Can performance continue? UBS 13 th Annual Nordic Financial Services Conference 2 September 21 CEO Rune Bjerke
Strong pre-crisis position 35 3 25 2 15 1 5 3 25 2 15 1 5 2 4 Pre-crisis market capitalisation 31 August 27 18 16 14 12 14 12 1 8 6 4 2 21 35 2 18 16 14 12 Scandinavia 1 Europe Global 8 6 4 2 1 8 6 4 2 DnB NOR DnB NOR DnB NOR 18 16 14 12 1 8 6 4 2 71 94 Source: Factset 31 Aug 21
Even stronger post-crisis position 35 3 25 2 15 1 5 35 3 25 2 15 1 5 2 4 Pre-crisis market capitalisation 31 August 27 16 14 12 1 16 14 12 2 18 16 14 12 Scandinavia Europe Global 8 6 4 2 1 8 6 4 35 94 2 DnB NOR DnB NOR DnB NOR Post-crisis market capitalisation 31 August 21 1 8 6 4 2 2 18 16 14 Scandinavia Europe Global DnB NOR DnB NOR DnB NOR Source: Factset 31 Aug 21 21 12 1 8 6 4 2 74
Where to grow? Share of group income, 3 June 21 Share of net lending, per segment - 3 June 21 International growth ambitions, but Norway will still be dominant Norwegian units 84 % Large corporates 37 % Private individuals 47 % International units 11% DnB NORD 5 % SME 16 %
How to grow? Share of group income, 3 June 21 Share of net lending, per segment - 3 June 21 A balanced portfolio - also in the future Norwegian units 84 % Large corporates 37 % Private individuals 47 % International units 11% DnB NORD 5 % SME 16 %
Opportunities in Norway Two drivers: 1. Strong macro- economic developments 2. DnB NOR's capacity and potential in the Norwegian market Den Norske Opera & Ballett
Norwegian public finances are sound Net public assets in per cent of GDP, 29 13 14 8 3 17-2 -33-7 -7-67 -62-58 -12-113 -15 Italy Japan Germany France UK USA Spain Sweden Norway Sources: IMF and OECD
GDP growth expected to be about 1 per cent higher in Norway than in the Euro zone over the next three years GDP % change y/y Euro zone Mainland Norway 4 3 2 1.8 1.6 2 2.4 2.9 1.4 1.4.9 1.8 1.8-1 -1.6-2 -3-4 -5-4.1 28 29 21 211 212 213 Source: DnB NOR Markets
3-6 per cent lower unemployment rate than in comparable countries Unemployment (per cent of labour force) Per cent 12 USA Euro zone UK Sweden Norway 1 8 6 4 2,7 3,3 3,5 3,4 3,2 2 1.6 28 29 21 211 212 213 Source: DnB NOR Markets
3 per cent growth in oil and gas investments Oil and gas investments Per cent 2 Volume growth from previous year % of Mainland GDP (rha) 18.9 15 1 9.8 5 4.3 6.5 5.2 5.7 2.7 3.3 3.5-5 -1 jan.4 jan.5 jan.6 jan.7 jan.8 jan.9 jan.1 jan.11 jan.12 jan.13-8.1 Source: DnB NOR Markets
Population growth and urbanisation Projected population as at 1 Jan. 21-23 Million 6 5,8 5,6 5.6 5.8 5,4 5.3 5,2 5 4.9 5 5.1 4,8 4,6 4,4 21 213 215 22 225 23 Source: Statistics Norway (middle growth scenario)
Utilise our key competitive advantages in Norway 1. Unique customer base 2. Strong distribution power 3. Deep and broad product range 4. Advanced technological capabilities
Increased focus on gaining market shares - particularly in the large cities outside Oslo Total market share DnB NOR - private and corporate
Growth potential in the Norwegian savings market - reinforced focus Financial vs real (housing) saving NOK million of net income Savings rate (per cent), rha Net real investments Net financial investments 7. NOK mill 12 5. 1.2% 9 3. 1. -1. -3..1% 1.5% 3.4% 7.4% 6.6% 6.6% 6.1% 5.9% 6 3-5. -3-7. 25 26 27 28 29 21 211 212 213-6 Source: Statistics Norway and DnB NOR Markets
International opportunities Two drivers: 1. Norwegian traditional industries 2. Positive macro-economic development in the Baltic countries
Our portfolio of large corporates reflects the traditional Norwegian export industries Norwegian exports by sector 197-29
Strongest growth potential within energy Exposure at default 3 June 21, NOK billion DnB NORD 4% Shipping 8% Energy 4 % MTOE 18 16 14 Forecast of world energy demand Coal Oil Gas Nuclear Renewables 12 1 Private individuals 42% Corporate 54% 8 6 4 2 198 2 27 215 23
We believe in long-term retail growth in the Baltics GDP per cent (y/y) Per cent 15 Latvia Estonia Lithuania 1 5-5 -1 The joint venture DnB NORD will be dissolved NORD/LB has not excercised its option to take over the operation in Poland All conclusions regarding values will be made no later than end- January 211-15 -2 1998 2 22 24 26 28 21 212 Sources: DnB NOR Markets and Datastream
Solid outlook for combined spreads Per cent Development in average interest rate spreads 1) 6.4 6.6 5.91 3.45 2.46 1.89 2.5 2.27 2.52 3-month NIBOR 1.3.98.81 1.16 1.4.97 1.34 1.12 1.58 1.6 1.63 1.61 1.58 1.6 1.16 1.16 1.16 1.13 1.12 1.15 Lending spread Combined spread - weighted average.68.33.3.29.23.29.32 Deposit spread 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 2Q1 1) Excluding lending to and deposits from credit institutions and impaired loans
Positive volume outlook Net lending (NOK billion) Net lending to customers Private individuals Exchange rate adjusted Corporate lending NOK billion 14 12 1 8 6 4 3-5 per cent volume growth in 21 5-7 per cent volume growth from 211 2 3 June 28 3 Sept. 28 31 Dec. 28 31 March 29 3 June 29 3 Sept. 29 31 Dec. 29 31 March 21 3 June 21
Stable access to long-term funding longer maturities at competitive prices 21 NOK billion Maturity Covered bonds 62.2 7.3 Senior bonds 23.9 7.2 Spread (3-month Euribor) Total 86.1 7.3 6 bp 29 NOK billion Maturity Spread Covered bonds 11.1 5.1 Senior bonds 39. 4.6 Total 139.1 4.9 5bp 28 NOK billion Maturity Spread Covered bonds 86.6 4.9 Senior bonds 1.5 3.7 Total 187.2 4.3 48bp
Long-term fundamentals are positive Opportunities in Norway International opportunities Two drivers: 1. Strong macro-economic developments 2. DnB NOR's capacity and potential in the Norwegian market Two drivers: 1. Norwegian traditional industries 2. Positive macro-economic development in the Baltic countries