Financial results for 2010

Transcription

1 ROADSHOW Q4 21 Financial results for 21 1 February 211 Peter Straarup CEO & Chairman of the Executive Board Henrik Ramlau Hansen CFO & Member of the Executive Board

2 AGENDA Agenda Slide Key messages 3 Highlights 4 Business trends 5 Capital management 16 Macroeconomics 17 Outlook 18 Q&A session 19 Appendix: Trends in focus areas & business units 2 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 t decision i 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 managements 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 Banks 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 thedatewhen these statements were provided. 2

3 Earnings recovery continues as impairments decline Net profit of DKK 3.7 bn in 21 Cost management continues to deliver results Declining impairment charges DKK m 2, 1, Profit before tax (Q4 21) No dividend payment for Q4 21 Negotiations with Danish government to prepay hybrid capital Plan for a rights issue of about DKK 2 bn in H1 to finance the prepayment Liquidity remained strong after the discontinuation of the general state guarantee -1, -2, Q4 21 Q3 21* Denmark Norway Sweden Baltics Finland N. Ireland Ireland * Denmark adjusted for Bank Package I (guarantee fee & loan impairment charges). 3

4 Declining impairments and expenses more than offset lower income DKK m Index Q3 21 Q4 21 Index Net interest income 27,524 23, ,84 6,69 14 Net fee income 7,678 8, ,69 2, Net trading income 18,244 7, , Other income 3,83 3, , Net income from insurance business 2,81 2, Total income 59,339 46, ,247 1, Expenses* 28,97 26,1 9 6,294 6, Profit bef. loan imp. charges 3,432 2, ,953 4,43 89 Loan impairment charges 25,677 13, ,83 2, Profit before tax 4,755 6, ,87 1, Tax 3,42 2, Netprofitfortheperiod for the period ,713 3, , Cost/income ratio (%) ex integr.,gw & state guar.fee Core tier 1 capital ratio (%) Risk-weighted assets (DKK bn) Total loans ex repos (DKK bn) 1,67 1, ,68 1,68 1 Deposits (ex repos) & issued RD bonds (DKK bn) 1,54 1, ,487 1, Total assets (DKK bn) 3,98 3, ,361 3, * Includes state guarantee fees of DKK 625 m per quarter from Q4 28 until Q

5 Net interest income fell in 21, but rose in Q4 Annual net interest income Quarterly net interest income DKK m 3, * Y/Y 13 % * DKK m 7,5 * * * Y/Y 1 % Q/Q 4 % 2, 6,5 * * * * 1, 5,5 4, Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 S-T interest rate sensitivity: 25 bp = DKK 9 m * White segment is the net cost of government hybrid capital. 5

6 Net fee income up on strong performance at Danske Capital Annual net fee income DKK m DKK m 1, 2,5 Quarterly net fee income 7,5 2, 5, 1,5 1, 25 2, Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Activity-based fees Y/Y 8 % Portfolio-based fees Y/Y 12 % Activity-based fees Y/Y 2 % Q/Q 1 % Portfolio-based fees Y/Y 17 % Q/Q 14 % 6

7 Net trading income at normal level despite low activity and difficult markets in Q4 Breakdown of net trading income DKK m Q4 29 Q1 21 Q2 21 Q3 21 Q4 21 Trading activities 7,361 16,929 5,812 1,791 2,13 1,665 1, Group Treasury* -3, * -195 Institutional banking (non-nordic) Danske Markets in total ,763 17,238 6,873 1, , ,457 1, BA Denmark Other trading activities 1, Net trading income 6,76 18,244 7,921 1,961 2,379 2,817 1, Value at Risk (DKK bn)** * Q2 1 includes a capital gain of DKK 659 m owing to merger of PBS Holding and Nordito AS. ** 99% confidence level, 1-day horizon. Calculated as an average of daily VaR values during the period. 7

8 Strong insurance income from booking the full risk allowance and shadow account Net income from insurance business DKK m Q4 29 Q1 21 Q2 21 Q3 21 Q4 21 Premiums (DKK bn) Share of technical provisions 1,88 1,87 1, Unit-linked (insurance result) Health and accident (insurance result) Investment result , Financing result Special allotments Net income before postponed risk allowance ,237 1, Postponed risk allowance -1, , Net income from insurance business -1,733 2,81 2,146 1, Net income as % p.a. of allocated cap

9 Underlying cost base continues to fall, but Q4 inflated by seasonal fluctuation and IT investments Expenses and number of employees DKK m Quarterly trend in expenses DKKm Index Expenses 28,726 28,97 26,1 9 Integration expenses Amortisation of intangibles Severance payments Goodwill impairment charges 384 1,458 - State guarantee fee (Bank Package I) 625 2,5 1, Underlying cost base 23,52 23,487 23, ,5 6, 6, ,457 Total FTEs (end-period) 23,624 22,93 21, ,5 Q3 21 Bank pa ckage I fee Holiday payments IT & co onsultants Marketing Seve erance pay Other Q4 21 9

10 Impairment charges cut in half in 21 and under DKK 3 bn in Q4 DKK m 3, Loan impairment charges DKK m 1, Quarterly loan impairment charges bp 2 25, 2, 7,5 Total loan impairment charges in basis points 15 15, 5, 1 1, 2,5 5 5, Total impairment charges Collective impairment charges -2,5-5 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 1

11 SMEs dominate impairment charges in 21 Impairments by customer segment - Charges on personal loans are increasing Net exposures in rating categories 1 and 11 - Exposure in cat. 11 increased due to partial write-offs in cat. 1 DKK m 7, 5, DKK bn 4 3 Rating category 11 3, 1, 2 Rating category % -1, Q29 Q39 Q49 Q11 Q21 Q31 Q41 SMEs Large corp. Financials Personal Q29 Q39 Q49 Q11 Q21 Q31 Q41 Rating category 11 (customers in default) Rating category 1 (financial difficulty, not in default) Personal customers Q4 21 includes a.6 bn DKK transfer of collective impairments on investment housing loans from SMEs 11

12 Nordic impairments: Stable, except that Denmark is still struggling DKK m 5, 4, Denmark, 58% of Groups lending *Acc. imp. DKK 19,293 m - Individual 172 bp - Collective 22 bp DKK m 1,5 85 *Acc. imp. DKK 2,664 m Finland, 9% of Groups lending - Individual 156 bp 216 bp - Collective 12 bp 3, 2, 1, 4 DKK m bp 114 bp 3, bp 2,97 2, bp 2, bp 2,79 87 bp 2,195 4-quarter moving average 53 bp (33 bp **) 46 bp 1,343 1, bp bp bp bp bp 22 bp Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 4 *Acc. imp. DKK 1,253 m DKK m *Acc. imp. DKK 1,512 m Sweden,11% of Groups lending - Individual 6 bp Norway, 9% of Groups lending - Individual 89 bp 68 bp - Collective 5 bp 3 77 bp - Collective 5 bp bp bp bp 25 bp 23 bp 11 bp 5 bp bp 13-2 bp Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q bp 18 bp 12 8 bp 4 bp 67 1 bp -3 bp Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q * Accumulated impairments at the end of period in DKK m and as basis points of total lending. ** Excluding payments to Financial Stability. 12

13 Other impairments: Northern Ireland and Ireland remain the most problematic DKK m DKK m 2,4 75 *Acc. imp. DKK 3,78 m *Acc. imp. DKK 9,564 m Northern Ireland, 3% of Groups lending - Individual 537 bp Ireland, 4% of Groups lending - Individual 1,244 bp - Collective 53 bp 4-quarter - Collective 116 bp moving average 883 bp 356 bp 5 1,6 736 bp 358 bp 683 bp 296 bp 279 bp 4-quarter 33 bp 633 bp 62 bp moving average 576 bp 561 bp 691 bp bp bp bp Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q ,473 1,346 1,232 1,187 1,89 1,647 1,2 1,213 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 DKK m 1,2 8 Baltics, 1% of Groups lending 1,173 bp 1,27 bp 749 bp 914 bp *Acc. imp. DKK 2,892 m - Individual 988 bp - Collective 228 bp DKK m 5, 4, 3, Other Activities Incl. Danske Markets, 5% of Groups lending *Acc. imp. DKK 3,513m - Individual 441 bp - Collective 52 bp , 577 bp bp 211bp 1, 317 bp 1, bp 6 bp 36 bp bp 143 bp -29 bp -377 bp 23 bp Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q , Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 * Accumulated impairments at the end of period in DKK m and as basis points of total lending. 13

14 Adjusted tax rate close to normal, but actual rate fluctuates owing to Ireland and one-offs Explanation of tax rate DKK m Q1 21 Q2 21 Q3 21 Q Pre-tax profit, Group 1,391 1,741 1,87 1,448 6,45 Pre-tax loss, BA Ireland 992 1, ,118 4,65 Non-taxable differences ,236 Adjusted pre-tax profit, Group 2,351 2,645 2,755 2,68 9,819 Tax according to P&L ,786 Portion from adj. of previous years Adjusted tax ,531 Adjusted tax rate 26.5% 26.5% 24.3% 26.1% 25.8% Actual tax rate 44.7% 46.2% 52.6% 26.% 43.2% 14

15 Limited funding needed in 211, partly frontloaded d in 21 DKK bn 2 New funding, Estimated funding needed in 211: DKK 7 bn 19 bn already raised % 4 Funding sources - Shift towards long-term funding sources Q Q Issued funding until end 21 Estimated funding needed banks Central (ex CB) Credit inst. ( Repo bonds Short-term De eposits inance unded) Mortgage fi (match-fu bonds Covered bonds Long-term Subordinate ed debt equity Shareholders' Short-term funding Long-term funding 15

16 Tier 1 ratio improved in 21; rights issue planned for H1 211, possible prepayment of hybrid capital % 2 Capital ratios: CRD/Basel II % 14.8% 12.9% % 1.1% 8 4 Negotiations with the Danish government to prepay the 24 bn of hybrid capital in May 212 Rights issue of DKK 2 bn planned for first half of 211 * AP Møller and Realdania support the rights issue Q4 8 Q4 9 Q4 1 Total capital ratio Tier 1 ratio Core tier 1 ratio plus convertible hybrid Solvency need Core tier 1 ratio * This presentation does not constitute an offer to sell, or a solicitation of offers to purchase or subscribe for, securities in the United States. 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. This notice is issued pursuant to Rule 135c of the Securities Act of 1933, as amended. 16

17 Economic recovery is improving, but is still uneven % GDP, 29-12E 8 (Growth Y/Y) Norway Euroland Denmark Sweden Ireland Finland Public finances Gross public Budget bal. Sovereign rating debt % of GDP %ofgdp &outlook(s&p) Denmark AAA/Stable Sweden AAA/Stable Norway AAA/Stable Finland AAA/Stable Ireland* A-/Negative watch Euroland Baltics E 212E Source: Danske Research and Nordic Outlook December 21. * Ex one-off bank bailout costs. Source: Danske Research and Nordic Outlook December

18 Outlook for 211: Recovery continues Macroeconomic recovery continues, but stable short-term rates and volumes keep NII under pressure Banking activities remain robust, but still difficult conditions in some markets Focus on costs will continue, and costs are expected to decline, partly because of the end of Bank Package I Danicas income is likely to be lower The performance of Danske Markets and Danske Capital is highly dependent on market developments Impairments continue to trend down but are likely to remain high in Ireland, Northern Ireland and Denmark 18

19 Q&A session 19

20 Appendix 2

21 Net interest income: Only minor changes in margins and volume Net interest income Q4 29 vs Q4 21 Net interest income Q3 21 vs Q4 21 DKK m DKK m 7, 7, 6,5 6, 6, ,5 6, ,5 6,69 5,5 5,84 6,69 5, 5, Q4 29 RD Deposit m argin Lending m argin Vo lume One e-offs Other Q4 21 Q3 21 RD Deposit m argin Lending m argin Vo lume VAT re efund Other Q

22 Net interest income, Realkredit Danmark - Q4 21 activity less than 1% of Q4 29 DKK m Q1 Q2 Q3 Q4 Note: Ex customer margin and interest on convertible government hybrid capital. 22

23 Net interest income: NII margins by business unit % Net interest margins Q1 29 Q4 21 (NII /loan stock) Northern Ireland Baltics Norway Finland Ireland Group Sweden Denmark.75 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 23

24 Lending margins remain under pressure as competition grows % Quarterly lending margins Q2 29 Q4 21 (loan stock) Denmark* Finland Sweden Norway Northern Ireland Ireland Baltics * Including Realkredit Danmark. 24

25 Deposit margins are benefiting from increasing short-term term rates % Quarterly deposit margins Q2 29 Q4 21 (deposit stock) Denmark Finland Sweden Norway Northern Ireland Ireland Baltics 25

26 Danske Markets income distribution is dominated by forex, fixed income and related products 21 Q % 3% Forex & Money market 22% 35% 22% Bonds & DCM Repo & Deriviatives 2% Equities & CF 37% 23% 26

27 Normalised market conditions for Danske Markets in 21, but Q4 was difficult % EUR/SEK 12M volatility - High FX volatility boosts activity Jun-8 Dec-8 Jun-9 Dec-9 Jun-1 Dec-1 bp, mid Covered and mortgage bond ASW spreads - Spreads on Danish covered bonds remained low Ireland Spain UK Germany -25 Denmark Jan-8 Aug-8 Mar-9 Oct-9 May-1 Dec-1 % M Libor vs. overnight swap rate spread -Back to pre-crisis level USD EUR % DKK yield curve 5 -Flattening yield curve erodes earnings Jun-7 Dec-7 Jun-8 Dec-8 Jun-9 Dec-9 Jun-1 Dec Year 27

28 Total assets up slightly Y/Y DKK bn Trend in total assets 4, Change Y/Y 3, Other assets +1 % Trading & inv. portfolio +3 % 2, Banks & repos + 14 % 1, Lending + 1 % Total + 4 % Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 28

29 Credit exposure increased by 3% Y/Y Credit exposure from lending activity, end-q4 21 (DKK 2,364 bn, including DKK 1,848 bn in lending and repos) Central and local governments 7% Subsidised housing companies 5% Personal customers 37% Banks 8% Commercial property 1% Other industrials 7% Transportation and shipping 3% Consumer discretionary and consumer staples 9% Construction, engineering and building products 1% Diversified financials 8% Other financials 3% Energy and utilities 2% 29

30 Upgrades/downgrades ratio is improving, but Denmark continues to lag % 8 Relation between upgrades and total rating changes on the corporate book - 12-month moving average Upturn Downturn Upturn 6 Upgrades > downgrades 4 Downgrades > upgrades Group 2 Banking Activities Denmark Source: Own data. 3

31 High monthly volatility in Danish bankruptcies, but downward trend in Q4 21 Index Number of monthly bankruptcies in the Nordics - Seasonally adjusted and indexed, Jan = Denmark 2 Norway 1 Sweden Finland Denmark updated until January 21. Source: EcoWin. 31

32 Credit exposure to commercial property and construction segments DKK bn Commercial property Portion from developers Construction and building materials Sector in total Denmark Finland Sweden Norway Northern Ireland Ireland Baltics Other Total Gross exp. subject to individual id imp.testing ti Individual impairment charges Portion from BA Ireland

33 Danish agriculture sector pressured by lower property and output prices Other 14% Mixed operations 6% Grocery trade 14% Agriculture 24% Cattle breeding 22% Exposure to agriculture DKK bn Realkredit Danmark 45 Banking Activities Denmark 11 Other business units 13 Agriculture 69 Agriculture LTV, Realkredit Danmark % Q Q Q Q Pig breeding 21% 33

34 Gross exposure subject to individual impairment test bp 3,5 Gross exposure, rating categories 1 and 11, in basis points of total loans 3,183 3, 2,5 2, 1,861 1,5 1, 1,213 1, Denmark Finland Sweden Norway Northern Ireland Ireland Baltics Other Act. Group Q38 Q48 Q19 Q29 Q39 Q49 Q11 Q21 Q31 Q41 34

35 Quarterly trend in gross exposure subject to individual id limpairment i test Gross exposure, rating categories 1 and 11, subject to individual impairment test DKK bn In bp of gross lending Other 1,348 bp Baltics 1,861 bp Ireland 3,183bp N. Ireland 1,213bp Norway 276 bp Sweden 175 bp Finland 525 bp Denmark 453 bp Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 35

36 Signs of housing market stabilisation Danish house prices by regions Region Prices Change since Change in * Preview peaked peak (%) Q31 (%) Q41 (%) Copenhagen Q Zealand Q South Denmark Q Central Jutland Q North Jutland Q Denmark overall Q Source: Realkreditforeningen. * Leading indicator, based on monthly statistics from home that cover about 1/3 of the market. Price per sq m 16, 12, 8, 4, Correlation between house prices and consumption in Denmark House prices Consumption * 11E 12E DKK bn Source: Danske Research. *Q4 21 is an estimate Index 1996 = Property prices Ireland % 15 Norway UK 1 Sweden Finland Denmark 5 Correlation between unemployment and foreclosures in Denmark Unemployment Foreclosures 1-year yield No. 2, 1,5 1, Source: Danske Research. Source: Danske Research. 36

37 Mortgages in Denmark: Low average LTV ratio, arrears declining i Danish mortgages 164 repossessed properties and 3,72 arrears out of 41,33 loans at end-21 (.9%) 1.1% of loans with LTV>8% and low rating Max. 8% LTV on origination for private individuals (legal requirement) Max. 6% LTV on origination for commercial mortgages (legal requirement) Average LTV of 67% at end-q4 Breakdown of loans by LTV and rating category Mortgage finance (residential & commercial) End-Q41 LTV/rating Total -2% 8.6% 22.4% 4.2% 35.3% 2-4% 58% 5.8% 18.8% 8% 38% 3.8% 28.6% 4-6% 3.4% 13.9% 3.3% 2.5% 6-8% 1.6% 7.6% 2.1% 11.3% >8%.8% 2.5% 1.1% 4.4% Total (DKK bn) % Arrears on retail loans with monthly payments - Improvement owing to lower rates on 1-year floaters No. 6, 4,5 Mortgage finance: number of arrears, end-period 3- & 6-month arrears and repossessed properties No , 1.6 1,5 5.4 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q Q1 8 Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 37

38 Liquid, highly rated bond portfolio Danish mortgage bonds 45% Bond portfolio (DKK 422 bn) Credit bonds 4% Certificates 2% Quasi- government 2% Swedish covered bonds 13% Other covered bonds 5% Rating distribution AAA 82% AA+ 7% AA 1% AA- 3% A+ 2% A 1% A- 1% BBB+ 1% BBB 1% BBB- % Lower or NA 1% Governments & municipals 29% Level 1-3 assets Level 1 91% Level 2 9% Level 3 % 38

39 Strong loan-to-deposit ratio and liquidity position Loan-to-deposit gap (DKK bn) and ratio (%) DKK bn % DKK bn month liquidity* Moodys Financial Strength End-Q End-Q End-Q4 28 Q19 Q29 Q39 Q49 Q11 Q21 Q31 Q41 Loan-to-deposit gap Loan-to-deposit ratio Note: Deposits include Realkredit Denmark bonds mont th 2 month hs 2 month hs 4 month hs 5 month hs 6 month hs 9 month hs 12 month hs * Main assumptions: No access to capital markets; no refinancing of debt to credit institutions, issued bonds or subordinated capital; and moderate reduction of business activities. 39

40 Well-diversified funding position Central banks, 4% Repos, 6% Equity, 4% Deposits, 33% 57% deposits and fully match-funded Danish mortgage bonds (net) Banks, net, 5% Long-term bonds: DKK 184 bn S-T bonds, 7% Issued covered bonds: DKK 12 bn L-T bonds, 8% Termination of state guarantee at end- September has not changed the funding market. Subordinated debt, 3% Covered bonds, 4% Total borrowing increased by DKK 1 bn in Q4 21 Match-funded DK mortgage bonds, 24% 4

41 Funding in 21: Completed with long duration and without ih guarantees In 21 Danske Bank issued bonds for DKK 51 bn covering more than the estimated long-term funding needed (DKK 3 bn) 59% of the issuance was covered bonds and 41% was senior debt Longest maturity: 16 years Weighted average maturities: All issues: 6.8 years Covered bonds: 8.8 years Senior debt: 4.2 years Issues by type and currency Issue type Currency DKK bn Covered bonds EUR 26 NOK 2 CHF 1 Senior debt EUR 12 USD 4 GBP 3 Other 2 Total 51 41

42 Banking Activities Denmark: Improvement from lower costs and impairments, but S-T rate hurts Profit before loan impairment charges 16% - Declining NII reduces income, partly offset by drop in expenses DKK m Index Net interest income 16,124 13, Net fee income 3,658 3, Other income 1, Total income 21,277 18, Total expenses 12,45 1, Profit bef. loan imp. charges 8,827 7, Loan impairment charges 1,49 7, Profit before tax -1, % Margin trends (ex Realkredit Danmark) 4 Trend in lending volume (average) DKK bn Retail: Y/Y 1% Corporate: Y/Y 4% Q/Q 1% Q/Q % Bank pack.1 (fees & loan imp.charges) 4,112 3, Adj. profit before tax 2,89 3, ROE before loan imp. chgs Note: On operating leasing moved from BA Denmark to Other Banking Act. The move reduces BA Denmarks other income and expenses by about DKK 15 m per quarter. Q49 Q11 Q21 Q31 Q41 % Market shares 35 (ex Realkredit Danmark) 3 Lending 3 Deposits 2 1 Deposits 25 Lending 2 Q49 Q11 Q21 Q31 Q41 Q49 Q11 Q21 Q31 Q41 42

43 Banking Activities Finland: Lower costs and imp. charges, but declining NII reduces profit Profit before loan impairment charges 54% Trend in lending volume - NII pressured by low interest rates despite strong deposit growth (average) DKK m Index DKK bn Retail: Y/Y 4% Corporate: Y/Y 8% Net interest income 3,15 2, Q/Q 2% Q/Q 2% Net fee income 1,11 1, Other income Total income 4,577 3, Total integration expenses Expenses ex total intgr. exp. 2,78 2, Profit bef. loan imp. charges 1, Loan impairment charges 1, Profit before tax ROE before loan imp. chgs Q49 Q11 Q21 Q31 Q41 % 1.5 Margin trends % 18 Market shares 1. Lending 15 Deposits.5 Deposits 12 9 Lending. 6 Q49 Q11 Q21 Q31 Q41 Q49 Q11 Q21 Q31 Q41 43

44 Banking Activities Sweden: Benefits from increasing short-term term rates and low impairments Profit before loan impairment charges 3% - Affected by 13% appreciation of SEK against DKK DKK m Index Net interest income 1,997 2, Net fee income Other income Total income 2,776 3, Expenses 1,513 1, Profit bef. loan imp. charges 1,263 1,64 13 Loan impairment charges Profit before tax 754 1, ROE before loan imp. chgs DKK bn Retail: Y/Y 5% Q/Q 2% Trend in lending volume (average, %-change in local currency) Corporate: Y/Y 8% Q/Q % Q49 Q11 Q21 Q31 Q41 % Margin trends Lending Deposits % Market shares Lending Deposits.5 2. Q49 Q11 Q21 Q31 Q41 Q49 Q11 Q21 Q31 Q41 44

45 Banking Activities Norway: Lower impairment charges lead to improved profit before taxes Profit before loan impairment charges 15% -Costs 4% in local currency; 9% appreciation of NOK vs DKK DKK m Index DKK bn Net interest income 2,666 2, Net fee income Other income Total income 3,62 3,44 95 Expenses 1,87 1, Profit bef. loan imp. charges 1,813 1, Loan impairment charges Profit before tax 1,137 1, ROE before loan imp. chgs Trend in lending volume (average %-change in local currency) Retail: Y/Y 6% Q/Q 2% Corporate: Y/Y 6% Q/Q 4% Q49 Q11 Q21 Q31 Q41 % Margin trends % Market shares Lending Lending.5 Deposits 4 2 Deposits. Q49 Q11 Q21 Q31 Q41 Q49 Q11 Q21 Q31 Q41 45

46 Banking Activities Northern Ireland: Resilient top line, but impairments remain high Profit before loan impairment charges 27% - Slightly declining NII despite higher deposits DKK m Index Net interest income 1,315 1,188 9 Net fee income Other income Total income 1,695 1, Total integration expenses 53 - Expenses ex total intgr. exp. 1,73* 1,183* 11 Profit bef. loan imp. charges Loan impairment charges 1,399 1, Profit before tax ROE before loan imp. chgs * Includes a levy of DKK 49 m in 29 and DKK 45 m in 21 by the UK financial services compensation scheme. DKK bn 5 25 Trend in lending volume (average, %-change in local currency) Retail: Y/Y 3% Q/Q 2% Corporate: Y/Y 7%* Q/Q 3%* Q49 Q11 Q21 Q31 Q41 * Corporate lending growth is adjusted for lending to public authorities. % Margin trends Lending % 4 3 Market shares Corporate Deposits 2 1 Retail. Q49 Q11 Q21 Q31 Q41 Q49 Q11 Q21 Q31 Q41 46

47 Banking Activities Ireland: Impairment charges for commercial property segment still high Profit before loan impairment charges 16% Trend in lending volume - Income under pressure; cost reductions not fully visible until 211 (average) DKK m Index Retail: Y/Y 7% Corporate: Y/Y 7% Net interest income 1,14 1,67 94 DKK bn Q/Q 2% Q/Q 2% Net fee income Other income Total income 1,325 1,28 91 Total integration expenses 24 - Expenses ex total intgr. exp Profit bef. loan imp. charges Loan impairment charges 5,238 4, Profit before tax -4,923-4,65 - ROE before loan imp. chgs Q49 Q11 Q21 Q31 Q41 % Margin trends Lending % 8 6 Market shares Lending.5. Deposits 2 Deposits Q49 Q11 Q21 Q31 Q41 Q49 Q11 Q21 Q31 Q41 47

48 Banking Activities Baltics: Profitable again as loan impairment charges return to normal Returns to profit afterloan impairment charges Trend in lending volume - Increased efficiency and profitability from tight cost control (average) DKK m Index Net interest income Net fee income Other income Total income Goodwill impairment charges 1,417 - Expenses ex. gw imp. charges Profit bef. loan imp. charges -1, Loan impairment charges 2, Profit before tax -3, ROE before loan imp.chgs & gw % Margin trends Lending Deposits Q49 Q11 Q21 Q31 Q41 DKK bn 2 1 % Retail: Y/Y 6% Q/Q 2% Corporate: Y/Y 14% Q/Q 2% Q49 Q11 Q21 Q31 Q41 Market shares lending Estonia Lithuania Latvia Q49 Q11 Q21 Q31 Q41 48

49 Danske Markets: Income down to more normal level Weak Q4 from low-risk profile, but 21 in normal range - Decline reflects exceptionally high income in 29 DKK m Index Total income 17,238 6,873 4 Expenses 2,886 2,78 96 Profit bef.loan imp.charges 14,352 4,93 29 Loan impairment charges 3, Profit before tax 11,115 4,71 42 ROE before loan imp. chgs Quarterly breakdown of income DKK m Q1 21 Q2 21 Q3 21 Q4 21 Trading activities 2,13 1,665 1, Group Treasury 119 * Institutional banking (non-nordic) Danske Markets in total 2,27 2,457 1, * Includes a capital gain of DKK 659 m owing to merger of PBS Holding and Nordito AS. Market position in the Nordics - Strong position in all main product areas Product area / # Nordic Fixed income Forex Derivatives i n/a 1 Equities 1 5 n/a 3 4 Source: Prospera Trading activities accumulated income Fixed income and forex Q1 Q2 Q3 Q

50 Danske Capital: Net fees up 32% on to higher volume and performance fees Profit before loan impairment charges 17% - Limited growth in total income reflects change of business in Luxembourg DKK m Index Net fee income 1,297 1, of which performance fees Total income 1,728 1, Expenses 1,14 1,4 13 Profit bef. loan imp. chrg ex.gl&off-offs Loan impairment charges Profit before tax DKK bn AuM Customer breakdown Private equity Institutional Retail cust. Life insurance Q49 Q11 Q21 Q31 Q41 %.35 Margin for asset management - Adjusted income incl. performance fees/business volume, end of period % 1 AuM Asset breakdown Cash Equities Bonds Q49 Q11 Q21 Q31 Q41 Q49 Q11 Q21 Q31 Q41 5

51 Danica Pension: Books full risk allowance and shadow account Net income from insurance business 24% Investment returns, YTD Customers funds DKK m Index Premiums (DKK bn) % Investment return Investments & liabilities Share of technical provisions 1,87 1, Unit-linked (insurance result) Health and accident (insurance result) Investment result 1, Financing result Net income before postponed risk allowance , ,562-7 Special allotments Postponed risk allowance Net income from insurance business 2,81 2, Net income as % p.a. of allocated cap Possibility of booking risk allowance Base: YE 21 Asset allocation Customers funds 1% Full risk allowance 5% +3% Partly risk allowance %-points change in interest rate % -1.% -.5%.%.5% 1.% -5% -23% No risk allowance Credit bonds Properties 1% Other equities 1% 9% Listed equities 17% 63% Other bonds, etc. -1% % change in equities 51

52 Danicas profit model Profit model Condition / sensitivity 21 DKK m = Risk allowance 64 bp of technical prov. (DKK 176 bn) Return on investment portfolio at shareholders risk Financing result Insurance result, unit-linked long-term:.4-.5% of AuM Special allotments, depending on profit and business volume Shadow account Health & accident No usage of bonus potential of paid-up policies and sufficient investment income Positive technical basis of DKK 2.3 bn Equity markets, interest rates Annualised investment return: 4.9% ST interest rate (equity alloc. cap. + subord. bonds) High new sales will lower result and vice versa Expected to be DKK.5 bn p.a. in next 2-4 years, then declining Sufficient investment income Combined ratio Low short-term interest rate Solid income base from existing customers Higher due to income from shadow account 1, Total 2,

53 Investment distribution within Danica Traditionel Interest rate group 1 (.5%-1.5%) Interest rate group 2 (1.5%-2.5%) 13% 16% 1% 11% 27% 25% 44% 54% Equities Bonds Interest rate group 3 (2.5%-3.5%) Interest rate group 4 (3.5%-4.5%) 9% 8% 9% 4% Credit bonds 16% 1% Properties 67% 77% 53