presse q2 2008 - uk - danskebank.com file. 10 danske parent study loan - new socially responsible...
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Copenhagen, 7 August 2008
Press conferenceFinancial results for the first half of 2008- Stability in the midst of financial unrest
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DKr m H1 2007 H1 2008 Index
Net interest income 11,804 12,901 109
Net fee income 4,571 4,271 93
Net trading income 4,001 3,518 88
Other income 1,552 1,968 127
Income from insurance 669 -837 -
Total income 22,597 21,821 97
Operating expenses 12,530 12,933 103
Profit before credit losses 10,067 8,888 88
Credit loss expenses 5 1,114 -
Profit before tax 10,062 7,774 77
Tax 2,433 1,967 81
Net profit 7,629 5,807 76
Group accounts, first half of 2008- Stable income despite financial unrest; rising credit loss expenses
Income statement
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The Danish housing market- Losses remain very low at Realkredit Danmark
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RD: No. loans in arrears 3 and 6 months
Total No. loans: approx. 430,000
RD: No. repossessed propertiesNo. loans No. properties
1238
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Lending to commercial property: 8% of total credit- Of which developere below 1%
Breakdown of commercial const. & prop.
DKr bn Denmark Ireland GroupRental comm. 52.0 12.0 172.9Developers 1.6 6.5 15.7
Others 7.1 2.1 22.6
Total 60.7 20.6 211.2
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Credit loss expenses- Rising, but still below the average for a business cycle
Expected average loss over a business cycle
DKr m Credit loss expenses
-200
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International units gaining significance
Income, Banking Activities
Denmark Outside Denmark
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IncomeInternational banking activitiesas % of total banking activities
%
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Danske Parent Study Loan- New socially responsible product for students with children
ADVISORY SERVICES
ADVANTAGEOUS LOAN
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Group accounts, first half of 2008- Stable income, but rising credit loss expenses
Income statement
Lending up 10%
Deposits up 14%
DKr m H1 2007 H1 2008 Index
Net interest income 11,804 12,901 109
Net fee income 4,571 4,271 93
Net trading income 4,001 3,518 88
Other income 1,552 1,968 127
Income from insurance 669 -837 -
Total income 22,597 21,821 97
Operating expenses 12,530 12,933 103
Profit before credit losses 10,067 8,888 88
Credit loss expenses 5 1,114 -
Profit before tax 10,062 7,774 77
Tax 2,433 1,967 81
Net profit 7,629 5,807 76
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Banking Activities Denmark- Good income growth; higher loan losses
� Lending ↑ 7%
� Net interest income ↑ 6%
� Income ↑ 4%
� Profit before tax ↓ 12%
� Profit before tax DKr 4,471m
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Banking Activities Finland- Good volume despite focus on integration
� Lending ↑ 8%
� Net interest income ↑ 24%
� Income ↑ 16%
� Profit before tax ↓ 89%
� Profit before tax DKr 48m
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Sweden� Lending ↑ 22%
� Net interest income ↑ 7%
� Income ↑ 7%
� Profit before tax ↑ 16%
� Profit before tax DKr 534m
Banking Activities Sweden- Strong growth leads to sound advance in earnings
Sweden
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� Lending ↑ 31%
� Net interest income ↑ 23%
� Income ↑ 16%
� Profit before tax ↑ 14%
� Profit before tax DKr 523m
Banking Activities Norway- High growth continues in healthy economy
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� Lending* ↑ 22%
� Net interest income ↓ 11%
� Income ↓ 12%
� Profit before tax ↑DKr 280m
� Profit before tax DKr 253m* Measured in GBP.
Banking Activities Northern Ireland- Earnings growth despite falling FX rate and higher loan losses
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� Lending ↑ 19%
� Net interest income ↑ 15%
� Income ↑ 9%
� Profit before tax ↓ 68%
� Profit before tax DKr 18m
Banking Activities Ireland- High growth falters because of abrupt economic downturn
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� Lending ↑ 29%
� Net interest income ↑ 48%
� Income ↑ 59%
� Profit before tax ↑ 101%
� Profit before tax DKr 175m
Banking Activities Baltics- Surge in earnings growth
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Danske Markets - Record-high customer activity, but also effects of financial unrest
� Income ↓ 23%
� Trading activities ↑ 39%
� Profit before tax ↓ 40%
� Profit before tax DKr 1,075m
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Danske Capital- Lower activity because of financial volatility
� Assets under mgt ↓ 11%
� Income ↓ 5%
� Profit before tax ↓ 21%
� Profit before tax DKr 422m
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Danica Pension- Sound business trend, but result hurt by losses on equity holdings
� Premium income ↑ 23%
� Return on investments -2.2%
� Profit/loss before tax ↓DKr 1,506m
� Profit/loss before tax DKr -837m
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Outlook for 2008- Banking Activities will continue to grow, but forecast uncertain
Expectations in detail√ Income growth in Banking Activities of 4%-7%
√ Expenses increase 2%-4%
√ Profit before credit loss expenses, ex trading income and income from insurance business, up 10%-20%
√ Net trading income lower than in 2007
√ Income from insurance business negative because risk allowance postponed
√ Rise in credit loss expenses approaches average for a business cycle
Assumptions in detail! Weighted economic growth for DB markets of 1.6%
vs. average for EU of 1. 4%
! Interest rates in core markets unchanged
! Lower lending growth than in 2007
! Continuation of volatility in capital markets
! Increased uncertainty about results because of the capital markets
! Risk allowance at Danica cannot be booked
Profit before credit loss expenses, ex net trading income and income from insurance business, up 10%-20%
Net trading income lower than in 2007
Negative result from insurance business
Increase in credit loss expenses