Danske Bank A/S · OMXCOP:DANSKE
Danske Bank A/S — Debt Investor Presentation (November 2015)
31 slides from Danske Bank A/S's debt investor presentation, November 2015
Slide 1: Covered Bond Presentation
Covered Bond Presentation Danske Bank Plc, Finnish subsidiary of Danske Bank A/S Pekka Antero Toivonen Head of ALM Finland Bent Callisen First Vice President, Group Funding November 2015
Slide 2: Disclaimer
Disclaimer Important You must read the following before continuing. The following applies to the Confidential Information following this page (the "Confidential Information"), and you are therefore advised to read this carefully before reading, accessing or making any other use of the Confidential I
Slide 3: Table of contents
Table of contents Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 3
Slide 4: Table of contents
Table of contents Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 4
Slide 5: Executive summary
Executive summary Danske Bank Plc (Finnish Issuer) – 100% owned by Danske Bank A/S – Fully integrated in Danske Bank Group, one of the largest financial institutions in the Nordic region – Well-diversified funding base with a high deposit ratio – Long term ratings of A2 (Stable)/A (Stable) and sho
Slide 6: Agenda
Agenda Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 6
Slide 7: Danske Bank Group results January–30 September 2015
Danske Bank Group results 1 January–30 September 2015 MEUR* 1-9/ 2015 1-9/ 2014 Net interest income 2,167 2,221 Net fee income 1,202 1,072 Net trading income 707 773 Other income 156 131 Net income from insurance business 194 190 Total income 4,425 4,388 Operating expenses 2,139 2,219 Profit before
Slide 8: Danske Bank Group Covered Bond Universe
Danske Bank Group Covered Bond Universe Legislation and history behind three business lines • Covered Bond issuer since 1851 • Covered Bond issuer since 2007 • Covered Bond issuer since 2005 • Based on Danish legislation • Based on Danish legislation • The former Sampo Housing Loan Bank • Specialize
Slide 9: The four Danske Bank cover pools - Overview
The four Danske Bank cover pools - Overview Residential Residential Combined Residential 1 Characteristics Cover Pool D Cover Pool I Cover Pool C Danske Bank plc Pool notional DKK 38.4,6bn DKK 123.8bn DKK 53.0bn DKK 45.5bn (EUR 5.2bn equivalent) (EUR16.6bn equivalent) (EUR 7.1bn equivalent) (EUR 6.1
Slide 10: Table of contents
Table of contents Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 10
Slide 11: Danske Bank Plc Group Financial Performance
Danske Bank Plc Group Financial Performance EURm +9% 1-6/ 2015 1-6/ 2014 Net interest income 150.6 153.6 113,0 Net fee income 116.8 117.8 6,5 Net trading income 14.8 18.2 12,9 Other income 10.7 12.5 103,6 Income total 293.0 302.1 3,0 Staff costs 71.6 70.7 1,0 12,9 3,4 Other operating expenses 105.3
Slide 12: Danske Bank Plc Group Balance Sheet
Danske Bank Plc Group Balance Sheet EURm 1-6/ 2015 1-6/2014 9% Deposits MM deposits Cash and balances at central banks 4,323 1,355 1% 0% Cd’s 1% Due from credit institutions 3,084 3,257 Deposits from Group2 Loans and receivables 19,694 19,368 Covered bonds1 Trading portfolio assets 4,181 2,779 14% I
Slide 13: Group loan portfolio, impairments, arrears and funding structure
Danske Bank Plc Group loan portfolio, impairments, arrears and funding structure Danske Bank Plc Group loan portfolio; EURm Quarterly impairment balances and net credit losses of housing loans; % Corporate loans Other household loans Mortgages Impairment balance Net losses 25,000 0.20 20,000 0.15 15
Slide 14: Table of contents
Table of contents Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 14
Slide 15: Finnish macro and housing markets (1/4)
Finnish macro and housing markets (1/4) GDP; Q4/2007 = 100 Finnish economy has been stagnant since 2012 Finland Denmark and continues to lag behind other Nordic Sweden Norway countries 108 106 104 Finnish exports have been hit by loss of Nokia 102 mobile phones, falling demand for printing paper
Slide 16: Finnish macro and housing markets (2/4)
Finnish macro and housing markets (2/4) y/y%; value of good exports; 3 month moving average Finland is an open economy and exports have Rest of the World Russia Germany and USA often been the decisive factor in economic cycles 80 Germany, Sweden, USA and Russia are the 60 biggest export markets.
Slide 17: Finnish macro and housing markets (3/4)
Finnish macro and housing markets (3/4) Property Price Index, 2005/I = 100 (log scale) Finnish housing market did not overheat before Ireland Finland Germany the financial crisis and has been stable in recent Spain Sweden Denmark years 200 180 160 In Q3 2015, dwelling prices fell by 0.5% in the
Slide 18: Finnish macro and housing markets (4/4)
Finnish macro and housing markets (4/4) Household gross debt/disposable income; % Households’ indebtedness ratio rose to 123% in Finland Netherlands Germany Spain United States the Q2 2015, which is below other Nordic Denmark Sweden France Ireland Austria countries 300 250 Finnish housing loans
Slide 19: Table of contents
Table of contents Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 19
Slide 20: Key characteristics of cover pool
Key characteristics of cover pool Pool notional EUR 6.1bn Number of Loans 90,816 Substitution collateral 0 Number of Borrowers 90,816 Total Value of Properties N/A Number of Properties 77,231 Average Property Value N/A 100% Finnish prime owner occupied residential properties, no Property Type vacati
Slide 21: Asset pool characteristics — Regional portfolio distribution by collateral value
Asset pool characteristics — Regional portfolio distribution by collateral value Southern Finland Oulu Western Finland Lapland Eastern Finland 2.7% 6.1% 2.7% 6.5% 6.1% 21.2% 6.5% 63.5% 21.2% 63.5% 2/3 of Finns live Helsinki south of this line 21
Slide 22: Asset pool characteristics — Loans by LTV and balance size
Asset pool characteristics — Loans by LTV and balance size LTV Loan size; EUR’000s Loan count Loan balance; EURm Loan count Loan balance; EURm 1,100 12,000 1,100 25,000 1,050 11,500 1,050 1,000 11,000 1,000 950 10,500 950 900 10,000 900 9,500 20,000 850 850 9,000 800 800 8,500 750 750 8,000 700 7,50
Slide 23: Asset pool characteristics — Loans by origination year and interest rate type
Asset pool characteristics — Loans by origination year and interest rate type Origination year Interest rate type; % Loan count Loan balance; EURm EURIB 12M FIXED EURIB 1M EURIB 3M EURIB 6M PRIME 1,000 14,000 950 13,000 900 5% 850 12,000 4% 800 11,000 750 8% 700 10,000 650 9,000 600 8,000 550 500 7,
Slide 24: Table of contents
Table of contents Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 24
Slide 25: Appendix — Finnish covered bond legislation
Appendix — Finnish covered bond legislation The Finnish Act on Mortgage Credit Bank Operations (Fi. Laki kiinnitysluottopankkitoiminnasta, the “MCBA”, 688/2010, as amended), came into force on1 August 2010 Covered bonds are issued either by specialized mortgage credit bank or any licensed credit
Slide 26: Appendix — Loan granting process
Appendix — Loan granting process Customer identification Customer must be identified and verified, also regarding age and legal capacity Customer’s background and financial position must be determined, both external (credit bureau) and internal payment defaults Scoring Application score model
Slide 27: Appendix — Collateral valuation and loan decision
Appendix — Collateral valuation and loan decision Collaterals All collaterals are located in Finland Only residential purposes Must be valued by a valuer independent of the credit decision process – External qualified valuer or – Internal valuer who have sufficient qualifications and experienc
Slide 28: Non-performing loans
Non-performing loans Termination letter sent1 Loan transferred to collection (default) 1. Reminder 2. Reminder 3. Reminder Customer Letter sent Letter sent Letter sent defaulted Due 14 29 55 85 90 Days 1. Until defined termination conditions are fulfilled, 3.reminder letter is sent repeatedly 28
Slide 29: Arrears collection process — Acceleration notice to public auction
Arrears collection process — Acceleration notice to public auction Cumulative Days Letter of Termination The loan cannot become current Voluntary Sale/ +21 again after registered to debt Restructuring Payment Days collection system. Will need full payment It takes about 20 days for the Danske Debt M
Slide 30: Table of contents
Table of contents Executive Summary 5 Overview of Danske Bank Group 7 Overview of Danske Bank Plc 11 Finnish Economy and Housing Markets 15 Danske Bank Plc Cover Pool 20 Appendix 25 Contact details 31 30
Slide 31: Contacts
Contacts Pekka Antero Toivonen Claus Ingar Jensen Head of ALM Finland Head of IR Direct +358 10 546 7718 Direct: +45 45 12 84 83 E-mail: pekka.toivonen@danskebank.fi Mobile: +45 25 42 43 70 E-mail: clauj@danskebank.dk Christoffer Møllenbach John Bäckman Head of Group Treasury Chief IR Officer Direct
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