the board of directors' report - danske bank · chairman, board of directors directors the...
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18 March 2013
Ole Andersen Chairman, Board of Directors Directors
The Board of Directors' report
Danske Bank’s Annual General Meeting 2013
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General meeting 2013
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We are following our plans for increased customer focus and efficiency
New Standards strategy launched
October
New customer programme in Denmark
January
From country organisations to business units
June
Name changed to Danske Bank in seven countries
November
Credit decisions closer to the customer
July
Decentralised business decisions
New CEO
February
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Economic growth remained slow in Europe in 2012
-1.10%
-0.60%
-0.01%
0.90%
-2.40%
Annual growth
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Highlights of the 2012 financial statements
Net profit improved DKK 3 billion to DKK 4.7 billion
Loan impairment charges fell to the lowest level since the beginning of the crisis
ROE of 3.7% is still far below our target
Capital ratios and liquidity strengthened significantly in 2012
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Income generally grew
Income breakdown (DKK millions )
Insurance bus. income 2,263
569
Other income 2,951
3,648
Net trading income 8,901
7,325
Net fee income 8,782
8,298
Net interest income 24,788
23,537
2012 2011
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Rise in income at Danske Bank Markets and Danske Capital
Danske Bank Markets & Group Treasury Danske Capital
4.097 4.487
+10%
2012 2011
910
1.094
2012
+20%
2011
Profit before tax (DKK millions)
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Expenses affected by restructuring, but were as planned
Expenses (DKK billions)
23,6 23,2
26.0
2012
Underlying expenses
Extraordinary expenses
3.4
2011
26.0
2.4
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Lowest impairment charges since the beginning of the financial crisis
1% = 100 bp
10
9
8
7
6
5
4
3
2
1
0
Impairment ratio
Impairment charges
10 bp
173 bp
57 bp
99 bp
52 bp
2010 2009 2008 2011 2012
Loan impairment charges, 2008 - 2012 (DKK billions)
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Overall, a sound rise in profit despite difficult conditions
Income statement (DKK millions)
Income up 10%
Expenses slightly higher
Impairment charges down 5%
Net profit up DKK 3 billion
ROE of 3.7% is low and below 2015 target
2012 2011 Index
Net interest income 24,788 23,537 105
Net fee income 8,782 8,298 106
Net trading income 8,901 7,325 122
Other income 2,951 3,648 81
Income from insurance bus. 2,263 569 -
Total income 47,685 43,377 110
Operating expenses 26,588 25,987 102
Profit bef. loan imp. charges 21,097 17,390 121
Loan impairment charges 12,529 13,185 95
Profit before tax 8,568 4,205 204
Tax 3,819 2,482 154
Net profit 4,749 1,723 276
RoE (%) 3.7 1.4 -
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New strategy launched — clear goals for 2015
New mission for 2015
Setting new standards
in financial services
Top 3:
Financial
results
2015
Top 1-2:
Customer
satisfaction
2015
New vision for 2015
Recognised as the most trusted
financial partner
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New organisation moves decisions closer to the customer
Personal Banking
Business Banking
Corporates
& Institutions
Danica
Pension
Danske Capital
CEO
Support functions
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New customer programme launched in Denmark
Simple and
transparent
Fair
More benefits
Three overall objectives
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Good results in the first months of the customer programme
Almost 450,000 customers have registered
Net outflow of about 10,000 customers in January and February
Inflow of business has risen more than 25%
The number of insurance referrals has doubled
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Customers use the Bank in new ways
Electronic logons (millions) Teller transactions (millions)
20
16
12
8
4
+79%
2013 2009
3
2
1
0
-74%
2013 2009
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Strong focus on customised solutions for business customers
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No. 1 with Corporate & Institutions customers in Denmark
154
0
165
352
682
649
88
176
374
671
704+8%
Peer 5
Peer 4 88
Peer 3
Peer 2
Peer 1
Danske Bank
Points 2011 Points 2012
Source: Prospera — Large Corporates & Institutions Surveys 2012
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The Bank’s ratings must improve
2008 2007 2006 2013 2012 2011 2010 2009
Fitch Moody’s S&P
BBB+
AAA
BBB-
AA+
AA
AA-
A+
A
A-
BBB
Aaa
Baa3
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
S&P/Fitch scale Moody’s scale
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Core tier 1 capital ratio
Tier 1 capital ratio
Total capital ratio
Q4 2012
14.5
18.9
21.3
Q4 2011
11.8
16.0
17.9
Capital increase the first step towards higher ratings
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Board of Directors
Chairman Ole Andersen
Vice Chairman Niels B. Christiansen
Elected by employees
Susanne Arboe Helle Brøndum Carsten Eilertsen Charlotte Hoffmann Per Alling Toubro
Elected by annual general meeting
Urban Bäckström Michael Fairey Mats Jansson Jørn P. Jensen Majken Schultz Trond Ø. Westlie
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New targets for more women in Danske Bank’s top management
2013
Executive
Board
0% 12.5%
Board of
Directors
12.5% 25%
2017
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Remuneration
policy
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Focus areas for the Board of Directors in 2013
Increase customer satisfaction
Increase earnings
Raise ratings
Regulations
Strategy execution
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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.