Danske Bank A/S · OMXCOP:DANSKE
Danske Bank A/S — Cheuvreux European Spring Large Cap Conference 2008
27 slides from Danske Bank A/S's conference presentation, May 20, 2008
Slide 1: Resilient retail banking - troublesome capital markets
Resilient retail banking - troublesome capital markets Cheuvreux - European Spring Large Cap Conference 2008 Peter Straarup CEO & Chairman of the Executive Board 20 May 2008
Slide 2: Agenda
Agenda 1. Danske Bank universal banking model Focus on retail banking Northern Europe 2. Retail banking in troublesome financial markets Risk profile solvency, liquidity, credit and interest losses 3. Recent result, Q1 2008 4. Financial targets 2012 2
Slide 3: Danske Bank at a glance
Danske Bank at a glance 5 million customers 842 branches in 9 countries Aa1/AA- rating Sweden (stable outlook) z z z z z 3
Slide 4: Danske Bank at a glance
Danske Bank at a glance Market Challenger 5 million customers Market Leader 842 branches in 9 countries Market Challenger Aa1/AA- rating Sweden Market Challenge (stable outlook) Market z Challenge Market Leader Market Challenger Market Leader Market Challenger z z z z 4
Slide 5: Domestic vs. international growth
Domestic vs. international growth - Intl expansion is an important driver in growth and diversification DKr m Total income 5,500 -2% 5,000 4,500 BA Denmark 4,000 Banking Activities +19% outside Denmark 3,500 3,000 Q1 2007 Q1 2008 5
Slide 6: Increasing diversification
Increasing diversification - Transition from a Danish bank to an international bank % 60 Total income from foreign banking activities as a percentage of total income from banking activities 50% 45 30 15 12% 0 2001 2004 2007 2012 6
Slide 7: 7 years of Key figures
7 years of Key figures DKr bn. Revenues DKr bn. Expenses 50 30 CAGR: 7% CAGR: 7% 40 25 30 20 20 15 10 0 10 2001 2002 2003 2004 2005 2006 2007 2001 2002 2003 2004 2005 2006 2007 DKr bn. Profit before tax DKr bn. Total lending 22 CAGR: 7% 2500 CAGR: 14% 2000 17 1500 1000 12 500 7 0 2001 2002 2003 2004
Slide 8: Agenda
Agenda 1. Danske Bank universal banking model Focus on retail banking Northern Europe 2. Retail banking in troublesome financial markets Risk profile solvency, liquidity, credit and interest losses 3. Recent result, Q1 2008 4. Financial targets 2012 8
Slide 9: Market/Counterpart risk
All risk committee Credit committee Operational risk committee Liquidity and Funding Market/Counterpart risk IT platform Solvency Risk Management Daily P&L - A focus area in Danske Bank External overview/rating 9
Slide 10: Capital management
BUSINESS TRENDS Capital management - Capital ratios well above new targets; positive effect from CRD rules Ratios within capital targets Capital ratios - CRD Solvency of 13.6% and core capital of Q1 2008 1 Jan '08 Target 9.5% Core capital 9.5 8.7 Min. 7.5 Solvency 13.6 12.6 Min. 11.0 The capital
Slide 11: Healthy funding structure
Healthy funding structure - Danish mortgages are a unique and stable funding vehicle Funding structure Q1 2008 Danish mortgages fully match funded Shareholders equity No liquidity risk 4% No interest rate risk. Higher yield is 18% passed on to borrower 26% Currently very few foreclosures an
Slide 12: Liquidity management
HIGHLIGHTS Liquidity management - Already strong position improved in Q1 2008 DKr bn 12-month liquidity* Strong liquidity position Moodys Financial Strength DKr640bn is match-funded 300 with the AAA-rated Danish End Q1 2008 mortgage bonds 200 DKr19bn covered bonds issued since December 2007 100
Slide 13: Bond portfolio
HIGHLIGHTS Bond portfolio - Safe portfolio with large share of resilient Danish mortgage bonds Bond portfolio, DKr447bn (market value) bp Spreads (Danish mortgage bonds, Swedish mortgage bonds, Itraxx Main 200 and Iboxx covered bonds versus AA-rated swap rates) Itraxx Main Credit bonds 4% 150 Iboxx
Slide 14: Credit management
BUSINESS TRENDS Credit management - Moving closer to expected average for a business cycle Credit loss expenses Credit exposure Q1 2008(DKr 2680bn)* Public Non profit org 2% 5% bp Collective impairment charges Banks Other credit loss expenses Private 16% 14 32% Tele-communication 9 0% Div. financial
Slide 15: Backup liquidity facilities for conduits
HIGHLIGHTS Backup liquidity facilities for conduits - Q1: Lines reduced by DKr13bn; drawn lines reduced by DKr6bn End Q1 2008 SIVs ABCPs Polonius Total Number 9 13 1 23 Bank-managed 4 - 1 5 Amount (DKr bn) 3.5 16.4 12.8 32.7 Bank-managed (DKr bn) 1.7 - 12.8 14.5 Lines drawn (DKr bn) 1.4 1.8 11.9 15.
Slide 16: Agenda
Agenda 1. Danske Bank universal banking model Focus on retail banking Northern Europe 2. Retail banking in troublesome financial markets Risk profile solvency, liquidity, credit and interest losses 3. Recent result, Q1 2008 4. Financial targets 2012 16
Slide 17: Performance highlights
HIGHLIGHTS Performance highlights - Tough market conditions reduced result in Q1 Net profit È 33% to DKr 2.6bn Income statement and key figures Earnings below our expectations after Q4 DKr m Q1 2007 Q1 2008 Index 2007 Net interest income 5,730 6,236 109 Net fee income 2,235 2,213 99 Total income
Slide 18: Analysis of results
HIGHLIGHTS Analysis of results - Earnings affected by capital markets and credit losses Adjusted Adjusted DKr m Adjusted for for impact for credit Sampo Bank + from capital + loss As reported +own shares markets expenses 6,000 +14% Denmark -6% Finland -39% 5,000 -1% +Dkr682m Sweden +6% Norway +18% N
Slide 19: Resilient banking activities
HIGHLIGHTS Resilient banking activities - Good growth absorbing margin pressure and intl turmoil DKr m Income total banking activities Stable income absorbing 10,000 1% Increasing funding costs 7,500 Lower deposit margins 5,000 Lower activity based investment fees 2,500 Reduced fees in Denm
Slide 20: Agenda
Agenda 1. Danske Bank universal banking model Focus on retail banking Northern Europe 2. Retail banking in troublesome financial markets Risk profile solvency, liquidity, credit and interest losses 3. Recent result, Q1 2008 4. Financial targets 2012 20
Slide 21: How far can we take it from here?
How far can we take it from here? - Excellent point of departure 9 Sweden and Norway at competitive levels 9 Fully integrated Irish banks and improving 9 Finland was integrated at Easter 2008 Financial targets 2012 9 Well-diversified and stable revenue composition 9 CRD advanced approval 21
Slide 22: Financial targets 2012
Financial targets 2012 - From vision to ambitious financial targets Our vision Our mission One platform exceptional brands The best local financial partner Danske Banking Concept DKr 1bn investment in IT platform 2008-09 Digitalisation of infrastructure and platform Acceleration of product lau
Slide 23: Financial targets 2012
OUTLOOK Financial targets 2012 - An ambition and commitment to deliver value-creating growth DKr bn Total income and C/I ratio % Earnings per share 2003-08 & 2012 target (minimum) 2003-08 & 11% growth target (minimum) 60 C/I ratio (rhs) 60 Income EPS 5% GR: CA m 50 ni mu 55 M i % Po : 11 sit GR ive
Slide 24: Key elements of Digital Banking
Key elements of Digital Banking Full service all channels at all times 24/7 Convenient Digital ID used for identification and signing Automated direct marketing and CRM Products are digital by design Optimised Products are available online for instant use Customer output is digital
Slide 25: Management execution
EPS growth components - Several low-risk EPS enhancers make goal easier to accomplish Size of bubbles: EPS effect EPS 2012 High 35 Execution skill set External tailwind and Digitalisation MIN 2012 LEVEL execution skill set Management execution 30 Synergies Business development / share buybacks 25 In
Slide 26: Concluding remarks
CONCLUDING REMARKS Concluding remarks - Core business is still solid despite stormy weather Present situation Response/outlook Danske Markets, Danske Capital and Danica One-off items are expected to improve when Pension affected by financial storm the financial markets return to equilibrium Fina
Slide 27: www.danskebank.com/ir
Bank www.danskebank.com/ir
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