Capital Markets Day 26 March 29 From growth to consolidation in DnB NORD Leif Teksum, group executive vice president 1
DnB NORD constitutes 4.4 per cent of DnB NOR's total lending DnB NORD (%) Exposure at default (EaD) Total lending in DnB NOR 28 (NOK bn) Private individuals Corporate clients DnB NORD 619 4% 47 98 DnB NORD * DnB NOR** * DnB NOR holds 51 % of DnB NORD, here 1 % consolidated, ** DnB NORD not included 2
Risk related to capital and funding shared 51/49 DnB NORD ownership split between NORD/LB and DnB NOR 49 % DnB NOR consolidates DnB NORD 1 %, adjusted through minority interests DnB NOR is committed to providing 51 % of capital as well as meeting 51 % of funding needs 51 % 3
DnB NORD present in six countries Home market DnB NOR DnB NORD Finland Estonia Latvia Denmark Lithuania Poland 4
Joint venture for three years portfolio existed for ten years NORD/LB DnB NORD 1999 2 21 22 23 24 25 26 27 28 Lithuania Estonia Denmark Latvia Poland Finland BISE Bank 5
Well-diversified portfolio across countries Total portfolio of DnB NORD per country EUR 9.9 billion 9 % 4 % 12 % Estonia 34 % Lithuania Latvia 15 % Denmark Poland Finland 26 % 6
24 25 26 27 28E 29F 21F 211F 24 25 26 27 28E 29F 21F 211F Rough times expected, especially in the Baltics GDP growth forecast (%) Unemployment rate forecast (%) 12 1 8 6 4 2-2 -4-6 -8-1 -12 2 18 16 14 12 1 8 6 4 2 Denmark Estonia Finland Latvia Lithuania Poland Source: EIU (Economist Intelligence Unit), DnB NOR Markets 7
DnB NORD development in total lending Lithuania Latvia Poland Estonia Denmark Finland 8 356 8 7 6 5 22 1 41 1 212 2 594 7 6 5 4 3 2 1 2 271 461 1 516 3 352 2 62 1 75 26 27 28 4 3 2 1 889 232 456 1 464 472 818 26 27 28 8
Limited exposure to large corporates in DnB NORD's core markets Lending in the Baltics and Poland by segment Large corporates SME Private individuals 8 8 Lending to large corporates in Denmark and Finland 7 7 6 2 91 6 5 2 445 5 4 4 3 1 53 3 397 3 2 1 2 815 1 181 972 892 1 216 26 27 28 2 1 2 353 74 1 274 26 27 28 Definitions: Large corporates: turnover > 2, SME < 2 9
Diversified portfolio in Denmark Lending volumes in Denmark by sector 3 % 1 % 4 % 2 % 7 % 11 % 14 % 36 % The Danish portfolio consists of only large corporates 14 % of the portfolio represents leveraged buy-outs, mostly within manufacturing Steep fall in the real estate market caused high loanloss provisions in 4Q 28. 22 % Manufacturing Finance and credit Trade Culture and social services Other Commercial real estate Transport Services and management Building and construction 1
Large corporates with low risk profile in Finland Lending volumes in Finland by sector 21 % 7 % 6 % 3 % 36 % 77.7 % of lending is classified as low risk (PD -.75%) and 22.3 % as medium risk (PD.75-2.%) All exposures within commercial real estate have a loan-to-value ratio of less than 65 %, and all customers have a diversified portfolio Still no non-performing or doubtful loans 27 % No leveraged buy-out exposure Commercial real estate Wood processing Media and telecom Manufacturing Power and water supply Building and construction 11
Retail exposure in Latvia 3 Lending volumes in Latvia by sector 3 Lending volumes in Latvia by segment 2 5 2 1 5 11 73 57 92 29 267 238 2 5 2 1 5 1 231 1 378 327 1 1 841 5 1 75 5 541 864 948 26 27 28 Mortgages Commercial real estate Trade Leasing Private loans Manufacturing Transport Wood processing Hotels and accommodation Building and construction Agriculture Consumer loans Other 134 177 269 26 27 28 Large corporates SME Private individuals Definitions: Large corporates: turnover > 2, SME < 2 12
Focus on SME and retail segments in Lithuania 3 5 3 2 5 2 1 5 1 5 Lending volumes in Lithuania by sector 366 75 99 172 173 243 264 284 38 378 935 26 27 28 Mortgages Commercial real estate Private loans Trade Manufacturing Leasing Agriculture Consumer loans Transport Services and management Wood processing Other 3 5 3 2 5 2 1 5 1 5 Lending volumes in Lithuania by segment 1 431 1 155 687 1 457 1 133 641 377 333 463 26 27 28 Large corporates SME Private individuals Definitions: Large corporates: turnover > 2, SME < 2 13
Polish business in line with SME strategy 1 4 Lending volumes in Poland by sector 1 4 Lending volumes in Poland by segment 1 2 1 8 6 263 31 66 165 174 1 2 1 8 6 24 634 22 769 4 222 4 2 236 2 461 383 422 26 27 28 26 27 28 Commercial real estate Trade Building and construction Funds and trust companies Private individuals Manufacturing Housing cooperatives Finance and credit Wood processing Other Large corporates SME Private individuals Definitions: Large corporates: turnover > 2, SME < 2 14
Areas with longer historical presence have the lowest losses Loan-loss provisions DnB NORD Group Non-performing loans DnB NORD Group 2 % 1 % 6.5 % 8 % 6 % 1 % 4 % 2 % % Q46 Q27 Q47 Q28 Q48 % Q46 Q27 Q47 Q28 Q48 Denmark Finland Latvia Lithuania Poland * Adjusted for accumulated write-downs before the consolidation of BISE Bank 15
Active involvement required by shareholders Both DnB NOR and NORD/LB fully committed to providing capital and liquidity Strengthening of management at holding level Credit officers with experience from past crisis deployed in the Baltics Workout team in place in Denmark DnB NOR is expecting and prepared for rough times ahead 16