Financial results for Q1 2015 Thomas F. Borgen Chief Executive Officer Henrik Ramlau-Hansen Chief Financial Officer 30 April 2015
Agenda Executive summary and financial results 3 Business unit update 5 Selected topics 7 Outlook for full-year 2015 12 Q&A 13 Appendix 14 2
Executive summary Q1 2015 Net profit & ROE Net profit of DKK 5.0 bn and ROE of 13.2% Income Total income of DKK 12.2 bn up 18% vs Q1 2014 Expenses Expenses of DKK 5.4 bn flat vs Q1 2014 and cost/income ratio of 44.5% Impairments Impairments of DKK 0.5 bn down 22% vs Q1 2014 Non-core Non-core result of DKK 0.1 bn vs DKK -0.6 bn in Q1 2014 Capital Common equity tier 1 ratio of 14.1% and total capital ratio of 18.4% Share buy-back The DKK 5 bn share buy-back programme in 2015 commenced on 30 March Outlook Reaffirm guidance of net profit for 2015 of above DKK 14 bn 3
Net profit: DKK 5 bn, up 76% from Q1 2014 Income statement & key figures (DKK m) Key points, Q1 2015 vs Q1 2014 Q1 2015 Q1 2014 Index Q4 2014 Index Net interest income 5,313 5,155 103 5,742 93 Net fee income 3,046 2,564 119 3,153 97 Net trading income 2,715 1,901 143 928 293 Other income 360 309 117 366 98 Net income from insurance business 777 405 192 1,032 75 Total income 12,211 10,335 118 11,221 109 Expenses 5,437 5,432 100 6,090 89 Goodwill impairment charges - - - 9,099 - Profit before loan impairment charges 6,774 4,903 138-3,968 - Loan impairment charges 502 641 78 853 59 Profit before tax, core 6,272 4,262 147-4,821 - Profit before tax, Non-core 90-632 - -477 - Profit before tax 6,362 3,630 175-5,298 - Tax 1,411 818 172 987 143 Net profit 4,951 2,812 176-6,285 - Net profit before goodwill impairments 4,951 2,812 176 2,814 176 Return on avg. shareholders' equity (%) 13.2 7.7-16.9 ROE before goodwill impairments (%) 13.2 7.7 7.1 Cost/income ratio* 44.5 52.6 54.3 Common equity tier 1 capital ratio (%) 14.1 14.0 15.1 EPS 4.9 2.8-6.4 Lending (DKK bn) 1,605 1,559 103 1,564 103 Deposits (DKK bn) 827 782 106 763 108 Return on equity improved from 7.7% to 13.2% Total income up 18%, with gains in all income lines Expenses flat, with cost/income ratio of 44.5% Impairments down 22% Lending volume up 3% and deposit volume up 6% Key points, Q1 2015 vs Q4 2014 NII fell owing primarily to declining interest rates Fee income held up well because of higher activity in mortgage refinancing; Q4 14 included performance fees Trading income up owing to high client activity in financial markets Expenses down 11% owing mainly to seasonality 4
Banking units: Strong performance vs. Q1 2014 at all units Pre-tax return on allocated capital ex goodwill charge (%) Financial highlights, Q1 2015 vs Q1 2014 Q1 2014 20.1 12.7 Personal Q1 2015 18.7 11.9 Business 12.4 C&I 17.3 Personal Banking Lower NII offset by higher fees and trading income Expenses down 1% owing to further cost efficiencies Impairments down 27% Business Banking Higher total income, with gains in all income lines Impairments down 70% C&I Strong improvement in NII, fees and trading income Capital markets income up 17% to DKK 0.5 bn Impairments up owing to a few large exposures Income statement (DKK m) Personal Business C&I Q1 2015 Q1 2014 Index Q1 2015 Q1 2014 Index Q1 2015 Q1 2014 Index Net interest income 2,398 2,615 92 2,224 2,085 107 660 599 110 Net fee income 1,351 1,062 127 572 507 113 577 514 112 Net trading income 268 205 131 212 195 109 1,732 1,220 142 Other income 153 138 111 174 132 132 2 1 190 Total income 4,170 4,020 104 3,182 2,919 109 2,971 2,334 127 Expenses 2,627 2,652 99 1,322 1,348 98 1,158 1,126 103 Profit before loan impairment charges 1,543 1,368 113 1,860 1,571 118 1,813 1,208 150 Loan impairment charges 245 337 73 91 299 30 164 5 - Profit before tax 1,298 1,031 126 1,769 1,272 139 1,649 1,203 137 Lending (DKK bn) 808 805 100 644 622 103 190 169 112 Deposits (DKK bn) 335 330 101 262 259 101 230 189 121 5
Danske Capital and Danica Pension: Strong performance continued in Q1 2015 Danske Capital: Financial highlights, Q1 2015 vs Q1 2014 Total income up 15% owing primarily to an increase in assets under management Performance fees in Q1 amounted to DKK 14 m Net sales of DKK 11 bn, with 40% from non-danish clients Assets under management up 9% to DKK 813 bn vs DKK 748 bn in Q1 2014 Danica Pension: Financial highlights, Q1 2015 vs Q1 2014 Result from insurance business up 7% owing to volume growth Premiums of DKK 8.4 bn, up 6% Risk allowance booked in full for all four interest rate groups Shadow account balance unchanged at DKK 0.6 bn Profit before tax up 22% Danske Capital: Income statement (DKK m) Danica Pension: Income statement (DKK m) Q1 2015 Q1 2014 Index Net interest income -2 - - Net fee income 567 494 115 - portion from performance fees 14 20 71 Other income 2-1 - Total income 567 493 115 Expenses 244 228 107 Profit before tax 323 265 122 Assets under management (bn) 813 748 109 Q1 2015 Q1 2014 Index Premiums 8,353 7,845 106 Danica Traditionel (insurance result) 333 304 110 Unit-linked (insurance result) 153 147 104 Health and accident (ins. result) -36-32 - Result from insurance business 450 419 107 Return on investments 360 110 - Financing result -12-49 - Special allotments -21-24 - Net income bef. postponed risk allow. 777 457 170 Change in shadow account - -52 - Net income 777 405 192 6
Expenses: Flat vs. Q1 2014 despite higher activity, bonuses and one-off pension charge Total expenses ex goodwill charge (DKK m) Change in expenses ex goodwill (DKK m) Consultants etc. Severance payments Deposit scheme guarantee / bank packages 23,794 780 22,641 694 542 931 590 762 873 826 Bonuses Other costs Q1 2014 5,432 Staff costs ex pension and bonuses 37 Pension and bonuses 103 Severance payments IT 30 4 20,627 19,810 5,437 122 27 176 245 Rent of premises Marketing and consultancy 37 27 4,867 Depreciation, tangibles 103 Other costs 4 2013 2014 Q1 2015 Q1 2015 5,437 7
Impairments: Loan loss ratio for Q1 of 11 bp for core activities and 8 bp for the entire Group Group impairments, 2011 to Q1 15 (DKK bn/bp) Impairments (DKK m) 5.0 4.5 4.0 3.5 3.0 Impairments Loan loss ratio* (rhs) Q115 Q114 Index Q414 Index 59 99 100 90 80 70 60 Personal Banking 245 337 73 517 47 Business Banking 91 299 30 161 57 C&I 164 5-177 93 Other activities 1 - - -2 - Total core 502 641 78 853 59 Non-core -136 303-413 - Group 366 944 39 1,266 29 2.5 50 Loan loss ratio, annualised (bp) 2.0 1.5 1.0 0.5 26 8 40 30 20 10 Q115 Q114 Index Q414 Index Personal Banking 12 17 71 25 48 Business Banking 6 20 30 10 60 C&I 11 - - 12 92 Total core 11 14 79 18 61 Non-core -176 393-447 - Group 8 20 40 26 31 0.0 Q111 Q112 Q113 Q114 Q115 0 * The loan loss ratio is defined as annualised impairment charges as a percentage of loans and guarantees. 8
Capital: Solid capital base, CET1 ratio of 14.1% net of full share buy-back, volume growth and Danica phase-in Capital ratios, under Basel III/CRR (%) Capital drivers Tier 2 21.4 2.4 4.3 14.7 2013 Hybrid T1 / AT1 Common Equity Tier 1 19.3 18.4 2.6 1.6 2.2 2.1 15.1 14.1 2014 Q1 2015 In Q1 2015, total REA increased to DKK 896 bn, mainly because of volume growth and increased counterparty exposure and market risk Share buy-backs of DKK 5 bn in 2015 caused a decrease of 0.6 of a percentage point in the CET1 ratio compared with end-2014 Effect of CRR/CRD IV on fully loaded CET1 ratio is a decline of about 1 percentage point from the Q1 2015 ratio CRD IV leverage ratio: 4.1% according to the transitional rules; 3.7% fully phased-in CET1 ratio development, Q4 14 to Q1 15 (%) REA development, Q4 14 to Q1 15 (DKK bn) 15.1 0.3 0.5 Other Volume 896 0.6 0.2 14.1 866 Q4 2014 Net profit* Higher REA Share buy back CRD IV phase-in Q1 2015 Q4 2014 Credit risk Counterparty risk Market risk Q1 2015 * Excluding 50% dividend. 9
Non-core: Sale of SME portfolio agreed, transfer of Baltic personal customers to Non-core in Q1 Key points The profit before tax increased to DKK 0.1 bn compared with a loss before tax of DKK 0.6 bn in Q1 2014 Total loan book reduced by DKK 6.6 bn since Q1 2014, although exposure to Personal Banking Baltics of DKK 8.3 bn entered the book in Q1 2015 REA increased after the inclusion of Baltic exposure The SME portfolio of around DKK 4 bn (nominal amount) was sold in Q1 with effect from April 2015 (the reason the exposure is still included in total REA) New Non-core loan portfolio,* Q1 2015 (DKK bn) Allowance account Non-performing credit exposure 29 20 Personal customers (incl. Baltics) 7 3 Commercial portfolio Performing credit exposure 11 10 Conduits etc. 47 8 6 33 Total Property pipeline and sales (No. of properties) Total REA (DKK bn) 2013 1,634 2014 Q1 2015 1,423 Non-core conduits, etc. Non-core Banking 44 42 42 41 9 9 8 8 45 8 36 523 238 789 908 712 470 429 35 34 33 33 36 37 35 31 28 8 27 27 Sold Agreed to sale On the market Q114 Q214 Q314 Q414 Q115 Q115 proforma** * Gross credit exposure. ** Excluding the SME portfolio expected to be off the books in H1 2015. 10
Impact of monetary policy events in early 2015 by business unit Illustration of ceteris paribus impact Personal Banking Business Banking C&I Short-term NII NII Trading Long-term Loan losses Fees Loan losses Activity Yield curve Volatility Danske Capital Inflow Asset allocation Danica Pension Investment gains Reinvestment 11
Outlook for 2015: Net profit of above DKK 14 bn Macro Economic growth remains slow and fragile, with low interest rates Total income Income is expected to be around the same level as in 2014 Expenses Expenses are expected to be below DKK 22 bn Impairments Impairments charges in core activities to remain low Non-core Non-core pre-tax result is expected at around DKK 0 million Net profit Net profit of above DKK 14 bn Note: This guidance is subject to uncertainty and depends on economic conditions, including the development in monetary policy by the central banks. 12
Q&A session www.danskebank.com/ir 13
Appendix Business units 15 Special topics: NII, trading income and expenses 20 Impairments 23 Macro, credit quality and portfolio reviews 25 Funding, liquidity and ratings 30 Tax 33 Contact details 34 14
Personal Banking: Positive trend in impairments and income except for NII; good momentum in Norway Income statement & key figures (DKK m) Lending volume by country,* Q4 2013 = Index 100 Q1 2015 Q4 2014 Index Net interest income 2,398 2,660 90 Net fee income 1,351 1,224 110 Net trading income 268 264 102 Other income 153 137 112 Total income 4,170 4,285 97 Expenses 2,627 2,839 93 Goodwill impairment charges - 5,539 - Profit before loan impairment charges 1,543-4,093 - Loan impairment charges 245 517 47 Profit before tax 1,298-4,610 - Profit before tax excl. goodwill 1,298 929 140 Lending 808 794 102 Deposits 335 329 102 FTE 6,713 6,673 101 Profit before tax by country (DKK m) Other Northern Ireland Norway Sweden Finland Denmark Denmark Finland Sweden 118 116 114 112 110 108 106 104 102 Norway Northern Ireland 1,031 1,315 1,373 929 1,298 100 98 96 94 92 90 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 * Based on local currency lending volumes. 15
Business Banking: Positive trend in most income lines and impairments; good momentum in Nordic lending Income statement & key figures (DKK m) Lending volume by country,* Q4 2013 = Index 100 Q1 2015 Q4 2014 Index Net interest income 2,224 2,301 97 Net fee income 572 552 104 Net trading income 212 192 110 Other income 174 136 128 Total income 3,182 3,181 100 Expenses 1,322 1,555 85 Goodwill impairment charges - 3,559 - Profit before loan impairment charges 1,860-1,933 - Loan impairment charges 91 161 57 Profit before tax 1,769-2,094 - Profit before tax excl. goodwill 1,769 1,465 121 Lending 644 634 102 Deposits 262 260 101 FTE 3,115 3,663 85 Denmark Finland Sweden 130 125 120 115 Norway Northern Ireland Profit before tax by country (DKK m) Other Northern Ireland Sweden Baltics Norway Finland Denmark 110 105 1,272 1,541 1,455 1,465 1,769 100 95 90 85 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 * Based on local currency lending volumes. 16
Corporates & Institutions: Trading income drives PBT higher as client activity increased and market conditions improved Income statement & key figures (DKK m) Key points, Q1 15 vs Q4 14 Q1 2015 Q4 2014 Index Net interest income 660 717 92 Net fee income 577 592 97 Net trading income 1,732 791 219 Other income 2 4 53 Total income 2,971 2,103 141 Expenses 1,158 1,196 97 Profit before loan impairment charges 1,813 907 200 Loan impairment charges 164 177 93 Profit before tax 1,649 730 226 Lending 190 172 110 Deposits 230 174 132 FTE 1,826 1,646 111 Profit before tax up 126%, mainly because of higher net trading income Net trading income up 119% from a low level owing to increased client activity and better market conditions Impairments relating to a few large exposures Pre-tax return on allocated capital of 17.3% FTE rose owing to transfer of Transaction Banking FTEs from Business Banking ROE before tax (%) Income breakdown (DKK m) FICC Capital Markets General Banking 12.4 8.5 15.1 7.8 17.3 2,334 2,201 2,483 2,103 2,971 Q114 Q214 Q314 Q414 Q115 Q114 Q214 Q314 Q414 Q115 17
Danske Capital: Higher AuM drives 3% increase in total income, excluding performance fees; expenses down 4% Income statement (DKK m) Q1 2015 Q4 2014 Index Net interest income -2 2 - Net fee income 567 825 69 - portion from performance fees 14 288 5 Other income 2 - - Total income 567 827 69 Expenses 244 253 96 Profit before tax 323 574 56 Key points, Q1 15 vs Q4 14 Non-performance-based income was up 3% Performance fee income of DKK 14 m vs DKK 288 m in Q4 14 Expenses fell 4% because of lower marketing costs Assets under management up 2% to DKK 813 bn Assets under management (bn) 813 795 102 Net inflow AuM (DKK bn) AuM customer breakdown (DKK bn) Net inflow Net inflow as % of AuM (rhs) 12 2.5 10 2.0 8 1.5% 1.4% 1.5 6 1.1% 11.4 1.0% 11.3 0.8% 1.0 4 7.7 8.5 6.2 2 0.5 0 0.0 Q114 Q214 Q314 Q414 Q115 Private Equity Retail* Institutions Life insurance Q114 Q214 Q314 Q414 16 295 344 158 Q115 * Retail includes Danske Invest. 18
% change in equities Financial results for Q1 2013 2015 Danica Pension: Strong improvement in insurance result; full risk allowance booked for all four interest rate groups Income statement (DKK m) Investment allocation for Danica Traditionel, end-q1 15 (%) Q1 2015 Q4 2014 Index Premiums 8,353 6,477 129 Danica Traditionel (insurance result) 333 289 115 Unit-linked (insurance result) 153 95 161 Health and accident (ins. result) -36-28 - Result from insurance business 450 356 126 Return on investments 360 78 - Financing result -12-20 - Special allotments -21-10 - Net income bef. postponed risk allow. 777 404 192 Change in shadow account - 628 - Net income 777 1,032 75 Possibility of booking risk allowance in 2015 (%) Equities Credit bonds Alternative investments Bonds Property 8 1 9 1 48 56 73 66 25% Full risk allowance 14 18 Partial risk allowance -25% -1.00% 0.00% 1.00% Percentage point change in interest rates 17 13 14 12 New schemes Low 10 10 9 10 6 6 Medium High 19
Net interest income: Q1 affected by lower interest rate environment Quarterly net interest income (DKK m) Quarterly changes in net interest income (DKK m) +3% 5,681 5,735 5,742 Q4 14 5,742 5,155 5,313 Lending effect 189 Q114 Q214 Q314 Q414 Q115 Deposit effect 425 Balance sheet items (DKK bn) Loans and advances Deposits (rhs) Days 116 1,610 1,600 1,590 1,580 1,570 1,560 0 840 820 800 780 760 0 Other 77 Q1 15 5,313 Q114 Q214 Q314 Q414 Q115 20
Trading income: High customer activity in financial markets and positive fair value adjustments in Q1 Trading income by business unit (DKK m) Key points Other incl. Treasury C&I Business Personal 2,715 Trading income increased owing to high customer activity in financial markets 2,252 Income from Treasury lifted by positive fair value adjustments 1,903 1,613 Personal Banking and Business Banking benefitted from DKK 141 m in refinancing fees, down from DKK 186 m in Q4 2014 928 Refinancing income (DKK m) 242 186 138 148 141 Q114 Q214 Q314 Q414 Q115 Q1 2013 Q4 2013 Q1 2014 Q4 2014 Q1 2015 21
Expenses: Drop of 11% owing to seasonality and restructuring charges in Q4 2014 Total expenses ex goodwill charge (DKK m) Consultants etc. Severance payments Deposit guarantee scheme/bank packages Bonuses Other costs 6,090 Change in expenses ex goodwill (DKK m) Q4 2014 6,090 Staff costs 58 Severance payments 260 5,432 5,589 5,530 5,437 IT 252 Marketing and consultancy 123 Deposit guarantee scheme 56 4,853 Q1 14 4,921 Q2 14 4,861 Q3 14 5,174 Q4 14 4,867 Q1 15 Other costs 20 Q1 2015 5,437 22
Impairments: Positive underlying trend in impairments continues; Q4 impairments included AQR charges Impairments by business unit (DKK bn) Individual loan impairment charges,* ex Core Baltics (DKK bn) Non-core C&I Business Personal New Increased Reversal 1.3 0.8 0.9 0.8 0.9 0.8 1.0 0.7 1.7 0.4 0.2 0.1-2.6 0.2-0.1-0.1 Q114 Q214 Q314 Q414 Q115 Q114 Q214 Q314 Q414 Q115 Note: Non-performing loans are loans in rating categories 10 and 11 against which individual impairments have been made. *Excludes Non-core. 23
Group impairments: DKK 40.9 bn in the allowance account Allowance account (DKK m) Impairment drivers Personal Banking Business Banking Corporates & Institutions Non-core Personal Banking: Down from Q4 level owing to collective AQR charges of DKK 0.3 bn in Q4; individual impairments remain low 46.8 45.7-13% 44.5 40.9 40.9 Business Banking: Impairments down owing to improving credit quality C&I: Impairments related to a few large exposures 8.3 Non-core: Reversals of DKK 0.1bn primarily due to the improved property market in Ireland Non-performing loans* (DKK bn) 21.2 Not in default In default 29.7 28.4 28.6 29.4 29.9 3.6 7.8 20.8 18.9 19.4 18.8 18.8 8.9 9.5 9.2 10.6 11.1 Q114 Q214 Q314 Q414 Q115 Q114 Q214 Q314 Q414 Q115 * Includes Non-core activities. 24
Nordic macro Real GDP, (constant prices, index 2005 = 100) Inflation, (%) 130 120 110 100 Denmark 90 Sweden Norway 2006 2008 2010 2012 Finland 2014 Denmark (CPI) Norway (CPI) Sweden (CPI) Finland (HICP) 6 4 2 0-2 2006 2008 2010 2012 2014 Interest rates, (leading, %) Unemployment, (Labour Force Survey %) Denmark Sweden Norway Euro Area Denmark Sweden Norway Finland 6 10 5 4 3 2 1 0-1 2006 2008 2010 2012 2014 8 6 4 2 0 2006 2008 2010 2012 2014 25
Nordic housing market House prices, (index 2005 = 100) House prices/nom. GDP, (index 2005 = 100) Denmark Sweden Norway Finland 200 180 160 140 120 100 Denmark 130 120 110 100 90 Sweden Norway Finland 2006 2008 2010 2012 2014 2006 2008 2010 2012 2014 Apartment prices, (index 2005 = 100) Apartment prices/nom. GDP, (index 2005 = 100) Denmark 250 Sweden Norway Finland Denmark Sweden Norway Finland 180 200 160 140 150 120 100 100 80 2006 2008 2010 2012 2014 2006 2008 2010 2012 2014 26
+ refinancing fee* + refinancing fee* Financial results for Q1 2013 2015 Realkredit Danmark and the Danish housing market: Portfolio overview Portfolio facts, Realkredit Danmark, end-q1 15 Stock of retail loans, Realkredit Danmark, end-q1 15 (%) Approx. 379,000 loans (residential and commercial) 2,131 loans in 3- and 6-month arrears 67 repossessed properties DKK 15 bn of loans with LTV ratio > 100%, including DKK 1bn with public guarantee Average LTV ratio of 70% Variable rate instalments Fixed rate instalments 24% Variable rate interest-only Fixed rate interest-only 43% LTV ratio at origination (legal requirement) Residential: max. 80% Commercial: max. 60% 25% 8% Unemployment and foreclosures (%) Trend in mortgage margins, 80% LTV, owner-occupied (bp) 10Y swap rate Unemployment 10 No. of forced sales (rhs) 1,500 All products Fixed rate 86 Adjustable rate 101 118 5 1,000 500 52 68 0 0 1993 1997 2002 2006 2010 2015 2011 Jan13: with amortisation Jan 13: interest-only * We charge a fee of 30 bp of the bond price for refinancing of 1- and 2-year floaters and a fee of 20 bp for floaters of 3 or more years. 27
Realkredit Danmark: Increase in fixed-rate loans driven by very low interest rates Key points Expected development in RD portfolio* (%) Trend away from short-term Flexlån continued in Q1 2015 The share of total new mortgages represented by fixedrate instalment loans increased to 65% in Q1 2015 from 23% in Q1 2014 Since end-q4 2012, the amount of Flexlån F1 and F2 loans has been reduced by DKK 101 bn, or 53% Interest-only Amortising 51 50 49 48 46 45 43 Loan portfolio, FlexLån F1 and F2 (DKK bn) -53% 191 169 160 161 130 111 109 107 99 90 49 50 51 52 54 55 57 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 2014 2015E 2016E 2017E 2018E 2019E * Based on the assumption that the portion of interest-only mortgages of new loans is unchanged and that the observed trend in customers who start to amortise at the end of the IO period continues. 2020E 28
Credit exposure: Limited agriculture and shipping/oil exposure Agriculture exposure (2.8 % of Group exposure) Market conditions remain weak although output prices have improved through Q1 supported by a stronger USD. Impairment charges decreased in Q1 2015 due to collective impairments charges booked in Q4 2014. RD represent 70% of total gross exposure and 5% of total accumulated impairment charges to agriculture in Business Banking. Shipping and oil related exposure (2.3 % of Group exposure) The shipping portfolio is mainly booked in C&I and the coverage ratio is generally high. Oil-related exposure amounts to DKK 17bn and relates to Offshoring (DKK 10bn), Oil majors (DKK 1bn) and Oil service providers (DKK 6bn). The credit quality is generally good, and no impairment charges were booked in 2014. 70% of oil related exposure is denominated in USD. The Group s shipping exposure is managed by specialist teams for customer relationships and credit management. Agriculture by segments, Q1 2015 (DKK bn) Gross credit exposure Portion from RD Acc. Individual impairment charges Net credit exposure NPL coverage ratio Business Banking 60,323 42,619 2,444 57,879 80% Growing of crops, cereals, etc. 17,620 14,187 433 17,187 75% Dairy 13,809 7,630 828 12,981 91% Pig breeding 13,360 10,556 1,013 12,347 75% Mixed operations etc. 15,534 10,246 170 15,365 67% C&I 7,028 2,732 1 7,028 100% Others 447 40 407 Total before collective impairments 67,799 2,484 65,314 80% Collective impairment charges 639 139 Total gross exposure 68,438 Shipping exposure, Q1 2015 (DKK bn) Gross credit exposure Acc. impairment charges Net credit exposure NPL coverage ratio C&I 37,663 1,868 35,795 68% Offshore 10,890-10,890 - Tank 8,436 1,454 6,982 63% Container 3,528 39 3,489 87% LNG/LPG 5,257-5,257 - Dry Bulk 2,366 15 2,350 99% Car carriers 1,878-1,878 - Others 5,307 360 4,947 100% Personal & Business Banking 1,764 68 1,696 88% Total 39,427 1,936 37,491 69% * Gross credit exposure is excluding accumulated collective impairment charges. 29
Funding and liquidity: 20 bn of long-term funding issued in Q1; expensive funding up for redemption in 2015 Changes in funding, 2014 (DKK bn and bp*) Long-term funding ex RD (DKK bn) Cov. Bonds 107bp Senior Tier 2 Tier 1 Funding plan Completed 95 51bp 26 33 62bp 55bp 6 39bp 73bp 0 2 3 5 0 12bp 8 29bp 7 574bp 6 73 39 64 50-70 20 Redemptions 2015: DKK 65bn Redeemed Q1 2015: DKK 11bn New Q1 2015: DKK 20bn 2011 2012 2013 2014 2015E Maturing funding, 2016-18 (DKK bn and bp*) Liquidity coverage ratio** (%) Cov.bonds 94bp 98bp Senior Tier 2 Tier 1 118bp 42bp 150 32 28 0 0 2016: DKK 60 bn 49bp 23 18 0 65bp 13 2017: DKK 54 bn 26 53bp 192bp 14 12 0 2018: DKK 52 bn 125 100 119 Q1 14 133 Q2 14 125 Q3 14 129 131 Q4 14 Q1 15 110*** * Spread over 3M EURIBOR. **LCR is calculated in accordance with the Danish FSA s specifications and includes holdings of covered bonds and Danish mortgage bonds, including own issued bonds. ***Minimum requirement of the Danish FSA. 30
Deposits credit inst. CD & CP Repos Deposits Senior unsecured Covered bonds Subord. debt Equity Financial results for Q1 2013 2015 Funding: Structure and sources; Danish mortgage system is fully pass-through Loan portfolio and long-term funding, Q1 15 (DKK bn) Funding sources (%) 1,880 Q4 2014 Q1 2015 110 Senior debt 45 1,605 Bank loans 541 827 Deposits 21 Bank mortgages 315 194 Covered bonds 6 6 11 8 2 2 RD mortgages 749 749 Issued RD bonds Loans Funding Short-term funding Long-term funding 31
Three distinct methods of rating banks; Moody s rating under review for possible upgrade Rating methodology Danske Bank s rating Anchor SACP* Extraord. Add. + 1 + 2 + 3 + 4 = SACP = + = Support factors Issuer Rating bbb+ +1 0 0 0 a- +2-1 A (Negative) 1=Business Position 2=Capital & Earnings 3=Risk Position 4=Funding & Liquidity Bank Financial Strength Rating Baseline Credit Assessment (BCA) Parental and Loss Given Systemic + Cooperative + + = Failure Support Support Issuer Rating C- Baa1 0 notches 0 notches** 1 notch A3 (Stable) Individual Rating/Viability Rating Support Rating/Support Rating Floor a A- Issuer Default Rating (IDR) IDR is the higher of the Viability Rating and the Support Floor A (Stable) * Stand-Alone Credit Profile. **Moody s rating is under review for possible upgrade owing to introduction of loss-given-failure analysis. 32
Tax Actual and adjusted tax rates (DKK m) Q12015 Q42014 Q32014 Q22014 Q12014 Profit before tax 6,362-5,298 4,503 5,000 3,630 Ireland core and non-core -433 434 79 87 140 Permanent non-taxable difference 20 8,969 45-1,240-100 Adjusted pre-tax profit, Group 5,949 4,105 4,627 3,847 3,670 Tax drivers The difference between profit before tax and adjusted pre-tax profit relates mainly to previous years losses in Ireland Tax according to P&L 1,411 987 1,231 953 818 Taxes from previous years 33 44-60 -5 53 Adjusted tax 1,445 1,031 1,171 948 871 Adjusted tax rate 24.3% 25.1% 25.3% 24.6% 23.7% Actual tax rate 22.2% N/A 27.3% 19.1% 22.5% 33
Contacts Henrik Ramlau-Hansen Direct: +45 45 14 06 66 Chief Financial Officer Mobile: +45 22 20 73 10 hram@danskebank.com Claus Ingar Jensen Direct: +45 45 12 84 83 Head of IR Mobile: +45 25 42 43 70 clauj@danskebank.dk John Bäckman Direct: +45 45 14 07 92 Chief IR Officer Mobile: +45 30 51 46 85 jbc@danskebank.dk Robin Hjelgaard Løfgren Direct: +45 45 14 06 04 IR Officer Mobile: +45 24 75 15 40 rlf@danskebank.dk Louisa Grue Baruch Direct: +45 45 13 92 34 IR Officer Mobile: +45 21 56 19 35 lobar@danskebank.dk 34
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 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 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. 35