Investor presentation UBS - FINANCIAL SERVICES CONFERENCE - PowerPoint PPT Presentation

Investor presentation UBS - FINANCIAL SERVICES CONFERENCE STOCKHOLM 18 SEP 2014 Per Sagbakken Head of Investor Relations

DNB - Norway’s leading financial services group - Market leader in Norway and leading within selected global industries Significant market share ~ 1/3 Global leader within selected industries #1 shipping and offshore bank globally One of the world’s leading seafood banks A leading international energy bank 2

DNB’s financial targets towards 2016 Target Requirement Return on equity CET1 capital ratio above 12 per cent 13.5-14.0 per cent Return on equity CET 1 capital ratio- Transition rules Per cent Per cent 11.7 % 13.2 % 14.1 % 13.6 % 12.1 % 10.7 % 11.8 % 11.4 % 10.6 % 9.4 % 9.2 % 8.5 % 2009 2010 2011 2012 2013 1H 2014 2009 2010 2011 2012 2013 1H 2014 3

DNB delivers healthy profit growth Pre-tax operating profit before impairments (NOK bn) 4

DNB: Development in 1H 2014 Pre-tax operating profit before impairment Profit for the period excl. basis swaps excl. basis swaps NOK million NOK million 14 661 10 584 11 505 7 211 1H13 1H14 1H13 1H14 Return on equity excl. basis swaps Cost/income ratio excl. basis swaps Per cent Per cent 14.7 49.2 11.2 41.6 1H13 1H14 1H13 1H14 5

DNB: Development in lending and deposit volumes NOK bn 1 369 1 341 1 312 1 349 1 322 882 1 298 881 868 820 811 861 854 849 797 30 30 31 31 30 30 31 31 30 30 30 31 31 30 30 31 31 30 June Sept. Dec. March June Sept. Dec. March June June Sept. Dec. March June Sept. Dec. March June 2012 2013 2014 2012 2013 2014 Deposits at end of period Loans at end of period Deposits adjusted for exchange rate movements Loans adjusted for exchange rate movements Deposits adjusted for short-term money market investments 6

DNB: Development in average interest rate spreads Per cent 2.42 2.42 2.42 2.39 Lending spread 2.32 2.21 2.18 2.01 1.98 1.30 1.29 1.28 1.27 1.25 Combined spread 1.22 1.20 1.18 1.18 - weighted average (0.11) (0.13) (0.24) (0.27) (0.29) (0.30) (0.29) (0.30) (0.27) Deposit spread 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 7

DNB: Development in commissions and fees + 5% growth NOK million 4 426 4 208 4 095 4 048 3 766 3 631 1H09 1H10 1H11 1H12 1H13 1H14 Sale of insurance products Money transfer and banking services Asset management and custodial services Corporate finance, credit and securities broking etc. Real estate broking Net commissions and fees 8

DNB: Non-life and new pensions (DC) show improvement DNB Non- life’s part of private market Defined contribution (Per cent) PTP - break even after 10 years (NOK million) 62 5.8 5.3 2003 2005 2007 2009 2011 2013 4.7

DNB: Cost-income ambition maintained Total operating expenses excluding non-recurring effects NOK million, per cent Total operating expenses excluding non-recurring effects Non-recurring effects Cost/income ratio - trailing 12 months 60 6100 5600 55 Continued cost focus to stay in line with amotions 5100 50 4600 45 4100 Below 40 45 3600 35 3100 30 2600 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 2015 2016 guiding 10

DNB: Reduction in new impairments NOK million Bps annualised 1,400 0.30 2012 0.24 1,200 0.25 1,000 2013 0.20 0.17 800 0.15 1H14 600 0.09 0.10 400 0.05 200 - - 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Total new individual impairment Total impairments in bps

DNB: Common equity Tier 1 capital ratio 1) Leverage ratio Basel III 3) CET1 transitional rules Per cent Per cent 2) 12.1 5.3 5.3 11.9 11.8 5.1 11.0 10.8 4.3 4.2 30 June 30 Sept. 31 Dec. 31 March 30 June 30 June 30 Sept. 31 Dec. 31 March 30 June 2013 2013 2013 2014 2014 2013 2013 2013 2014 2014 CET1 Basel III estimate Basel III applying average weights used by Swedish banks 4) Per cent Per cent 17.5 17.3 16.3 15.2 14.8 14.4 14.2 13.6 12.5 12.1 30 June 30 Sept. 31 Dec. 31 March 30 June 30 June 30 Sept. 31 Dec. 31 March 30 June 2013 2013 2013 2014 2014 2013 2013 2013 2014 2014 1) Including 50 per cent of profit for the period, 3) Calculated according to CRD IV rules except for the full year figures 4) Estimated common equity Tier 1 capital ratio according to 2) 12.4 per cent if 75 per cent of profit for the Basel III, applying average weights used by Swedish banks period is included 12

DNB versus Nordic peers: Capital ratios Simple "Leverage ratio" CET1-ratio trans.rules 5.4% 12.1% 11.6% 10.7% 10.3% 9.9% 4.1% 3.9% 9.0% 3.7% 3.6% 3.6% DNB Nordea SHB SEB Swedbank Danske DNB Nordea SHB SEB Swedbank Danske CET1 Basel III S&P RAC-ratio 20.9% 10.0% 20.1% 9.5% 8.9% 8.6% 8.3% 8.1% 16.0% 15.2% 14.4% 14.4% DNB Nordea SHB SEB Swedbank Danske DNB Nordea SHB SEB Swedbank Danske All ratios as of 30 June 2014 in per cent excluding S&P RAC- ratio as of 31 Dec 2013. Simple “Leverage ratio” = CET1 / Total assets

DNB: Stronger earnings and increased solidity Retained earnings (bps) Long-term dividend policy intact CET1-ratio transition rules 50 per cent 11.8% 12.1% 178 10.7% 161 9.4% Long-term policy 9.2% 8.5% 128 109 133 121 min 25 per cent 96 73 2013-2016 during capital build up phase 2009 2010 2011 2012 2013 1H Avg'07-11 2012 2013 YTD 2014 2014 Dividends 25% level Retained earnings

DNB: Outlook is firm The build-up of Tier 1 capital is on schedule, and regulatory uncertainty has been reduced The ambition to achieve 3-4 per cent trailing 12-month lending growth and stable volume-weighted spreads remains firm High level of activity in all customer segments and a continued increase in commissions is expected Underlying nominal costs are expected to be stable in the period up to 2016, and the cost/income ratio will remain highly competitive Credit quality will improve further, and losses are expected to be well below normalised levels 15

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