSUER INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE ISSUER TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN
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