Danske Bank A/S : Debt investor update Q1 2021

Debt investor update - first quarter 2021

Agenda

01.	Financial update	2

02.	Capital and funding	10

03.	Covered bond universe and ratings	16

04.	Appendix	19

Debt investor update - Q1 2021

We are a Nordic universal bank with strong regional roots

Norway (AAA)	Finland (AA+)
Challenger position	3rd largest
Market share: 7%	Market share: 10%
Share of Group lending: 10%	Share of Group lending: 7%
GDP growth 2021E: 3.7%	GDP growth 2021E: 2.2%
Unemployment 2021E: 3.3%	Unemployment 2021E: 3.3%
Leading central bank rate: 0.00%	Leading central bank rate: -0.50%

Denmark (AAA)	Sweden (AAA)
Market leader	Challenger position
Market share: 25%	Market share: 5%
Share of Group lending: 39%	Share of Group lending: 10%
GDP growth 2021E: 3.0%	GDP growth 2021E: 3.4%
Unemployment 2021E: 4.6%	Unemployment 2021E: 8.5%
Leading central bank rate: -0.60%	Leading central bank rate: 0.00%

Northern Ireland (AA)

Market leader

Market share Personal: 19%, Business: 27%

Share of Group lending: 3%

Note: Data as per end-Q1 2021 unless otherwise stated. Share of Group lending is before loan impairment charges and excludes Corporates & Institutions (14%), Global Commercial Real Estate (14%) and Nordic Asset Finance (3%)

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Debt investor update - Q1 2021

Summary - Good customer activity drives total income up; significant decline in impairment charges and progress towards cost-income ratio ambition

Continued lending growth driven by Nordic franchise, lockdown in Denmark resulting in low credit demand

Credit quality remained strong; low impairments in Q1 and solid buffers

Diversified business model; capital markets platform delivering in current environment

Steady progress with cost initiatives; costs further down in line with expectations

Positive impact from retail deposit repricing in Denmark; margin pressure on lending. Further deposit initiatives launched in April

We confirm our net profit guidance for the year as a whole

Profit development Q1-21 vs Q1-20 (DKK m)

Lending and deposit growth

Cost-income ratio*

										4,034
										3,754
								392			112
					1,296
-1,409		110
	NII		Fee/	Insurnace	Expenses Impairments Q1-21PBT
Q1-20 PBT
						trading/		business
						other

Lending

+3%

1,828

1,782

Q1-20Q1-21

Deposits

+23%

1,381

1,126

Q1-20Q1-21

69	69
		58
Q1-20	Q4-20	Q1-21

*Excl. impairment charges on intangible assets

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Debt investor update - Q1 2021

Solid trading and fee performance combined with more normalised impairment levels resulting in net profit of DKK 3,139 m

Income statement and key figures (DKK m)

	Q1-21	Q1-20	Index	Q4-20	Index
Net interest income	5,450	5,560	98	5,447	100
Net fee income	3,402	3,240	105	3,644	93
Net trading income	1,266	141	898	1,044	121
Net income from insurance business	491	99	496	350	140
Other income	195	186	105	97	201
Total income	10,805	9,227	117	10,582	102
Expenses	6,273	6,385	98	7,316	86
Impairment charges on goodwill	-		-	-	-
Impairments charges, other intangible assets	-		-	379	-
Profit before loan impairment charges	4,531	2,842	159	2,886	157
Loan impairment charges	497	4,251	12	713	70
Profit before tax, core	4,034	-1,409	-	2,173	186
Profit before tax, Non-core	20	-254	-	-113	-
Profit before tax	4,054	-1,663	-	2,059	197
Tax	914	-374	-	609	150
Net profit	3,139	-1,289	-	1,450	216

RoE (%)		C/I *(%)		CET1 (%)		REA (DKK bn)	EPS
Q1-21	7.5	Q1-21	58.1	Q1-21	18.1	Q1-21	798	Q1-21	3.5
Q4-20	3.4	Q4-20	69.1	Q4-20	18.3	Q4-20	784	Q4-20	1.6
Q1-20	-3.8	Q1-20	69.2	Q3-20	18.2	Q3-20	766	Q1-20	-1.7

Key points, Q1-21 vs Q1-20

• Total income up 17%, driven by the rebound in trading income and net income from insurance business, off-set by slightly lower NII
• Cost-incomeratio closer to longterm ambition; down 11pp due to a combination of higher total income and results from cost management initiatives
• Profit before tax further up due to a significant decrease in impairment levels of 88%, in line with expectations

Key points, Q1-21 vs. Q4-20

• Total income stable from Q4, despite record-high performance fee bookings in Q4 of 628 m
• Cost-incomeratio further down from Q4, due mainly to run-off of transformation cost and costs related to AML/Estonia
• Impairments further down from the level in Q4, driven primarily by positive trend in LC&I oil-related exposure

*Excl. impairment charges on intangible assets

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