Danske Bank A/S · OMXCOP:DANSKE
Danske Bank A/S — Q1 2006 Earnings Presentation
52 slides from Danske Bank A/S's earnings presentation, May 2006
Slide 1: Fact Book Q1 2006
Danske Bank Fact Book Q1 2006 Fact Book Q1 2006 Supplementary Information for Investors and Analysts Unaudited Updated: May 2006 1
Slide 2: Contacts, financial calendar and disclaimer
Danske Bank Fact Book Q1 2006 Fact Book Q1 2006 This publication is meant as a supplement to the information published in the quarterly interim reports and the annual report. Additional information can be found on www.danskebank.com and www.danskebank.dk. For further information, please contact: Fin
Slide 3: Table of contents
Danske Bank Fact Book Q1 2006 Table of contents 1. Danske Bank Group overview 3. Business segments and key statistics 1.1. Executive management 5 3.1. Banking Activities 28 1.2. History and Business composition 7 3.1.1. Banking Activities, Danske Bank 29 1.3. Financial goals 11 3.1.2. Banking Activi
Slide 4: Danske Bank Group overview
Danske Bank Fact Book Q1 2006 Danske Bank Group overview 4
Slide 5: 1.1. Executive management
Danske Bank Fact Book Q1 2006 1.1. Executive management Executive Board and members of the Executive Committee Peter Straarup, CEO Jakob Brogaard Chairman of the Executive Board Deputy Chairman of the Executive Board and the Executive Committee and member of the Executive Committee Born in 1951 Born
Slide 6: Members of the Executive Committee
Danske Bank Fact Book Q1 2006 Members of the Executive Committee Tonny Thierry Andersen Søren Kaare-Andersen Don Price Chief Financial Officer Head of BG Bank CEO of Northern Bank Born in 1964 Born in 1958 Born in 1953 Hired in 1999 Hired in 1986 Hired in 1998 Education: Master of Business Education
Slide 7: 1.2. History and Business composition
Danske Bank Fact Book Q1 2006 1.2. History and Business composition Year Mergers & acquisitions Divestments 2005 History Danske Bank A/S was founded in 1871 and has merged with a number of HandelsFinans financial institutions through the years. In 1990, it merged with Aktieselskabet Kjøbenhavns Hand
Slide 8: Geographical operations
Danske Bank Fact Book Q1 2006 Geographical operations Danske Bank is predominantly represented in Northern Europe within retail banking, through branches in London and Hamburg as well as in the Nordic capitals of Oslo, Stockholm and Helsinki. A subsidiary provides private banking services in Luxembo
Slide 9: Brands
Danske Bank Fact Book Q1 2006 Brands A central part of Danske Banks marketing strategy concerns utilising the groups various brands. Although we operate on a shared IT platform, we believe that targeted branding is necessary in order to appeal to as many customers as possible. Overview of brands i
Slide 10: Danske Bank organisation
Danske Bank Fact Book Q1 2006 Danske Bank organisation May 2006 Board and Executive management Business areas Other business units Other units, primarily support functions Board of Directors Banking Activities Danske Bank (DK) Alf Duch Petersen Chairman Banking Activities Jørgen Nue Møller BG Bank D
Slide 11: 1.3. Financial goals
Danske Bank Fact Book Q1 2006 1.3. Financial goals Beginning in 2006, the Group is basing its capital management on the following overall capital targets: Solvency ratio of 9.0%-10.0% (previously 9.5%) Core (tier 1) capital ratio (excluding hybrid core capital) of 6.0%-6.5% (previously 6.5%) H
Slide 12: 1.4. Ratings
Danske Bank Fact Book Q1 2006 1.4. Ratings Danske Bank rating overview The agencies each use their own rating scales, on which the highest possible ratings are AAA and Aaa (see the table below). Ratings in the A categories are considered "investment grade", indicating only a marginal risk that the i
Slide 13: 1.5. Change in Fact Book principles
Danske Bank Fact Book Q1 2006 1.5. Change in Fact Book principles The Group has not changed any significant principles from those presented in the Fact Book Q4 2005, except for the instances described below: With effect from January 1, 2006, the Group has adjusted its policies for the recognition of
Slide 14: Financial statistics
Danske Bank Fact Book Q1 2006 Financial statistics 14
Slide 15: 2.1. Income statement – Danske Bank Group
Danske Bank Fact Book Q1 2006 2.1. Income statement Danske Bank Group Income statement (DKr m) Year to date Full year Q106 Q405 Q305 Q205 Q105 2006 2005 Net interest income 4,524 4,432 4,462 4,270 4,002 4,524 17,166 Guarantees & other commissions 515 531 557 508 380 515 1,976 Securities & custody
Slide 16: 2.1.1. Breakdown of income statement
Danske Bank Fact Book Q1 2006 2.1.1. Breakdown of income statement Income Country distribution of net interest income Money market rates Others 8.00 Q1 2006 UK The Rep. of 5% 0% Ireland* 4% Northern Ireland* 7.00 9% Sweden 6.00 9% DB, BG & MF 65% Norway 5.00 8% USA 0% 4.00 3.00 Others Q1 2005 6% UK
Slide 17: Net interest income; Net fees and commissions
Danske Bank Fact Book Q1 2006 Net interest income 4,600 4,400 4,200 4,000 3,800 3,600 Q105 Q205 Q305 Q405 Q106 Net fees and commissions DKr m 2,000 1,500 1,000 500 0 Q105 Q205 Q305 Q405 Q106 Guarantees & other commissions Security & custody commissions Payment services Remortgaging/loan fees 17
Slide 18: Total other income
Danske Bank Fact Book Q1 2006 Total other income DKr m 4,000 3,000 2,000 1,000 0 Q105 Q205 Q305 Q405 Q106 Net trading income Other income Net income from insurance business 18
Slide 19: Expenses; IT expenses; Full-time employees
Danske Bank Fact Book Q1 2006 Expenses Total IT expenses IT expenses (DKr m) Year to date Full year Q106 Q405 Q305 Q205 Q105 2006 2005 Total IT expenses (development and operations) 849 796 627 720 602 849 2,745 Total IT expenses/operating expenses, % 17.4 16.0 13.7 15.3 15.2 17.4 15.1 Total IT expe
Slide 20: 2.2. Balance sheet
Danske Bank Fact Book Q1 2006 2.2. Balance sheet Balance sheet (DKr m) End of period Full year Q106 Q405 Q305 Q205 Q105 2006 2005 Cash in hand and demand deposits with central banks 29,677 13,881 17,940 5,347 10,257 29,677 13,881 Due from credit institutions and central banks 275,488 274,918 215,926
Slide 21: 2.2.1. Breakdown of balance sheet: lending by segment
Danske Bank Fact Book Q1 2006 2.2.1. Breakdown of balance sheet Lending portfolio broken down by segment Lending portfolio breakdown, end period End of period End of year Volume (DKr bn) Segment Q106 Q405 Q305 Q205 Q105 2006 2005 Banking Activities, Danske Bank Retail 76.8 75.9 70.2 67.2 64.2 76.8 7
Slide 22: Deposit portfolio broken down by segment
Danske Bank Fact Book Q1 2006 Deposit portfolio broken down by segment Deposit portfolio breakdown, end period End of period End of year Volume (DKr bn) Segment Q106 Q405 Q305 Q205 Q105 2006 2005 Banking Activities, Danske Bank Retail 122.7 122.9 119.1 115.5 108.3 122.7 122.9 Corporate 101.6 93.3 92
Slide 23: Lending and deposit breakdown charts Q106
Danske Bank Fact Book Q1 2006 Others Danske Markets 4% 3% Bank lending, retail Q106 Others Bank lending, corporate Q106 11% BA, The Rep. of Ireland Danske Markets 6% BA, DB 7% 32% BA, Northern BA, DB Ireland 30% 7% BA, The Rep. of Ireland 6% BA, Northern BA, NO Ireland 18% 6% BA, BG 7% BA, NO BA, SE
Slide 24: Provisions and non performing loans
Danske Bank Fact Book Q1 2006 Provisions and non performing loans Provisions and non performing loans (Danske Bank Group) Year to date Full year Q106 Q405 Q305 Q205 Q105 2006 2005 Accumulated provisions (DKr bn end period)* 4.78 5.05 6.62 6.42 6.61 4.78 5.05 Non performing loans (Dkr bn end period)
Slide 25: 2.3. Key ratios and indicators
Danske Bank Fact Book Q1 2006 2.3. Key ratios and indicators Key ratios Year to date Full year Q106 Q405 Q305 Q205 Q105 2006 2005 Net profit for the period per share, DKr 5.0 6.0 4.7 4.8 4.8 5.0 20.2 Diluted net profit for the period per share, DKr 5.0 6.0 4.7 4.8 4.8 5.0 20.2 Net profit for the per
Slide 26: Earnings per share, return on equity, total assets
Danske Bank Fact Book Q1 2006 Return on equity [after tax] p.a., % Earnings per share, DKr 25.0 22.5 20.2 20.0 18.4 20.0 16.8 17.5 17.5 15.2 14.4 15.0 14.0 13.9 15.0 13.3 12.5 12.5 11.5 10.0 10.0 7.5 7.5 5.0 5.0 5.0 2.5 2.5 0.0 0.0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Total assets, DKr
Slide 27: Business segments and key statistics
Danske Bank Fact Book Q1 2006 Business segments and key statistics 27
Slide 28: 3.1. Financial performance, Banking Activities
Danske Bank Fact Book Q1 2006 3.1. Financial performance, Banking Activities Banking activities encompasses all banking activities in Danske Bank Group both national and international. Banking Activities (DKr m) Year to date Full year Q106 Q405 Q305 Q205 Q105 2006 2005 Net interest income 3,843 3,82
Slide 29: 3.1.1. Financial performance, Danske Bank
Danske Bank Fact Book Q1 2006 3.1.1. Financial performance, Danske Bank Banking Activities Danske Bank encompasses the banking activities of the Danske Bank division in Denmark. Danske Bank caters to all types of retail and corporate customers. The banks finance centres serve large corporate and pr
Slide 30: 3.1.2. Financial performance, BG Bank
Danske Bank Fact Book Q1 2006 3.1.2. Financial performance, BG Bank Banking Activities BG Bank encompasses the banking activities of the BG Bank division in Denmark. BG Bank caters to all types of retail customers and most types of corporate customers through its branch network. In addition, BG Bank
Slide 31: Net interest income in Danske Bank and BG Bank (YOY)
Danske Bank Fact Book Q1 2006 Net interest income in Banking Activities, Danske Bank and BG Bank (YOY) Historical net interest income in Banking Activities, Danske Bank and BG Bank (DKr m) Q105 Change Q106 Net interest income 2,127 Loan volume 201 Loan margins -170 Deposit volume 65 Deposit margins
Slide 32: 3.1.3. Financial performance, Sweden
Danske Bank Fact Book Q1 2006 3.1.3. Financial performance, Sweden Banking Activities Sweden encompasses the banking activities of Östgöta Enskilda Bank and Provinsbankerne in Sweden, which serve all types of retail and corporate customers. Banking Activities Sweden has four regions with 56 branches
Slide 33: 3.1.4. Financial performance, Norway
Danske Bank Fact Book Q1 2006 3.1.4. Financial performance, Norway Banking Activities Norway encompasses primarily the banking activities of Fokus Bank in Norway. Fokus Bank serves all types of retail and corporate customers. Banking Activities Norway has five regions with 70 branches, five finance
Slide 34: 3.1.5. Financial performance, Northern Ireland
Danske Bank Fact Book Q1 2006 3.1.5. Financial performance, Northern Ireland Banking Activities Northern Ireland encompasses the banking activities of Northern Bank, which serves both retail and corporate customers. Banking Activities Northern Ireland has four regions with 95 branches, four finance
Slide 35: 3.1.6. Financial performance, The Republic of Ireland
Danske Bank Fact Book Q1 2006 3.1.6. Financial performance, The Republic of Ireland Banking Activities Ireland encompasses the banking activities of National Irish Bank, which serves both retail and large corporate customers. Banking Activities Ireland has five regions with 59 branches, five finance
Slide 36: 3.1.7. Financial performance, Other Banking Activities
Danske Bank Fact Book Q1 2006 3.1.7. Financial performance, Other Banking Activities Other Banking Activities comprises the activities of Nordania and the banking activities carried out in Luxembourg, Germany, Poland and Finland. Other Banking Activities (DKr m) Year to date Full year Q106 Q405 Q305
Slide 37: 3.2. Financial performance, Mortgage Finance
Danske Bank Fact Book Q1 2006 3.2. Financial performance, Mortgage Finance Mortgage Finance encompasses the Danske Bank Groups mortgage finance and real-estate agency business in Denmark. The division markets its financing solutions through Realkredit Danmark, Danske Bank, BG Bank and home. Real-
Slide 38: Distribution of mortgage loan portfolio
Danske Bank Fact Book Q1 2006 Distribution of Mortgage loans portfolio Distribution of mortgage loan portfolio by loans-to-value ratios as at March 31, 2006 Distribution of loan portfolio by outstanding bond debt as at March 31, 2006 100 100 Outstanding debt 80 per property: Percentage of loan portf
Slide 39: 3.3. Financial performance, Danske Markets
Danske Bank Fact Book Q1 2006 3.3. Financial performance, Danske Markets Danske Markets is responsible for the Groups activities in the financial markets. Trading activities include trading in fixed-income products, foreign exchange, equities and interest-bearing securities, providing the largest c
Slide 40: 3.4. Financial performance, Danske Capital
Danske Bank Fact Book Q1 2006 3.4. Financial performance, Danske Capital Danske Capital manages the funds of retail customers and institutional investors and the funds of Danica Pension, Danske Fund, Puljeinvest (pooled investment) and Flexinvest. The division also provides advisory services to Dans
Slide 41: 3.5. Financial performance, Danica Pension
Danske Bank Fact Book Q1 2006 3.5. Financial performance, Danica Pension Danica encompasses all the Danske Bank Groups activities in the life insurance and pensions market. Marketed under the name of Danica Pension, the unit targets both personal and corporate customers. Products are marketed throu
Slide 42: 3.6. Financial performance, Other areas
Danske Bank Fact Book Q1 2006 3.6. Financial performance, Other areas Other areas encompasses the Groups real property activities, unallocated cost of capital and expenses for Group support functions and severance payments. Moreover, the area covers the elimination of returns on own shares. Other a
Slide 43: Shareholder information
Danske Bank Fact Book Q1 2006 Shareholder information 43
Slide 44: 4.1. Ownership structure
Danske Bank Fact Book Q1 2006 4.1. Ownership structure Shareholder composition At the end of March 2006, Danske Bank had about 296,530 shareholders. 17 shareholders held around 59.2% of the Bank's share capital. At the annual general meeting, each share (nominal value DKr10) has one vote. Shareholde
Slide 45: Geographical shareholder breakdown; 4.2. Share data
Danske Bank Fact Book Q1 2006 Geographical shareholder breakdown The Bank estimates that one-third of its share capital is held outside of Denmark. The region with the largest shareholding outside of Denmark is the US, with about 12% of the Bank's share capital. England ranks second, with about 8%.
Slide 46: Macroeconomics
Danske Bank Fact Book Q1 2006 Macroeconomics 46
Slide 47: 5.1. Tables and charts
Danske Bank Fact Book Q1 2006 5.1. Tables and charts Denmark (%) 2007E 2006E 2005E 2004 2003 2002 2001 2000 GDP Growth 2.2 2.6 3.1 1.9 0.7 0.5 0.7 3.5 Export 5.0 6.4 8.0 2.7 -1.2 4.8 3.1 12.7 Private Consumption 2.5 2.4 3.8 3.4 1.6 0.8 0.1 0.2 Public Consumption 0.9 1.5 1.3 1.5 0.2 2.2 2.2 2.3 Infla
Slide 48: Euroland and Ireland macroeconomic tables
Danske Bank Fact Book Q1 2006 Euroland (%) 2007E 2006E 2005E 2004 2003 2002 2001 2000 GDP Growth 1.7 2.2 1.4 1.8 0.5 0.8 1.6 3.5 Export 4.8 5.9 3.7 5.6 0.3 1.8 3.3 12.2 Private Consumption 1.7 1.7 1.3 1.2 1.0 0.6 1.9 2.8 Public Consumption 1.8 1.7 1.1 1.6 1.7 3.1 2.4 2.3 Inflation 2.3 2.3 2.3 2.1 2.
Slide 49: House price index; Unemployment rate (DK)
Danske Bank Fact Book Q1 2006 House price index (DK-seasonally adj) House-price indices, % change (1995=100) 265 240 215 Ireland 200 190 UK 164 165 140 Spain 148 115 France 106 90 1995 1996 1997 1998 2000 2001 2002 2003 2005 Sweden 96 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 82 Netherlands Unemployment Rate (DK)
Slide 50: GDP Growth; Private Consumption
Danske Bank Fact Book Q1 2006 GDP Growth 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2000 2001 2002 2003 2004 2005E 2006E 2007E Denmark Norway Sweden Ireland UK Euroland Private Consumption 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2000 2001 2002 2003 2004E 2005E 2006E 2007
Slide 51: Household debt and interest payments, Denmark and Norway
Danske Bank Fact Book Q1 2006 % of disposable Household debt and interest payments, Denmark % of disposable income income Debt burden Interest burden 250 12.0 240 10.0 230 220 8.0 210 6.0 200 190 4.0 180 2.0 170 160 0.0 Dec-98 Mar-99 Jun-99 Sep-99 Dec-99 Mar-00 Jun-00 Sep-00 Dec-00 Mar-01 Jun-01 Sep
Slide 52: Household debt and interest payments, Sweden
Danske Bank Fact Book Q1 2006 % of disposable Household debt and interest payments, Sweden % of disposable income income Debt burden Interest burden 160 12.00 140 10.00 120 8.00 100 80 6.00 60 4.00 40 2.00 20 0 0.00 Mar-87 Dec-87 Sep-88 Jun-89 Mar-90 Dec-90 Sep-91 Jun-92 Mar-93 Dec-93 Sep-94 Jun-95