Dnb Obx · OSL:OBXD
Dnb Obx — DNB Group — Debt Investor Presentation (May 2014)
35 slides from Dnb Obx's debt investor presentation, May 16, 2014
Slide 1: Bond Investor presentation
Bond Investor presentation DNB GROUP Rune Bjerke (CEO) 16 May 2014
Slide 2: Setting direction towards 2016
Setting direction towards 2016 Target Requirement Return on equity CET1 capital ratio above 12 13.5-14.0 per cent per cent 2
Slide 3: Our portfolio is well diversified
Our portfolio is well diversified 3
Slide 4: DNB delivers healthy profit
DNB delivers healthy profit Pre-tax operating profit before impairment (NOK bn) 4
Slide 5: Results from first quarter of 2014 confirm the positive trend
Results from first quarter of 2014 confirm the positive trend Pre-tax operating profit before impairment in NOK billion 7.4 (5.1) Cost/income ratio in per cent 41.3 (52.0) Return on equity in per cent 15.5 (10.0) Earnings per share 3.39 (1.96) Common equity Tier 1 capital ratio in per cent (transiti
Slide 6: Growth in all customer segments
Growth in all customer segments 6 08.05.2014
Slide 7: Annualised 1Q growth of 2.5% for lending and 9% for deposits
Annualised 1Q growth of 2.5% for lending and 9% for deposits NOK billion Lending Deposits 1 341 1 344 1 306 1 315 1 324 1 298 900 868 881 816 874 854 845 811 797 31 30 30 31 31 30 30 31 31 31 30 30 31 31 30 30 31 31 March June Sept. Dec. March June Sept. Dec. March March June Sept. Dec. March June S
Slide 8: Combined spread down due to higher volume growth in deposits than lending
Combined spread down due to higher volume growth in deposits than lending Per cent 2.42 2.42 2.42 2.32 Lending spread 2.18 2.21 1.98 2.01 1.83 1.28 1.29 1.30 1.25 1.16 1.18 1.18 1.22 1.20 Combined spread - weighted average 0.04 (0.11) (0.13) (0.27) (0.24) (0.29) (0.30) (0.30) (0.29) Deposit spread 1
Slide 9: Upward trend in commissions & fees
Upward trend in commissions & fees – especially the “capital light” products/services are growing NOK million +12% growth 2 185 1,981 1,935 1 956 1,757 1,806 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 Net commissions and fees Corporate finan ce, credit and securities broking etc. Asset management and custodial s
Slide 10: The cost-income-ratio is now below 45 per cent
The cost-income-ratio is now below 45 per cent 49,1 48,3 47,6 47,1 45,7 41,3 2009 2010 2011 2012 2013 1Q 2014 Underlying nominal costs are expected to be stable in the period up to 2016, and the Group’s cost/income ratio will remain highly competitive 10
Slide 11: Positive development in asset quality
Positive development in asset quality – decline in net non-performing and net doubtful loans and guarantees 1) Per cent 1.71 1.71 1.70 1.55 1.50 1.50 1.48 1.38 1.19 1.37 1.39 1.10 1.16 1.10 1.10 1.05 0.88 0.91 23.3 22.9 NOK billion 20.7 19.5 19.7 19.9 19.1 18.4 16.4 31 Dec. 31 Dec. 31 Dec. 31 Dec. 3
Slide 12: Positive development in impairment levels driven by shipping recoveries
Positive development in impairment levels driven by shipping recoveries and strong underlying development NOK millions. Credit quality will improve further, and losses are expected to be well below normalised levels 12
Slide 13: Positive development in impairment levels driven by shipping recoveries
Positive development in impairment levels driven by shipping recoveries and strong underlying development NOK millions. Per cent Credit quality will improve further, and losses are expected to be well below normalised levels 13
Slide 14: On track to reach all required capital levels
On track to reach all required capital levels - Comparison with Nordic Peers Per cent 19.5 18.3 1) 17.5 15.7 14.6 14.2 14.0 11.9 10.8 11.3 10.3 10.5 9.7 8.9 7.6 6.4 6.7 6.8 5.5 5.2 4.3 3.8 3.7 3.8 3.7 DNB SEB Swedbank Handelsbanken Nordea Danske bank Co mmon equi ty tie r1 /total assets ("le ve rage
Slide 15: DNB has significantly improved the long term funding structure
DNB has Significantly Improved The Long Term Funding Structure Since the Financial Turmoil Started in 2007 Share of stable long-term funding* Average life of long term funding (Senior debt and covered bonds) 135% 5 128% 4,4 125% 4 115% 105% 3 95% 2,4 2 85% 75% 1 2003 2005 2007 2009 2011 2013 2008 20
Slide 16: Strong Growth in Deposits
Strong Growth in Deposits Percent 16
Slide 17: Issuance of Long Term Debt
Issuance of Long Term Debt - Significantly reduced needs compared with 2011 / 2012 2014 NOK mrd Løpetid OMF / Covered Bonds 14,5 7,2 Senior 14,6 5,4 Sum 29,1 6,3 Ansvarlig lån 0,0 0,0 Totalt 29,1 6,3 2013 NOK mrd Løpetid OMF / Covered Bonds 59,7 6,3 Senior 12,6 5,6 Sum 72,3 6,2 Ansvarlig lån 7,5 5,0
Slide 18: On track towards 2016 targets
On track towards 2016 targets Return on equity Target 13.6 % 13.2 % 15.5 % 10.6 % 11.4 % 11.7 % Return on equity > 12 per cent 2009 2010 2011 2012 2013 1Q 2014 CET 1 capital ratio (transition rules) Requirement 10.7 % 11.8 % 11.9 % 8.5 % 9.2 % 9.4 % CET1 capital ratio 13.5-14.0 per cent 2009 2010 20
Slide 19: DNB's Large Corporates & Institutions
Investor presentation DNB’s Large Corporates & Institutions Harald Serck-Hanssen (LCI) 16 May 2014
Slide 20: Large corporates and international (LCI)
Large corporates and international (LCI) Business Management and Products Industries Geographies Energy Nordic International SOL Corporates Corporates Americas Central Europe Middle East & Africa Baltic Division Asia Northern Europe 20
Slide 21: LCI - Creating more with less
LCI - Creating more with less Employees Exposure at Default Profit Full Time Equivalents* NOK Billion* NOK Million* 5 000 900 2 400 4 500 800 2 000 4 000 700 1 600 3 500 600 1 200 3 000 500 800 1Q12 1Q13 1Q14 1Q12 1Q13 1Q14 1Q12 1Q13 1Q14 21
Slide 22: LCI - With steady increase in pre-tax operating profit
LCI - With steady increase in pre-tax operating profit 2 789 2 855 2 742 2 739 2 610 2 629 2 437 2 474 2 028 1 844 14,5 % 13,7 % 12,7 % BNOK 10,0 % 10,4 % 1Q13 2Q13 3Q13 4Q13 1Q14 Pre-tax operating profit before impairment Pre-tax operating profit REKA 22
Slide 23: LCI - Increasing lending margins
LCI - Increasing lending margins 454 461 459 441 445 379 354 361 331 338 2,20 % BNOK 2,13 % 2,14 % 2,15 % 2,16 % -0,17 % -0,19 % -0,19 % -0,17 % -0,17 % 1Q13 2Q13 3Q13 4Q13 1Q14 Lending Deposits Margin Lending Margin Deposits Lending = performing loans to customers. Deposits = deposits from customer
Slide 24: LCI - Stable portfolio quality with reduced concentration of risk
LCI - Stable portfolio quality with reduced concentration of risk Distribution by Probability of Default Exposure at Default, 30 largest corporates Large Corporates and International, NOK billion Per cent of large corporates (EAD) 450 409 400 376 369 350 300 271 239 245 250 200 150 100 32 40 50 28 1
Slide 25: LCI - Reducing net non-performing and net doubtful commitments
LCI - Reducing net non-performing and net doubtful commitments 25
Slide 26: LCI - Industry sector strategies
LCI - Industry sector strategies Global scope Selective international scope Norwegian/Nordic/ Shipping, offshore North European scope Energy Seafood & logistics Healthcare Telecoms Packaging Media Technology Manufacturing Real estate and Retail industries Public sector Service Finance industries con
Slide 27: DNB Group with a diversified corporate banking portfolio
DNB Group with a diversified corporate banking portfolio Commercial real estate Private individuals 11.8% (11.1%) Shipping 6.4% (6.4%) 6.3% (7.0%) Logistics 1.0% (1.1%) Oil, gas and offshore Residential mortgages 6.2% (6.5%) 44.6% (44.6%) Energy 3.3% (3.0%) Other corporate customers 5.2% (6.1%) Publ
Slide 28: Shipping and commercial real estate portfolio is reduced
Shipping and commercial real estate portfolio is reduced Shipping and commercial real estate portfolio Execution on 2012 guiding Per cent of group EAD* • Rebalancing targets achieved 20,0 • Commercial real estate exposure reduced. 19,5 • Exit from Sweden, Finland and Denmark on track 19,0 • Shipping
Slide 29: DNB's maritime business is profitable
DNB’s maritime business is profitable - shipping losses on the way down SOL’s Pre-tax operating profit Shipping, Offshore and Logistics, NOK million 29 Maritime business = The LCI division Shipping, Offshore and Logistics (SOL)
Slide 30: LCI - The shipping, offshore and logistic portfolio is diversified
LCI - The shipping, Offshore and Logistic (SOL) portfolio is diversified Exposure at default according to sector1) Other shipping; 3,0% RoRo/PCC; 3,3% Chemical and product tankers; 7,4% Other non-shipping; 7,3% Container; 12,8% Crude oil tankers; 9,8% Offshore; 23,9% Cruise; 4,1% Logistics; 4,3% Dry
Slide 31: And from a macro perspective, things are looking better
And from a macro perspective, things are looking better 31
Slide 32: LCI - Robust Energy Portfolio
LCI - Robust Energy Portfolio Well diversified portfolio Capital efficient with high returns Energy EAD split per 1Q14, NOK billions • Total DNB Group exposure (EAD) to the energy sector per 1Q14 is NOK 131,9 billion • Our portfolio is well diversified, has high credit quality and is profitable Mids
Slide 33: LCI - The Baltics and Russia on good track
LCI - The Baltics and Russia on good track 33
Slide 34: Large corporates and international (LCI) going forward
Large corporates and international (LCI) going forward • Increase customer profitability – prioritising the right customers • Increase sale of capital efficient products • Leverage on industry expertise 34
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