29 October 2015
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 buy-back programme in 2015 2
Financial targets: Target for ROE of above12.5% in 2018 Target Status at 30 September 2015 Comments 2015 ambition Return on equity Above 12.5%* 11.5% Initiatives progressing 9.5% as planned Ratings A ratings S&P/Moody s/fitch A/A2/A Stable/Stable/Stable Target met after upgrade from Moody's in June and stable outlook from S&P in July S&P rating outlook improved to stable CET1 ratio Minimum 13% 15.7% Met since end-2012 Around 14% Total capital ratio Minimum 17% 20.6% Met since end-2012 Well above 17% Dividend payments Payout of 40-50% of net profit For 2014: 43% of net profit before goodwill impairments Met with payout for 2014 Payout of 40-50% of net profit * 2018 at the latest 3
Well on track to meet our financial ambitions RoE after tax; (%) Total Group expenses ex goodwill charge (DKK bn) Group loan loss ratio, (bps) Capital ratios, under Basel III/CRR (%) T1/T2 Common Equity Tier 1 <22 21.4 19.3 20.6 11.5 23.8 22.6 27 8.5* 20 15.1 15.7 5.0 16 14.7 1 2013 2014 9M 2015 2013 2014 2015E 2013 2014 9M 2015 2013 2014 9M 2015 * Before goodwill impairments of DKK 9.1 billion 4
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 Customer promise We help customers be financially confident and achieve their ambitions by making daily banking and important financial decisions easy Core values Expertise, Integrity, Value creation, Agility, Collaboration 5
Overview: Danske Bank has a strong Nordic franchise Facts 3.5 million customers 305 branches* 15 countries 18,984 full-time employees Business units Personal Banking Business Banking Corporates & Institutions Danica Pension Danske Capital For divestment Non-core (Ireland & Conduits) Personal banking activities in the Baltics Northern Ireland Danske Bank market share** Norway 5% Denmark 20% 26% Sweden 5% Finland 10% Estonia 7% Latvia 3% Lithuania 6% * Excluding agricultural centres in Denmark. **Market share by lending 6
Share performance vs. European bank sector Share price development (index) Danske Bank MSCI Banks 140 1 year development 120 100 C20 Cap* Key figures, Q3 2015 Earnings per share: DKK 3.6 Book Value per share: DKK 153.1 80 Q4 14 Q1 15 Q215 Q3 15 Market cap: DKK 197,609 m 200 150 3 year development Issued shares: 1,008.6 m 100 50 Q4 12 Q3 13 Q3 14 Q3 15 5 year development 150 100 50 Q410 Q3 12 Q3 13 Q3 15 *C20 Cap data available from 28 November 2011. 7
Shareholder base at end Q3 2015 Shareholder distribution (%) Rest of Europe 11% Other 0% Cevian Capital 8% UK 16% 22% AP Møller Mærsk USA/Canada 18% 25% Rest of Denmark 8
Nordic footprint across sectors Total lending*, Q3 2015 (%) Credit exposure by industry, Q3 2015 (%) Denmark 56 Personal customers Commercial property 12 35 Public Institutions 9 Finland 9 Non-profit & Associations Others 4 6 Sweden 11 Consumer discretionary Banks 4 4 Industrial Services etc 4 Norway 9 Other financials Investment funds 3 3 N. Ireland 3 Agriculture Consumer staples 3 2 Insurance 2 Baltics & Other 1 Other commercials 2 Materials 2 C&I 11 Total lending of DKK 1,623 bn *Lending by country includes Personal Banking and Business Banking Shipping Energy & Utilities Constr. & building products 2 2 2 Total credit exposure of DKK 2,385 bn 9
Result highlights Income statement (DKK millions) 9M 2015 2014* 2013 2012* 2011 Net interest income 16,169 22,313 22,077 22,778 23,537 Net fee income 8,963 11,154 9,468 8,866 8,298 Net trading income 5,273 6,693 5,799 10,562 7,325 Other income 1,162 1,344 1,308 1,285 3,648 Net income from insurance business 1,445 2,496 1,088 2,171 569 Total income 33,012 44,000 39,740 45,662 43,377 Expenses 15,953 22,641 23,794 24,642 25,987 Goodwill impairment charges - 9,099 - - - Profit before loan impairment charges 17,059 12,260 15,947 21,020 17,390 Loan impairment charges 196 2,788 4,111 7,680 13,185 Profit before tax, core 16,863 9,472 11,836 13,340 Profit before tax, Non-core 33-1,503-1,777-4,801 Profit before tax 16,896 7,969 10,059 8,539 4,205 Tax 3,808 4,020 2,944 3,814 2,482 Net profit for the year 13,088 3,948 7,115 4,725 1,723 Net profit for the year before goodwill impairments 13,088 13,047 7,115 4,725 1,884 *Restated 10
Danske Bank s credit ratings Danske Bank s long-term issuer rating and outlook Moody s Stable S&P Stable Fitch Stable Aaa AAA AAA Aa1 AA+ AA+ Aa2 AA AA Aa3 AA- AA- A1 A+ A+ A2 A A A3 A- A- Baa1 BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB- Rating agency issues General comments Standard & Poor s change outlook to stable On July 13 2015 S&P s reviewed the banks outlook from negative to stable. The changed outlook reflects the recent strengthening of Danske Bank s earnings and the introduced ALAC concept. With the stable outlook from S&P the bank meet its strategic ambitions for 2015. Rating upgrade from Moody s On 17 June 2015, Moody s upgraded Danske Bank s long-term rating to A2 from A3 and Danske Bank s short-term rating to P-1 from P-2. The upgrade by Moody s reflects the introduction of Moody s Loss Given Failure (LGF) analysis part of Moody s revised bank rating methodology. The upgrade has put Moody s rating on Danske Bank in line with the rating from the other rating agencies. Expects no change in our rating from Fitch in 2015 On September 8, 2015 Fitch affirmed Danske Banks A long-term debt rating reflecting Fitch s view of the bank s strong standalone strength, stabilizing asset quality and solid capitalization. Ca D D 11
Personal Banking Personal Banking Income distribution, Q3 2015 (%) Personal Banking serves personal and private banking customers through a large network of branches, call centres and online channels. The unit offers a wide range of financial products and services within banking, property financing, leasing, insurance and pensions. Full-time employees amounts to 6,527 Northern Ireland Other 7 1 Norway 11 Sweden 7 Finland 13 62 Denmark Income statement & key figures (DKK m) Income distribution of group total, Q3 2015 (%) 9M 2015 9M 2014 Index Net interest income 7,057 8,104 87 Net fee income 3,956 3,343 118 Net trading income 555 459 121 Other income 479 495 97 Total income 12,047 12,401 97 Expenses 7,648 7,787 98 Profit before loan impairment charges 4,399 4,614 95 Loan impairment charges 388 895 43 Profit before tax 4,011 3,719 108 Lending (DKK bn) 801 806 99 Deposits (DKK bn) 344 331 104 38% Personal Banking 12
Business Banking Business Banking Income distribution, Q3 2015 (%) Business Banking serves small, medium-sized and large businesses through a large network of finance centres, branches, contact centres and online channels. The unit offers leading solutions within financing, investing, cash management and risk management. Full-time employees amounts to 2,955 Northern Ireland Baltics 2 9 Norway 10 50 Denmark Sweden 18 11 Finland Income statement & key figures (DKK m) Income distribution of group total, Q3 2015 (%) 9M 2015 9M 2014 Index Net interest income 6,782 6,677 102 Net fee income 1,629 1,530 106 Net trading income 515 445 116 Other income 481 380 127 Total income 9,407 9,032 104 Expenses 3,849 3,918 98 Profit before loan impairment charges 5,558 5,114 109 Loan impairment charges -193 846 - Profit before tax 5,751 4,268 135 Lending (DKK bn) 647 637 102 Deposits (DKK bn) 250 258 97 30 Business Banking 13
Corporates & Institutions Corporates & Institutions Income distribution, Q3 2015 (DKK m) Corporates & Institutions is a leading provider of wholesale banking services for the largest institutional and corporate customers in the Nordic region. Products and services include cash management, trade finances and custody services; equity, bond, foreign exchange and derivatives products; corporate finance; and acquisition finance. 720 260 1,056 Full-time employees amounts to 1,811 FICC Capital Markets General Banking Income statement & key figures (DKK m) 9M 2015 9M 2014 Index Net interest income 2,030 2,001 101 Net fee income 1,727 1,614 107 Net trading income 3,770 3,401 111 Other income 4 3 109 Total income 7,530 7,018 107 Expenses 3,334 3,418 98 Profit before loan impairment charges 4,196 3,600 117 Loan impairment charges - 195 - Profit before tax 4,196 3,405 123 Lending (DKK bn) 174 176 99 Deposits (DKK bn) 227 172 132 Income distribution of group total, Q3 2015 (%) 20 C&I 14
Danske Capital Wealth management Assets under management, Q3 2015 (%) Develops and provides asset and wealth management products and services that are marketed through Personal Banking and directly to businesses, institutional clients and external distributors. The unit also supports advisory and asset management services for Personal Banking customer segments. Through Danske Bank International Luxembourg, Danske Capital provides private banking services to clients outside Danske Bank s home markets. Equities Alternatives Cash 9 2 34 55 Bonds Income statement & key figures (DKK m) Facts, Q3 2015 9M 2015 9M 2014 Index Net interest income -4 - - Net fee income 1,708 1,577 108 - portion from performance fees 36 41 88 Other income -9 1 - Total income 1,695 1,578 107 Expenses 707 746 95 Profit before tax 988 832 119 Assets under management DKK bn 759 Growth in AuM (9M 15/9M 14): -4% Profit before tax DKKm 317 Market share in the Nordic: 11% FTEs: 522 Assets under management (bn) 759 791 96 15
Danica Pension Life insurance and pension Customer fund distribution, Q3 2015 (%) Provides life insurance and pension products to both personal and business customers. The products are marketed especially through Personal Banking and Danica Pension s own insurance brokers and advisers. Cross-synergies with bank. Danica Pension offers three unit-linked products: Danica Balance, Danica Link and Danica Select. These products allow customers to select their own investment profiles, and the return on savings depends on market trends. Danica Pension also offers Danica Traditionel. This product does not offer individual investment profiles, and Danica Pension sets the rate of interest on policyholdes savings. Danica Link Danica Balance 25 22 53 Danica Traditionel Income statement & key figures (DKK m) Facts, Q3 2015 9M 2015 9M 2014 Index Premiums 22,019 20,345 108 Danica Traditionel (insurance result) 1,002 1,023 98 Unit-linked (insurance result) 456 478 95 Health and accident (ins. result) -117-274 - Result from insurance business 1,341 1,227 109 Return on investments 239 375 64 Financing result -45-96 - Special allotments -63-72 - Net income bef. postponed risk allow. 1,472 1,434 103 Change in shadow account -27-17 - Net income 1,445 1,418 102 Total premiums DKKm: 6,544 Net income from insurance DKKm 335 Customer funds DKKbn: 311 FTEs: 766 16
Outlook for 2015: Net profit of above DKK 16 bn Total income Income is expected to be in line with the level in 2014 Expenses Expenses are expected to be below DKK 22 bn Impairments Impairments charges in our core activities are expected to decline to a level significantly lower than in 2014 Non-core Non-core pre-tax result is expected at around DKK 0 million Net profit Net profit of above DKK 16 bn Note: This guidance is subject to uncertainty and depends on economic conditions, including the development in monetary policy by the central banks. 17
Appendix 18
Danske Bank timeline Den Danske Landmandsbank was founded Handelsbanken was founded next door to the bank Shipowner A.P. Møller becomes chairman of the board The bank shortens its name to Danske Bank Thomas Borgen appointed CEO 1958 1968 1976 2012 1871 1873 1928 2000 2013 The bank now has 58 branches in Greater Copenhagen, and even more spread around the country The launch of Pondus savings bank. In two weeks 50,000 children join the Pondus Club The bank changed its name to Den Danske Bank All brands gathered under one name: Danske Bank. Three new business units established: Personal Banking, Business Banking and C&I 19
Historical expansion through mergers and acquisitions Denmark Northern Ireland/Ireland 1990 Sweden 1999 2001 2007 1995 1997 2005 Norway Finland/the Baltic states Denmark The bank merges with Handelsbanken and Provinsbanken Denmark 20
Three distinct methods of rating banks Rating methodology Danske Bank s rating Anchor SACP* Extraord. Add. + 1 + 2 + 3 + 4 = SACP = + ALAC + = Support factors Issuer Rating bbb+ +1 0 0 0 a- 0 +1 0 A (Stable) 1=Business Position 2=Capital & Earnings 3=Risk Position 4=Funding & Liquidity Macro Profile + 1 + 2 + 3 + 4 + 5 + Quali- Affiliate Gov. = BCA** + + LGF*** + = tative Support Support Factors Issuer Rating Strong Plus baa1 a1 baa2 ba1 a3 0 Baa1 0 +1 +1 A2 (Stable) 1=Asset Risk 2=Capital 3=Profitability 4=Funding Structure 5=Liquidity Resources Individual Rating/Viability Rating Support Rating/Support Rating Floor a A- Issuer Default Rating (IDR) IDR is the higher of the Viability Rating and the Support Floor A (Stable) * Stand-Alone Credit Profile. ** Baseline Credit Assessment. *** Loss Given Failure 21
Contacts Henrik Ramlau-Hansen Direct: +45 45 14 06 66 Chief Financial Officer Mobile: +45 22 20 73 10 hram@danskebank.com Claus Ingar Jensen Direct: +45 45 12 84 83 Head of IR Mobile: +45 25 42 43 70 clauj@danskebank.dk John Bäckman Direct: +45 45 14 07 92 Chief IR Officer Mobile: +45 30 51 46 85 jbc@danskebank.dk Robin Hjelgaard Løfgren Direct: +45 45 14 06 04 IR Officer Mobile: +45 24 75 15 40 rlf@danskebank.dk Louisa Grue Baruch Direct: +45 45 13 92 34 IR Officer Mobile: +45 21 56 19 35 lobar@danskebank.dk 22
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 presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation contains forward-looking statements that reflect management s current views with respect to certain future events and potential financial performance. Although Danske Bank believes that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors many of which are beyond Danske Bank s control. This presentation does not imply that Danske Bank has undertaken to revise these forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided. 23