Creation of the Norwegian Financial Champion. Geir Bergvoll, Executive Vice President and Head of Capital Markets and Investor Relations DnB NOR ASA

Transcription

1 Creation of the Norwegian Financial Champion Geir Bergvoll, Executive Vice President and Head of Capital Markets and Investor Relations DnB NOR ASA

2 Agenda Banking background in Norway Rationale behind DnB/Gjensidige NOR merger DnB NOR: The Norwegian Financial Champion 2

3 Banking background in Norway Late 1980ies and early 1990ies Deregulation of financial markets Banking crisis Fragmented banking structure and overcapacity 2004: 30% market share controlled by foreigners Banking (except savings banks) and insurance market fully consolidated 3

4 Mergers and acquisitions 1990: Merger between DnC and Bergen Bank to form DnB 1993: Acquisition of Real Kreditt 1996: Acquisition of Vital Forsikring 1999: Merger with Postbanken 2002: Acquisition of Skandia Asset Management 2003: Acquisition of Nordlandsbanken 1990: Merger of five regional savings banks to form Sparebanken NOR (UBN) 1991: Listing of PCC on Oslo Børs 1993: UBN aquired Sparebankkreditt 1999: Gjensidige and UBN created the Gjensidige NOR Group 2002: Demutualisation of Gjensidige NOR's banking and life insurance operations 2003: Merger of DnB and Gjensidige NOR to form DnB NOR 4

5 Merger rationale Increased demand for new products and distribution techniques Retail market commoditised Increased requirements for competence and scale in corporate banking Foreign competition Value creation through cost synergies 5

6 Complementary strengths Leading bank for corporate customers Leading capital markets player Strong nationwide presence Strong market position in group pensions Significant competence in asset management with Nordic orientation Leading position within retail banking Leading position in SME segment Strong presence in South Eastern Norway Strong market position in individual life insurance Customer oriented distribution systems 6

7 DnB NOR: Well-diversified business 2002 reported operating profit before loan losses NOK 4,059m (1) NOK 2,782m (2) NOK 6,841m (3) 2.3% 18.8% 13.8% 18.8% Markets 47.9% Corporate Ban king 60.5% 88.6% Retail Banking 41.0% Asset Management 20.4% 0.7% (0.4%) (2.4%) (7.2%) (0.2%) (2.5%) Life & Pensions (4) 7 DnB (1) Gjensidige NOR (2) DnB NOR (1) Excludes Nordlandsbanken. Breakdown excludes Other of NOK (979)m (2) Breakdown excludes Other and Eliminations of NOK 596m (3) Sum of individual reported figures (SME included in Corporate for DnB and Retail for Gjensidige NOR) (4) Net profits

8 DnB NOR: Strong retail and diversified corporate portfolio Transportation and communication 2.2 % (2.6 %) Trade Building and construction Oil and gas Services and management Manufacturing Real estate Power and water supply 1.0 % (1.2 %) 1.0 % (1.7 %) 0.7 % (0.7 %) 4.0 % (4.5 %) 5.8 % (6.5 %) 3.9 % (4.7 %) 14.9 % (15.6 %) Fishing 1.8 % (1.9 %) Other sectors 3.1 % (3.9 %) Retail customers 55.4 % (51.2 %) International shipping 6.0 % (5.4 %) Figures as at 31 March 2004 (percentage as at 31 March 2003 in parentheses) excluding Elcon Finans Pro forma accounting figures prior to 31 December

9 DnB NOR: Norwegian market leader DnB Gjensidige NOR DnB NOR Banking Lending No. 1 No. 3 No. 1 Deposits No. 1 No. 3 No. 1 Life & Pensions (1) No. 3 No. 4 No. 1 Mutual Funds (2) No. 1 No. 2 No. 1 Discretionary Asset No. 2 No. 3 No. 1 Management (2) Capital Markets (3) No. 1 No. 3 No. 1 9 Source: FNH, Sparebankforeningen, VFF, OSE, company data (1) By policyholders funds (2) By assets under management (3) Equity, FX and bond primary and secondary trading

10 Value creation through significant synergies Calculation Base Synergies as % of Calculation Base Cost Base - NOK 13bn GNO 37 % Cost Reductions - NOK 1.8bn Synergies 14% DNB 63 % Revenue Base - NOK 20bn GNO 38 % Revenue Losses - NOK 0.4bn Synergies 2% DNB 62 % Employees (FTE) - 11,600 GNO 36 % Staff Reductions - 1,630 Synergies 14% DNB 64 % 10

11 Synergy implementation plan Pre-tax net synergies (NOK m) 90% 60% 30% , Synergy implementation to be realised over 3 years Full run-rate net synergies achieved end full P&L effect (NOK 1,405 million pre-tax) in

12 Value creation for shareholders of Gjensidige NOR and DnB NOK Billion Cash considerati on and dividend DnB NOR Gjensidige NOR DnB Pre-merger Post-announcement Today 12 Source: Reuters NOK million Share prices as of 11 March and 4 April 2003, and as of 14 May 2004

13 Pre-eminent distribution platform Significant branch overlap in eastern part of Norway Bank branches Life insurance Associated agents Postbanken outlets Retail Internet banks DnB Gjensidige NOR Cooperation and distribution agreements: Gjensidige NOR Forsikring offices Cooperating savings banks Post offices In-store postal outlets Rural postmen

14 Enhanced Nordic position Market capitalisation in euro billion Nordea Danske Handelsbanken Swedbank S E B DnB NOR Sampo Skandia Jyske Storebrand 14 Source: Reuters in EUR billion Share prices as of 17 May 2004

15 Strategy for DnB NOR Be the best financial partner for Norwegian retail and corporate customers Be the preferred partner in Norway for international customers Secure a leading position in all strategic product areas Establish a base for growth in a Nordic and international perspective through a strong customer base and attractive products in the home market 15

16 A local presence and a full range of services are our strengths DnB NOR will be customers' best partner and will meet their needs for financial solutions throughout Norway and in selected areas in the international arena Selective international focus Customer relationships with individuals and businesses in Norway are the foundation for profitable growth. Norway's local bank Gateway to Norway Offers a broad range of products Producer of strategic products 16

17 Norway's leading financial services group Around 38 per cent of lending to the retail market, with more than 2.2 million retail customers Around 37 per cent of lending to small and medium-sized companies, with around corporate clients Principal bankers for around 60 per cent of Norway's 300 largest companies Norway's largest life insurance company Norway's largest capital markets operation Norway's largest asset management operation full-time positions 17

18 .and the most international Partner for Norwegian companies abroad and for large international companies in Norway International network of 12 branches and representative offices Handles payment flows for more than 50 per cent of Norway's foreign trade Norway's leading foreign exchange bank One of the world's foremost shipping banks A major international player in the energy sector 18

19 Financial targets for DnB NOR Return on equity: Minimum 14 per cent before goodwill amortisation Core capital ratio: 7 per cent Payout ratio: Around 50 per cent Credit rating: Upheld at Aa level 19

20 Key figures Full year 1Q04 1Q Net other operating income (%) 1) 2) Co st/income ratio excluding goodwill amorti sation (%) Return on equity excluding goodwill amorti sation (%) Return on equity ( %) Earnings per share excluding goodwill amortisation (%) Earnings per share (NOK) ) Excluding gains on the sale of Elcon Finans in the first quarter of ) As a pecentage of tot al inc o me. Pro forma key figures for

21 DnB NOR - diversity and local presence are our strengths