Danske Bank A/S · OMXCOP:DANSKE
Danske Bank A/S — Debt Investor Presentation (November 2015)
41 slides from Danske Bank A/S's debt investor presentation, November 2015
Slide 1: Danske Bank debt investor update
Danske Bank debt investor update November 2015
Slide 2: Agenda
Danske FinancialBank debtfor results investor Q1 2013update Agenda Key messages 3 Overview 5 Financial results 10 Capital, liquidity & funding 19 Appendix 24 2
Slide 3: Key messages
Danske FinancialBank debtfor results investor Q1 2013update Key messages Nordic universal bank – Solid foothold across all our four Nordic markets Traction towards 9.5% ROE in 2015 is on track Strong focus on cost management Significant improvement in credit quality Strong capital position, share bu
Slide 4: Agenda
Danske FinancialBank debtfor results investor Q1 2013update Agenda Key messages 3 Overview 5 Financial results 10 Capital, liquidity & funding 19 Appendix 24 4
Slide 5: The essence of Danske Bank
Danske FinancialBank debtfor results investor Q1 2013update The essence of Danske Bank Vision To be recognised as the most trusted financial partner Strategic core We are a modern bank for people and businesses across the Nordics with deep financial competence and leading, innovative solutions Custo
Slide 6: 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** 3.5 million customers 305 branches* 15 countries 18,984 full-time employees Finland Business units Sweden 10% Personal Banking 5% Business Banking Norway E
Slide 7: Nordic footprint across sectors
Danske FinancialBank debtfor results investor Q1 2013update Nordic footprint across sectors Total lending*, Q3 2015 (%) Credit exposure by industry, Q3 2015 (%) Personal customers 35 Denmark 56 Commercial property 12 Public Institutions 9 Finland 9 Non-profit & Associations 6 Others 4 Consumer discr
Slide 8: Well on track to meet our financial ambitions
Danske FinancialBank debtfor results investor Q1 2013update Well on track to meet our financial ambitions Total Group expenses ex Capital ratios, under Basel III/CRR RoE after tax; (%) goodwill charge (DKK bn) Group loan loss ratio, (bps) (%) T1/T2 Common Equity Tier 1 <22 21.4 20.6 19.3 23.8 11.5 2
Slide 9: Agenda
Danske FinancialBank debtfor results investor Q1 2013update Agenda Key messages 3 Overview 5 Financial results 10 Capital, liquidity & funding 19 Appendix 24 9
Slide 10: 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
Slide 11: Net profit: DKK 13.1 bn, up 28% from first 9 months of 2014
Danske FinancialBank debtfor results investor Q1 2013update Net profit: DKK 13.1 bn, up 28% from first 9 months of 2014 Income statement & key figures (DKK m) Key points, 9M 2015 vs 9M 2014 9M 2015 9M 2014 Index Q3 2015 Q2 2015 Index • Return on equity improved to 11.5% Net interest income 16,169 16
Slide 12: Good progress in all business units
Danske FinancialBank debtfor results investor Q1 2013update Good progress in all business units Business Units results before tax (DKK m) 9M 2015 +35% 9M 2014 5.751 +23% +8% 4.268 4.196 4.011 3.719 3.405 +2% +19% 1.445 1.418 988 832 Personal Banking Business Banking Corporates & Danske Capital Danic
Slide 13: Banking units: Strong performance vs 9M 2014 at all units
Danske FinancialBank debtfor results investor Q1 2013update Banking units: Strong performance vs 9M 2014 at all units Pre-tax return on allocated capital ex goodwill charge (%) Financial highlights, 9M 2015 vs 9M 2014 Q1-Q3 2014 Q1-Q3 2015 Personal Banking • Lower NII due to pressure on deposit marg
Slide 14: Danske Capital and Danica Pension: Satisfactory performance continued
Danske FinancialBank debtfor results investor Q1 2013update Danske Capital and Danica Pension: Satisfactory performance continued Danske Capital: Financial highlights, 9M 2015 vs 9M 2014 Danica Pension: Financial highlights, 9M 2015 vs 9M 2014 • Total income up 7% owing to higher assets under • Prem
Slide 15: Expenses: Down 4% vs 9M 2014
Danske FinancialBank debtfor results investor Q1 2013update Expenses: Down 4% vs 9M 2014 due to continued cost focus; on track to meet full-year guidance of below DKK 22 bn Total expenses ex goodwill charge (DKK m) Change in expenses ex goodwill (DKK m) Consultants etc. Bonuses Severance payments Ot
Slide 16: Impairments: Loan loss ratio for Q3
Danske FinancialBank debtfor results investor Q1 2013update Impairments: Loan loss ratio for Q3 of -2 bp for core activities and -1 bp for the entire Group Group impairments, 2011 to Q3 15 (DKK bn/bp) Impairments (DKK m) Impairments Loan loss ratio* (rhs) 9M 15 9M 14 Index Q3 15 Q2 15 Index Personal
Slide 17: Impairments (continued)
Danske FinancialBank debtfor results investor Q1 2013update Impairments (continued): Impairments remained low because of low interest rates and improving macroeconomic climate Individual loan impairment charges* (DKK bn) Impairment drivers, Q3 2015 vs Q2 2015 New Increased Reversal • The low level o
Slide 18: Agenda
Danske FinancialBank debtfor results investor Q1 2013update Agenda Key messages 3 Overview 5 Financial results 10 Capital, liquidity & funding 19 Appendix 24 18
Slide 19: Capital: Strong capital base; CET1 ratio of 15.7%
Danske FinancialBank debtfor results investor Q1 2013update Capital: Strong capital base; CET1 ratio of 15.7% from significantly lower REA. Successful Danica T2 capital issuance Capital ratios, under Basel III/CRR (%) Capital highlights Tier 2 Hybrid T1 / AT1 Common Equity Tier 1 • REA declined 7% d
Slide 20: Funding: Structure and sources
Danske FinancialBank debtfor results investor Q1 2013update Funding: Structure and sources; Danish mortgage system is fully pass-through Loan portfolio and long-term funding, Q3 15 (DKK bn) Funding sources (%) Q2 2015 Q3 2015 1,871 110 Senior debt 48 1,590 Bank loans 529 824 Deposits Bank mortgages
Slide 21: Funding and liquidity: Funding plan almost completed
Danske FinancialBank debtfor results investor Q1 2013update Funding and liquidity: Funding plan almost completed; LCR compliant with new rules Changes in funding , 2015 (DKK bn and bp1) Long-term funding ex RD (DKK bn) Cov. bonds Senior Tier 2 Tier 1 Funding plan 107bp Completed 45bp 51bp 116bp 95 7
Slide 22: Danske Bank's credit ratings
Danske FinancialBank debtfor results investor Q1 2013update Danske Bank’s credit ratings Danske Bank’s long-term issuer rating and outlook Rating agency issues Moody’s S&P Fitch General comments Stable Stable Stable Standard & Poor’s change outlook to stable On July 13 2015 S&P’s reviewed the banks
Slide 23: Agenda
Danske FinancialBank debtfor results investor Q1 2013update Agenda Key messages 3 Overview 5 Financial results 10 Capital, liquidity & funding 19 Appendix 24 23
Slide 24: Personal Banking: Positive momentum in costs and impairments
Danske FinancialBank debtfor results investor Q1 2013update Personal Banking: Positive momentum in costs and impairments in Q3; good trend in Norway continues Income statement & key figures (DKK m) Lending volume by country,* Q2 2014 = Index 100 Q3 2015 Q2 2015 Index Denmark Sweden Northern Ireland
Slide 25: PB Norway: Strong loan growth drives NII higher
Danske FinancialBank debtfor results investor Q1 2013update PB Norway: Strong loan growth drives NII higher despite market pressure; new customers have sound credit quality Lending volume in NOK (Q2 2014 = Index 100) Comments 132 • At PB Norway in Q3, NII rose in NOK and expenses fell slightly 124 •
Slide 26: Business Banking: Income down from high Q2 activity
Danske FinancialBank debtfor results investor Q1 2013update Business Banking: Income down from high Q2 activity; good customer activity in Sweden and Norway Income statement & key figures (DKK m) Lending volume by country,* Q2 2014 = Index 100 Q3 2015 Q2 2015 Index Denmark Sweden Northern Ireland Ne
Slide 27: Corporates & Institutions: Income down due to lower activity
Danske FinancialBank debtfor results investor Q1 2013update Corporates & Institutions: Income down due to lower activity in Q3, costs down 7% Income statement & key figures (DKK m) Key points, Q3 15 vs Q2 15 Q3 2015 Q2 2015 Index Net interest income 667 703 95 • Trading income down in Q3 due to lowe
Slide 28: Danske Capital: AuM down in Q3
Danske FinancialBank debtfor results investor Q1 2013update Danske Capital: AuM down in Q3 due to asset transfer to Danica and negative market impact; continued net inflow Income statement (DKK m) Key points, Q3 15 vs Q2 15 Q3 2015 Q2 2015 Index • Assets under Management down 5% driven by a DKK Net
Slide 29: Danica Pension: Full risk allowance for three of four groups
Danske FinancialBank debtfor results investor Q1 2013update Danica Pension: Full risk allowance for three of four interest rate groups; investment return low in volatile markets Income statement (DKK m) Investment allocation for Danica Traditionel, end-Q3 15 (%) Q3 2015 Q2 2015 Index Equities Credit
Slide 30: Non-core: Commercial portfolio is almost run down
Danske FinancialBank debtfor results investor Q1 2013update Non-core: Commercial portfolio is almost run down; profit before tax expected around zero for full year 2015 Key points Non-core loan portfolio, Q3 2015 (DKK bn) • Profit before tax rose to DKK 33 m in Q1-Q3 2015 Allowance account Performin
Slide 31: Net interest income: Effect from extremely low interest rates
Danske FinancialBank debtfor results investor Q1 2013update Net interest income: Effect from extremely low interest rates and margin pressure Changes in net interest income (DKK m) Changes in net interest income (DKK m) 9M 2014 16,571 Q2 15 5,516 Lending volume 4 Lending volume 411 Lending margin 11
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 Trading income by business unit (DKK m) Key points Other incl. Treasury C&I Business Personal • H1 2015 saw extraordinarily high 2,715 customer activity • Trading income down in Q
Slide 33: Expenses: Positive trend in expenses continues
Danske FinancialBank debtfor results investor Q1 2013update Expenses: Positive trend in expenses continues Total expenses ex goodwill charge (DKK m) Change in expenses ex goodwill (DKK m) Consultants etc. Bonuses Severance payments Other costs Deposit guarantee scheme/bank packages Q2 2015 5,313 6,0
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
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 3 110 2 1 100 0 90 -1 2006 2008 2010 2012 2014 2006 2008 2010 2012 2014 -2 Interest rates (len
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
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-Q3 15 Stock of retail loans, Realkredit Danmark, end-Q3 15 (%) • Approx. 377,000 loans (residential and commercial) Variable rate
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* (%) • Growing interest in long-term variable rate loans in Q3 Interest-only Amortising owing to steeper yield curv
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 (2.8 % of Group exposure) Shipping and oil related exposure (2.0 % of Group exposure) • Market conditions stayed weak. Both milk and pig prices declined • T
Slide 40: 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: [email protected] E
Slide 41: 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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