3 February 2015
FINANCIAL RESULTS FOR 2014
Thomas F. Borgen Chief Executive Officer
PRESS CONFERENCE
2
Agenda
Financial highlights 2014
Outlook for 2015
Macroeconomics
The way forward
3
Best financial results since 2007
Income statement and key figures (DKK millions)
2014 2013 Index Q4 2014 Q3 2014 Index
Net interest income 23,107 22,077 105 5,880 5,976 98
Net fee income 10,491 9,468 111 2,966 2,640 112
Net trading income 6,562 5,799 113 977 1,525 64
Other income 1,344 1,308 103 366 304 120
Net income from insurance business 2,362 1,088 217 1,032 488 211
Total income 43,866 39,740 110 11,221 10,933 103
Expenses 22,641 23,794 95 6,090 5,530 110
Goodwill impairment charges 9,099 - - 9,099 - -
Profit before loan impairment charges 12,126 15,947 76 -3,968 5,403 -
Loan impairment charges 2,788 4,111 68 853 668 128
Profit before tax, core 9,338 11,836 79 -4,821 4,735 -
Profit before tax, Non-core -1,503 -1,777 - -477 -232 -
Profit before tax 7,835 10,059 78 -5,298 4,503 -
Tax 3,989 2,944 135 987 1,231 80
Net profit 3,846 7,115 54 -6,285 3,272 -
Net profit before goodwill impairments 12,945 7,115 182 2,814 3,272 86
Return on avg. shareholders' equity (%) 2.4 5.0 -16.9 8.5
ROE before goodwill impairments (%) 8.5 5.0 7.1 8.5
Cost/income ratio* 51.6 59.9 54.3 50.6
Common equity tier 1 capital ratio (%) 15.1 14.7 15.1 15.0
EPS 3.6 7.1 -6.4 3.2
Lending (DKK bn) 1,564 1,537 102 1,564 1,582 99
Deposits (DKK bn) 763 776 98 763 761 100
4
Strengthened topline despite weak macro
Totale income
23,107
Net fee inc.
43,866 39,740
Net interest inc. 22,077
10,491 9,468
2,362 Insurance
6,562
1,088
1,308
Net trading inc.
Other income 1,344
5,799
2014 2013 Income (DKK millions)
5
Expenses reduced according to plan
Expenses, 2013- 15 (DKK billions) Cost/income ratio, 2013 -14 (%)
-5%
2014
22.6
23.8
2013 2014
59.9
-8.3%-point
2013
51.6
6
Impairment charges remain low
* The loan loss ratio is defined as yearly impairment charges as a percentage of loans and guarantees.
Loan impairment charts,* 2008-14 (DKK billions)
1,4
1,2
1,0
0,8
0,6
0,4
0,2
0,0
26
24
22
20
18
16
14
12
10
8
6
4
2
0
0,2
4
2013 2014
0,3
5
2012
0,6
13
2011
0,7
13
2010
0,7
14
2009
1,4
26
2008
0,6
12
Loan loss rations *(rhs) Impairments
7
Good progress winding up Non-core activities in Ireland
Credit exposure,* 2014 (DKK billions)
2014 2013
42.8
-42%
31.3
53.7
2012 * Excluding the allowance account.
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Ratings upgrades in 2014
2014
A
Negative outlook
A3
Stable outlook
A
Stable outlook
2013
A-
Stable outlook
Baa1
Positive outlook
A
Stable outlook
9
11.7%
Danske Bank is sound and well-capitalised
Minimum requirement: 5.5% Danske Bank: 11.7 %
Common equity tier 1 capital ratio in the EBA’s most severe stress test scenario
10
Strong capital position makes it possible to pay a dividend and adjust the capital structure
Total capital ratio* (%) Dividend and share buy-back
Proposal to pay a dividend of DKK 5.5 per share, or 43% of the profit for the year
Share buy-back of DKK 5 billion in 2015
Target: >13%
19.3
2014
15.1
1.6
2.6
2013
21.4
14.7
2.8
1.5
2.4
Common equity tier 1 Tier 2
Additional tier 1
State hybrid
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Personal Banking – positive developments and good earnings
2013 2,899
+60%
2014 4,648
2014
-25%
2013 1,887
1,412
Impairments (DKK millions)
Profit before tax & goodwill (DKK millions)
Strong gains in financial results
Stable income Reduction of expenses Continued decline in impairments
Focus on innovation
MobilePay in Denmark and Finland – 1.9 million users in Denmark
Mobile and tablet solutions in every country Launch of customer programme in Finland Expansion of customer programme in
Denmark
Customer satisfaction improving
Increases in Denmark, Sweden and Finland High satisfaction with digital solutions Desire for more individual advisory services
12
Business Banking – solid developments and progress
+18%
2014 5,733
2013 4,838
2013
1,007
-42%
2014
1,751
Impairments (DKK millions)
Profit before tax & goodwill (DKK millions)
Growth in all primary markets
Increase in lending in Denmark, Norway, Sweden and Finland
Change from customer outflow to customer inflow in Denmark
More satisfied customers
Positive trends in Denmark In the top 2 in Sweden, Norway, Finland and
Northern Ireland Business bank of the year in Sweden
Strong digital platform
MobilePay Online and MobilePay Business MobilePay Business at about 5,000
businesses and 30 local authorities
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Corporates & Institutions – a year of many changes
3.374
+23%
2014 4.135
2013
Client-driven income (DKK millions)
Profit before tax (DKK millions)
Strengthened customer relations
More good mandates at Corporate Finance Prize-winning euro issuances from Debt
Capital Markets
Strong position
In the top 3 in 57 of 84 Prospera surveys No. 1 in Institutional Banking, Nordics No. 1 in Corporate Banking, Denmark
Rise in client-driven income
Focus on stable, diversified income Gains at Transaction Banking and Capital
Markets Client-focused organisation and approach
based on advisory services
8.2
7.0
+17%
2014
2013
14
Danske Capital – solid advance in focus areas
+24%
2014 1,406
2013 1,131
795
727
+9%
2014
2013
Assets under management (DKK billions)
Profit before tax (DKK millions)
Focus on alternative investments
Increase in alternative investments of 23% Alternative investments now make up 7% of
all assets under management
Strengthened international position
59% of net sales outside of Denmark Growth of 22% in assets under
management in Sweden
Managed accounts for personal
customers
Increasing activity in managed accounts Assets under management rose 19%
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Danica Pension – strong results
+117%
2014 2,362
2013 1,088
Income (DKK millions)
26,822 2014
2013 26,808
Premiums (DKK millions)
Increased customer focus
Close collaboration between Danica Pension and Danske Bank
Development of digital platform and digital tools
Pension Check gives clear
recommendations
More than 25,000 customers took the Pension Check
Almost half were not adequately covered
Risk allowance and shadow account
booked to income
Full risk allowance booked Transfer of DKK 611 million from shadow
account
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Outlook for 2015
Macro Economic growth remains fragile, with low interest rates
Total income Income is expected to be around the same level as in 2014
Expenses Expenses are expected to be below DKK 22 billion
Impairments Impairment charges expected to remain low
Net profit Net profit above 14 DKK billion
17
Europe is improving, but still has problems
Source: Danske Bank’s forecast.
GDP growth (%) GDP growth, est. (%)
USA
Euro zone
Denmark
Sweden
Finland
Norway
China China
Euro zone
Denmark
Norway
Sweden
18
Historically low interest rates
Source: Danmarks Nationalbank.
Yield, %.
10 year government bond
3-month Cibor
2014
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The way forward
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Digitalisation creates new opportunities
0
500,000
1,000,000
1,500,000
2,000,000 o
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ebanking (1 logon within last 3 months)
Mobile Banking DK (Activated modules/agreements)
MobilePay DK (Registrations)
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Continued focus on innovation and good customer experience
Managed accounts
Hedge funds
Personal Banking Business Banking Corporates & Institutions
Danske Capital Danica Pension
Specialised advisory
services for young people
Danske Guide in online
channels
Expansion of the customer
programme
New customer packages
for SMEs
Better advisory services for
startup businesses
MobilePay Online and
MobilePay Business
New post-trade service for
large corporates
Advanced supply chain
finance solution
Danske One Trader foreign
exchange trading platform
Danica Pension Check
Danica Health Check
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Minimum 12.5% in 2018
Key building blocks
* Baseret på vores eksterne ROE mål på 9% justeret for goodwill nedskrivninger på 9,1 mia. kr.
‘14
8.5
‘13
5.0
‘12
3.6
‘11
2.1
‘18E
Above 12.5
‘15E
9.5*
Improved ratings and lower
funding costs
Gradual efficiency gains
Growth in business volume
Rising income
Lower impairments/non core
Capital structure
ROE (%, after tax, before goodwill impairments)
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A strong platform as a Nordic universal bank
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Please use the microphones beside your seats
www.danskebank.com/ir
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Disclaimer
Important notice
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, including the United States, 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. The securities referred to herein have not been, and will not be, registered under the Securities Act of 1933, as amended, and may not be offered, exercised or sold in the United States absent registration or an applicable exemption from registration requirements. References to a potential share offering by Danske Bank are included herein pursuant to Rule 135c of the Securities Act of 1933, as amended. 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.