Annual General Meeting 30 March 2012
Welcome at the Annual General Meeting of BankNordik
Disclaimer
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of BankNordik, or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees or advisors accept any liability whatsoever arising directly or indirectly from the use of this document
Slide 2
Agenda
1. The Board of Director’s report on the Bank’s activities in the past year
2. Submission of audited annual accounts for adoption and Annual Report 2011
3. Decision on distribution of profit in accordance with the adopted annual accounts
4. Election of members to the Board of Directors
5. Election of auditor/auditors
6. Proposals from the Board of Directors and Finansieringsfonden af 1992
a. Amendment of the Articles of Association
b. Authorization to the Board of Directors to let the Bank acquire own shares
7. Miscellaneous
Slide 3
1. The Board of Director’s report on the Bank’s activities in the past year
Presented by Klaus Rasmussen,
Chairman of the Board of Directors
Slide 4
Content
Annual result Financial crisis Creation Risk picture The coming years
Síða 5
The development in the share price since the intial public offering
Síða 6
Pre tax profit 2007-2011
Síða 7
The development in market value and equity
Síða 8
The development in the bank’s share price compared to the development in the price of Danish shares
Síða 9
Financial crisis
Síða 10
Amount paid by BankNordik to bank pagages og the like
In total DKK 114,3 million in the years 2010 og 2011
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Amount paid by BankNordik to bank pagages og the like
In total DKK 114,3 million in the years 2010 og 2011
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A time characterized by creation...
Síða11
Síða 12
...in the years 2009-2012 a solid platform for future growth has been created
| 2010
Acquisition of Sparbank branches
Integration of the acquired activities Focus on profitability and synergies Consolidation High one off costs to integration Deposits (bn DKK)
| 2011 | 2012
Acquisition of the healthy parts of Amagerbanken
| 2009
Acquisition of Vørður
Risks in a bank
Credit risk Liquidity Market risk Operational risk
Síða 13
The coming years
2012: Growth, but still extraordinary costs 2013: Normal year for the bank on a new and
different leval than before
Síða14
Presentation of the audited annual accounts and the Annual Report 2011
Presented by Janus Petersen, CEO
Slide 15
Acquisition of Amagerbanken
Stronger business baseStrong geographical representation in Copenhagen and Capital region in DenmarkStronger presence in Aarhus and Odense82,000 new retail customers10,000 new commercial clientsDeposit surplus + 1.3 bnAssets in client portfolio + DKK 6 bn200 new employees
Financial results for 201116
Side 17
25,000 customers5 branches
120,000 customers 19 branches
5,000 costumers1 branch
10,000 costumers
20,000 costumers
Financial Highlights 2011
Pre-tax profit DKK 31m Operating profit DKK 134 compared to DKK 73m in 2010 – adjusted for non recurring costs Net interest and fee income increased 16% to DKK 681m Net income from insurance activities suffered from exceptionally bad weather in Q4 Impairment charges amounted to DKK 101m (at the relative historical level of 0.85%) Loans and advances increased 36% to DKK 11.8bn Deposits increased by DKK 4.1m to DKK 13bn Capital and liquidity remained strong (solvency 15.6% and deposit surplus DKK 1.3bn) Outlook for Pre-tax profit before non recurring items and value adjustments in 2012 is DKK
150-200m
18Financial results for 201118
Income statement, Group
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 157 173 232 192 754 666
Total operating expenses 103 107 152 157 519 393
Core earnings 54 66 80 35 235 273
Impairment charges on loans and advances etc. 28 11 19 43 101 200
Core earnings incl. impairments 26 55 61 -8 134 73
Non Recuring Items -16 -32 -31 -25 -104 312
Adjusting of external funding -7 -7 -4 -1 -19 -22
Integration and restructuring costs -3 -6 -35 -55 -99 -79
Sector costs 0 -17 3 -7 -21 -33
Market value adjustments -17 -5 5 27 10 17
Other 11 3 0 11 26 429
Profit before tax 10 23 30 -33 31 385
19
Highlights, GroupCore earnings DKK 235m and DKK 134m incl. impairments
Pre-tax profit amounted to DKK 31m Integration and restructuring costs of DKK 99m Core earnings incl. impairments improved by DKK
61m from 2010 to 2011 Insurance income in Faroe Islands affected by
claims of DKK 20-25m from exceptionally bad weather in Q4 2011
Deposit surplus of DKK 1.3m
Financial results for 201119
Income statement, Banking
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 141 142 208 202 693 588
Total operating expenses 89 91 137 142 460 335
Core earnings 52 51 71 59 233 253
Impairment charges on loans and advances etc. 26 11 21 43 101 200
Core earnings incl. impairments 26 40 50 16 132 53
Non Recuring Items -25 -33 -30 -34 -121 -88
Adjusting of external funding -7 -7 -4 -1 -19 -22
Integration costs -3 -6 -35 -55 -99 -79
Sector costs 0 -17 3 -7 -21 -29
Market value adjustments -24 -3 4 18 -6 6
Other 9 2 1 11 24 37
Profit before tax 1 7 19 -17 10 -35
20
Highlights, BankingCore earnings DKK 233m but DKK 121m in Non Recurring Items
Core earnings incl. impairments improved by DKK 79m from 2010 to 2011
Impairment charges amounted to DKK 101m against DKK 200m in 2010
The number of employees has been reduced with 30 in 2012
Focus on reducing the operating costs
Financial results for 201120
Income statement, Faroe Islands
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 98 100 91 87 376 424
Total operating expenses 47 55 48 52 201 225
Core earnings 51 45 43 35 174 199
Impairment charges on loans and advances etc. 11 -6 6 12 23 173
Core earnings incl. impairments 40 51 37 23 151 26
Non Recuring Items -27 -26 -1 5 -49 -95
Adjusting of external funding -7 -7 -4 -1 -19 -22
Integration and restructuring costs -1 -1 -1 -1 -2 -44
Sector costs 0 -17 3 -7 -21 -29
Market value adjustments -24 0 1 8 -16 4
Other 5 -1 -1 6 9 -4
Profit before tax 13 25 37 28 102 -69
21
Highlights, Faroe IslandsStable volumes and low impairments
Core earnings incl. impairments improved by DKK 125m from 2010 to 2011
The loan level has been fairly stable
Financial results for 201121
Income statement, Denmark
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 30 30 104 101 264 108
Total operating expenses 32 25 79 80 216 99
Core earnings -2 5 25 20 48 9
Impairment charges on loans and advances etc. 13 16 14 35 78 20
Core earnings incl. impairments -15 -11 11 -15 -30 -11
Non Recuring Items 2 -5 -33 -40 -76 29
Adjusting of external funding 0 0 0 0 0 0
Integration costs -3 -6 -35 -54 -97 -7
Sector costs 0 0 0 0 0 0
Market value adjustments 0 -2 1 10 10 1
Other 4 2 0 4 11 35
Profit before tax -13 -16 -22 -55 -106 18
22
Highlights, DenmarkIncreased core earnings but high impairments
Core earnings DKK 48m in 2011 against DKK 9m in 2010
Integration and restructuring costs of DKK 97m The number of employees has been reduced in
2012 Impairments DKK 67m net of reversed
impairments at aquisition Focus on reducing the operating costs
Financial results for 201122
Income statement, Greenland
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 13,5 12,3 12,1 14,4 52 56
Total operating expenses 10,6 11,5 9,9 10,4 42 39
Core earnings 2,9 0,8 2,2 4,0 10 17
Impairment charges on loans and advances etc. 1,6 0,7 1,0 -3,7 0 8
Core earnings incl. impairments 1,3 0,1 1,3 7,7 10 9
Non Recuring Items 0 -2 3 2 4 7
Adjusting of external funding 0 0 0 0 0 0
Integration costs 0 0 0 0 0 0
Sector costs 0 0 0 0 0 0
Market value adjustments 0 -2 1 0 -1 1
Other 0 0 2 2 4 6
Profit before tax 2 -1 5 9 14 16
23
Highlights, GreenlandIncreased loans and core earnings
Core earnings DKK 10m in 2011 against DKK 9m in 2010
Loans level stable since Q1 2011
Financial results for 201123
Highlights, InsuranceProfits before tax DKK 20m but bad Q4 due to bad weather
Income statement, Insurance
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 16 31 24 -9 62 78
Total operating expenses 14 15 12 14 55 59
Core earnings 2 16 12 -23 6 19
Impairment charges on loans and advances etc. 0 0 0 0 0 -1
Core earnings incl. impairments 2 16 12 -23 6 19
Non Recuring Items 4 -2 3 9 13 11
Adjusting of external funding 0 0 0 0 0 0
Integration costs 0 0 0 0 0 0
Sector costs 0 0 0 0 0 0
Market value adjustments 4 -2 3 9 13 11
Other 0 0 0 0 0 0
Profit before tax 6 13 14 -14 20 30
• Core earnings DKK 6m in 2011 against DKK 19m in 2010
• Core earnings negative with DKK 23m in Q4 2011• Insurance income in Faroe Islands affected by
claims of DKK 20-25m from exceptionally bad weather in Q4 2011
• Relatively high claim level in Q4 2011
Financial results for 201124
Income statement, Trygd
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 10 14 14 -16 22 39
Total operating expenses 4 5 5 4 17 19
Core earnings 5 10 9 -20 5 20
Impairment charges on loans and advances etc. 0 0 0 0 0 0
Core earnings incl. impairments 5 10 9 -20 5 20
Non Recuring Items 0 0 0 0 0 0
Adjusting of external funding 0 0 0 0 0 0
Integration costs 0 0 0 0 0 0
Sector costs 0 0 0 0 0 0
Market value adjustments 0 0 0 0 0 0
Other 0 0 0 0 0 0
Profit before tax 5 10 10 -20 5 20
25
Highlights, Trygd Core earnings DKK 5m in 2011 against DKK 20m
in 2010 Core earnings negative with DKK 20m in Q4 2011 Insurance income affected by claims of DKK 20-
25m from exceptionally bad weather in Q4 2011 Relatively high claim level in Q4 2011
Financial results for 201125
Income statement, Vørður
DKKmQ1
2011Q2
2011Q3
2011Q4
2011YE
2011YE
2010
Interest, fee and income from insurance activities, net 6 17 10 7 40 39
Total operating expenses 9 11 8 10 38 40
Core earnings -3 6 2 -3 2 -1
Impairment charges on loans and advances etc. 0 0 0 0 0 -1
Core earnings incl. impairments -3 6 2 -4 2 -1
Non Recuring Items 4 -2 2 9 13 11
Adjusting of external funding 0 0 0 0 0 0
Integration costs 0 0 0 0 0 0
Sector costs 0 0 0 0 0 0
Market value adjustments 4 -2 2 9 13 11
Other 0 0 0 0 0 0
Profit before tax 1 4 5 5 15 10
Core earnings DKK 5m in 2011 against DKK -1m in 2010
Relatively high claim level in Q4 2011
26
Highlights, Vørður
Financial results for 201126
ImpairmentsImpairment level as expected at historical average
Impairment charges amounting to DKK 101m in 2011
0,85 per cent of the loan portfolio
BankNordik’s average level approx. 0.8 per cent during the last fifteen years
* Previous GAAP, the parent company
Financial results for 201127
Financial results for 2011
Loan, advances and garantees on sectorOnly 39% corporate and good diversification
28
Funding in place and strong solvency
Deposit surplus of DKK 1.3 billion
Solvency 15.6% (requirement is 9.5%)
Relative to liquidity requirement 115,3%
29Financial results for 201129
Outlook 2012
Profit before value adjustments, taxes, sector costs and non-recurring costs relating to the integration DKK 150-200m (2011: DKK 134m)
One-off costs from acquisition and integration DKK 30-50m (2011: DKK 99m) Profit after non-recurring costs DKK 100-170m (2011: DKK 35m) Expected impairment charges DKK 80-120m (2011: DKK 101m) Loans and advances are expected to be at the level at 31 December 2011
30Financial results for 201130
Strategy and focus 2012-14Improved businessplatform in place
StrategyProximity to the customersTight risk managementOperational profitability
Strategic assets180.000 customers600 employeesProfitable business conceptSound credit portfolioStrong geographical and industry diversification
Financial results for 201131
Strategy and focus 2012-14ROE 12% before tax
Key management prioritiesIntegration of the new activitiesAttaining synergiesOrganic growth
Financial targets for 2012-2014ROE of 12% before taxC/I ratio not higher than 60%Solvency 13–16%No decline in RWAExcess liquidity cover of 100%
Financial results for 201132
2 and 3. Submission of audited annual accounts for adoption and Annual Report 2011 and decision on distribution of profit in accordance with the adopted annual accounts
Slide 33
The Board of Directors proposes that the General Meeting adopt the annual accounts and allocation of net profits as presented in the Annual Report 2011.
Slide 34
4. Election of members to the Board of Directors
Slide 35
Klaus Rasmussen (re-election)Education: MSc in Economics and MSc in Business Management and Auditing. Former occupation: State-authorized public accountant. Former owner of and partner in State-authorized public accountant company
Principal occupation: Self-employed with
activities as a professional Board member
Current Board positions held: Chairman of the Board of: P/F Effo, P/F Effo Bunkers, P/F
Vónin, P/F VON and Refa Frøystad Group.Board member of: Qalut Vónin A/S
Date of first election to the Board: 2008
Jens Erik Christensen (re-election) Education: MSc in Actuarial Science Former occupation: CEO of Codan A/S and member of the Executive Committee of Royal & SunAlliance. Principal occupation: Self-employed with activities as a professional Board member as well as business development through the investment company Sapere Aude A/S. Current Board positions held:
Chairman of the Board of: Danish Merchant Capital A/S, Your Pension Management Luxembourg SA, Your Pension Savings Association, Luxembourg Board member of: SAS AB, Andersen & Martini A/S, Amrop A/S, Nordic Corporate Investments A/S
Date of first election to the Board: 2007
Bent Naur (election) Education: HD(F) Former occupation: CEO of Ringkjøbing Landbobank (1987-2012)Principal occupation: Professional board member
Current Board positions held:Chairman of the Board of: Foreningen Bankdata and Totalkredit A/S (Vice Chairman) Board member of: Nykredit Holding A/S,
Nils Suni Sørensen (re-election)Education: BSc in Economics and Business Administration, MBA from Lancaster University Former occupation: CEO of Faroe Seafood Principal occupation: Managing Director of Faroe Petroleum, Faroe Islands; Managing director of Greenland Oil Company A/S Current Board positions held:
Board member of: Faroe Petroleum Faroe Islands, Financing Fund from 1992, Faroe Petroleum plc. UK, Greenland Oil Company A/S
Date of first election to the Board: 2010
Síða 36
5. Election of auditor/auditors
Slide 37
The Board of Directors proposes re-election of NOTA, Løggilt grannskoðanarfelag P/F and PwC Denmark as external auditors.
Slide 38
6. Proposals from the Board of Directors
Slide 39
a. Amendment of the Articles of Association
Finansieringfonden af 1992 proposes:
a)1 To revoke the quorum requirement in Article 9.2 when the General Meeting decides on the Board of Directors proposal a)2.
The Board of Directors proposes:
The Board of Directors propose
a 2) In addition to the existing secondary names that “Amagerbanken (BankNordik)” is included as a new secondary name of the company.
Slide 40
Amendment of the Articles of Association
a 3) To replace the existing clause 6.3 with the following: Extraordinary general meetings shall be held pursuant to resolution by a general meeting, pursuant to decision by the board of directors of the auditor(s), or upon written request to the board of directors from shareholders holding no less than 5% of the share capital specifying the issue(s) to be considered. Extraordinary general meetings shall be convened within 14 (fourteen) days of receipt of a request to such effect.
a 4) To replace the existing clause 6.4 with the following: The board of directors shall convene general meetings by inserting a notice in Dimmalætting and in one or more of the other Faroese newspapers. The notice shall be inserted in the newspapers with no more than 5 (five) weeks and no less than 3 (three) weeks’ notice.
Side 41
Amendment of the Articles of Association
a 5) To replace the existing clause 7.1 with the following: Any shareholders shall be entitled to have a specific subject considered by the Company in Annual General Meeting. The Company shall receive proposals to this effect not later than six weeks prior to the General Meeting. If the Company receives the proposal later than six weeks prior to the General Meeting, the Board of Directors may decide, however, that the proposal has been submitted in time for the subject to be considered on the general meeting anyway.
Side 42
Amendment of the Articles of Association
a 6) To replace the existing clause 7.2 with the following: No later than three weeks prior to the General Meeting up until and including the day of the General Meeting, a copy of the notice convening the Meeting with agenda, the complete proposals the documents to be presented at the General Meeting, information about voting and capital structure at the time of convening the Meeting as well as forms for issue of proxy and voting by correspondence shall be available at the Company’s website. The annual report shall be sent to all registered shareholders upon request.
a 7) To replace “financial statement” in Article 7. 3.2, Article 7.3.3, Article 13.2 and Article 14.1 to be “Annual Report”
Side 43
Amendment of the Articles of Association
a 8) To replace the existing clause 8.1 with the following: A shareholders right to attend a general meeting and vote according to his shares shall be determined by the shares which such shareholder owns at the record date. The record date shall be one week prior to the general meeting.
To replace the existing clause 8.2 with the following: Any shareholders who are entitled to attend the general meeting cf. article 8.1, and who wants to attend, shall apply for an admission card and vote not later than three days prior to the holding of the general meeting.
Side 44
b. Authorization to the Board of Directors to let the Bank acquire own shares
The Board of Directors requests that the General Meeting renews, until 30 March 2017, the following authority to allow the Bank to acquire its own shares:
“The General Meeting authorises the Board of Directors – until 30 March 2017 – to permit the Bank – by way of ownership or pledge - to acquire own shares up to a total nominal value corresponding to 10% of the Bank’s share capital in accordance with Article [198] in the Companies Act. When the Bank acquires own shares by way of ownership, the share price shall not deviate from the market price by more than 10%.”
Slide 45
7. Miscellaneous
Slide 46
Thank you for attending BankNordik’s Annual General Meeting 2012