DnB NOR Group 1st half and 2nd quarter 2010 results. Bjørn Erik Næss, chief financial officer

Transcription

1 DnB NOR Group 1st half and 2nd quarter 2010 results Rune Bjerke, group chief executive Rune Bjerke, group chief executive Bjørn Erik Næss, chief financial officer

2 1st half and 2nd quarter 2010 Rising credit growth and increase in net interest income Cost programme ahead of schedule compensates for wage and price inflation Write-downs on loans markedly reduced Positive i profit performance enhanced by non-recurring items 2

3 Profit for the 1st half Pre-tax operating profit before write-downs Profit for the period Profit for the period after minority interests 3

4 Key figures for the 1st half Earnings per share Return on equity Cost/income ratio Ratio of deposits to lending 4

5 Profit for the 2nd quarter Pre-tax operating profit before write-downs Profit for the period Profit for the period after minority interests 5

6 Key figures for the 2nd quarter Earnings per share Return on equity Cost/income ratio Ratio of deposits to lending 6

7 Business areas 7

8 Development in lending volumes 1) 1) Figures at end of period 8

9 Development in deposits 1) 1) Figures at end of period 9

10 Development in average interest rate spreads Group 1) 10

11 Development in average interest rate spreads Large Corporates and International 1) 11

12 Development in average interest rate spreads Retail Banking 1) 12

13 Income statement 1st half 1st half Amounts in NOK million 2Q10 1Q10 4Q09 3Q09 2Q Net interest income Net other operating income Total income Total operating expenses before impairment losses for goodwill and intangible assets Impairment losses for goodwill and intangible assets Pre-tax operating profit before write-downs Net gains on fixed and intangible assets (1) (4) Write-downs on loans and guarantees Pre-tax operating profit Taxes Profit from operations held for sale (8) (4) (13) 0 Profit for the period Profit after minority interests

14 Changes in net interest income 14

15 Changes in net other operating income 15

16 Changes in operating expenses Amounts in NOK million 2Q10 Changes 2Q09 Total operating expenses Impairment losses for goodwill and intangible assets Total ordinary operating expenses Cost programme (178) Restructuring expenses (3) Wage and price inflation 140 Reclassification of marketing expenses in DnB NOR Eiendom 66 IT expenses 59 Operational leasing 44 Other operating expenses (14) 16

17 Cost programme ahead of schedule 17

18 Streamlining measures Streamline production and operations across the Group and implement the cost programme NOK million Change procurement routines ll NOK million Concentrate t production functions in Norwegian regions into one organisation NOK million Centralise, specialise and streamline staff and support functions NOK million Reorganise IT operations for the entire Group NOK million 18

19 Net non-performing and net doubtful commitments 1) 19

20 Write-downs on loans and guarantees First half First half Amounts in NOK million 2Q10 1Q10 4Q09 3Q09 2Q Individual write-downs: Retail Banking - Private Customer Divisions SME Divisions (3) DnB NOR Finans Nordlandsbanken Large Corporates and International: - Nordic Corporates Division 0 (20) (2) (20) International Corporates and Institutions Division (3) Shipping, Offshore and Logistics Division Special and Structured Finance (7) (6) (13) 0 - Northern Europe Other units DnB NOR excl. DnB NORD DnB NORD Total individual write-downs Collective write-downs DnB NOR excl. DnB NORD (168) (65) (233) 442 DnB NORD 46 (325) (279) 413 Total group write-downs on loans (122) (390) (512) 856 Write-downs on loans and guarantees

21 Write-downs in per cent of lending 1st half 1st half Per cent 2Q10 1Q10 4Q09 3Q09 2Q Total write-downs in relation to average volumes (annual basis) Of which: - DnB NOR excluding DnB NORD DnB NORD

22 Lending and write-downs in DnB NORD 2nd quarter 2010 Full year 2009 Write-downs Write-downs Write-downs Write-downs Net lending as at on loans and in per cent of on loans and in per cent of Amounts in NOK million 30 June 2010 guarantees net lending 1) guarantees net lending 1) Latvia Lithuania Estonia The Baltic States - total Poland Other DnB NORD total ) Individual and collective write- downs, relative to average volumes (annual basis) 22

23 Balance sheets DnB NOR Group DnB NOR Bank ASA 30 June 31 Dec. 30 June 30 June 31 Dec. 30 June Amounts in NOK billion Net lending to customers 1) Other assets Total assets ) Deposits from customers 2) Short-term debt securities issued Long-term debt securities issued Other liabilities and provisions Equity Total liabilities and equity Ratio of deposits to net lending (%) 3) Total combined assets ) Currency-adjusted lending ) Currency-adjusted deposits ) The ratio of deposits to lending in DnB NOR Bank ASA must be seen in connection with the transfer of loans to DnB NOR Boligkreditt 23

24 Stable access to long-term funding longer maturities at competitive prices 2010 NOK billion Maturity Spread (3-month Euribor) Covered bonds Senior bonds Total bp NOK billion Maturity Spread Covered bonds Covered bonds, Norges Bank (central bank) Senior bonds Total bp 2008 NOK billion Maturity Spread Covered bonds Covered bonds, Norges Bank (central bank) Senior bonds Total bp 24

25 Tier 1 capital ratio 1) Including 50 per cent of profit for the period 25

26 DnB NORD 30 January 2010 Start of evaluation period of shareholder agreement between DnB NOR and NORD/LB 30 July 2010 Close of evaluation period. DnB NOR's Board of Directors will decide on the further course of action on 15 July Notification of the termination of the shareholder agreement must be given ten days prior to the expiry of the evaluation period 1 August October 2010 (upon notification i of termination) i Each party will appoint advisers to assist in the negotiations. If agreement is not reached on the price, an independent adviser, appointed by the parties, or by the Danish Bankers Association, will determine a binding price January 2011 Completion of the transaction 26

27 Macroeconomic outlook 2010 Signs of recovery in our most important markets Positive economic trend in Asia, improvement in the US, major challenges in Europe Norwegian economy in a unique position Uncertainty in the international financial markets 27

28 Outlook for DnB NOR Retail Banking Growth in housing loans, lag in margin adjustments, low write-downs Large Corporates and International Signs of increase in credit demand, increasing lending spreads, moderate write-downs Markets Certain increase in demandd and activity it levels. l Volatility gives good earnings from FX, interest rate and commodity derivatives and counteracts stock market turmoil Insurance and Asset Management Short-term challenges related to market trend, well-positioned for future growth and good profitability DnB NORD Reduction in write-downs, improving operations 28

29 DnB NOR s financial targets Updated estimate for write-downs on loans in 2010: NOK 4 5 billion Updated d estimate t for taxes in 2010: 33 per cent on an annual basis Oh Other targets remain unchanged 29

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31 1 Appendix

32 Changes in net interest income 2

33 Changes in net other operating income 3

34 Changes in operating expenses Amounts in NOK million 2Q10 Changes 1Q10 Total operating expenses Impairment losses for goodwill and intangible assets Reversals of contactual early retirement pensions (367) Total ordinary operating expenses Cost programme (56) Restructuring expenses 19 Performance-based pay 112 Marketing expenses etc. 38 IT expenses 35 Other operating expenses 83 4

35 Expected annual budget deficit and surplus for Norway* - budget surplus - budget deficit Other countries budget deficits: USA 10.7 % Japan 8.2 % Canada % Australia 3.5 % ICELAND 10.1% PORTUGAL 7.6% SPAIN 8.5% IRELAND 12.2% UK 13.3% FRANCE 86% 8.6% NORWAY +9.9% DENMARK 5.4% NETHERLANDS BELGIUM 5.6% 5.9% LUX. 4.3% SWITZ. 13% 1.3% GERMANY 5.3% FINLAND 4.8% ESTONIA SWEDEN 26% 2.6% 3.0% CZECH REP. 5.6% AUSTRIA 3.5% SLOVENIA ITALY 5.4% 6.0% POLAND 7.8% SLOVAKIA 6.3% 8.5% LITHUANIA 9.5% LATVIA GREECE 9.8% * percentage share of country GDP; data for 2010 Source: OECD/Guardian 5

36 Norway stands out as significantly better also within Scandinavia Net public assets 2008 (Per cent of GDP) 140 Credit default swaps (bp) Norway Sweden Denmark Norway Sweden Denmark