Copenhagen, Danske Markets 19 June 2012 Per Sagbakken, Head IR/Long - - PowerPoint PPT Presentation

Copenhagen, Danske Markets 19 June 2012 Per Sagbakken, Head IR/Long term Funding

Absolute or relative strength?

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Strength 1: A strong home market

Source: OECD Economic Outlook No. 90, November 2011 Note: Budget surplus/deficit calculated as a percentage share of country GDP; forecasts for 2012

Annual budget deficit/surplus for 2012 (forecast)

General government net financial liabilities (As a percentage of nominal GDP 2011)

Budget deficit Budget surplus

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Strength 2 : Dominant market shares

Very Strong franc in very str econ Åtte sirkler m markedsandel - bilde

Lending Deposits Assurance fund Assets managed in funds Lending Corporate Deposits Assurance fund Assets managed in funds Retail

Strength 3: A business model shaped for the future

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Private individuals SME + Corporate 50% 50%

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Strength 4: Sustainable achievements, DNB has delivered as promised

Development in pre-tax operating profit before write-downs (NOK billion)

Profit per quarter

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Pre-tax operating profit before write-downs

(NOK million)

Profit for the period

(NOK million)

Pre-tax operating profit before write-downs excl. basis swaps

(NOK million) 5 276 4 952 3 837 4 737 5 588 1Q11 2Q11 3Q11 4Q11 1Q12 2 851 3 546 2 493 4 089 1 760 1Q11 2Q11 3Q11 4Q11 1Q12 4 692 5 101 5 235 6 806 3 156 1Q11 2Q11 3Q11 4Q11 1Q12

Development in average interest rate spreads - DNB Group

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1.58 1.60 1.57 1.67 1.61 1.55 1.55 1.64 1.83 0.29 0.32 0.41 0.27 0.29 0.31 0.33 0.28 0.04 1.12 1.15 1.16 1.17 1.13 1.10 1.11 1.14 1.16 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Per cent 2) Lending spread Deposit spread Combined spread

• weighted average

Net interest income - trailing 12 months

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23 893 25 252 25 887

31 March 30 June 30 Sept. 31 Dec. 31 March 2011 2012 NOK million Net interest income 2011 Trailing 12 months

+ 8.3 per cent from 1st quarter 2011

Business areas

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1 882 1 816 1 843 414 97 1 828 1 415 1 115 666 21

First quarter 2012 First quarter 2011

Pre-tax operating profit after write-downs in the first quarter

(NOK million)

Retail Banking Large Corporates and International DNB Markets Insurance and Asset Management DNB Baltics and Poland

Strength 5: A strategy based on growth industries

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Energy Shipping Seafood

Strength 6: Strong credit quality - Write-downs in per cent of lending

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Full year Full year Per cent 1Q12 4Q11 3Q11 2Q11 1Q11 2011 2010 Total write-downs in relation to average volumes (annual basis) 0.25 0.29 0.38 0.15 0.31 0.28 0.26

• DNB excl. DNB Baltics and Poland

0.24 0.23 0.16 0.10 0.25 0.19 0.15

• DNB Baltics and Poland

0.47 1.56 5.30 1.31 1.44 2.39 2.48

12 Source: Fourth quarter report 2011 from the financial institutions

Strength 7: Sufficient solidity - DNB is among the most solid banks

2.6 % 3.1 % 3.2 % 3.9 % 4.2 % 4.9 % Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 DNB

Equity Tier 1/total assets (“leverage ratio”)

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Improved capitalisation with “Nordic” risk weights

Reported capital adequacy Pro forma full IRB IRB with Nordic risk weights Adjusted for Nordic risk weights Adjusted for full IRB DNB risk weights

Per cent

14.5

11.0 9.3

Equity Tier 1 capital ratio – Q1 2012

NOK billion Maturity Spread 3month Euribor Spread 3month Nibor

Covered Bonds

47,1 7,4 67 96

Senior Bonds

42,8 6,8 172 194

Total

89,9 7,1 117 143

Subordinated debt

5,7

Total

95,5

in addition: LTRO Funding

9,0 3,0 NOK billion Maturity Spread 3month Euribor Spread 3month Nibor

Covered Bonds

98,3 6,5 53 68

Senior Bonds

27,8 8,8 108 123

Total

126,1 7,0 65 80

in addition: LTRO Funding

15,7 3,0 NOK billion Maturity Spread 3month Euribor

Covered Bonds

84,4 7,5 49

Senior Bonds

32,3 7,3 84

Total

116,6 7,5 59

Strength 8: Favourable funding position

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2012 2011 2010

Redemption profile 2012 - 2015

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Strength 9: Competitive on cost efficiency

Cost/income ratio* – Nordic banks 2011

Source: Company reports *All figures are before adjustments for goodwill i.a.

Strength 10: Regulatory firmness

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The lessons from the previous bank crisis still influence the behaviour of the Norwegian FSA

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• Transition floor still in

place

• Guiding of maximum 85 %

LTV and 5 % stress test

• n mortgage interest rates
• Highest risk-weights on

mortgages in the Nordic region

The Norwegian FSA is thus quite conservative

Strength 11: Competent staff and an attractive employer

DNB #2 in Universum’s Ideal Employers ranking 2012

19 Source: http://www.universumglobal.com/IDEAL-Employer-Rankings

• Norway’s largest financial institution, high degree of specialists

Strength 12: Market trust - DNB vs. Nordic peers 2012

20 90 95 100 105 110 115 120 125 130 135 31.12.11 05.01.12 10.01.12 15.01.12 20.01.12 25.01.12 30.01.12 04.02.12 09.02.12 14.02.12 19.02.12 24.02.12 29.02.12 05.03.12 10.03.12 15.03.12 20.03.12 25.03.12 30.03.12 04.04.12 09.04.12 14.04.12 19.04.12 24.04.12 29.04.12 04.05.12 09.05.12 14.05.12 19.05.12 24.05.12 29.05.12 03.06.12 08.06.12

DNB Danske SEB Handelsb NORDEA Swedbank

SEB 104 Nordea 105 Swedbank 119 DNB 98 Handelsb 116 Danske 111

Market trust - Debt ratings from Moody’s

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Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3

Conclusions and actions

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Conclusions

• A strong home market will continue to support healthy financial results
• Stable and favourable access to capital markets
• Prudent and intelligent growth

Actions

• Continue to strengthen solidity
• Achieve higher profitability through increased effort in the

Norwegian retail market

• Active positioning to better meet new regulations, both in

life insurance and banking