BoAML BANKING & INSURANCE CEO CONFERENCE Competing in the Age of Austerity Peter Straarup CEO & Chairman of the Executive Board 28 September 2010
The future for Danske Bank A period of low growth is our base case scenario Future program is focusing on changing customer behaviour Improving efficiency Cut costs Danske Banks strongcapital capital, liquidity and funding positions are well documented 2
Geography: A strong Nordic franchise 5.0 million customers 2.3 million active Internet customers 703 branches in 14 countries* 22,025 full-time employees Northern Ireland Market position: Leader Branches: 82 Market share: 19-30% Market rank: 1-2 Loan growth (Y/Y): -3% Ireland Market position: Challenger Branches: 44 Market share: 4% Market rank: 6 Loan growth (Y/Y): -5% * Excluding agricultural centres in Denmark. ** Loan growth represents total loan growth for Baltic countries. Note: Market share represents market share of lending. Other activities Danica Pension Danske Capital Danske Markets Norway Market position: Challenger Branches: 45 Market share: 6% Market rank: 3 Loan growth (Y/Y): 7% Denmark Market position: Leader Branches: 320 Market share: 26% Market rank: 1 Loan growth (Y/Y): -1% Retail banking Sweden Market position: Challenger Branches: 49 Market share: 6% Market rank: 5 Loan growth (Y/Y): 5% Finland Market position: Leader Branches: 121 Market share: 12% Market rank: 3 Loan growth (Y/Y): -4% Estonia Market position: Challenger Branches: 19 Market share: 11% Market rank: 4 Loan growth (Y/Y):** -12% Latvia Market position: Challenger Branches: 4 Market share: 2% Market rank: 12 Loan growth (Y/Y):** -12% Lithuania Market position: Challenger Branches: 13 Market share: 7% Market rank: 5 Loan growth (Y/Y):** -12% 3
Strong, increasingly competitive financial services providers 600 AuM (DKK bn) 70 Customer funds, unit link products (DKK bn) 575 60 550 50 40 525 30 500 Q109 Q209 Q309 Q409 Q110 Q210 20 Q109 Q209 Q309 Q409 Q110 Q210 20 Trading income (DKK bn) 725 Lending (DKK bn) 15 700 10 5 675 0 2005 2006 2007 2008 2009 H1 10* 650 Q109 Q209 Q309 Q409 Q110 Q210 * H1 trading income, annualised. 4
Customers: Improve service to four customer groups through digitalisation Improve customer service strategies CIB SME Private banking Mass market Digital services Create a more efficient bank Efficient processes/roadmaps Cost reductions 5
Customers have become more and more demanding di and request a higher h level l of service I would like to bank instantly and anytime, 24/7 My bank should be accessible wherever I am I like to choose how I engage with ihmy bank I prefer personalised interaction My friends are now my expert panel I have little tolerance for technical failures Allow me to feel that I can influence the product I buy Source: Interbrand 2010, Imediaconnection 2010. 6
Improving customer service, digitalisation and creating a more efficient i bank go hand din hand Improve customer service Investments in digital services Create a more efficient bank 7
Digital channels will become increasingly important for superior customer service and advice Service 2000 2010 2020 Advice 2000 2010 2020 Branch / finance centre Contact centre Internet Mobile phone 8
Service strategy for business customers will be tailored il d to customer needs d and d profitability fi bili Main channel/advice CIB <1% CIB units Regional R i l business 5% Finance centres Locall L business 15% Service business 80% Service & transactions Branches Business Online (Internet) Business Direct (contact centre) Integrated systems 9
Personal customers: Needs and service offerings will drive interactioni Finance centres Internet Branches Face-toface service Selfdirected service Mobile ATMs Contact centre Direct mail Digital it letters 10
Strong capital position maintained under the new Basel III 20 Solvency Solvency Tier 1 Core/tier 1 18 16 14 12 10 8 6 4 2 0 Tier 2 Other hybrid State hybrid Core DB Q2 2010 Full Basel II ICAAP SIFI? not decided yet DB result Countercycl. core/tier 1? Min Tier 1 EU stress test Transision Conversion buffer - core Core New Basel III 11
Strong loan-to-deposit ratio DKK bn Loan-to-deposit gap (DKK bn) and ratio (%) % 500 130 400 Loan-to-deposit ratio 125 300 200 Loan-to-deposit gap 120 100 115 0 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 110 Note: Deposits include Realkredit Denmark bonds. 12
Funding need for 2010 has been met, and very limited i need in 2011 DKK bn New funding, 2008-11 200 Entire funding need of DKK 30 bn for 2010 already covered 150 100 Can be fully funded through unutilised covered bond pool assets 50 0 2008 2009 2010 2011 Issued funding (2010 until end of H1) Estimated funding need 13
Bond spreads Covered bond ASW spreads (bp, mid) 425 375 325 275 225 175 125 75 25-25 1/Jan/08 1/Apr/08 1/Jul/08 1/Oct/08 1/Jan/09 1/Apr/09 1/Jul/09 1/Oct/09 1/Jan/10 1/Apr/10 1/Jul/10 iboxx EUR UK iboxx EUR Ireland iboxx EUR Spain iboxx EUR France iboxx EUR Germany DM SEK Sweden DM DKK Denmark 14
Nordic countries are well below EU debt limit and dhave the highest h sovereign ratings 150 Gross publ. debt as % of GDP 2010E 100 60% EU limit 50 0 Denmark Finland Sweden Norway Portugal Italy Greece Spain Euroland USA Public budget as % of GDP -5.6-3.9-3.5 12.0-7.3-5.0-7.8-10.0-6.7-10.2 S&P Rating AAA AAA AAA AAA A- A+ BB+ AA - AAA 15
Very strong cost performance, and more to come Costs Employees* 14% 4% * Adj. for summer temps in Finland 16
Costs 8-10% Impairments 460m as of Q4 2010 OCTOBER owing to termination of Bank Package I in Denmark 17
Impairment charges fell for the sixth consecutive quarter, but level reflects fragile macroeconomics DKK m 10,000 Quarterly loan impairment charges 7,500 5,000 2,500 0 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 18
Key priorities and earnings drivers going forward Customer service strategy Cost programme Credit management Capital and new regulation Long-term value creation Improving macroeconomics Bank Package I expires at end-q3 2010 19
www.danskebank.com/ir 20
Disclaimer 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 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. This presentation contains forward-looking statements that reflect managements 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 Banks 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. 21