Danske Bank A/S · OMXCOP:DANSKE

Danske Bank A/S — Merger or Acquisition (November 2006)

16 slides from Danske Bank A/S's merger presentation, Nov 9, 2006

  1. Slide 1: Stepping up retail banking expansion

    Stepping up retail banking expansion Acquisition of Sampo Bank Peter Straarup, CEO & Chairman of the Executive Board Tonny Thierry Andersen, CFO & Member of the Executive Board November 9, 2006

  2. Slide 2: Disclaimer

    Disclaimer This presentation is not for release, publication or distribution in Australia, Canada, the Hong Kong Special Administrative Region of the People's Republic of China, Japan, South Africa or the United States. These materials are not an offer for sale of securities in the United States. Se

  3. Slide 3: Transaction summary

    Transaction summary • Danske Bank acquires Sampo Bank for €4,050m / DKr 30.1bn • Expected total pre-tax synergies of DKr 610m with full accounting effect in 2009 • Integration costs of DKr 1,550m • New capital structure: • Reduction of core tier 1 capital, ex hybrid, ratio target to 5.5%–6.0% (6.0%-

  4. Slide 4: Strategic rationale

    Strategic rationale - In line with stated retail banking ambitions in northern Europe Mergers/acquisitions • Creates a more competitive, leading financial services group in the Nordic region with a strong focus on retail banking, including 2006 mortgage lending 2005 • Provides a platform for further

  5. Slide 5: Broadening the scope in attractive and fast-growing markets

    Broadening the scope in attractive and fast- growing markets GDP growth, 2007E Mortgage debt as % of GDP % 8 120 111 88 73 4 60 54 53 45 38 Eurozone Average 16 12 8 0 0 EU 25 Denmark Sweden Ireland Finland Estonia Latvia Lithuania Netherlands UK Baltics IE FI NO ES SE UK DK CH NL FR IT DE Danske Ban

  6. Slide 6: Expansion of growth potential in retail banking

    Expansion of growth potential in retail banking Population1 (m) Sweden 36 Branches: 57 +57% Finland: Market share: 6% 23 Market rank: 5 Branches: 125 Branches: 63 Market share: 15% Loan growth*: 25% Market share: 5% Market rank: 3 Market rank: 4 Loan growth**: 14% Loan growth*: 28% Estonia: Danske B

  7. Slide 7: Diversification

    Diversification - Sampo Bank’s home market increases diversification Lending, geographical breakdown Danske Bank (stand alone) Ireland & N. Other Correlation, real GDP growth (1992-2005) Ireland 7% 6% Norway 100% 7% Sweden 79% 10% 68% 64% Denmark 70% 50% 45% Danske Bank + Sampo Bank Finland Baltics

  8. Slide 8: Significant contribution to Danske Bank

    Significant contribution to Danske Bank - Sampo Bank contributes 10%-15% to the combined entity Pro forma Consolidated Danske Bank DKr (bn) Loan exposure by type Total assets 93 7 2,704 Other loans 39% Mortgage RWA 88 12 1,154 loans 47% Loans 91 9 1,695 Deposits 88 12 780 Mortgage- like loans 14% Au

  9. Slide 9: Danske Banks international retail operations

    Danske Bank’s international retail operations - Sampo Bank adds significant size and profitability Loans, DKr (bn) Deposits, DKr (bn) 33.1 Pre-tax RoE (%) 158 97 134 101 59 18.3 15.9 15.7 46 57 40 9.8 47 20 Sampo Sweden Norway NB NIB Sampo NB Sweden Norway NIB Sampo Norway Sweden NIB NB Branches FTE

  10. Slide 10: Expected synergies and integration costs

    Expected synergies and integration costs - Integration onto Danske Bank’s IT platform • DKr 610m synergies • Integration costs are expected to amount to • 19 per cent of Sampo Bank’s cost base € 209m, or DKr 1,550m • 94%, or DKr 575m, in cost synergies • Will be booked when used, but estimated at 50

  11. Slide 11: New capital targets

    New capital targets - Increased leverage as a natural next step towards CRD/Basel II New capital targets, % Current Change New Core capital 6.0-6.5 Ø 5.5-6.0 Hybrid capital 0.5-1.0 × 1.0-1.5 Core capital incl. hybrid 6.5-7.5 Ö 6.5-7.5 Solvency 9.0-10.0 Ö 9.0-10.0 Payout ratio 30-50 Ö 30-50 • Solvenc

  12. Slide 12: Financing the transaction

    Financing the transaction -Prudent measures to limit execution risk € bn DKr bn • Financing package in place at Total consideration 4 30 announcement. Financed by: • Rapid completion of overall process, - Common equity 2 14 - Tier 1 hybrid and other liquidity 2 16 with transaction closing expected i

  13. Slide 13: Key financials for Sampo Bank

    Key financials for Sampo Bank FAS* IFRS 2002 - 9M 2006 Change €m 2002 2003 2004 2004**** 2005**** 9m 2005 9m 2006 2006/2005 Key P&L Items Net interest income 448 404 394 322 346 255 276 8% Net fee and commission income 175 164 194 193 223 166 189 14% Other operating income 60 75 70 156 169 108 139 2

  14. Slide 14: Earnings after tax 2007 – broker consensus

    Earnings after tax 2007 – broker consensus - Earnings accretive from 2007 DKr bn 16 0.1 -0.8 2.1 -0.6 -0.6 8 Financing (volume): DKr bn 14.4 13.0 - Tier 1 hybrid and liquidity 16 13.3 - Capital relief (securitisation) 6 0 Earnings Earnings Financing Synergies Proforma earnings Integration Amortisati

  15. Slide 15: Sampo Bank - Result broken down by business segment

    Sampo Bank - Result broken down by business segment 9M 2006 Asset mgmt. Private Corporate Baltic & Investment OtherSampo Sampo €m clients clients banking banking Bank Group Bank total Key P&L items Total operating income 238 231 55 79 1 605 Profit before taxes 87 138 20 43 -9 279 Key balance sheet i

  16. Slide 16: For further information

    For further information - www.danskebank.com/ir 16

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