Financial results for 2011

Transcription

1 CONFERENCE CALL FOR ANALYSTS AND INVESTORS Financial results for 211 Henrik Ramlau-Hansen CFO & Member of the Executive Board Martin Gottlob Head of Investor Relations 9 February 212

2 Agenda Overview Financial results Capital, funding and liquidity Macroeconomics Outlook & initiatives Q&A session Appendix: Trends in focus areas & business units 2

3 Reduce cost ~ 2 billion Financial results for 211 Key points: 211 results are not satisfactory; improvement from Q3 to Q4 Net profit DKK 1.7 bn for the year and DKK.2 bn in Q4 are unsatisfactory results Capital markets Lower net income from insurance due to turmoil in the capital markets Impairments Impairment charges fell 5% in 211 Charges rose in Q4, mostly in Denmark and CIB Capital & funding Core tier 1 ratio of 11.8% and strong liquidity 5% of 212 funding plan completed despite distressed capital markets 212 outlook The result is expected to be at a low level 3

4 Income statement: Income and expenses close to expectations, but impairments above budget Income statement & key figures (DKK m) Index Q4 211 Q3 211 Index Net interest income 23,537 23, ,182 6,16 13 Net fee income 8,298 8, ,218 1, Net trading income 7,325 7, , Other income 3,648 3, Net income from insurance business 569 2, Total income 43,377 46, ,863 8, Expenses 25,987 26,1 1 6,459 5, Profit bef. loan imp. charges 17,39 2, ,44 2, Loan impairment charges 13,185 13, ,789 2, Profit before tax 4,25 6, Tax 2,482 2, Net profit 1,723 3, C/I ratio ex integration, goodwill, state & deposit guarantee fees (%) Core tier 1 capital ratio (%) Risk-weighted assets (bn) Total loans ex repos (bn) 1,698 1, ,698 1,694 1 Deposits (ex repos) & issued RD bonds (bn) 1,525 1, ,525 1,56 11 Total assets (bn) 3,424 3, ,424 3,

5 Quarterly net interest income continues to grow despite significantly lower central bank rates Quarterly net interest income (DKK m) Quarterly change in net interest income (DKK m) +11% 6,182 Q3 11 6,16 6,69 6,16 RD 37 Deposit margin 247 5,785 Lending margin 391 5,554 Funding costs 17 Equity 124 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Other 126 S-T interest rate sensitivity across all currencies: +25 bp = DKK 65 m - 25 bp = DKK -8 m Q4 11 6,182 5

6 Net fee income: Danske Capital booked DKK 22 m in performance fees in Q4 Quarterly net fee income (DKK m) Quarterly fee income at Danske Capital (DKK m) Portfolio fees Activity fees Total fee income Fee income adjusted for performance fees 2, % 633 2,93 2,49 1,938 2, ,578 1,377 1,412 1,374 1, Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q41 6

7 Germany Denmark Sweden UK France Norway Finland Holland Canada Austria Ireland US Spain Portugal Italy Greece Other Financial results for 211 Net trading income: As expected for the year despite the financial turmoil in Q3 Breakdown of net trading income (DKK m) Danske Markets income split (%) Index Q4 211 Q3 211 Index Danske Markets 5,35 5, , Group Treasury Total 5,716 6, , Retail Banking DK Other trading income Net trading income 7,325 7, , Value at Risk* Bonds & DCM Repos & deriviatives 38 Forex & money market Equities 22 Gross sovereign exposure, Group ex. Danica, end-q4 211 (DKK bn) * Interest rate risk (Value at Risk at 99% confidence level; 1-day horizon) is calculated as an average of daily VaR values during the period. 7

8 Net insurance income: Low investment return causes significant drop in insurance income Net income from insurance business (DKK m) Index Q4 11 Q3 11 Index Premiums (bn) Danica Traditionel (insurance result) 1,12 1, Unit-linked (insurance result) Health and accident (insurance result) Investment result Financing result Special allotment Net income bef. postp. risk allowance 1,727 1, Postponed risk allowance -1, Strengthening of technical reserves Net income 569 2, Danica Traditionel customers funds (%) Investment return Investment return incl adj of technical provisions Unit-linked insurance business (DKK) Premiums (bn) AUM (bn) Insurance result (m, rha)

9 Expenses: Lower-than-expected Expenses (DKK m) Quarterly trend in expenses (DKK m) Index Q4 11 Q3 11 Index Expenses 25,987 26,1 1 6,459 5, Integration expenses Amortisation of intangibles Severance payments etc State and deposits guarantee 742 1, Asset write-down PPI, Northern Ireland Underlying cost base 23,831 23, ,152 5, Q3 11 5,499 Dep. guarantee Perf. based comp. Severance etc Employees (number of FTEs) Marketing 113 Holiday payment ,632 23,624 22,93 21, ,32 Amortisation and dep. 38 Rent of premises 99 Others Q4 11 6,459 9

10 Impairment charges: 5% lower than in 21, but rose towards the end of the year Quarterly loan impairment charges (DKK bn) Impairments by customer segment (DKK bn) Total impairments Collective impairment charges Financials SMEs Large corp. Personal Q4 1 Q1 11 Q2 11 Q Q Q41 1

11 Nordic impairments: Charges high in Denmark and rising in the other Nordics Denmark, 57% of Group s lending (DKK m) Finland, 9% of Group s lending (DKK m) Allowance* 18,18 m Individual 165 bp Collective 23 bp 1,667 Allowance* Individual Collective 1,974 m 12 bp 12 bp 1, , Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q4 1 Q1 11 Q2 11 Q3 11 Q bp 33 bp 31 bp 46 bp 69 bp 4 bp 8 bp -9 bp 17 bp 35 bp Sweden, 11% of Group s lending (DKK m) Norway, 8% of Group s lending (DKK m) Allowance* Individual Collective 1,226 m 61 bp 5 bp Allowance* Individual Collective 1,474 m 18 bp 4 bp Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q4 1 Q1 11 Q2 11 Q3 11 Q bp 1 bp 1 bp -1 bp 33 bp 2 bp 4 bp 5 bp 4 bp 33 bp * Accumulated impairment charges (allowance account) at the end of period in DKK m and as basis points of total lending. 11

12 Other impairments: Spike in CIB charges in Q4, no big changes at the Irish units Northern Ireland, 3% of Group s lending (DKK m) Ireland, 4% of Group s lending (DKK m) Allowance* Individual Collective 464 5,83 m 97 bp 46 bp Allowance* 13,82 m Individual 2,61 bp Collective 15 bp 1,213 1,283 1,85 1,578 1,622 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q4 1 Q1 11 Q2 11 Q3 11 Q bp 267 bp 496 bp 545 bp 393 bp 69 bp 741 bp 19 bp 948 bp 118 bp Baltics, 1% of Group s lending (DKK m) CIB, 6% of Group s lending (DKK m) Allowance* Individual Collective 36 2,244 m 952 bp 143 bp Allowance* Individual Collective 1,455 m 121 bp 13 bp Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q4 1 Q1 11 Q2 11 Q3 11 Q bp -69 bp -167 bp -43 bp -193 bp bp 57 bp -8 bp -11 bp 239 bp * Accumulated impairment charges (allowance account) at the end of period in DKK m and as basis points of total lending. 12

13 Arrears and loan-to-value levels on residential mortgages in Realkredit Danmark and Ireland 1-month arrears, Realkredit Danmark (% of stock) No. of customers in arrears*, Ireland (%) days 18+ days Market Q2 9 Q4 9 Q2 1 Q4 1 Q2 11 Q4 11 Q4 9 Q2 1 Q4 1 Q2 11 Q4 11 Loan-to-value distribution on loans to personal customers** (DKK bn) Total loans 93 bn Avg. LTV 78 % Total loans 421 bn Avg. LTV 68 % Total loans 24 bn Avg. LTV 119 % Retail Banking Denmark Realkredit Danmark BA Ireland * Arrears exclude Investment housing loans. ** Average LTV ratio is calculated on the basis of the last krone lent. In the LTV ratio ranges, each krone lent is categorised according to its seniority in the total debt. LTV Ireland includes investment housing loans

14 Funding: 5% completed for 212 Funding plan (DKK bn) Funding plan Completed funding (until end of January 212) Maturing funding* (DKK bn) Hybrid T1 Subordinated T2 Senior Covered bonds *Tier 1 and tier 2 loans are set to mature at call date. Maturing funding includes Sampo Bank, but excludes Realkredit Danmark s mortgage bonds and hybrid. 14

15 Solid funding structure and liquidity Loan portfolio and long-term funding (DKK bn) 12-month liquidity*, end of period (DKK bn) 1, , Senior debt 3 Bank loans Deposits 2 Bank mortgages Covered bonds 1 RD mortgages Issued RD bonds Loans Funding * Moody s Financial Strength. Main assumptions: No access to capital markets; no refinancing of debt to credit institutions, issued bonds or subordinated capital; moderate reduction of business activities mth 6 mth 9 mth 12 mth 15

16 Strong capital position despite increasing RWA Capital ratios: CRD/Basel II (%) Total capital Tier 1 Core tier Solvency need Risk-weighted assets (DKK bn) Q Market risk Portfolio changes etc Q

17 European economic growth is slowing GDP growth, Y/Y (%) Public finances (% of GDP) DK SE NO FI IE BAL Eurozone Gross public debt Budget balance Sovereign rating & outlook (S&P) 6 Denmark AAA/Stable Sweden AAA/Stable 5 Norway AAA/Stable Finland AAA/Neg. Ireland BBB+/Stable 4 Eurozone Danish housing market* ( s) 2 No. housing units for sale 8 House price per sq m (rhs) E 212E 213E * Source: Association of Danish Mortgage Banks and home. 17

18 Cost-saving programme and digitalisation Five key elements of cost reduction Teller transactions annually* (m) 62 Distribution 43-31% Operations IT Investments Digital letters sent annually (m) External spend 58 Global overhead % * Teller transactions include both personal and business customers ex. Baltics. 18

19 Outlook for 212: Net interest income will continue to rise, but total income depends on uncertain capital markets Net profit for 212 will be at a low level, but there is much uncertainty Higher net interest income because of higher lending margins, assuming unchanged central bank rates Trading and insurance are highly dependent on market developments, but Danica will probably not book the full risk allowance Cost-savings programme initiated, and 212 expenses expected to be in line with 211 level Impairments are likely to remain high 19

20 Q&A session Press 1 to ask a question Press # to cancel Press Ask a question in your webcast player 2

21 Appendix Tax 22 NII and margin developments 23 Credit 26 Liquidity and funding 38 Business units 4 21

22 Adjusted tax rate close to normal, but actual rate fluctuates owing to Ireland and one-offs Actual and adjusted tax rates (DKK m) 211 Q4 211 Q3 211 Q2 211 Q1 211 Pre-tax profit 4, ,81 1,499 Pre-tax loss, BA Ireland 5,997 1,522 1,491 1,78 1,24 Permanent non-taxable difference* Adjusted pre-tax profit, Group 9,815 2,68 1,493 3,531 2,723 Tax according to P&L 2, Taxes from previous years** Adjusted tax 2, Adjusted tax rate 24.7% 2.2% 26.5% 25.8% 25.9% Actual tax rate 59.% 67.5% NM 42.3% 52.8% * Permanent non-taxable differences are due primarily to value adjustments and the dividend from Nets. ** Taxes from previous years are due primarily to the adjustment of the tax booked in Denmark for

23 Net interest income Net interest income (DKK m) Net interest income at Realkredit Danmark (DKK m) 21 23, RD 26 Deposit margin 949 Lending margin 525 Volume Equity Funding costs 39 One-off items Other ,536 Q1 Q2 Q3 Q4 23

24 Net interest margin by business unit: Improvement visible in Sweden, Ireland and CIB Net interest margins, NII/loan stock (%) Denmark 2.8 Norway Sweden Finland N. Ireland Ireland Baltics CIB Group Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Note: 29 figures are not comparable with figures for Q1 21 and onwards because CIB was not a separate unit. 24

25 Higher lending margins are beginning to feed through, but lower central bank rates put pressure on deposit margins Quarterly lending margins (%) Quarterly deposit margins (%) Denmark* Finland Q1 11 Q2 11 Q3 11 Q4 11 Sweden Norway Northern Ireland Ireland Baltics CIB * Includes Realkredit Danmark. 25

26 Impairments Impairments broken down by segment (%) Change in allowance account (DKK m) SMEs CRE Personal Financials Large corp. 41 Allowance, end-27 4, Gross impairments 89, Reversals 19,173 7 Write-offs 26,861-1 Allowance, end , Q3 211 Q

27 Impairment charges is higher mainly because of new impairments, which also reflect higher NPLs Individual impairments, ex Baltics (DKK bn) Net exposure in rating categories 1 and 11 (DKK bn) New Increased Reversals 9 4 Rating category 1 Rating category Q4 1 Q1 11 Q2 11 Q3 11 Q Q31 Q41 27

28 Commercial property exposure Dividend Individual impairments Value of collateral Collective impairments Denmark (DKK bn) Ireland (DKK bn) Northern Ireland (DKK bn) Baltics (DKK bn) NPL 11% 19.6 NPL 8% 1.4 NPL 39% 2.4 NPL 42% Gross lending Impaired loans Gross lending Impaired loans Value of collateral is capped by size of loan and reflects a haircut of at least 2%. * NPL (non-performing loans) are defined as loans in categories 1 and 11 and are shown as a percentage of total loans Gross lending Impaired loans.2 Gross lending.3. Impaired loans 28

29 Credit exposure to commercial property and construction segments Credit exposure broken down by business unit, Q4 211 (DKK bn) Commercial property - portion from developer subsegment Construction and building materials Industry total Retail Banking Denmark Retail Banking Finland Retail Banking Sweden Retail Banking Norway Banking Activities Northern Ireland Banking Activities Ireland Banking Activities Baltics Corporate & Institutional Banking Other Total Gross exposure subject to individual impairment testing Impairment charges Portion from Banking Activities Ireland

30 Residential mortgage exposure Dividend Individual impairments Value of collateral Collective impairments Denmark (DKK bn) Ireland (DKK bn) Northern Ireland (DKK bn) Baltics (DKK bn) NPL 2% NPL 7% NPL 2% NPL 15% Gross lending Impaired loans Gross lending Impaired loans Gross lending Impaired loans Gross lending Impaired loans Note: Value of collateral is capped by size of loan and reflects a haircut of at least 2%. 3

31 House prices continues to decline in Denmark Danish house prices by region (%) House prices and consumption Denmark (DKK) Region Prices Change Change in Preview* House price per sq m Consumption, bn (rha) peaked since peak Q3 11 Q , 22 Copenhagen Q Zealand Q , 2 South Denmark Q Central Jutland Q Northern Jutland Q , Nationwide Q , Property prices Nordic countries (index 1996 = 1) Unemployment and foreclosures Denmark (%) Denmark Norway Sweden Finland 1Y swap rate Unemployment No. of forced sales (rha) * Leading indicator, based on monthly statistics from home (Danske Bank s real estate agency) that cover about one-third of the market. Source: Danske Research and Realkreditforeningen. 31

32 Danish agricultural industry: 4% of exposure to Danish pig farmers are impaired in the bank Breakdown of loan portfolio, Q4 211 (%) Agricultural exposure and allowance, Q4 211 (DKK bn) Business unit Gross Allowance Coverage exposure Mixed operations 6 Other 13 Agriculture 26 Realkredit Danmark % Retail Banking Denmark % - portion from pig farmers % Other business units % Total exposure % Grocery trade 14 Pig farming 2 21 Cattle breeding Loan -to-value ratio at Realkredit Danmark (%) End of quarter Q4 28 Loan-to-value ratio 46 Q Q Q Q Q Q

33 Shipping exposure Breakdown of shipping exposure (%) Shipping exposure and impairments, Q4 211 (DKK bn) Offshore supply 1 Ro-Ro Product tanker 3 Other 6 1 Tug/Pilot vessels 1 1 Car carriers Chemical tanker 7 Container Business unit Gross Exposure Estimated Collateral Allowance CIB portion from Danish customers portion from Norwegian customers portion from other customers Other business units Total exposure Freight rates, Baltic index ( s) Offshore rig 8 Multipurpose Baltic Dirty Tanker Baltic Clean Tanker Baltic dry (rhs) 12 7 Gas tanker FPSO/FSO 1 4 Crude tanker 8 9 Dry bulk Cruise/Ferry

34 Retail Banking Denmark, including Realkredit Danmark Impairments at Retail Banking Denmark, Q4 211 (DKK m) Individual Collective Total Bank Personal customers Agriculture Commercial property Other Total RD Personal customers Commercial Total Retail Banking Denmark Prices of pig feed and pork (index 24=1) Loans by LTV and rating, Realkredit Danmark, end-q4 211 (%) Rating Total Public LTV ratio guarantee > Total (DKK bn) Portfolio facts, Realkredit Danmark, end-q4 211 Pork Pig feed 42,976 loans (residential and commercial) 3,68 3 and 6-month arrears (.8%) 161 repossessed properties DKK 9 bn of loans with LTV > 1%, including DKK 2 bn with public guarantee Average LTV ratio of 67% LTV ratio on origination (legal requirement) Residential: max. 8% Commercial: max. 6% 34

35 Upgrades/rating changes ratio above 5 in the Nordic countries but lagging in Denmark Relation between upgrades and total rating changes*, corporates, 12-month rolling average (%) Denmark Norway Sweden Finland CIB 1 Upgrades > downgrades 5 Downgrades > upgrades * Q4 ratings are affected by rating recalibration. 35

36 Gross exposure subject to individual impairment test Gross exposure in rating categories 1 and 11 (bp) Q4 1 Q1 11 Q2 11 5, 4, 4,9 3, 2, 1,9 1,476 1, Denmark Finland Sweden Norway Northern Ireland Ireland Baltics CIB Other Act. Group 36

37 Economic climate in Denmark is still lagging the other Nordics Bankruptcies (index 1996=1) Business confidence indicator (index 1996=1) 4 Denmark Finland Norway Sweden Sweden Finland Denmark Indexes are seasonally adjusted. Source: EcoWin. 37

38 Liquid bond portfolio and funding sources Bond portfolio of DKK 465 bn (%) Issued funding, types and duration (DKK bn) Covered bonds Senior Credit bonds Commercial paper Other Quasi-government covered 2 2 bonds 3 Swedish 5 covered bonds Danish mortgage bonds years Governments & municipals years 2-6 years years years 2-5 years years 1-5 years years Q1 11 Q2 11 Q3 11 Q4 11 January 12 38

39 Central banks Due to credit inst. (ex CIB) Repos Short-term bonds Deposits Mortgage finance (match-funded) Cov. bonds Long-term bonds Subord. debt Shareholders eq. Financial results for 211 Well-diversified funding position Funding position (%) Funding sources (%) Q4 8 Q Central banks Subordinated debt 6 3 Repos 7 Equity 5 33 Deposits 3 2 Banks, net 6 1 S-T bonds 3 L-T bonds 7 Covered bonds 6 24 Match-funded DK mortgage bonds Short-term funding Long-term funding Issued long-term bonds: DKK 162 bn incl. Sampo Issued covered bonds: DKK 148 bn incl. Sampo 39

40 Retail Banking Denmark: Strong earnings improvement because of lower expenses and impairments Income statement (DKK m) Trend in lending volume, average (DKK bn) Index Net interest income 12,269 12, Net fee income 3,214 3, Other income 1, Total income 16,576 17,99 97 Total expenses 8,841 1, Profit bef. loan imp. charges 7,735 6, Loan impairment charges 4,316 7, Profit before tax 3, Bank Package 1 (fees & imp.) - 3,25 Adj. profit before tax 3,419 2, ROE before loan imp. charges Retail Q41 Corporate % -1% Margin trends* ex RD (%) Market shares incl. CIB and repo lending**, ex RD (%) Lending Deposits Lending Deposits Q41 2 Q41 * Margin change in Q1 211 was affected by the change in transfer pricing. ** From Danske Markets. 4

41 Retail Banking Finland: Stable profit before impairments Income statement (DKK m) Trend in lending volume, average (DKK bn) Index Net interest income 2,18 2,24 14 Net fee income Other income Total income 3,581 3,46 13 Total integration expenses Expenses ex total intgr. exp. 2,663 2,57 14 Profit bef. loan imp. charges Loan impairment charges Profit before tax ,553 ROE before loan imp. charges Retail Q41 Corporate % +7% Margin trends* (%) Market shares incl. CIB (%) Lending Deposits Lending Deposits Q41 1 Q41 * Margin change in Q1 211 was affected by the change in transfer pricing. 41

42 Retail Banking Sweden: Strong income growth because of higher lending margins and increasing repo rates Income statement (DKK m) Trend in lending volume, average (DKK bn) Index Net interest income 2,44 2, Net fee income Other income Total income 3,225 2, Expenses 1,716 1, Profit bef. loan imp. charges 1,59 1, Loan impairment charges Profit before tax 1,37 1, Retail Corporate % +8% ROE before loan imp. charges Q41 Margin trends* (%) Market shares incl. CIB (%) Lending Deposits Lending Deposits Q Q41 * Margin change in Q1 211 was affected by the change in transfer pricing. 42

43 Retail Banking Norway: Pressure on interest margins in retail segment results in lower NII Income statement (DKK m) Trend in lending volume, average (DKK bn) Index Net interest income 1,553 1,74 91 Net fee income Other income Total income 2,564 2,68 96 Expenses 1,848 1, Profit bef. loan imp. charges Loan impairment charges Profit before tax Retail Corporate % +13% ROE before loan imp. charges Q41 Margin trends* (%) Market shares incl. CIB (%) Lending Deposits Lending Deposits Q41 4 Q41 * Margin change in Q1 211 was affected by the change in transfer pricing. 43

44 Banking Activities Northern Ireland: Stable income, but higher loss due to increasing impairment charges Income statement (DKK m) Trend in lending volume**, average (DKK bn) Index Net interest income 1,141 1, Net fee income Other income Total income 1,587 1, Expenses 1,267 1, Profit bef. loan imp. charges Loan impairment charges 2,178 1, Profit before tax -1, Retail Corporate % +1% ROE before loan imp. charges Q41 Margin trends* (%) Market shares (%) Lending Deposits Retail Corporate Q41 1 Q41 * Margin change in Q1 211 was affected by the change in transfer pricing. ** Corporate lending volume excludes lending to public sector. In local currency, the YoY changes are -2% for Retail and -8% for Corporate. 44

45 Banking Activities Ireland: Continued deficit due to high loan impairment charges Income statement (DKK m) Trend in lending volume, average (DKK bn) Index Net interest income 936 1,67 88 Net fee income Other income Total income 1,54 1,28 87 Expenses Profit bef. loan imp. charges Loan impairment charges 6,334 4, Profit before tax -5,998-4,65 - Retail Corporate % -6% ROE before loan imp. charges Q41 Margin trends* (%) Market shares (%) 2 Lending Deposits 4 Lending Deposits Q41 1 Q41 * Margin change in Q1 211 was affected by the change in transfer pricing. 45

46 Banking Activities Baltics: Strong earnings recovery because of write-back of impairments Income statement (DKK m) Trend in lending volume, average (DKK bn) Index Net interest income Net fee income Other income Total income Expenses Profit bef. loan imp. charges Loan impairment charges Profit before tax Retail Corporate % -9% ROE before loan imp. charges Q41 Margin trends* (%) Market shares Lending (%) Lending Deposits Estonia Latvia Lithuania Q41 Q41 * Margin change in Q1 211 was affected by the change in transfer pricing. 46

47 Corporate & Institutional Banking: Solid pre provision profit, but impairments lowered profit before tax Income statement (DKK m) Trend in lending volume, average (DKK bn) Index Net interest income 2,31 1,98 16 Net fee income 85 1,22 83 Other income Total income 3,29 3,24 1 Total integration expenses Expenses ex total intgr. exp. 1,1 1, Profit bef. loan imp. charges 1,973 1, Loan impairment charges Profit before tax 1,229 1, % ROE before loan imp. charges Q41 Margin trends* (%) Geographical breakdown of lending, Q4 211 (%) 1.2 Lending Deposits Sweden 2 Denmark Finland 16. Q41 37 Norway * Margin change in Q1 211 was affected by the change in transfer pricing. 47

48 Danske Markets & Treasury: Solid result despite difficult markets in the second half of 211 Income statement (DKK m) Market positions in the Nordics** (rank) Index Total income 5,716 6, Expenses 2,652 2, Profit bef. loan imp. charges 3,64 4,35 76 Loan impairment charges -1, Profit before tax 4,97 4, Product area Denmark Sweden Norway Finland Fixed income DCM n/a Forex Derivatives Equities 1 6 n/a 3 ROE before loan imp. charges Impairments*, 3% of Group lending (DKK m) Trading activities accumulated income (DKK bn) Allowance* Individual Collective 66 2,599 m 539 bp 47 bp , 6, 4, 2, 211 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 * Accumulated impairment charges (allowance account) at the end of period in DKK m and as basis points of total lending. ** Prospera rankings. Q1 Q2 Q3 Q4 48

49 Danske Capital: Solid growth and improved profit, despite difficult markets Income statement (DKK m) AuM customer breakdown (DKK bn) Index Private equity Institutional Retail* Life insurance Net interest income Net fee income 1,795 1, portion from performance fees Other income Total income 1,98 1, Expenses 1,93 1,4 15 Profit bef. loan imp. charges Loan impairment charges Profit before tax Q Margin trends** (%) AuM asset breakdown (%).4.3 Cash Equities Bonds Q41 Q41 * Retail includes Danske Invest. ** Margin for asset management is adjusted income including performance fees divided by business volume, end of period. 49

50 % change in equities Financial results for 211 Danica Pension: Lower result due to postponement of risk allowance in three groups Income statement (DKK m) Investment allocation for Danica Traditionel, end-q4 211(%) Index Premiums (bn) Danica Traditionel (insurance result) 1,12 1, Unit-linked (insurance result) Health and accident (ins. result) Investment result Financing result Special allotment Net income bef. postp. risk allow. 1,727 1, Change in shadow account -1, Net income 569 2, Possibility of booking risk allowance in 212, end-q4 211 (%) Equities 15 6 Bonds Credit bonds Property Full risk allowance 5 25 Partial risk allowance No risk allowance % point change in interest rate 13 New schemes 12 Low 1 Medium 9 High 5

51 Danica Pension s profit model = Profit model Condition/ sensitivity 211 DKK m Danica Traditionel. Mainly risk allowance 69 bp of technical provisions (DKK 17 bn) Unit-linked business. Long-term: approximately.4% of AuM Can be booked only if investment return is high enough Prices and volume Risk allowance Other Solid income base from existing customers but also lower prices 1, Health and accident business Combined ratio 1 Return on investment portfolio at shareholders risk Financing result Special allotments, depending on profit and business volume Shadow account Equity markets, interest rates S-T interest rate (equity allocated capital) Expected to be around DKK.1 billion in 212, hereafter expected to be at a level of around DKK.2 to.3 billion annually. Annualised investment return: 1.7% Low short-term interest rate -163 Lower because of lower result and higher solvency need Partial risk allowance booked. Further strengthening of technical reserves -94-1,118 Total

52 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 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 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. 52