Danske Bank A/S · OMXCOP:DANSKE

Danske Bank A/S — Debt Investor Presentation (August 2015)

44 slides from Danske Bank A/S's debt investor presentation, August 2015

  1. Slide 1: Danske Bank debt investor update

    Danske Bank debt investor update Peter Holm Senior Vice President, Group Funding Robin Løfgren IR Officer August 2015

  2. Slide 2: Agenda

    Danske FinancialBank debtfor results investor Q1 2013update Agenda Executive summary 3 Overview 5 Financial results 8 Capital, liquidity & funding 20 Appendix 26 2

  3. Slide 3: Executive summary: Danske Bank in brief

    Danske FinancialBank debtfor results investor Q1 2013update Executive summary: Danske Bank in brief Macro-economic Operates principally in AAA rated Northern European countries: the largest Danish commercial operating bank with a strong footprint across the Nordic space environment Diversified Diver

  4. Slide 4: Agenda

    Danske FinancialBank debtfor results investor Q1 2013update Agenda Executive summary 3 Overview 5 Financial results 8 Capital, liquidity & funding 20 Appendix 26 4

  5. Slide 5: Overview: Danske Bank has a strong Nordic franchise

    Danske FinancialBank debtfor results investor Q1 2013update Overview: Danske Bank has a strong Nordic franchise Facts Danske Bank market share** 3.6 million customers 313 branches* 15 countries 18,874 full-time employees Finland Business units Sweden 10% Personal Banking 5% Business Banking Norway E

  6. Slide 6: Nordic footprint across sectors

    Danske FinancialBank debtfor results investor Q1 2013update Nordic footprint across sectors Total lending*, Q2 2015 (%) Credit exposure by industry, Q2 2015 (%) Personal customers 35 Denmark 56 11 Commercial property Public Institutions 11 9 Non-profit & Associations 6 Finland Other 4 Banks 4 Sweden

  7. Slide 7: Agenda

    Danske FinancialBank debtfor results investor Q1 2013update Agenda Executive summary 3 Overview 5 Financial results 8 Capital, liquidity & funding 20 Appendix 26 7

  8. Slide 8: Net profit: DKK 9.4 bn, up 36% from first half of 2014

    Danske FinancialBank debtfor results investor Q1 2013update Net profit: DKK 9.4 bn, up 36% from first half of 2014 Income statement & key figures (DKK m) Key points, H1 2015 vs H1 2014 • Return on equity improved to 12.5% H1 2015 H1 2014 Index Q2 2015 Q1 2015 Index from 9.4% Net interest income 10,8

  9. Slide 9: Personal Banking

    Danske FinancialBank debtfor results investor Q1 2013update Personal Banking Personal Banking Income distribution, Q2 2015 (%)  Personal Banking serves personal and private banking Northern Ireland Other customers through a large network of branches, call centres 6 1 and online channels. Norway 12

  10. Slide 10: Business Banking

    Danske FinancialBank debtfor results investor Q1 2013update Business Banking Business Banking Income distribution, Q2 2015 (%)  Business Banking serves small, medium-sized and large Baltics Northern Ireland businesses through a large network of finance centres, 4 branches, contact centres and onlin

  11. Slide 11: Corporates & Institutions

    Danske FinancialBank debtfor results investor Q1 2013update Corporates & Institutions Corporates & Institutions Income distribution, Q2 2015 (DKK m)  Corporates & Institutions is a leading provider of wholesale banking services for the largest institutional and corporate 1.118 1.014 customers in th

  12. Slide 12: Danske Capital

    Danske FinancialBank debtfor results investor Q1 2013update Danske Capital Wealth management Asset under management, Q2 2015 (%)  Develops and provides asset and wealth management Alternatives products and services that are marketed through Personal Cash 8 Banking and directly to businesses, instit

  13. Slide 13: Danica Pension

    Danske FinancialBank debtfor results investor Q1 2013update Danica Pension Life insurance and pension Customer fund distribution, Q2 2015 (%)  Provides life insurance and pension products to both personal and business customers.  The products are marketed especially through Personal Danica Link Ba

  14. Slide 14: Expenses: Reduced by 5% in 2014 as a result of cost-efficiency

    Danske FinancialBank debtfor results investor Q1 2013update Expenses: Reduced by 5% in 2014 as a result of continued cost-efficiency measures Total Group expenses ex goodwill charge (DKK m) Change in expenses ex goodwill (DKK m) Consultants etc. Bonuses Severance payments Write-down on Sampo name 20

  15. Slide 15: Impairments: Loan loss ratio for Q2 of -5 bp for core activities

    Danske FinancialBank debtfor results investor Q1 2013update Impairments: Loan loss ratio for Q2 of -5 bp for core activities and -4 bp for the entire Group Group impairments, 2011 to Q2 15 (DKK bn/bp) Impairments (DKK m) Impairments Loan loss ratio* (rhs) H1 15 H1 14 Index Q2 15 Q1 15 Index Personal

  16. Slide 16: Impairments (continued): net reversals in Q2

    Danske FinancialBank debtfor results investor Q1 2013update Impairments (continued): Improved credit quality and higher collateral values result in net reversals in Q2 Individual loan impairment charges* (DKK bn) Impairment drivers, Q2 2015 vs Q1 2015 New Increased Reversal • Impairments decreased a

  17. Slide 17: Non-core: Commercial portfolio is almost run down

    Danske FinancialBank debtfor results investor Q1 2013update Non-core: Commercial portfolio is almost run down; REA decline owing mainly to the sale of the SME portfolio Key points Non-core loan portfolio, Q2 2015 (DKK bn) • Profit before tax rose to DKK 30 m in H1 2015 compared Allowance account Per

  18. Slide 18: Outlook for full-year 2015: Net profit of above DKK 16 bn

    Danske FinancialBank debtfor results investor Q1 2013update Outlook for full-year 2015: Net profit of above DKK 16 bn Total income Income is expected to increase from the level in 2014 Expenses Expenses are expected to be below DKK 22 bn Impairment charges in our core activities are expected to decl

  19. Slide 19: Agenda

    Danske FinancialBank debtfor results investor Q1 2013update Agenda Executive summary 3 Overview 5 Financial results 8 Capital, liquidity & funding 20 Appendix 26 19

  20. Slide 20: Funding: Structure and sources; Danish mortgage system is fully pass-through

    Danske FinancialBank debtfor results investor Q1 2013update Funding: Structure and sources; Danish mortgage system is fully pass-through Loan portfolio and long-term funding, Q2 15 (DKK bn) Funding sources (%) Q1 2015 Q2 2015 1,886 114 Senior debt 47 1,601 Bank loans 542 840 Deposits 18 Bank mortgag

  21. Slide 21: Funding and liquidity: 36 bn of long-term funding issued in H1

    Danske FinancialBank debtfor results investor Q1 2013update Funding and liquidity: 36 bn of long-term funding issued in H1; 45 bn of funding up for redemption in H2 Changes in funding , 2015 (DKK bn and bp*) Long-term funding ex RD (DKK bn) Cov. bonds Senior Tier 2 Tier 1 Funding plan 107bp Complete

  22. Slide 22: Capital: Solid capital base, with CET1 ratio of 14.3%

    Danske FinancialBank debtfor results investor Q1 2013update Capital: Solid capital base, with CET1 ratio of 14.3% Capital ratios, under Basel III/CRR (%) Capital drivers Tier 2 • In H1 2015, total REA increased by Hybrid tier 1 / Additional tier 1 DKK 26 bn to DKK 892 bn, mainly Common equity tier 1

  23. Slide 23: Danske Bank's credit ratings

    Danske FinancialBank debtfor results investor Q1 2013update Danske Bank’s credit ratings Danske Bank’s long/short-term issuer rating and outlook Rating agency issues Moody’s S&P Fitch General comments Stable Stable Stable Danske Bank’s credit ratings have improved remarkably since the low in June 20

  24. Slide 24: Financial targets: Target for ROE of above 12.5% in 2018

    Danske FinancialBank debtfor results investor Q1 2013update Financial targets: Target for ROE of above12.5% in 2018 Status at Target Comments 2015 ambition 30 June 2015 Return on equity Above 12.5%* 12.5% Initiatives progressing 9.5% as planned Ratings A ratings S&P/Moody’s/Fitch Target met after S&

  25. Slide 25: Agenda

    Danske FinancialBank debtfor results investor Q1 2013update Agenda Executive summary 3 Overview 5 Financial results 8 Capital, liquidity & funding 20 Appendix 26 25

  26. Slide 26: Personal Banking: Positive momentum in fees, impairments and costs

    Danske FinancialBank debtfor results investor Q1 2013update Personal Banking: Positive momentum in fees, impairments and costs in Q2; good trend in Norway continues Income statement & key figures (DKK m) Lending volume by country,* Q1 2014 = Index 100 Q2 2015 Q1 2015 Index Denmark Sweden Northern Ir

  27. Slide 27: Business Banking: Positive trend in income, costs and impairments

    Danske FinancialBank debtfor results investor Q1 2013update Business Banking: Positive trend in income, costs and impairments in Q2; good momentum in Nordic lending Income statement & key figures (DKK m) Lending volume by country,* Q1 2014 = Index 100 Q2 2015 Q1 2015 Index Denmark Sweden Northern Ir

  28. Slide 28: Corporates & Institutions: NII up 6%

    Danske FinancialBank debtfor results investor Q1 2013update Corporates & Institutions: NII up 6%; trading income down after exceptional Q1 Income statement & key figures (DKK m) Key points, Q2 15 vs Q1 15 Q2 2015 Q1 2015 Index Net interest income 703 660 106 • Profit before tax down 6% after excepti

  29. Slide 29: Danske Capital: AuM down 1% in Q2

    Danske FinancialBank debtfor results investor Q1 2013update Danske Capital: AuM down 1% in Q2 because of value adjustments despite good inflow Income statement (DKK m) Key points, Q2 15 vs Q1 15 Q2 2015 Q1 2015 Index • Non-performance-based income up 2% Net interest income -1 -2 - Net fee income 583

  30. Slide 30: Danica Pension: Full risk allowance booked

    Danske FinancialBank debtfor results investor Q1 2013update Danica Pension: Full risk allowance booked for all four interest rate groups; investment return down owing to volatile market Income statement (DKK m) Investment allocation for Danica Traditionel, end-Q2 15 (%) Q2 2015 Q1 2015 Index Equitie

  31. Slide 31: Net interest income: Flat vs. H1 2014

    Danske FinancialBank debtfor results investor Q1 2013update Net interest income: Flat vs. H1 2014 as lending effects and repayment of the state hybrid offset deposit margin pressure Quarterly net interest income (DKK m) Changes in net interest income (DKK m) -3% 5,735 5,742 H1 14 10,836 5,681 5,516

  32. Slide 32: Trading income: Lower customer activity in financial markets

    Danske FinancialBank debtfor results investor Q1 2013update Trading income: Lower customer activity in financial markets and negative value adjustments in Q2 Trading income by business unit (DKK m) Key points Other incl. Treasury C&I Business Personal • Trading income down in Q2 owing to 2,715 lower

  33. Slide 33: Expenses: Down 2% because of continued cost focus

    Danske FinancialBank debtfor results investor Q1 2013update Expenses: Down 2% because of continued cost focus and lower bonuses in Q2 Total expenses ex goodwill charge (DKK m) Change in expenses ex goodwill (DKK m) Consultants etc. Bonuses Severance payments Other costs Q1 2015 5,437 Deposit guarant

  34. Slide 34: Allowance account: Commercial property and personal customers

    Danske FinancialBank debtfor results investor Q1 2013update Allowance account: Commercial property and personal customers make up 52% of the individual allowance account Individual allowance account by industry* (DKK bn) Gross non-performing loans, ex Non-core (DKK bn) Individual allowance account P

  35. Slide 35: Nordic macro

    Danske FinancialBank debtfor results investor Q1 2013update Nordic macro Real GDP (constant prices, index 2005 = 100) Inflation (%) Denmark Sweden Norway Finland Denmark Sweden Norway Finland 130 6 5 120 4 110 3 2 100 1 90 0 2006 2008 2010 2012 2014 -1 2006 2008 2010 2012 2014 Interest rates (lendin

  36. Slide 36: Nordic housing market

    Danske FinancialBank debtfor results investor Q1 2013update Nordic housing market Property prices (index 2005 = 100) House prices/nom. GDP (index 2005 = 100) Denmark Sweden Norway Finland Denmark Sweden Norway Finland 200 130 180 120 160 110 140 100 120 90 100 2006 2008 2010 2012 2014 2006 2008 2010

  37. Slide 37: Realkredit Danmark and the Danish housing market: Portfolio overview

    Danske FinancialBank debtfor results investor Q1 2013update Realkredit Danmark and the Danish housing market: Portfolio overview Portfolio facts, Realkredit Danmark, end-Q2 15 Stock of retail loans, Realkredit Danmark, end-Q2 15 (%) • Approx. 377,000 loans (residential and commercial) Variable rate

  38. Slide 38: Realkredit Danmark: Increase in fixed-rate loans

    Danske FinancialBank debtfor results investor Q1 2013update Realkredit Danmark: Increase in fixed-rate loans driven by very low interest rates Key points Expected trend in RD portfolio* (%) • Trend away from short-term Flexlån® continued in Q2 Interest-only Amortising 2015 • The share of total new m

  39. Slide 39: Credit exposure: Limited agriculture and shipping/oil exposure

    Danske FinancialBank debtfor results investor Q1 2013update Credit exposure: Limited agriculture and shipping/oil exposure Agriculture exposure Shipping- and oil-related exposure • Market conditions remain weak; pig prices have increased • The shipping portfolio is booked mainly at C&I, and the sinc

  40. Slide 40: Three distinct methods of rating banks

    Danske FinancialBank debtfor results investor Q1 2013update Three distinct methods of rating banks Rating methodology Danske Bank’s rating Anchor Extraord. Add. Issuer + 1 + 2 + 3 + 4 = SACP + + ALAC + = SACP* Support factors Rating bbb+ +1 0 0 0 a- 0 +1 0 A (Stable) 1=Business Position 2=Capital &

  41. Slide 41: Danske Bank timeline

    Danske FinancialBank debtfor results investor Q1 2013update Danske Bank timeline Den Danske Landmandsbank was founded Handelsbanken was founded next door to the bank The bank shortens its name to Danske Bank Thomas Borgen Shipowner A.P. Møller becomes appointed CEO chairman of the board 1958 1968 19

  42. Slide 42: Historical expansion through mergers and acquisitions

    Danske FinancialBank debtfor results investor Q1 2013update Historical expansion through mergers and acquisitions Denmark Northern Ireland/Ireland Sweden 1990 1999 2001 2007 1995 1997 2005 Norway Finland/the Baltic states Denmark The bank merges with Handelsbanken and Denmark Provinsbanken 42

  43. Slide 43: Contacts

    Danske FinancialBank debtfor results investor Q1 2013update Contacts Henrik Ramlau-Hansen Claus Ingar Jensen Chief Financial Officer, Member of the Executive Board Head of IR Direct: +45 45 14 06 66 Direct: +45 45 12 84 83 Mobile: +45 22 20 73 10 Mobile: +45 25 42 43 70 E-mail: hram@danskebank.com E

  44. Slide 44: Disclaimer

    Danske FinancialBank debtfor results investor Q1 2013update Disclaimer Important Notice This presentation is confidential and solely for use at an investor meeting and does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy

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