21 st Annual Financials CEO conference

Transcription

1 21 st Annual Financials CEO conference Bank of America Merrill Lynch Jacob Aarup-Andersen Chief Financial Officer September 2016

2 Five drivers of change will affect the financial sector Macroeconomics Customer expectations Increased competition Digitalisation Regulation 1

3 2020 strategy four strategic themes set the direction Customer Experience Disruption & Digitalisation Nordic potential People & Culture 2

4 Customer experience: Delivering progress towards ambitious customer satisfaction goals Trend Market position Trend Market position > PB C&I BB WM Note: The slide show our current ranking among peers. The trend is based on development since Q

5 Disruption and Digitalisation: Within a few years a new breed of customers will dominate - the digital natives Traditional consumers Transitionals Digital natives

6 Disruption and Digitalisation: Customers behaviour is changing as they go mobile 24/7 Average channel usage per customer per month, Danske Bank DK 2011 YTD ,2 3,7 2,3 1,0 0,1 0,3 0,5 0,5 Branch All teller transactions Phone All inbound calls ebank Logins to netbank Mobile Log-ins to MobilBank 5

7 Disruption and Digitalisation: MobilePay is an example of exponential growth Active users; 000 3,600 3,000 MobilePay 2,400 1,800 1, Onlinebank Mobilbank

8 Disruption and Digitalisation: The MobilePay family has gradually been expanded to build a multisided platform P2P POS with Dansk Supermarked MobilePay terminals Jan 15 June 15 May 16 May 13 June 15 March 2016 MobilePay Online Receipts Invoice 7

9 Successful execution of our Nordic growth strategy; Strategic partnerships supports the growth in Personal Banking Lending volume (bn)* Lending volume (bn)* Successful launch of Saco partnership with good customer inflow 650,000 members Strong growth since launch primo 2015 Good inflow of new customers continues 23 affiliated associations incl. economist, lawyers, doctors, engineers etc Strong credit quality Strong cross sales traction +14% % H H *Lending volumes in local currencies from Personal and Business Banking 8

10 Bridge to above 12.5% ROE in 2018 with negative rates ROE E, after tax (%) ROE 2015* 11.6% Adjustments** 0.2% Costs 0.5-1% Funding & ratings 0.5% Volume effect 0.5-1% Income initiatives 0.5% Loan losses & other 0.5% Capital effect 0.5% ROE 2018E Above 12.5% * Excluding goodwill impairment charges. ** Adjustments for equity effect of goodwill impairment charges, remortgaging fees, payroll tax refund, one-off gain on property sales, resolution fund payment and tax. 9

11 Danske Bank is closing the gap to peers Return on equity (%)* Peer average 1) Danske Bank ** ** H ) Includes Nordea, SEB, Handelsbanken, Swedbank and DNB *Figures are reported return on equity which includes one-off items **Before goodwill impairments charges 10

12 A satisfactory result for the first half of 2016 Low economic growth continuation of negative interest rates Financial results, H Net profit of DKK 9.4 bn, in line with first half of 2015 ROE of 12.4% - on track to meet long-term target above 12.5% Financial markets improved from the weak environment in the beginning of the year Solid capital position, with a CET1 capital ratio of 15.8% after deducting for full share buy-back in Q1 Increased lending activity across customer segments continued strong focus on costs Overall customer satisfaction continued to improve Net profit ROE H1 15 H

13 The steady improvement in financial results continues - Driven by a strong cost focus and improvements in credit quality Total income (DKK bn) Expenses (DKK bn) Loan loss ratio (bps) Restated* Reported Restated* Reported H116 *Restated to reflect new business unit structure H H116 12

14 More than one year with extremely low interest rates; Significant financial effect in 2015 Leading central bank rates (%) Changes in net interest income (DKK m) 1.6 Denmark Sweden Norway Euro area ,049 2, ,313 21, Lending effect & Other 31 Deposit volume 28 Deposit margin

15 Mitigating actions and diversified business model off-set effects from negative rates; No further major effect expected in 2016 Effects from lower rates Mitigating actions Supports macroeconomic growth Partial pass through of negative rates Improves credit quality and collateral values Strong cost discipline Significant effect on deposit margins HtM portfolio Lending margin pressure in Denmark 14

16 Strong capital build-up despite capital distributions - CET1 at 15.8% after deducting for share buy-back of DKK 9bn CET1 capital ratios and targets (%) Excess capital Regulatory min. CET1 required* CET1 target: 14-15% Expected requirement in 2019: 12 %* H H fully loaded * Expected fully phased-in minimum CET1 requirement in 2019: min. CET1 requirement 4.5%, capital conservation buffer 2.5%, SIFI requirement 3%, countercyclical buffers 0.5% and CET1 component of Pillar II requirement. 15

17 Capital Management: Stable dividend pay-out ratio and return of excess capital to our shareholders Total payout ratio 1 ; % Share buyback Dividend payout ratio 96% 81% 51% 38% Ordinary dividend target: % of net profit 28% 43% 46% 0% Based on year-end communicated distributions 16

18 Overall outlook for full-year 2016 maintained NII We now expect somewhat less pressure on margins for the remainder of 2016, and we will benefit from volume growth and somewhat lower funding costs Expenses Expected below the 2015 level 1 Fee income In light of weak activity levels and uncertainty in the financial markets, we now expect net fee income to be lower than in 2015 Impairments Expected at a low level Trading income Net trading income remains subject to customer activity and volatility in the financial markets Net profit Expected in line with 2015 level 1 1. Before goodwill impairment charge. Note: This guidance is subject to uncertainty and depends on economic conditions, including developments in monetary policy at central banks 17

19 Q&A session Want easy access to all relevant Danske Bank material? Download the Danske Bank MyInvestor app on your iphone, ipad or Android device! 18

20 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 ( Securities Act ), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. 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 forwardlooking 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. 19