DNB Boligkreditt AS DNB Bank ASA. November 2013

Transcription

1 DNB Boligkreditt AS DNB Bank ASA November 2013

2 Contents DNB ASA ("DNB") A brief overview The Norwegian Economy - Important for DNB Financial performance and capital Asset quality Funding Appendix : Cover pool portfolio information The Norwegian Mortgage Market and House Prices The Norwegian Covered Bond legislation Financial performance and capital additional slides 2

3 DNB - Norway s Leading Financial Services Group Approximately 30% market share of the retail market Approximately 30% market share of the corporate market 34% owned by the Norwegian Government Credit Ratings: Moody's S&P DBRS A1 (stable) A+ (stable) AA (stable) 3

4 The DNB Group DNB ASA DNB Bank ASA A1 / A+ / AA DNB Life and Asset Management (Senior/ short term issuance) DNB Boligkreditt AS (Covered Bonds) 100% owned by DNB Bank and functionally an integrated part of the parent Mortgages originated within DNB Bank s distribution network in accordance with the bank's credit policy 4

5 Norway Is of Vital Importance to the Group More than 80 per cent of our lending stems from Norway More than 80 per cent of our income stems from Norway More than 80 per cent of our deposits stems from Norway Only Norwegian residential mortgages in the Cover Pool backing our Covered Bonds 5

6 The Norwegian Economy: Of High Importance to DNB 6

7 Percent A Rock-Solid Norwegian Economy Annual budget deficit/surplus for 2013* (OECD) -180 General government net financial liabilities (As a percentage of nominal GDP 2011) Other countries budget deficit: USA -5.4% Japan -10.3% Canada -2.9% Australia -1.8% *Note: Budget surplus/deficit calculated as a percentage share of country GDP; forecasts for 2013 Source: OECD Economic Outlook No. 93, May 2013 Source: OECD Economic Outlook No. 93, May

8 The Norwegian Economy Is a Steady Performer - strong growth and low volatility 8,0% 6,0% Real GDP growth Standard deviation Standard deviation ,0% 2,0% 0,0% -2,0% f2013 f ,0% -6,0% Norway* Denmark Sweden Finland Norway Sweden UK Euro Area Source: OECD Economic Outlook No. 93, May *Mainland GDP

9 Norway Has Consistently Lower Unemployment Rates Unemployment rate (As a percentage of total workforce) 14,0% 12,0% Norway Sweden UK Euro Area Forecast 10,0% 8,0% 6,0% 4,0% NORWAY 2,0% 0,0% F2013 F2014 Source: OECD Economic Outlook No. 93, May

10 Financial Targets, Performance and Capital 10

11 DNB Delivers Healthy Profit Pre-tax operating profit before write-downs (NOK bn) 14,1 15,1 15,6 18,7 21,1 21,8 21,0 18,0 7,7-0,3 0,2 3,5 3,0 3,4 3,2 2, Jan-Sep 2013 Pre-tax operating profit before writedowns Write-downs 11

12 Key Financial Ratios Solid Results and Strong Capital Generation Jan-Sep Return on equity 12,1 11,2 11,4 13,6 10,6 12,4 22,0 Cost income 47,6 49,5 47,1 47,6 48,3 51,4 50,6 Comb. weighted total average spread 1,26 1,18 1,12 1,15 1,15 1,04 1,00 Write down ratio (%) 0,22 0,24 0,28 0,26 0,67 0,33 0,02 Equity tier 1 ratio * 11,0 10,7 9,4 9,2 8,5 5,8 6,3 Total capital 13,1 12,6 11,4 12,4 12,1 9,5 9,6 * Equity Tier 1 ratio 12.5 % after full IRB implementation 12

13 Net Non-Performing and Net Doubtful Loans and Guarantees 1) Per cent NOK billion Dec. 31 Dec. 31 March 30 June 30 Sept. 31 Dec. 31 March 30 June 30 Sept. 31 Dec. 31 March 30 June 30 Sept ) Includes non-performing committments and committments subject to individual impairment. Accumulated individual impairment is deducted. Baltics and Poland DNB Group excl. Baltics and Poland As a percentage of net loans As a percentage of net loans excl. Baltics and Poland 13

14 DNB: Solid Capital Position but will continue to grow Core Tier New and stricter requirements: Norwegian Banks needs a Core Tier 1 of 12 % by June 2016 and a Countercyclical Buffer of 0 2.5% DNB is very well capitalised vs Peers: DNB has one of the highest Core Tier 1 of Nordic Peers, in an apple to apple comparison DNB s capital ratios are measured more conservatively: Transitional floor might be effective until at least end of 2017 Significant different RWs for similar assets in the different Nordic countries DNB will face higher RWs for mortgages ( 20-25% area versus 11.4 % as used in our estimated Basel III today) DNB s new Basel III ratio for Core Tier 1 will be lower than todays estimate of 12.5%, as a result of higher RWs 14

15 DNB versus Nordic peers : - Best on Leverage Ratio and Second Best on S&P RAC ratio Leverage Ratio (Equity vs Total Assets) 1) S&P RAC Ratio 2) 9,4 8,9 8,5 8,2 8,2 7,8 4,9 4,5 4,3 3,9 3,7 3,6 1) As of 30 June ) As of 31 December

16 Capital Adequacy Figures as at 30 June 2013 Comparison with Nordic Peers Percentage *) Due to requirements from Finanstilsynet, DNB's risk weights are conservatively estimated. The adjusted capital adequacy figures are estimated on the basis of average observed risk weights on corresponding portfolios in Nordic banks. 16

17 Asset Quality 17

18 Loan Book Exposure By Sectors EAD by segments as at 30 September ) Private individuals; 6,4%(6,3%) Commercial real estate; 11,3%(11,7%) Shipping; 6,8% (7,3%) Logistics; 1,1%(1,2%) Oil, gas and offshore; 6,2%(6,7%) Energy; 3,1%(3,2%) Other corporate customers; 6,2%(5,7%) Residential mortgages; 44,1% (43,8%) Public sector; 1,6%(1,6%) Fishing, fish farming and farming; 2,4%(2,2%) Services; 2,1%(2,0%) Telecom and media; 1,8%(1,5%) Trade; 2,6%(2,6%) Manufacturing; 4,4%(4,2%) 1) Distribution of exposure at default based on. The breakdown into principal customer groups corresponds to the EU's standard industrial classification, NACE Rev.2. Comparable figures as at 30 September 2012 in parentheses. 18

19 Mortgage Lending in DNB Is Based on Cash Flow Approval of a loan is based on: 1. Willingness to repay the loan: By means of scoring model based on historical behaviour 2. Capability of repaying the loan: In calculating the capability or ability to repay, an adequate margin (currently 5.0%, increased from 4.0% from Jan 2012), accommodate the effects of a possible increase in interest rates, is included in the model 3. Collateral: Credit should thus not be approved solely on the basis of the proposed collateral All borrowers are subsequently classified monthly by behaviour scoring DNB - Mortgage Loan payment characteristics : Standard payment method is monthly in arrears More than 95 % of the customers pays their mortgages by fixed debit of their bank account 19

20 House Price Growth Can be Explained by Fundamentals We must not forget that during the banking crisis in the beginning of the 90s, many households came into severe trouble. Nonetheless, losses tied to households were relatively low. By far the greatest number of households will manage higher debt liabilities. - Morten Baltzersen, Norwegian FSA (Dagens Næringsliv, March 14, 2012) Norwegian Real House Price Index, (1985=100) Nominal CPI-deflated Income -deflated * * Income per capita deflated house prices Source: Association of Norwegian Real Estate Agents, Finn.no, Econ Pöyry and Statistics Norway. 20

21 Housing Market: Real Demand Exceeding Cupply for Several Years Annual Figures ) 21

22 Norwegian Households are Solid Household assets and debt 2011 (NOK billion) Household assets and debt (NOK billion) Source: Statistics Norway, EFF, NEF, Finn.no, Econ Pöyry, DNB Markets and Norwegian Central Bank 22

23 DNB is Well Prepared for a Potential Negative House Price Correction All mortgage lending based on cash flow Low unemployment and good social benefit schemes makes cash flows robust Average LTV in the Cover Pool is 54 % Current OC is more than 30% DNB has showed good access to Senior funding with diversified funding sources Covered Bonds could be refinanced with Senior if pool value declines In addition, any Norwegian recession would be softer due to a likely fiscal stimulus by the Norwegian Government (as in 2009) 23

24 DNB Boligkreditt Covered Bonds Rating: AAA / Aaa / AAA Portfolio Characteristics Cover Pool Size Number of Mortages in the Cover Pool Average Loan Balance Over Collateralisation * 31,2 % Weighted Average LTV Indexed 54,3 % Weighted Average Seasoning 55,00 * eligible loan balance, nominal loans Pool statistics as of 30 Sep 2013 The pool cut date is coinciding with our financial quarterly reporting. The cover pool consists of 100% Norwegian Residential Mortgages - No substitution with assets of lower quality 24

25 Shipping, Offshore and Logistic Portfolio Exposure at default according to sector 1) Other shipping; 7,8% RoRo/PCC; 3,2% Chemical and product tankers; 8,7% Other non-shipping; 2,3% Container; 13,8% Offshore; 22,5% Crude oil tankers; 9,9% Cruise; 3,7% Logistics; 4,5% Gas; 12,6% Dry cargo; 11,0% 1) Figures as at 30 Sep

26 The Dominant Part of the SOL Portfolio is within the Low- and Medium Risk Segment The total Division The tanker segment The dry bulk segment The container segment Based on DNB's risk classification system. The volume represents the expected outstanding amount in the event of default. PD = probability of default 26

27 Funding 27

28 DNB has Significantly Improved The Long Term Funding Structure Since the Financial Turmoil Started in 2007 Share of stable long-term funding* Average life of long term funding (Senior debt and covered bonds) 125 % 120 % 122% 5 4,5 115 % 110 % % 100 % 95 % 90 % 85 % 80 % 3 2 2,43 75 % * Deposits from customers, subordinated debt, covered bonds and senior debt > 12 months residual maturity. 28

29 Strong Growth in Deposits Ratio of deposits to net loans Development in deposits Percent Sept Dec March June Sept March 30 June 30 Sept. 31 Dec. 31 March 30 June 30 Sept The ratio of deposits to net loans excl. short-term money market investments in DNB New York. Deposits Deposits at end of period at end of period Deposits Deposits adjusted for adjusted exchange rate movements for exchange rate movements 29

30 DNB Is a Well Established International Borrower - with a strong focus on diversification of funding sources DNB Bank EMTN program of EUR 45 billion Samurai issue (JPY) Established 2011 USD 144A program USD 10 billion Established 2012 USCP program of USD 18 billion Yankee CD program of USD 12 billion ECP/CD program of EUR 15 billion DNB Boligkreditt (Covered Bonds) Covered Bond program of EUR 60 billion Established 2007 Covered Bond program of USD 12 billion Established 2010 Covered Bond program of AUD 4 billion Established

31 DNB Issuance of Long Term Debt 31

32 A Well Established International Covered Bond Issuer Tenor Redeems Euro mn 5 years (2015) Euro mn 5 years ( Jan) Euro mn 5 years ( Oct) Euro mn 7 years ( Jan) Euro mn 5 years (2017 Apr) Euro mn 7 years ( Aug) Euro mn 5 years ( Jan) Euro mn 5 years (2018 Nov) Euro mn 7 years (2019) Euro mn 10 years (2021) Euro mn 10 years ( Mar) Euro mn 10 years ( Nov) Best USD issuer 2013 Best USD deal 2013 USD mn 5 years (2015) USD mn 5 years (2016) USD mn 5 years (2018) AUD 600 mn 5 years (2016) Registered Covered Bonds: 2008: Euro mn 25 issues Avg. mat: 11 years 2009: Euro mn 20 issues Avg. mat: 13 years 2010: Euro mn 43 issues Avg. mat: 14 years 2011: Euro 850 mn 24 issues Avg. mat: 12 years 2012: Euro 400 mn 11 issues Avg. mat: 13 years 2013: Euro mn 27 issues Avg. mat: 11 years CHF market: CHF mn 11 issues Mat: 5 20 years 32

33 Summing up: Look to Norway! 33

34 Norway Is of Vital Importance to DNB DNB is 34% owned by the Norwegian government The Norwegian economy is performing significantly better than most others, including Scandinavia More than 80 per cent of our income stems from Norway More than 80 per cent of our lending stems from Norway 34

35 Long Term Funding Contacts Thor Tellefsen, Senior Vice President, Head of Long Term Funding Phone direct: Mobile Fax number: thor.tellefsen@dnb.no Trond Sannes Marthinsen, Vice President, Long Term Funding Phone direct: Mobil Fax number: trond.marthinsen@dnb.no Kristine Øvrebø, Senior Vice President, Long Term Funding Phone direct: Mobil Fax number: kristine.ovrebo@dnb.no 35

36 Appendix Appendix A: Cover pool portfolio information 36

37 Portfolio Characteristics Report date: Report currency: NOK 1.1 Key characteristics Total cover pool, nominal balance Number of mortgages Number of borrowers Average loan balance Outstanding covered bonds, nominal balance Substitute assets (% of total cover pool) 0,0 WA indexed LTV (%) 54,3 WA seasoning (in months)* 55 WAL of cover pool (contractual maturity in years) 13,3 WAL of outstanding covered bonds (contractual maturity in years) 5,6 * Seasoning indicates the number of months since collateral for the loan was established. 1.2 Overcollateralisation* Cover pool size Nominal Market value Residential mortgages, eligible loan balance Residential mortgages, non eligible loan balance Substitue assets 0 0 Market value derivatives (net MtM) Total cover pool (incl. non eligible loan balance) Total cover pool, eligible loan balance Covered bonds outstanding Overcollateralisation (incl. non eligible loan balance) 32,0 % 30,3 % Overcollateralisation, eligible loan balance 31,2 % 29,5 % * The nominal Overcollateralisation (OC) percentage may change from time to time and may be reduced in the future. However, DNB Boligkreditt intends to uphold an OC percentage necessary to support a rating of the covered bonds in line with the company s ambition. 37

38 des.07 feb.08 apr.08 jun.08 aug.08 okt.08 des.08 feb.09 apr.09 jun.09 aug.09 okt.09 des.09 feb.10 apr.10 jun.10 aug.10 okt.10 des.10 feb.11 apr.11 jun.11 aug.11 okt.11 des.11 feb.12 apr.12 jun.12 aug.12 okt.12 des.12 feb.13 apr.13 jun.13 aug.13 Cover Pool OC History 160% Actual Overcollateralisation Rating requirements 140% 120% 100% 80% 60% 40% 20% 0% 38

39 Maturity Structure 1.3 Maturity structure cover pool Contractual maturity (years) Loan balance % ,9 % ,0 % ,1 % ,8 % ,0 % > ,1 % Total ,0 % 1.4 Maturity structure covered bonds Contractual maturity (years) Loan balance % ,0 % ,6 % ,3 % ,2 % ,0 % > ,9 % Total ,0 % Expected maturity (years) Loan balance % ,6 % ,8 % ,8 % ,2 % ,7 % > ,9 % Total ,0 % 39

40 Property Types, Largest Borrowers and Occupancy Types 2.1 Property types Loan balance % WA LTV Private ownership Detached ,9 % 55,2 Semi-detached ,3 % 54,3 Apartment ,2 % 54,4 Share in housing cooperative Semi-detached ,6 % 58,4 Apartment ,9 % 56,8 Housing cooperative ,0 % 25,1 Second home ,0 % 56,6 Other ,0 % 73,1 Total ,0 % 54,3 2.2 Largest borrowers Private individuals 5 largest (% of total mortgages) 0,03 % 10 largest (% of total mortgages) 0,06 % Housing cooperatives 5 largest (% of total mortgages) 0,14 % 10 largest (% of total mortgages) 0,24 % 2.3 Occupancy type Loan balance % WA LTV Owner occupied ,9 % 55,1 Housing cooperative ,0 % 25,1 Second home ,0 % 56,6 Buy-to-let ,1 % 60,0 No data ,0 % 55,7 Total ,0 % 54,3 40

41 Composition of the Residential Mortgage Cover Pool 2.4 Repayment type Loan balance % WA LTV Amortization ,6 % 51,6 Interest only* ,4 % 58,4 Total ,0 % 54,3 * No installments for a limited period of time. 2.5 Flexible loans Drawn balance Total limit on flexible loans Percentage drawn of limit 75,1 % WA LTV* 54,4 * The WA LTV is calculated based on limit. 2.6 LTV buckets Indexed LTV ,1 % ,5 % ,0 % ,3 % ,2 % ,3 % ,7 % ,4 % ,2 % ,1 % ,1 % ,1 % > ,1 % Total ,0 % 41

42 Composition of the Residential Mortgage Cover Pool 2.7 Seasoning* Loan balance % WA LTV < 12 months ,3 % 62,2 12 < 24 months ,7 % 58,9 24 < 36 months ,2 % 57,6 36 < 60 months ,4 % 54,5 60 months ,4 % 46,9 Total ,0 % 54,3 * Seasoning indicates the number of months since collateral for the loan was established. 2.8 Interest rate type Loan balance % WA LTV Floating rate ,5 % 54,4 Fixed rate with reset < 2 years ,2 % 52,2 Fixed rate with reset 2 but < 5 years ,8 % 55,1 Fixed rate with reset 5 years ,6 % 52,4 Total ,0 % 54,3 2.9 Loan performance Loan balance % WA LTV Performing loans ,65 % 54,3 Delinquent loans (arrears 31 to 90 days) ,21 % 60,2 Gross non performing loans (arrears 91 days +) ,14 % 61,5 Total ,00 % 54,3 42

43 Geographical Distribution 2.10 Geographical distribution Loan balance % WA LTV Average loan balance Akershus ,3 % 51, Aust-Agder ,7 % 60, Buskerud ,5 % 53, Finnmark ,5 % 59, Hedmark ,3 % 55, Hordaland ,8 % 55, Møre og Romsdal ,6 % 57, Nordland ,8 % 55, Nord-Trøndelag ,4 % 59, Oppland ,6 % 58, Oslo ,3 % 51, Østfold ,3 % 55, Rogaland ,5 % 56, Sogn og Fjordane ,4 % 60, Sør-Trøndelag ,9 % 57, Telemark ,5 % 58, Troms ,5 % 52, Vest-Agder ,8 % 61, Vestfold ,3 % 54, Total ,0 % 54,

44 Net Non Performing Loans in DNB Boligkreditt AS 0,30% 0,20% 0,13%0,13% 0,16% 0,15%0,14% 0,15%0,15%0,15%0,15% 0,14%0,14%0,14% 0,13%0,13% 0,12% 0,13% 0,10% 0,05% 0,06% 0,10%0,10%0,10% 0,00% 0,01% 0,02%0,03% 90+ days Arrears 44

45 Future Updates On Cover Pool Developments Information about the cover pool of DNB Boligkreditt may be accessed via DNB Boligkreditt s web page: Contacts DNB Boligkreditt AS: - Håkon Røsand, Director, Rating & Investor information: hakon.rosand@dnb.no Øyvind Birkeland, CEO: oyvind.birkeland@dnb.no Portfolio information will be updated when DNB quarterly results are released 45

46 Appendix Appendix B: The Norwegian Mortgage Market and House Prices 46

47 The Norwegian Residential Mortgage Market Nearly 80% of Norwegians own their home: Few mortgages are buy-to-let. Norway is primarily a floating interest rate market: The large majority of mortgages originated by DNB are floating rate. Rates on floating rate mortgages can be reset at any time and at the bank s own discretion, by giving debtors six weeks notice. In Norway, all borrowing costs are deductible from taxable income at the current rate of 28%: Households are therefore better able to withstand an increase in interest rates. Loans are normally underwritten with a term of years: Average size for new mortgages originated by DNB is approximately NOK 1,000,000 (EUR 125,000). Source: Finance Norway - FNO 47

48 Residential Mortgages, Distribution of Loan to Value 40,0 % 35,0 % 30,0 % 25,0 % 20,0 % 30 Sept ,0 % 10,0 % 5,0 % 0,0 % >85 LTV 48

49 Norwegian Households: Credit growth and House prices stabilising Per cent Sources: Statistics Norway, the real estate sector (NEF, EFF, Finn.no and ECON Pöyry) and Norges Bank 49

50 Norwegian Households Are Used to and Prepared For Higher Interest Rate Burden Per cent 1) Loan debt as a percentage of disposable income adjusted for estimated reinvested dividend income for and redemption/reduction of equity capital for Q3 2) Interest expenses after tax as a percentage of disposable income adjusted for estimated reinvested dividend income for and redemption/reduction of equity capital for plus interest expenses Sources: Statistics Norway and Norges Bank 50

51 The Norwegian Residential Mortgage Market Source: Finance Norway - FNO 51

52 Appendix Appendix C: The Norwegian Covered Bond legislation 52

53 Norwegian Covered Bond Framework Overview The Norwegian covered bond framework was fully enacted in June 2007: Prior to adoption, close discussions were held with rating agencies in order to provide investors with robust protection. Covered bondholders have dual recourse: To the issuing entity. A preferential claim over a cover pool of eligible assets. The NPV of the assets in the cover pool must at all times at least be higher than the NPV of the outstanding covered bonds. Covered bonds are issued by specialised credit institutions licensed and supervised by the Norwegian Financial Supervisory Authority (NFSA): The activities of the company are limited to acquiring eligible assets and financing these predominantly by covered bonds. Norwegian covered bonds qualify for 10% risk weighting in eligible European jurisdictions and comply with the CRD of the EU: Certain bonds cleared through appropriate clearing systems may be eligible as collateral for liquidity loans in the ECB. 53

54 Norwegian Covered Bond Framework (cont.) Eligible assets: Mortgage assets: Residential property: Commercial property: this asset class) 75% LTV 60% LTV (By-laws of DNB Boligkreditt exclude Loans to municipalities, governments and other public sectors Liquid substitution assets, maximum 20% of cover pool Derivatives contracts Should property prices fall, the part of the loan that exceeds the relevant LTVlimit is still included in the cover pool and protects the covered bondholders, but is not taken into account when calculating the value of the pool. To maintain the value of the cover pool, new loans with LTV up to 75% must be added. The same principle applies to loans in default. All property values shall be set by a competent and independent person. ALM requirements: Matching requirements to control interest rate, foreign exchange and liquidity risk. 54

55 Norwegian Covered Bond Framework (cont.) Supervision by an Independent Inspector: An Independent Inspector, appointed by the Norwegian FSA, monitors assets and liabilities on a regular basis, and the compliance with certain requirements laid down in the covered bond legislation. Suspected irregularities will be reported to the NFSA. The company s external auditor may be appointed. Bankruptcy proceedings are laid down in a special framework: Should the issuing company go bankrupt, assets in the cover pool and the corresponding cash flows are separated from the bankruptcy estate. Holders of covered bonds and derivative counterparties have a preferential claim over the cover pool assets. The estate manager must seek to ensure that contractual payments for covered bonds and secured derivatives are made. To meet contractual payments, assets may be sold or new covered bonds issued. Should the cover pool be unable to make contractual payments and an imminent change is unlikely, it will be wound down. The covered bonds/derivative counterparts rank pari passu. Claims on covered bonds are made based on the agreed future cash flow discounted at the market rate for comparable bonds in the relevant currency. 55

56 Appendix Appendix D: Financial performance and capital additionally slides 56

57 Customer segments NOK million Pre-tax operating profit after impairment Third quarter 2013 Third quarter Personal customers Small and medium-sized enterprises Large corporates and international customers

58 Quarterly profit figures Pre-tax operating profit before impairment NOK million Pre-tax operating profit before impairment excl. basis swaps NOK million Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 Profit for the period NOK million Profit for the period excl. basis swaps NOK million Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q

59 Income statement January - September Amounts in NOK million 3Q13 2Q13 1Q13 4Q12 3Q Net interest income Net commissions and fees, core business Net financial items Net other operating income, total Total income Operating expenses Restructuring costs and non-recurring effects Expenses relating to debt-financed structured products Impairment losses for goodwill and intangible assets Pre-tax operating profit before impairment Net gains on fixed and intangible assets 2 (9) 4 (65) 20 (3) 63 Impairment of loans and guarantees Pre-tax operating profit Taxes Profit from operations held for sale, after taxes (7) (7) (5) 92 Profit for the period

60 Special items January - September Amounts in NOK million 3Q13 2Q13 1Q13 4Q12 3Q Mark-to-market adjustments - basis swaps (223) (88) (233) 235 (566) (544) (1 921) Net mark-to-market adjustments - other items 83 (67) Impairment losses for goodwill and intangible assets Expenses relating to debt-financed structured products Effect on pre-tax operating profit before impairment (140) (155) (651) 128 (573) (946) (1 676)

61 Impairment of loans and guarantees January - September Amounts in NOK million 3Q13 2Q13 1Q13 4Q12 3Q Individual impairment: Personal customers - Mortgage loans Consumer finance Small and medium-sized enterprises Large corporates and international customers - Nordic Corporates Division (24) 27 (14) 69 (47) - International Corporates and Institutions Division (18) Shipping, Offshore and Logistics Division Energy Division Baltics, Russia and Poland Other units (2) Total individual impairment Collective impairment: DNB excl. Baltics, Russia and Poland (174) (90) Baltics, Russia and Poland (25) (27) (38) (39) (58) (90) (132) Total collective impairment of loans (199) (148) Impairment of loans and guarantees

62 Exposure Baltics, Poland and Russia NOK million Net lending 30 Sep 2013 % of total loan book Latvia % Lithuania % Estonia % Poland % Russia % DNB Baltics, Russia and Poland % 62

63 Baltic Countries Are Among the EU Leaders According to GDP Growth Rates 10 Real GDP growth (f) 2013(f) EU 27 Estonia Latvia Lithuania Poland Source: Eurostat (f) = forecast 63

64 DNB Bank PIIGS Exposure No sovereign exposure 64

65 Solid Capital Position 30 Sept 2013 Equity Tier 1 ratio 11.0% Tier 1 ratio 11.3% Total capital ratio 13.1 % CET1 ratio (1) 4.9% At full IRB implementation Equity Tier 1 ratio 12.5% Tier 1 ratio 12.9% Total capital ratio 15.0 % 1) Core equity tier 1 relative to total assets 65

66 Balance sheets 30 Sept. 31 Dec. 30 Sept. 31 Dec. Amounts in NOK billion Deposits with central banks Due from credit institutions Loans to customers Other assets Total assets Due to credit institutions Deposits from customers Short-term debt securities issued Long-term debt securities issued Other liabilities and provisions Equity Total liabilities and equity Ratio of deposits to net loans (%) Adjusted ratio of deposits to net loans (%) 1) Total combined assets Currency-adjusted loans to customers Currency-adjusted deposits from customers ) Excluding short-term money market deposits in DNB New York DNB Group DNB Bank ASA

67 Disclaimer This material has been prepared on the basis of the information provided by DNB Bank ASA (referred to as "DNB Bank") under the Covered Bond program and public available sources. DNB ASA the holding company of the DNB group is referred to as "DNB " in this presentation. This material does not constitute an offering circular in whole or part and you must read the actual offering circular related to the Covered Bond program and the notes which may be issued from time to time thereunder as referred to in this material (respectively the "Program" and the Notes ) before making an investment decision. The offering circular for the Program is available from the Arranger. You should consult the offering circular for more complete information about DNB and the Program. This material is presented solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this material are subject to change without notice and DNB Bank is not under any obligation to update or keep current the information contained herein. In addition, institutions mentioned in this material, their affiliates, agents, directors, partners and employees may make purchases and/or sales of the Notes as principal or agent or may act as market maker or provide investment banking or other services in respect of the Program or the Notes which may be issued from time to time thereunder. DNB, the Arranger and the Dealers and their respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. The Notes are not to be offered or sold in any jurisdiction in circumstances in which the distribution of this document or the Notes would be prohibited in such jurisdiction. This document must not be acted on or relied on by persons who are not eligible to invest in the Notes. Any investment or investment activity to which this communication relates is available only to persons eligible to invest in the Notes and will be engaged in only with such persons. Furthermore, you should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the suitability of an investment in the Notes which may be offered from time to time under the Program) based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this presentation. 67