Danske Bank A/S · OMXCOP:DANSKE
Danske Bank A/S — Investor Day (February 2016)
46 slides from Danske Bank A/S's investor day presentation, Feb 9, 2016
Slide 1: Danske Bank Investor Day – New York
Danske Bank Investor Day – New York February 2016
Slide 2: State of the business
State of the business Thomas F. Borgen Chief Executive Officer February 2016
Slide 3: The essence of Danske Bank is our starting point
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 The essence of Danske Bank is our starting point 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 competenc
Slide 4: We see five drivers of change
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 We see five drivers of change Macro-economic Changing customer New competitive Digitalisation Continued increase conditions behaviours and forces in regulation expectations 4
Slide 5: Our response: Strategic Group themes
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Our response: Strategic Group themes Customer Digital experience Ensure value creation Capabilities understanding Customer experience Digital processes Expand in the Nordics Leadership ambitions Digital distribution Explo
Slide 6: Business reviews: to ensure strategic fit and sufficient scale
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Business reviews: to ensure strategic fit and sufficient scale Nordic Universal Bank Baltic personal exposure New Wealth PB Sweden and PB considered non-core Management Norway business review unit from April 2016 Q3 2013
Slide 7: We have a strong platform in strongly rated countries
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 We have a strong platform in strongly rated countries Sweden GDP growth (2016E) 3.0% Unemployment (2016E) 7.2% Lending growth (y-o-y) 6.1%* Interest rate (current) -0.35% Finland GDP growth (2016E) 0.6% Unemployment (2016
Slide 8: Significant improvement in credit quality driven by recovery in Denmark and de-risking
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Significant improvement in credit quality driven by recovery in Denmark and our ongoing de-risking House prices, Denmark (indexed) Loan loss ratio (bps) Non-performing loans (DKK bn) -63bps -40 bn 120 63 70 +14% 110 36 36
Slide 9: Limited direct oil and agriculture exposure
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Limited direct oil and agriculture exposure - Collective impairments of above DKK 1bn serve as a cushion Exposure distribution Oil related exposure • Net exposure of DKK 23 bn Oil related Agriculture • Strong credit quali
Slide 10: We have been on an important journey since 2012
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 We have been on an important journey since 2012 2012 2013 2014 2015 ROE of 3.6% ROE of 5.0% ROE of 8.6%* ROE of 11.6%* No dividend 28% dividend 43% dividend 46% dividend payout payout* payout* Share issue DKK 5 bn DKK 9 b
Slide 11: Delivering above 12.5% ROE in 2018 at the latest
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Delivering above 12.5% ROE in 2018 at the latest is an important part of our strategy ROE 2015-18E, after tax (%) ROE 2015* 11.6% Adjustments** 0.2% Costs 0.5-1% Funding & ratings 0.5% Volume effect 0.5-1% Income initiati
Slide 12: Disclaimer
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 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
Slide 13: Financial results 2015 - Another year of solid progress
Financial results 2015 - Another year of solid progress Henrik Ramlau-Hansen, Chief Financial Officer February 2016
Slide 14: Executive summary 2015
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Executive summary 2015 Net profit of DKK 13.1bn Net profit & ROE Net profit before goodwill impairment charges of DKK 17.7bn, corresponding to ROE of 11.6% Income Total income of DKK 44.2 bn – unchanged vs 2014 Expenses E
Slide 15: Net profit of DKK 17.7 bn in 2015
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Net profit of DKK 17.7 bn in 2015* Income statement (DKK millions) 2015 2014 2013 Index 15/13 Net interest income 21,476 22,313 22,077 97 Net fee income 12,122 11,154 9,468 128 Net trading income 6,933 6,693 5,799 120 Oth
Slide 16: Profit improvement in all three banking business units
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Profit improvement in all three banking Business Business Units results (DKK m) 2014 2015 Personal Banking Business Banking Corporates & Institutions +6.4pp +11% +7.0pp +32% +3.9pp +30% 20.8 5,137 20.5 7,592 14.8 5,396 4,
Slide 17: Danske Capital and Danica Pension in new wealth management unit
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Danske Capital and Danica Pension will be part of the new wealth management business unit as of Q1 2016 Business Units results (DKK m) 2014 2015 Danske Capital Danica Pension +7.9pp +17% -5.0pp -24% 62.7 20.8 2,496 1,649
Slide 18: Significant improvements in credit quality across the book
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Significant improvements in credit quality across the book Loan loss ratio (bp) Group Business units Personal Banking Business Banking C&I -27 -18 -32 -8 27 22 27 9 20 17 7 17 4 1 0 2013 2014 2015 2013 2014 2015 -5 2013 2
Slide 19: Positive development following a strong cost focus
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Positive development following a strong cost focus Cost development and guidance (DKK bn) Deposit guarantee scheme etc. Amortisation of customer relations* -8% 23.8 0,9 0,4 22.4 0,7 21.8 <21.8 0,4 0,9 22.4 21.3 0,4 20.5 2
Slide 20: Several rating upgrades since 2013
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Several rating upgrades since 2013 Danske Bank’s long-term rating history Rating distribution for the top 100 banks* S&P Moody’s Fitch S&P’s rating of top 100 banks AAA/Aaa AAA/Aaa Danske Bank (46th largest bank**) AA+/Aa
Slide 21: Strong capital build up despite capital distributions
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Strong capital build up despite capital distributions - CET1 improving to 16.1% and 14.7% after share buyback etc. CET1 capital ratios and targets (%) +1.4pp 16.1 15.8% 15.1 14.7 14.7 CET1 target At least13% Expected re
Slide 22: Significant increase in payouts compared to peers
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Significant increase in payouts compared to peers based on increased dividends and share buy-backs Total payout (%) Danske** Peer I Peer 2 Peer 3 Peer 4 Peer 5 100 80 60 40 20 0 2011 2012 2013 2014 2015E* * Based on conse
Slide 23: Outlook for full-year 2016
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Outlook for full-year 2016 Net profit Expected in line with 2015 level* * Before goodwill impairment charge. Note: This guidance is subject to uncertainty and depends on economic conditions, including developments in mone
Slide 24: Q&A session
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Q&A session www.danskebank.com/ir 24
Slide 25: Disclaimer
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 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
Slide 26: How to capitalize on digital disruption?
How to capitalize on digital disruption? Tonny Thierry Andersen Head of Personal Banking; Member of the Executive Board February 9th 2016, New York
Slide 27: Key take aways
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Key take aways Digital disruption is changing the World New business models are emerging Danske Bank has a track record of being first mover You don’t need a digital strategy, but a business strategy for the digit
Slide 28: FinTech investment is driving a change in our future landscape
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 FinTech investment is driving a change in our future landscape Global investment, bn$ 33 12 4 2013 2014 2015E Source: http://www.bankingexchange.com/news-feed/item/5424-fintech-demand-exploding-worldwide 28
Slide 29: Customers' behaviour is changing as they go mobile
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Customers’ behaviour is changing as they go mobile 24/7 Average channel usage per customer per month, Danske Bank DK 6,1 3,7 3,5 1,6 1,4 1,0 0,9 0,3 0,3 0,3 0,5 0,1 2011 2015 29
Slide 30: MobilePay is an exponential example
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 MobilePay is an exponential example Active users; ’000 3,000 MobilePay 2,400 1,800 Onlinebank 1,200 600 Mobilbank 0 2006 2015 30
Slide 31: The Nordics are uniquely positioned for riding the digital wave
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 The Nordics are uniquely positioned for riding the digital wave Mobile broadband rankings Highest ratio of mobile connections to population, 3G & 4G # Country % Total Source: GSMA Intelligence Inc., UN, US 31
Slide 32: Danske Bank has a strong track record of being first mover
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Danske Bank has a strong historical track record of being (technological) first mover 1881 1973 2010 2011 2013 2015 First to have First in DK to First in DK to First in DK to First in DK to First in DK to safe deposit lau
Slide 33: Danske Bank's transformation reflects changing customer behaviour
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Danske Bank’s transformation reflects changing customer behaviour From start 2012 To end 2015 612 300 branches - 51% branches 8,778 6,491 FTEs -26% FTEs 0 2.8m Users + 2.8m Users 300,000 960,000 Users X3 Users Source: Dan
Slide 34: You don't need a digital strategy, you need a business strategy
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 “You don’t need a digital strategy to succeed in this World, you need a business strategy for the digital age” 34
Slide 35: Digital transformation key focus points
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Digital transformation key focus points 1. Start with the customer experience 2. Pursue an omni-channel delivery model and think ecosystem 3. Own the customer interface 4. E2E integration 35
Slide 36: Our six Customer WOWs
Our six Customer WOWs 1. Product Life Event 2. Mortgage E2E process 800 min 80 min 3. Instant credit decisions 4. New customer 7 days 7 min 5. Customer time 40% 80% Our 6. Mobile first BIG
Slide 37: Everything that can be digitized, will be digitized, but...
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Everything that can be digitized, will be digitized, but... 37
Slide 38: Disclaimer
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 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
Slide 39: Benefits from better ratings
Benefits from better ratings Christoffer Møllenbach Head of Treasury 9 February 2016
Slide 40: Funding: Structure and sources; Danish mortgage system is pass-through
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Funding: Structure and sources; Danish mortgage system is pass-through Loan portfolio and long-term funding, Q4 15 (DKK bn) RD funding topics 1,863 112 Senior debt 1,609 • Covered Bond issuer since Bank loans 541 817 Depo
Slide 41: Significant part of funding from deposits; limited short term funding
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Significant part of funding (excl. RD) from deposits; exposure to short term funding very limited Funding sources excl. RD (%) Largest funding programmes (max size) Q3 2015 Q4 2015 EUR 35 bn 56 EMTN Programme EUR 30 bn 14
Slide 42: Senior funding: Significant effect from lower spreads
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Senior funding: Significant effect from lower spreads; expect further benefits in 2016 & 2017 Changes in funding spreads*, 2014-16 Redemptions New funding -70% -63% ? 132 bp ? 113 bp 94 bp 86 bp 39 bp 42 bp 2014 2015 2016
Slide 43: EUR Senior performance: a strong recovery
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 EUR Senior performance: a strong recovery 5 year EUR senior spreads Recovery highlights Danske Bank Nordic peers* Underperformance in the beginning of the financial Sovereign debt crisis in the EU 350 crisis: 300 Impa
Slide 44: Danske Bank's successful return to the 144A market
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Danske Bank’s successful return to the 144 A market Performance of recent rule 144A/3(a)(2) Nordic issues Key points SWEDA 2.2 03/04/20 SEB 2 5/8 11/17/20 Danske Bank returned to the DANBNK 2 3/4 09/17/20 SHBASS 2.4 10/
Slide 45: Regulatory topics: Danske Bank is a domestic SIFI (D-SIFI)
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 Regulatory topics: Danske Bank is a domestic SIFI (D-SIFI) Main topics globally and in Europe MREL and BRRD: Insolvency LCR: EBA LCR implemented as of 1 hierarchy adjusted in line with October 2015 article 108 of BRRD. MR
Slide 46: Disclaimer
Danske FinancialBank Investor results Day for Q1 - New York February 2016 2013 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