Chairman s report. Alf Duch-Pedersen Chairman, Board of Directors. 29 March 2011

Transcription

1 Chairman s report Alf Duch-Pedersen Chairman, Board of Directors 29 March 2011

2 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 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. 2

3 New era in the history of the Danske Bank Group Personal customers Easiest and fastest service Best-quality solutions Competitive prices SMEs Fast service Direct access to specialists Mid-sized companies Private banking The best choice for Nordic customers Large corporates Leader in capital markets and asset management 3

4 Denmark s first banking solution for smartphones 4

5 Strong product range achieves recognition One of Denmark s least expensive banks over a lifetime Best private banking in Denmark Best private banking in Norway Best unit trust for equities third consecutive year Best stockbroker in Denmark Winner Denmark, 2009 Winner Denmark, 2010 Winner Denmark,

6 No cases lost at Danish Complaint Board in Total Kendelser judgements i alt Danske Bank judgements kendelser Kendelser Judgementsimod against Danske Bank 0 6

7 Customer satisfaction on the rise 76 Customer satisfaction in Denmark Index Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 7

8 8

9 Profit for 2010 of DKK 3.7 billion after expected drop in income DKK millions Index Net interest income 27,524 23, Net fee income 7,678 8, Net trading income 18,244 7, Other income 3,083 3, Net income from insurance business 2,810 2, Total income 59,339 46, Operating expenses 24,949 24, Goodwill & Bank Pkg. I 3,958 1, Profit bef. loan imp. charges 30,432 20, Loan impairment charges 25,677 13, Profit before tax 4,755 6, Tax 3,042 2, Net profit for the year 1,713 3,

10 Net trading income back at more normal level DKK millions Index Net interest income 27,524 23, Net fee income 7,678 8, Net trading income 18,244 7, Other income 3,083 3, Net income from insurance business 2,810 2, Total income 59,339 46, Operating expenses 24,949 24, Goodwill & Bank Pkg. I 3,958 1, Profit bef. loan imp. charges 30,432 20, Loan impairment charges 25,677 13, Profit before tax 4,755 6, Tax 3,042 2, Net profit for the year 1,713 3,

11 Decline in net interest income DKK millions Index Net interest income 27,524 23, Net fee income 7,678 8, Net trading income 18,244 7, Other income 3,083 3, Net income from insurance business2,810 2, Total income 59,339 46, Operating expenses 24,949 24, Goodwill & Bank Pkg. I 3,958 1, Profit bef. loan imp. charges 30,432 20, Loan impairment charges 25,677 13, Profit before tax 4,755 6, Tax 3,042 2, Net profit for the year 1,713 3, % 1,0 0,5 0, Danish central bank s deposit rate

12 Insurance: Strong premium growth; sound result continues DKK millions Index Net interest income 27,524 23, Net fee income 7,678 8, Net trading income 18,244 7, Other income 3,083 3, Net income, insurance business 2,810 2, Total income 59,339 46, Operating expenses 24,949 24, Goodwill & Bank Pkg. I 3,958 1, Profit bef. loan imp. charges 30,432 20, Loan impairment charges 25,677 13, Profit before tax 4,755 6, Tax 3,042 2, Net profit for the year 1,713 3, Premium income - market products DKK billions

13 Large drop in expenses: More than offsets wage & price inflation DKK millions Index Net interest income 27,524 23, Net fee income 7,678 8, Net trading income 18,244 7, Other income 3,083 3, Net income, insurance business 2,810 2, Total income 59,339 46, Operating expenses 24,949 24, % Goodwill & Bank Pkg. 1 3,958 1, Profit bef. loan imp. charges 30,432 20, Loan impairment charges 25,677 13, Profit before tax 4,755 6, Tax 3,042 2, Net profit for the year 1,713 3, Expenses DKK billions Goodwill imp. charges & Bank Pkg. 1 fee -3% Bank Pkg. 1 fee

14 Loan impairment charges: Dominated by business customers DKK millions Net interest income 27,524 23, Net fee income 7,678 8, Net trading income 18,244 7, Other income 3,083 3, Net income from insurance business2,810 2, Total income 59,339 46, Operating expenses 24,949 24, Goodwill & Bank Pkg. I 3,958 1, Profit bef. loan imp. charges 30,432 20, Loan impairment charges 25,677 13, Profit before tax 4,755 6, Tax 3,042 2, Net profit for the year 1,713 3, DKK billions Impairment charges by customer type Distressed banks Personal Business 9 & financial 14

15 800 Impairment charges highest in Ireland, but decline every quarter bp Impairment charges/lending DKK billions Impairment charges by quarter Ireland Irland Nordirland Northern Ireland Baltics Baltikum Denmark Danmark Finland Finland Other Øvrige Sweden Sverige Norway Norge Markets Markets Q1 kv. 2. Q2 kv. 3. Q3 kv. 4. Q4 kv. 1. Q1 kv. 2. Q2 kv. 3. Q3 kv. 4. Q4 kv

16 Five of seven primary markets show a profit , ,500 DKK millions Profit before tax ex fees for Bank Package I , , , ,000 Denmark Danmark Norway Norge Sweden Sverige Finland Baltikum Baltics Nordirland Northern Ireland Ireland Irland 16

17 Lending stable, while positive trend in deposits continues ,800 DKK billions Lending 1, DKK billions Deposits , , , , Q3 kv Q4 kv Q1 kv Q2 kv Q3 kv Q4 kv Q3 kv Q4 kv Q1 kv Q2 kv Q3 kv Q4 kv. 10 Banking Bankaktiviteter Activities Danske Markets Note: Decline in Q because of release of large deposit custody account with Danske Markets. 17

18 Tax DKK millions Index Net interest income 27,524 23, Net fee income 7,678 8, Net trading income 18,244 7, Other income 3,083 3, Net income from insurance business 2,810 2, Total income 59,339 46, Operating expenses 24,949 24, Goodwill & Bank Pkg. 1 3,958 1, Profit bef, loan imp, charges 30,432 20, Loan impairment charges 25,677 13, Profit before tax 4,755 6, Tax 3,042 2, Net profit for the year 1,713 3,

19 Increase in deposits and solid liquidity Deposit deficit DKK billions % DKK Mia. billions kr. 450 Twelve-month liquidity curve End Ultimo End Ultimo End Ultimo Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Deposit deficit (DKK billions) Loan/deposit ratio Note: Deposits include Realkredit Danmark bonds måned 1 month 2 måneder 2 months 3 måneder 3 months 4 måneder 4 months 5 måneder 5 months 6 måneder 6 months 9 måneder 9 months måneder months 19

20 Capital base strengthened % Capital ratios Tier 1 ratio and total capital ratio improved in 2010 Request to repay hybrid capital to Danish state DKK 20 billion share offering under way* AP Møller Mærsk and Realdania support share offering 5 Core tier 1 capital ratio to be strengthened substantially and rank at top in Europe Kernekapital Core tier 1 Kernekapital Tier 1 Solvens Total % capital % ex hybrid ratio capital % ratio capital ratio * 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 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 information is included pursuant to Rule 135c of the Securities Act of 1933, as amended. 20

21 Share offering to raise DKK 20 billion 233 million new shares issued at DKK 86 Pre-emptive subscription rights for existing shareholders Two largest shareholders intend to subscribe for 33% of the shares offered Proceeds from the offering will be used to - strengthen shareholders equity - enable Danske Bank to repay hybrid capital to the Danish state Danske Bank will become one of the best-capitalised banks in Europe 21

22 Profit allocation Danske Bank A/S s net profit: DKK billion Equity method reserve: DKK billion Retained earnings: DKK billion No dividend will be paid for 2010 Dividend payout target of one third of net profit in future 22

23 Bank Package III Winding-up procedure for distressed financial institutions via Financial Stability A/S The Board of Directors must ask the general meeting whether it wishes to take a position on the winding-up procedure The general meeting is not required to take a position on the selection of a winding-up procedure or make a decision on the choice of a winding-up procedure The Board of Directors recommends that the general meeting declares that it does not wish to take a position on the winding-up procedure 23

24 Board of Directors 24

25 Executive Board 25

26 Outlook for 2011: Restoration of Danske Bank s earnings capacity continues Moderate economic growth Robust income from Banking Activities Expenses expected to be lower than in 2010 Increased focus on customer service and continued focus on costs Lower income from Danica, while Danske Markets and Danske Capital s income depends on trends in the capital markets Outlook for gradual overall profit growth 26

27 Chairman s report Alf Duch-Pedersen Chairman, Board of Directors 29 March 2011