Board of Directors report Ole Andersen Chairman of the Board of - PowerPoint PPT Presentation

Board of Directors’ report Ole Andersen Chairman of the Board of Directors 18 March 2014

Management changes Thomas F. Borgen Glenn Söderholm Jim Ditmore 2013 CEO 2013 Head of Corporates & 2014 Chief Operating Officer Institutions 2012 – Head of Corporates & 2013 Global Head of CIB 2013 Allstate Insurance, 2013 Institutions (Corp. & Inst. Banking) Chicago 1997 Joined Danske Bank 1998 Joined Danske Bank 2008 Barclays, London 2

Economic climate of low interest rates and weak growth Annual GDP growth (%) Central bank policy rates (%) Norway Sweden 2013 Eurozone Denmark 3,0 2014 (est.) 2,4 2.00 2,0 1.75 1,5 1,5 1.50 1,3 1.25 0,7 1.00 0.75 0.50 -0,4 0.25 0.00 -1,3 -0.25 2011 2012 2013 3

Highlights from Annual Report 2013 Net profit rose 51% from DKK 4.7 billion to DKK 7.1 billion Income Expenses Total income was DKK 40 billion, a Expenses fell 1% decline of 12% Impairment charges Return on equity Impairment charges declined 45% Return on equity was 5% 4

Expenses declined in 2013 Trend in expenses, 2012-14 (DKK billions) -1% -5% 24,6 24,3 About 23 2012 2013 2014 (est.) 5

Personal Banking Impairment charges Total income Expenses Profit before tax (DKK millions) ( DKK millions) ( DKK millions) (DKK millions) 2012 16.829 12.430 2.749 1.650 -1% -3% -30% +64% 2013 16.736 12.103 1.935 2.698 6

Business Banking Impairment charges Total income Expenses Profit before tax DKK millions) (DKK millions) DKK millions) DKK millions) 3.825 2012 12.352 5.466 3.061 -53% -2% +2% +55% 1.779 2013 12.105 5.574 4.752 7

Corporates & Institutions Total income Expenses Impairment charges Profit before tax (DKK millions) DKK millions) DKK millions) DKK millions) 2012 11.396 4.307 5.929 1.160 -26% +7% -43% -59% 2013 8.435 4.588 3.374 473 8

Danske Capital Total income Expenses Profit before tax Assets under mgt (DKK millions) DKK millions) DKK millions) (DKK bn.) 2012 1.917 982 935 687 +13% +5% +21% +6% 2013 2.164 1.033 1.131 727 9

Danica Pension Premiums Insurance business Profit before tax ( DKK millions) ( DKK millions) DKK millions) 2012 24.649 1.453 2.171 +9% +4% -50% 2013 26.808 1.511 1.088 10

Loan impairment charges normalised Impairment charges , 2008-14 (DKK billions and basis points) 100 bp =1% 10 180 Loan impairment charges (left scale) Loss percentage in basis points (right scale) 9 150 8 7 120 6 5 90 4 60 3 2 30 11 1 33 23 0 0 Q2 Q2 Q2 Q2 Q2 Q2 2008 2009 2010 2011 2012 2013 11 Note: Loss percentage is defined as the Group’s quarterly loan impairment charges (annualised) as a percentage of loans and guarantees.

Winding up of Non-core Ireland proceeding as planned Credit exposure, 2013* (DKK billions) Status, property sales, 2013 (No. properties) Q1 Q3 Q2 Q4 -23% 17,6 1,423 17,0 15,9 13,6 886 707 293 106 95 95 40 Q1 Q2 Q3 Q4 For sale Sold 12 * Excluding the allowance account.

Strong capital base and dividend proposal Capital base 1 (%) Tier 2 Hybrid tier 1 (incl. state hybrid) Core tier 1 21,4 21,3 Proposal for dividend payment 2,4 2,4 of DKK 2 per share, or 28% of 1,5 net profit for the year 4,4 State hybrid 2,8 14,7 14,5 2012 2013 13 1. CRD/Basel II.

Allocation of profit Net profit for Danske Bank Group DKK 7,115 million Adjustment to Danish rules 687 million Net profit for parent company DKK 7,802 million The Board of Directors proposes that the profit be allocated as follows: Distribution of dividend of DKK 2 per share DKK 2,017 million Transfer to share capital: • Transfer to the equity method reserve 613 million • Transfer to retained earnings 5,172 million Total DKK 7,802 million 14

Share price Trend in Danske Bank’s share price in comparison with other European banks Danske Bank MSCI Europe Bank Index 150 140 +23% 130 120 110 100 90 80 Dec Jun Dec Mar 2012 2013 2013 2014 15 NB: Share price history vs MSCI Euro Bank Index (end-2012=95.65) .

Stable ratings, with a positive underlying trend 2012 2013 Positive outlook Stable outlook A- A- Stable outlook Positive outlook Baa1 Baa1 Negative outlook Stable outlook A A 16

Regulations in 2013 Agreement on deposit Rangvid Committee guarantee and crisis report released management in the EU Apr Sep Oct Dec Agreement on CRR/CRD IV in EU Political agreement on SIFI rules announced 17

The strategy is firm Vision “Recognised as the most trusted financial partner” Customer satisfaction Financial results Mission “Setting new standards in financial services” Advisory services Digitalisation Transparency and openness 18

Composition of the Board of Directors 19

Remuneration policy . 20

Focus areas for the Board of Directors in 2014 Improvement of Improvement of ratings ROE of 9% in 2015 customer satisfaction by at least one notch as and eventually 12% soon as possible 21

Outlook for 2014 Slightly improving but fragile economic growth and continuation of low interest rates Income Expenses Total income expected to be higher Expenses reduced to about DKK 23 than in 2013 billion Impairment charges Net profit Expected to be in line with 2013 Net profit of DKK 9 billion to level DKK 12 billion 22

THANK YOU FOR YOUR ATTENTION 23

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, and may not be offered, exercised or sold in the United States absent registration or an applicable exemption from registration requirements. References to a potential share offering by Danske Bank are included herein pursuant to Rule 135c of the Securities Act of 1933, as amended. 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. 24