Danske Bank A/S · OMXCOP:DANSKE
Danske Bank A/S — H1 2010 Earnings Presentation
24 slides from Danske Bank A/S's earnings presentation, Aug 10, 2010
Slide 1: Interim Report – First Half 2010 Press Conference
INTERIM REPORT – FIRST HALF 2010 Press conference Peter Straarup, CEO & Chairman of the Executive Board Tonny Thierry Andersen, CFO & member of the Executive Board August 10, 2010
Slide 2: Financial results for H1 2010: Earnings growth continues
Financial results for H1 2010: Earnings growth continues DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses
Slide 3: Macroeconomic indicators improve, but growth is still fragile
Macroeconomic indicators improve, but growth is still fragile % GDP growth 8 4 0 Norway -4 Euroland Denmark Sweden Ireland -8 Finland -12 Baltics -16 2009 2010E 2011E Source: Danske Research (July 2010). 3
Slide 4: Danske Bank did well in EU stress test, with capital far above the requirement
Danske Bank did well in EU stress test, with capital far above the requirement Tier 1 ratio Full CRD 14.1% implementation 13.1% 12.1% Transitional 11.7% CRD rules 10.8% DKK 55 bn 10.0% under full DKK 40 bn Basel II in excess 6% capital Minimum requirement Actual result Adverse scenario Adverse scena
Slide 5: Revised Basel III proposal is a step in the right direction
Revised Basel III proposal is a step in the right direction, but there are still some issues • Revised proposal from the Basel committee has addressed criticism from banks • The proposal is favourable for Danske Bank, but • Key concerns around the treatment of the unique Danish mortgage market have
Slide 6: Danske Bank's payments for Bank Package I
Danske Bank’s payments for Bank Package I Bank Package I Expenses thus far Guarantee fees 4.4 Provisions made to Financial Stability 2.9 Total DKK 7.2 bn 6
Slide 7: Stronger customer focus and a more efficient bank
Stronger customer focus and a more efficient bank 7
Slide 8: Customers like the digital signature and adopt it very quickly
Customers like the digital signature and adopt it very quickly Agreements with digital signature in eBanking 14,000 (Denmark) 12,000 10,000 8,000 40% of digitalised 6,000 agreements are signed 4,000 online 2,000 0 1.4.09 1.5.09 1.6.09 1.7.09 1.8.09 1.9.09 1.1.10 1.2.10 1.3.10 1.4.10 1.5.10 1.6.10 1.
Slide 9: Business Direct: A new advisory programme for smaller enterprises
Business Direct: A new advisory programme for smaller enterprises Advisory services on Mon-Wed 70 13 30 00 7.30-18.00 What is your opinion of Business Direct? Thur 7.30-21.00 Fri 7.30-16.00 8% 25% 67% Positive Neutral Negative 9
Slide 10: Customer satisfaction on the rise and now above 2008 level
Customer satisfaction on the rise and now above 2008 level Customer satisfaction in Denmark 76 Index 74.4 73.0 74.1 73.0 72.9 72 72.1 72.0 70.7 71.1 70.6 68 64 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 10
Slide 11: Income declines 25%, as expected
Income declines 25%, as expected DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561 756 135 Total income 32,283 24,143 75 Operating expenses 13,968 13,259 95 Goodwil
Slide 12: Trading income falls to a more normal level
Trading income falls to a more normal level, although markets were volatile in Q2 DKK m H1 2009 H1 2010 Index bp Spreads, Danske 30- year mortgage bond Net interest income 14,134 11,934 84 45 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 40 Other income 1,508 2,141 142 35 Income
Slide 13: Net interest income declines because of lower interest rates and higher funding costs
Net interest income declines because of lower interest rates and higher funding costs DKK m H1 2009 H1 2010 Index % Danish central bank’s policy rate Net interest income 14,134 11,934 84 2.0 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 1.5 Other income 1,508 2,141 142 Income fro
Slide 14: Insurance: High premium growth and rising earnings
Insurance: High premium growth and rising earnings despite difficult investment markets DKK m H1 2009 H1 2010 Index Net interest income 14,134 11,934 84 Income growth of Net fee income 3,683 4,116 112 DKK 200m Net trading income 12,397 5,196 42 Other income 1,508 2,141 142 Income from insurance 561
Slide 15: Large reduction of expenses more than offsets salary and price inflation
Large reduction of expenses more than offsets salary and price inflation DKK m H1 2009 H1 2010 Index DKK bn Expenses Net interest income 14,134 11,934 84 16 Net fee income 3,683 4,116 112 Net trading income 12,397 5,196 42 Goodwill impairment Other income 1,508 2,141 142 charges Income from insuranc
Slide 16: Loan impairment charges: Dominated by business customers
Loan impairment charges: Dominated by business customers, while personal customers manage fairly well DKK m H1 2009 H1 2010 Index DKK bn Impairment 9 charges broken Net interest income 14,134 11,934 84 down by customer Net fee income 3,683 4,116 112 8 type Net trading income 12,397 5,196 42 Distress
Slide 17: Impairment charges are highest in Ireland, but declining steadily
Impairment charges are highest in Ireland, but are declining steadily from quarter to quarter bp Impairment charges/ lending DKK bn Impairment charges by H1 2010 quarter 800 10 600 8 400 6 200 4 0 2 -200 -400 0 Norway Baltics Markets Ireland Finland Denmark N. Ireland Sweden Other Q4 08 Q1 09 Q2 09
Slide 18: Results for our primary markets show a profit in five of seven countries
Results for our primary markets show a profit in five of seven countries DKK m Profit before tax, H1 2010 Ex expenses for Bank Package I 1,000 0 -1,000 -2,000 -3,000 Norway Denmark Sweden Finland Baltics N. Ireland Ireland 18
Slide 19: Lending is increasing again; deposits continue positive trend
Lending is increasing again, mainly in the Nordic region; deposits continue underlying positive trend DKK bn Lending DKK bn Deposits 1,800 1,000 800 1,600 Private 600 Finansielle 1,400 400 1,200 200 Erhverv 1,000 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Banking Activ
Slide 20: Liquidity has improved further in 2010, and funding need already met
Liquidity has improved further in 2010, and funding need for 2010 has already been met DKK bn 450 300 End of June 2010 150 End-2008 Positive 36 mos. End-2009 0 -150 1 week 2 weeks 3 weeks 1 month 12 months 2 months 3 months 4 months 5 months 6 months 9 months 20
Slide 21: Capital and solvency ratios improved significantly
Capital and solvency ratios improved significantly % DKK 62 bn buffer Capital ratios above ICAAP result 20 H1 09 H1 10 15 10 5 0 Tier 1 ratio Solvency ratio 21
Slide 22: Outlook: Moderate economic growth, but 2010 will remain challenging
Outlook: Moderate economic growth, but 2010 will remain a challenging year Moderate economic growth Expiry of Danish state guarantee on October 1 reduces expenses by about DKK 1 bn per quarter Robust income from Banking Activities Lower income from Danske Markets and Danica Expenses expected to be l
Slide 23: www.danskebank.com/ir
Please use the microphone at the side of your seat www.danskebank.com/ir 23
Slide 24: Disclaimer
Disclaimer This presentation 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 or acquire securities of Danske Bank A/S in any jurisdiction or an inducement to enter into investment activity. No part of this presentat