DNB Bank ASA DNB Boligkreditt AS · Shipping, Offshore and Logistic (SOL) Portfolio 30 Chemical and...
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DNB Bank ASA DNB Boligkreditt AS June 2015
Transcript of DNB Bank ASA DNB Boligkreditt AS · Shipping, Offshore and Logistic (SOL) Portfolio 30 Chemical and...
DNB Bank ASA DNB Boligkreditt AS
June 2015
Content
2
• DNB ASA ("DNB") – A brief overview
• The Norwegian Economy
• Financial Performance, Targets and Capital
• Asset quality
• Funding
• Appendix : • Cover Pool Portfolio Information • The Norwegian Mortgage Market and House Prices • The Norwegian Covered Bond Legislation • Norwegian Macro • Oil, gas and offshore • Financial Performance and Capital – Additional slides
DNB – A Brief Overview
3
DNB - Norway’s Leading Financial Services Group
• Approximately 30% market share in Norway
• 34% owned by the Norwegian Government
• Credit Ratings:
• Moody's Aa3 (stable)
• S&P A+ (negative)
• DBRS AA (under review negative)
4
The DNB Group
100% owned by DNB Bank and functionally an integrated part of the parent
Mortgages originated within DNB Bank’s distribution network in accordance with the bank's credit policy
DNB Bank ASA
A1 / A+ / AA
(Senior/ short term issuance)
DNB Life and
Asset Management
DNB ASA
DNB
Boligkreditt AS
(Covered Bonds)
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Only Norwegian residential mortgages in the Cover Pool backing
our Covered Bonds
More than 80 per cent of our lending stems from Norway
More than 80 per cent of our income stems from Norway
More than 80 per cent of our deposits stems from Norway
Norway Is of Vital Importance to the Group
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The Norwegian Economy
- Of High Importance to DNB
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Still a Solid Norwegian Economy
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*Note: Current account balance as a percentage share of country GDP; forecasts for 2014
Source: OECD Economic Outlook No. 96, November 2014
General government net financial liabilities (As a percentage of nominal GDP 2014)
Annual budget deficit/surplus for 2014* (OECD)
-250
-200
-150
-100
-50
0
50
100
150
Perc
ent
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F
Norway
Norway (DNB)
Sweden
Euro Area4.4%
Norway has consistently low unemployment rate
Norway
Norway (DNB forecast)
Sweden
Euro Area
98
205
155
1997 2000 2003 2006 2009 2012 2015e 2018e
Oljeinvesteringer Prognose
98
205
155
1997 2000 2003 2006 2009 2012 2015e 2018e
Oljeinvesteringer Prognose
Source: Statistics Norway and DNB Markets
9
3.5 %
4.1 % 4.4 % 4.5 % 4.4 %
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
2010 2011 2012 2013 2014 2015e 2016e 2017e 2018e
Mainland GDP growth Unemployment rate
GDP growth and unemployment Year on year, per cent
Economic Growth in Norway is Slowing Down - but the landing is soft and at a comfortable level
Financial Performance, Targets and Capital
10
Pre-tax operating profit before impairment (NOK bn)
DNB Delivers Healthy Profit
11
0
5
10
15
20
25
30
2007 2008 2009 2010 2011 2012 2013 2014 Q1-15
Pre-tax operating profit before impairment Impairment of loans
28.7
24.7
2.2 1.6
9.3
0.6
Key Financial Ratios
• Estimated CET 1-ratio Full IRB as of 31.03.15: 14.6%
Q1 2015 2014 2013 2012 2011 2010 2009
Return on equity 16.1 13.8 13.2 11.7 11.4 13.6 10.6
Cost income 37.0 41.9 45.7 49.5 47.1 47.6 48.3
Comb. weighted total average spread 1.28 1.27 1.27 1.18 1.12 1.15 1.15
Write down ratio (%) 0.16 0.12 0.17 0.24 0.28 0.26 0.67
Core Equity tier 1 ratio * 12.7 12.7 11.8 10.7 9.4 9.2 8.5
Total capital ratio 15.5 15.2 14.0 12.6 11.4 12.4 12.1
12
Continued Reduction in Non-performing Loans
13
Net non-performing and net doubtful loans and guarantees
18.419.5 19.7
20.7
16.4 16.114.9
17.3
13.9
1.55 1.50 1.501.38
1.19
1.05 1.01 0.960.83
31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 March 30 June 30 Sept. 31 Dec. 31 March
2010 2011 2012 2013 2014 2015
DNB Group As a percentage of net loans
Per cent
NOK billion
1) Includes non-performing commitments and commitments subject to individual impairment. Accumulated individual impairment is deducted.
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Financial Ambitions - 2016 and 2017
> 12 per cent
Min. 14% CET1-ratio*
as capital plateau
> 50% dividend
when capital plateau is reached
Return on equity
* Based on transitional rules.
DNB Is Well Positioned for New Capital Requirements
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Source: Norges Bank
138
101 92
32
40 55
170
141 147
2012 2013 2014
CET1 build up Dividends
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Capital Generation Ahead of Plan at DNB Group – Expecting to reach the capital plateau in 2016 at the latest
CET1 build up and dividend Basis points (bps) – transitional rules
8.5
9.2 9.4
10.7
11.8
12.7 12.7
2009 2010 2011 2012 2013 2014 2015Q1
2016e 2017e->
Capital plateau
min. 14.0
CET1 capital ratio - transitional rules Per cent
Management buffer
Optimising our Total Capital Structure
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Total Capital ratio
DNB will continue to issue additional capital
instruments to optimise our capital structure, i.e. 3.5
per cent of Additional Tier 1 and Tier 2.
Dividend payments on ordinary shares and coupon
payments on Additional Tier 1 (AT1) instruments are
at the discretion of the issuer.
DNB will give due consideration to the capital
hierarchy and look to preserve the seniority of
claims going forward*.
* Statement given at the DNB capital
Markets Day November 27th 2014
15.5 %
13,5 %
17.0-18.0 %
Total Capital RatioQ1 2015
RequirementQ1 2015
Target 2016
Management Buffer
Required Additional Tier 1 and Tier 2
Required CET1
Strong Capital Position vs. Peers
* DNB’s risk weights are conservatively set due to requirements from the Norwegian FSA. Applying average risk weights on mortgages and corporate
portfolio as used by Swedish peers would increase DNB’s CET1 ratio.
18
Capital adequacy figures as at 31.03.2015 – comparison with Nordic peers
Leverage
Basis
Risk
Weighted
Basis
5.7% 4.1% 4.4% 4.2% 4.3% 4.1%
41.3%
20.9% 18.6%
16.9%
20.8%
24.4%
DNB Group SEB Swedbank Handelsbanken Nordea Danske Bank
Leverage ratio RWAs (as % of total assets)
DNB Group SEB Swedbank Handelsbanken Nordea Danske Bank
DNB versus Nordic peers
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S&P RAC Ratio as of 31 December 2014
Asset Quality
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Loan Book EAD by segments as at 31 March 2015 1)
21
Commercial real estate 11%
Shipping 8%
Logistics 1%
Oil, gas and offshore 8%
Energy 3%
Other corporate customers
6%
Public sector 2%
Fishing and fish farming 2%
Trade 3%
Manufacturing 4%
Telecom and media 2%
Services 2%
Residential mortgages 42%
Private individuals 7%
Mortgage Lending in DNB Is Based on Cash Flow
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Approval of a loan is based on
1. Willingness to repay the loan: By means of scoring model based on historical behaviour
2. Capability of repaying the loan: In calculating the capability or ability to repay, an adequate margin (currently 5.0%), accommodate the effects of a possible increase in interest rates, is included in the model
3. Collateral:
Credit should thus not be approved solely on the basis of the proposed collateral
3%
8%
0%2%4%6%8%
10%
Current mortgagerate
Mortgage rateincluding stress
test5
%
• All borrowers are subsequently classified monthly by behaviour scoring
FSA regulation
• Loan to value (LTV) max 85%
• Must amortise > 70% LTV
• Yearly amortisation: the lower of 30 years annuity payment and 2,5%
• Debt-servicing capability.
• Must be able to tolerate +500 bp interest rate increase
House Price Growth Can be Explained by Fundamentals
Nominal House Prices 2000-2014
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50
100
150
200
250
300
20
00
20
00
20
01
20
02
20
03
20
03
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Norway UK Sweden Denmark USA
0
50
100
150
200
250
300
350
400
1985 1989 1993 1997 2001 2005 2009 2013
CPI Disposible income*
Norwegian Real House Prices - Selected deflators
Source: Eiendomsverdi AS (member of the European AVM Alliance) Source: Real Estate Norway, Statistics Norway
* Disposable income per capita deflated house prices
Housing Market: Real Demand Exceeding Supply for Several Years
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1)
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A Very Robust Residential Loan Portfolio
LTV
Loan to value bucket
Percentage of
Residential Mortgage book
14%
27%
34%
16%
9%
0%
5%
10%
15%
20%
25%
30%
35%
0-40 40-60 60-75 75-85 >85
31 March 2015
DNB Boligkreditt Covered Bonds – Cover Pool Data
Rating: AAA / Aaa
Pool statistics as of 31 March 2015. The pool cut date is coinciding with our financial quarterly reporting
* Eligible loan balance, nominal loans.
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House price decline Current 10 % 20 % 30 %
WA indexed LTV 56.5 % 62.5 % 69.9 % 79.5 %
Eligible overcollateralization 36.3 % 33.3 % 26.6 % 17.3 %
Stresstest – House price decline
Weighted Average LTV Indexed 56.5 %
Weighted Average Seasoning (in months) 58
Average Loan Balance 1,274,029
Over Collateralisation * 36.3 %
Number of Mortages in the Cover Pool 438,061
Portfolio Characteristics
Cover Pool Size 558,102,482,308
DNB Has a Solid and Well Diversified Oil-Related Portfolio - 8% of total Group EaD to oil related portfolios
OSV: Offshore Service Vessels, F(P)SO: Floating (Production) Storage Offloading.
LNG: Liquid Natural Gas. IG: Investment grade,, All figures as of 31 Mar 2015.
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Some Migration from Low to Medium Risk - 60% of portfolio is low risk and 39% is medium risk
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EaD: Exposure at Default, PD: Probability of default. Risk grade system, please see back up slide for details.
DNB's risk classification system, where 1 represents the lowest risk and 10 the highest risk.
DNB’s oil-related portfolio split by sub-segment in exposure (EaD) and by risk grade
NOK 169bn as of 31 Mar 2015 (and NOK 161bn as of 31 Dec 2014)
NOK billion
54
64 61
14 10
15 0.20
0.20 0.20
0.00 0.00 0.00
17
18 17
29 33
40
1.47 0.31 0.30 0.00 1.17 1.30
19
23 23
8 10
12
0.61 0.30 1.20 0.20 0.30 0.20
0
20
40
60
80
100
120
Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15
Grade 1-4 "Low risk" Grade 5-7 "Medium" Grade 8-10 "High" Grade 11-12 "Doubtful & NPL"
Oilfield Services
Offshore
Oil & Gas
DNB’s Maritime Business is Diversified and Profitable -Shipping, Offshore and Logistic
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• DNB’s maritime business is profitable
and has considerable loss-absorbing
capacity
• Broad product range, more than lending
• The average margin is increasing every
quarter and is expected to increase
further going forward.
• Unchanged strategy but increased focus
on client prioritisation and portfolio
management
Pre-tax operating profit before write-downs Shipping, Offshore and Logistics, NOK million
2,300 2,352
2,718 2,781 2,882 2,978
905
474
218 160
943
500
167 242
2009 2010 2011 2012 2013 2014 1q15
NOK mill
Pre-tax operating profit incl interest on allocated capital, beforeimpairment
Individual impairment
Shipping, Offshore and Logistic (SOL) Portfolio
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Chemical and product tankers
8 %
Container 11 %
Crude oil tankers 10 %
Cruise 5 %
Dry cargo 12 % Gas
14 %
Logistics 4 %
Offshore 25 %
RoRo/PCC 2 %
Other shipping 3 %
Other non-shipping
6 %
The SOL Portfolio - a dominant part within the Low- and Medium Risk Segment
Based on DNB's risk classification system. The volume represents the expected outstanding amount in the event of default. PD = probability of default
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2
20
2 0
0
10
20
30
40
50
60
70
80
90
100 30 Sept. 2013
31 Dec. 2013
31 March 2014
30 June 2014
30 Sept. 2014
31 Dec. 2014
31 March 2015
Net non-performing
and net doubtful
commitments
NOK billion
PD 0.01% - PD 0.75% - PD 3.0% -
The crude oil sector
8 13
4 1
0
10
20
30
40
50
60
70
80
90
100 30 Sept. 2013
31 Dec. 2013
31 March 2014
30 June 2014
30 Sept. 2014
31 Dec. 2014
31 March 2015
Net non-performing
and net doubtful
commitments
NOK billion
PD 0.01% - PD 0.75% - PD 3.0% -
The container sector
1
22
3 1
0
10
20
30
40
50
60
70
80
90
100 30 Sept. 2013
31 Dec. 2013
31 March 2014
30 June 2014
30 Sept. 2014
31 Dec. 2014
31 March 2015
Net non-performing
and net doubtful
commitments
NOK billion
PD 0.01% - PD 0.75% - PD 3.0% -
The dry bulk sector
71
143
11 4
0
20
40
60
80
100
120
140
160 30 Sept. 2013
31 Dec. 2013
31 March 2014
30 June 2014
30 Sept. 2014
31 Dec. 2014
31 March 2015
Net non-performing
and net doubtful
commitments
NOK billion
PD 0.01% - PD 0.75% - PD 3.0% -
SOL portfolio
Funding
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DNB has Significantly Improved The Long Term Funding Structure Since
the Financial Turmoil Started in 2007
Average life of long term funding
(Senior debt and covered bonds) Share of stable long-term funding*
* Deposits from customers, subordinated debt, covered bonds and senior debt > 12 months residual maturity.
2,4
4,1
1
2
3
4
5
2008 2009 2010 2011 2012 2013 2014 2015
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Ratio of deposits to net loans
75%
85%
95%
105%
115%
125%
135%
2003 2005 2007 2009 2011 2013 Q1 15
125.8%
50.1 53
54.8 57.8
62.5 64.7 65.4 65.2
• DNB Bank
• EMTN program of EUR 45 billion
• Samurai Shelf (JPY) JPY 500 billion Inaugural Samurai issue 2011, Shelf 2013
• USD 144A program USD 10 billion Established 2012
• USCP program of USD 18 billion
• Yankee CD program of USD 12 billion
• ECP/CD program of EUR 15 billion
• DNB Boligkreditt (Covered Bonds)
• Covered Bond program of EUR 60 billion Established 2007
• Covered Bond program of USD 12 billion Established 2010
• Covered Bond program of AUD 4 billion Established 2011
DNB is a Well Established International Borrower - with a strong focus on diversification of funding sources
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Issuance of Long Term Debt
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A Well Established International Covered Bond Issuer
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Tenor Redeems
EUR 2 000 mn 5 years (2016 - Jan)
EUR 2 000 mn 5 years (2016 - Oct)
EUR 1 500 mn 7 years (2017 - Jan)
EUR 2 000 mn 5 years (2017 – Apr)
EUR 1 500 mn 7 years (2017 - Aug)
EUR 1 500 mn 5 years (2018 - Jan)
EUR 1 500 mn 5 years (2018 – Nov)
EUR 1 500 mn 7 years (2019 - Jun)
EUR 1 250 mn 5 years (2019 – Oct)
EUR 1 500 mn 10 years (2021)
EUR 2 000 mn 10 years (2022 - Mar)
EUR 1 000 mn 10 years (2022 - Nov)
EUR 1 000 mn (FRN) 5 years (2019 – Jan)
EUR 1 000 mn (FRN) 7 years (2021 – Nov)
USD 2 000 mn 5 years (2015)
USD 2 000 mn 5 years (2016)
USD 2 000 mn 5 years (2018)
USD 1 250 mn 5 years (2020)
AUD 600 mn 5 years (2016)
GBP 500 mn (FRN) 5 years (2020)
Best USD issuer
2013
Best USD deal 2013
Funding Contacts
• Thor Tellefsen,
Senior Vice President, Head of Long Term Funding
Phone direct: + 47 24 16 91 22
Mobile + 47 915 44 385
E-mail: [email protected]
• Trond Sannes Marthinsen,
Senior Vice President, Long Term Funding
Phone direct: + 47 24 16 92 75
Mobile: + 47 99 03 48 20
E-mail [email protected]
• Kristine Øvrebø,
Senior Vice President, Long Term Funding
Phone direct: + 47 24 16 91 25
Mobile: + 47 916 08 005
E-mail: [email protected]
www.dnb.no
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Long Term Funding:
• Aasmund Midttun,
Senior Dealer, Rates, FICC
Phone direct: +47 24 16 90 28
Mobile: +47 901 13 559
E-mail: [email protected] / [email protected]
• Erik Braekke,
Senior Vice President, Rates, FICC
Phone direct: +47 24 16 90 31
Mobil: +47 930 47 504
E-mail: [email protected] / [email protected]
New York:
• Stephen Danna,
First Vice President, FX/Rates/Commodities, New York
Phone direct: +1 212 681 2550
Mobil: +1 646 824 0072
E-mail: [email protected] / [email protected]
Short Term Funding:
Appendix
38
Appendix A:
Cover Pool Portfolio Information
Portfolio Characteristics
39
Report date: 31.03.2015
Report currency: NOK
1. General cover pool information
1.1 Key characteristics
Total cover pool, nominal balance* 558,102,482,308
Number of mortgages 438,061
Number of borrowers 369,031
Average loan balance 1,274,029
Outstanding covered bonds, nominal balance 406,541,150,475
Substitute assets (% of total cover pool) 0.0
WA indexed LTV (%) 56.5
WA seasoning (in months)** 58
WAL of cover pool (contractual maturity in years) 12.6
WAL of outstanding covered bonds (contractual maturity in years) 5.0
* All cover pool assets are denominated in NOK.
** Seasoning indicates the number of months since collateral for the loan was established.
Description of hedging arrangements:
All issuances of covered bonds in foreign currency are swapped to NOK to eliminate FX-risk entirely.
Fixed interest rate exposures in the form of fixed rate covered bonds and fixed rate mortgages are swapped to 3 month NIBOR.
1.2 Overcollateralisation
Cover pool size Nominal Market value
Residential mortgages, eligible loan balance 553,972,413,499 557,191,092,770
Residential mortgages, non eligible loan balance 4,130,068,809 4,130,068,809
Substitue assets 0 0
Market value derivatives (net MtM) 75,185,586,455
Total cover pool (incl. non eligible loan balance) 558,102,482,308 636,506,748,034
Total cover pool, eligible loan balance 553,972,413,499 632,376,679,225
Covered bonds outstanding 406,541,150,475 484,153,306,387
Overcollateralisation (incl. non eligible loan balance) 37.3 % 31.5 %
Overcollateralisation, eligible loan balance 36.3 % 30.6 %
40
Cover Pool – Overcollateralisation History
Maturity Structure
41
1.3 Maturity structure cover pool
Contractual maturity (years) Loan balance %
≥ 0 ≤ 1 18,233,796,810 3.3 %
1 ≤ 2 18,078,107,153 3.2 %
2 ≤ 3 18,813,267,473 3.4 %
3 ≤ 5 42,397,690,134 7.6 %
5 ≤ 10 122,523,080,908 22.0 %
> 10 338,056,539,829 60.6 %
Total 558,102,482,308 100.0 %
1.4 Maturity structure covered bonds
Contractual maturity (years) Loan balance %
≥ 0 ≤ 1 4,110,680,000 1.0 %
1 ≤ 2 68,675,985,000 16.9 %
2 ≤ 3 49,015,479,500 12.1 %
3 ≤ 5 115,519,869,475 28.4 %
5 ≤ 10 144,780,646,000 35.6 %
> 10 24,438,490,500 6.0 %
Total 406,541,150,475 100.0 %
Expected maturity (years) Loan balance %
≥ 0 ≤ 1 70,980,835,000 17.5 %
1 ≤ 2 45,961,230,000 11.3 %
2 ≤ 3 80,669,079,500 19.8 %
3 ≤ 5 88,362,469,475 21.7 %
5 ≤ 10 96,734,246,000 23.8 %
> 10 23,833,290,500 5.9 %
Total 406,541,150,475 100.0 %
Loan Size
42
2.1 Loan size
Private individuals Loan balance Number of loans
≤ 1,000,000 97,099,665,090 213,470
> 1,000,000 ≤ 2,000,000 207,483,807,443 142,329
> 2,000,000 ≤ 3,000,000 129,697,410,304 53,495
> 3,000,000 ≤ 4,000,000 57,750,374,563 16,824
> 4,000,000 ≤ 5,000,000 24,802,987,794 5,572
> 5,000,000 24,860,887,645 3,784
Total 541,695,132,839 435,474
Housing cooperatives
≤ 5,000,000 2,938,431,283 1,687
> 5,000,000 ≤ 10,000,000 3,223,410,995 446
> 10,000,000 ≤ 20,000,000 4,082,472,563 287
> 20,000,000 ≤ 50,000,000 4,387,923,975 144
> 50,000,000 ≤ 100,000,000 1,292,632,881 19
> 100,000,000 482,477,773 4
Total 16,407,349,469 2,587
Property Types, Largest Borrowers and Occupancy Types
43
2.2 Property types
Loan balance % WA LTV
Private ownership
Detached 291,776,255,743 52.3 % 57.3
Semi-detached 79,000,549,992 14.2 % 56.7
Apartment 92,048,770,864 16.5 % 56.8
Share in housing cooperative
Semi-detached 9,182,622,707 1.6 % 60.3
Apartment 65,016,789,498 11.6 % 59.1
Housing cooperative 16,407,349,469 2.9 % 25.6
Second home (vacation) 4,632,389,153 0.8 % 56.5
Other 37,754,882 0.0 % 56.2
Total 558,102,482,308 100.0 % 56.5
2.3 Largest borrowers
Private individuals
5 largest (% of total mortgages) 0.03 %
10 largest (% of total mortgages) 0.06 %
Housing cooperatives
5 largest (% of total mortgages) 0.12 %
10 largest (% of total mortgages) 0.21 %
2.4 Occupancy type
Loan balance % WA LTV
Owner occupied 473,039,714,184 84.8 % 57.5
Housing cooperative 16,407,349,469 2.9 % 25.6
Second home 4,632,389,153 0.8 % 56.5
Buy-to-let 748,924,433 0.1 % 60.9
No data 63,274,105,068 11.3 % 56.6
Total 558,102,482,308 100.0 % 56.5
Composition of the Residential Mortgage Cover Pool
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2.5 Repayment type
Loan balance % WA LTV
Amortization 350,473,415,364 62.8 % 54.6
Interest only* 207,629,066,944 37.2 % 59.7
Total 558,102,482,308 100.0 % 56.5
*No principal payments for a limit period of time.
2.6 Flexible loans
Drawn balance 124,709,355,605
Total limit on flexible loans 171,590,222,998
Percentage drawn of limit 72.7 %
WA LTV* 56.0
* The WA LTV is calculated based on limit.
2.7 LTV buckets
Indexed LTV Loan balance %
≥ 0 ≤ 40 105,202,992,651 18.9 %
40 ≤ 50 62,300,445,808 11.2 %
50 ≤ 60 93,752,331,047 16.8 %
60 ≤ 70 175,994,523,953 31.5 %
70 ≤ 75 89,634,986,154 16.1 %
75 ≤ 80 18,214,957,593 3.3 %
80 ≤ 85 5,704,137,782 1.0 %
85 ≤ 90 2,948,349,803 0.5 %
90 ≤ 95 1,521,247,910 0.3 %
95 ≤ 100 930,235,186 0.2 %
100 ≤ 105 586,200,605 0.1 %
105 ≤ 115 587,614,143 0.1 %
> 115 724,459,673 0.1 %
Total 558,102,482,308 100.0 %
Composition of the Residential Mortgage Cover Pool
45
2.8 Seasoning*
Loan balance % WA LTV
< 12 months 100,865,036,118 18.1 % 64.8
12 < 24 months 73,908,865,358 13.2 % 61.8
24 < 36 months 71,320,543,146 12.8 % 58.9
36 < 60 months 106,767,843,473 19.1 % 57.7
≥ 60 months 205,240,194,212 36.8 % 49.0
Total 558,102,482,308 100.0 % 56.5
* Seasoning indicates the number of months since collateral for the loan was established.
2.9 Interest rate type
Loan balance % WA LTV
Floating rate 489,925,028,283 87.8 % 56.6
Fixed rate with reset < 2 years 22,597,665,604 4.0 % 52.1
Fixed rate with reset ≥ 2 but < 5 years 33,980,061,532 6.1 % 58.2
Fixed rate with reset ≥ 5 years 11,599,726,889 2.1 % 52.2
Total 558,102,482,308 100.0 % 56.5
2.10 Loan performance
Loan balance % WA LTV
Performing loans 556,211,528,522 99.66 % 56.4
Delinquent loans (arrears 31 to 90 days) 1,108,506,736 0.20 % 62.1
Gross non performing loans (arrears 91 days +) 782,447,050 0.14 % 62.2
Total 558,102,482,308 100.00 % 56.5
Geographical Distribution
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2.11 Geographical distribution
Loan balance % WA LTV
Average loan
balance
Akershus 101,260,657,229 18.1 % 54.2 1,413,485
Aust-Agder 9,092,296,150 1.6 % 63.0 1,140,958
Buskerud 35,272,616,836 6.3 % 55.9 1,187,191
Finnmark 8,373,163,202 1.5 % 61.2 1,074,860
Hedmark 12,190,164,517 2.2 % 55.1 1,006,453
Hordaland 44,016,155,966 7.9 % 57.0 1,346,884
Møre og Romsdal 9,284,321,113 1.7 % 59.7 1,222,586
Nordland 20,789,681,583 3.7 % 56.7 1,054,511
Nord-Trøndelag 7,497,202,555 1.3 % 61.6 1,147,238
Oppland 19,013,740,589 3.4 % 59.1 910,227
Oslo 119,029,929,322 21.3 % 54.5 1,489,550
Østfold 34,015,125,222 6.1 % 56.5 1,019,883
Rogaland 37,223,302,575 6.7 % 60.1 1,575,523
Sogn og Fjordane 2,085,666,779 0.4 % 61.8 1,015,912
Sør-Trøndelag 22,653,647,361 4.1 % 58.6 1,449,741
Telemark 13,217,288,321 2.4 % 59.8 1,014,763
Troms 14,467,973,098 2.6 % 52.9 1,335,670
Vest-Agder 9,674,552,761 1.7 % 63.8 1,360,505
Vestfold 38,944,997,129 7.0 % 56.3 1,085,061
Total 558,102,482,308 100.0 % 56.5 1,274,029
Northern Norway: 8 %
Mid- Norway: 5 %
Western Norway: 17 %
Southern Norway: 6 %
Eastern Norway: 64 %
100 %
Cover Pool sensitivity analysis
47
3.1 Stresstest - House price decline
House price decline Current 10 % 20 % 30 %
Total cover pool balance (nominal, NOKbn) 558.1 558.1 558.1 558.1
WA indexed LTV (%) 56.5 62.5 69.9 79.5
Eligible cover pool balance (nominal, NOKbn) 554.0 542.0 514.8 476.7
Total outstanding covered bonds (nominal, NOKbn) 406.5 406.5 406.5 406.5
Eligible overcollateralization 36.3 % 33.3 % 26.6 % 17.3 %
Net Non Performing Loans in DNB Boligkreditt AS
48
0.00%
0.10%
0.20%
0.30%
90+ days Arrears
14 bp
ECB eligibility and CRD-compliance of covered bonds issued by DNB Boligkreditt AS
49
• All covered bonds issued by DNB Boligkreditt AS fulfil the eligibility criteria for marketable
assets set by the Eurosystem and are thus eligible for Eurosystem monetary policy
operations.
• The Eurosystem set additional criteria for own use of eligible instruments in the
Eurosystem monetary policy operations. In the case of covered bonds, the instruments
must be issued in accordance with the criteria set out in Part 1, points 68 to 70 of Annex
VI to Directive 2006/48/EC. The covered bonds issued by DNB Boligkreditt AS fulfil these
criteria, but the Eurosystem has not checked the fulfilment of these conditions for
Norway, since Norway is not part of the EU. Therefore, covered bonds issued by DNB
Boligkreditt AS are market with a "N/A" what regards CRD-compliance in ECB's eligible
asset database.
• DNB Boligkreditt AS confirms that the covered bonds it issues are compliant with
the CRD-requirement set forth in the Eurosystem guidelines. In addition, DNB
Boligkreditt AS confirms that it gives the information required in Regulation (EU) No
575/2013 ("CRR") article 129 (7) to its investors, so that the covered bonds issued by
DNB Boligkreditt AS are eligible for the preferential treatment set out in CRR article 129
(4).
Future Updates On Cover Pool Developments
50
Information about the cover pool of DNB Boligkreditt may be accessed via
DNB Boligkreditt’s web page:
https://www.dnb.no/about-us/investor-relations/funding.html
Contacts DNB Boligkreditt AS:
- Per Sagbakken, CEO: [email protected] +47 906 61 159
Portfolio information will be updated when DNB quarterly results are released
Appendix B:
The Norwegian Mortgage Market and
House Prices
Appendix
51
The Norwegian Residential Mortgage Market
Source: Finance Norway - FNO 52
• Nearly 80% of Norwegians own their home: • Few mortgages are buy-to-let.
• Norway is primarily a floating interest rate market: • The large majority of mortgages originated by DNB are floating rate.
• Rates on floating rate mortgages can be reset at any time and at the bank’s own
discretion, by giving debtors six weeks’ notice.
• Loans are normally underwritten with a term of 15-25 years: • Average size for new mortgages originated by DNB is approximately NOK 1,000,000
(EUR 125,000).
• In Norway, all borrowing costs are deductible from taxable income at
the current rate of 27%: • Households are therefore better able to withstand an increase in interest rates.
Source: Statistics Norway, EFF, NEF, Finn.no, Econ Pöyry, DNB Markets and Norwegian Central Bank
53
Norwegian Households are Solid
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Debt Assets
Housing assets Financial assets
0
1000
2000
3000
4000
5000
6000
1981 1986 1991 1996 2001 2006 2011
Housing assets Debt Financial assets
Household assets and debt 2013 (NOK billion)
Household assets and debt (NOK billion)
1) Loan debt as a percentage of disposable income adjusted for estimated reinvested dividend income for 2000 – 2005 and redemption/reduction of equity capital for 2006 – 2012 Q3
2) Interest expenses after tax as a percentage of disposable income adjusted for estimated reinvested dividend income for 2000 – 2005 and redemption/reduction of equity capital for 2006 –
2016 plus interest expenses
Sources: Statistics Norway and Norges Bank
Per cent
Appendix C:
The Norwegian Covered Bond legislation
Appendix
54
Norwegian Covered Bond Framework
Overview
• The Norwegian covered bond framework was fully enacted in June 2007:
• Prior to adoption, close discussions were held with rating agencies in order to provide
investors with robust protection.
• Covered bondholders have dual recourse:
• To the issuing entity.
• A preferential claim over a cover pool of eligible assets.
• The NPV of the assets in the cover pool must at all times at least be higher than the NPV of
the outstanding covered bonds.
• Covered bonds are issued by specialised credit institutions licensed and supervised by the
Norwegian Financial Supervisory Authority (NFSA):
• The activities of the company are limited to acquiring eligible assets and financing
these predominantly by covered bonds.
• Norwegian covered bonds qualify for 10% risk weighting in eligible European jurisdictions
and comply with the CRD of the EU:
• Certain bonds cleared through appropriate clearing systems may be eligible as
collateral for liquidity loans in the ECB.
55
Norwegian Covered Bond Framework (cont.)
• Eligible assets:
• Mortgage assets:
• Residential property: 75% LTV • Commercial property: 60% LTV (The DNB Boligkreditt covered bond
programme exclude this asset class) • Loans to municipalities, governments and other public sectors
• Liquid substitution assets, maximum 20% of cover pool
• Derivatives contracts
• Should property prices fall, the part of the loan that exceeds the relevant LTV-
limit is still included in the cover pool and protects the covered bondholders, but is not taken into account when calculating the value of the pool. To maintain the value of the cover pool, new loans with LTV up to 75% must be added.
• The same principle applies to loans in default.
• All property values shall be set by a competent and independent person.
• ALM requirements:
• Matching requirements to control interest rate, foreign exchange and liquidity risk.
56
Norwegian Covered Bond Framework (cont.)
• Supervision by an Independent Inspector:
• An Independent Inspector, appointed by the Norwegian FSA, monitors assets
and liabilities on a regular basis, and the compliance with certain requirements
laid down in the covered bond legislation. Suspected irregularities will be
reported to the NFSA. The company’s external auditor may be appointed.
• Bankruptcy proceedings are laid down in a special framework: • Should the issuing company go bankrupt, assets in the cover pool and the
corresponding cash flows are separated from the bankruptcy estate.
• Holders of covered bonds and derivative counterparties have a preferential claim over the cover pool assets.
• The estate manager must seek to ensure that contractual payments for covered bonds and secured derivatives are made. To meet contractual payments, assets may be sold or new covered bonds issued.
• Should the cover pool be unable to make contractual payments and an imminent change is unlikely, it will be wound down. The covered bonds/derivative counterparts rank pari passu. Claims on covered bonds are made based on the agreed future cash flow discounted at the market rate for comparable bonds in the relevant currency.
57
Appendix D:
Norwegian Macro
Appendix
58
DNB Markets Oil Price Assumption: $65/bbl. (avg. price) - With an alternative downside scenario
Oil price development USD per barrel
Main assumptions and
a downside $50/bbl.-scenario by DNB Markets
Oil investments 2013 prices, NOK billion
Main assumptions and
a downside $50/bbl.-scenario by DNB Markets
98
205
155
123
1997 2000 2003 2006 2009 2012 2015e 2018e
Oil investments
DNB Markets' forecast
$50/bbl-scenario
59
0
20
40
60
80
100
120
140
1996 1999 2002 2005 2008 2011 2014 2017 2020
$/b
Forecast nominalDNB
Historical
Source: Reuters, DNB
47
85
$50/bbl-scenario
75
Slower Economic Growth in Norway is Expected – Exports, private and public consumption will ensure a soft landing
98
205
155
1997 2000 2003 2006 2009 2012 2015e 2018e
Oljeinvesteringer Prognose
98
205
155
1997 2000 2003 2006 2009 2012 2015e 2018e
Oljeinvesteringer Prognose
4.5 4.4 4.8
5.3
1.5
-1.6
1.7
2.5
3.4
2.0
2.5
1.2
1.6 2.1
2.4
1.1 0.7
0.6
1.6
4.4
5.2
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
2004
2005
2006
2007
2008
2010
2011
2012
2013
2014
2015e
2016e
2017e
2018e
Mainland GDP GDP $50/bbl-scenario Unemployment Unempl. $50/bbl-scen.
GDP growth and unemployment Year-on-year, per cent
Main assumptions and a downside $50/bbl.-scenario by DNB Markets
Source: Statistics Norway and DNB Markets
60
Appendix E:
Oil, Gas and Offshore Exposure
Presentation 27 February 2015
Appendix
61
Credit Strategy for the DNB Group
• We are a long term relationship oriented bank
• Focus on quality of management
• We have a low-risk portfolio strategy
• We finance corporate risk based on debt service ability (cash flow), not assets alone
• Exposure to non-investment grade companies is secured and followed up by covenants
• We finance industry sectors where we have institutional industry sector competence,
and we have been in the oil related industries since oil was discovered on the
Norwegian Continental Shelf
62
Credit Strategy for the DNB Group
Other corporate43%
Oil & Gas3.9%
Offshore2.8%
Oilfield services1.8%
Households48%
Refining & petchem 6.0%
Midstream incl LNG 10.3%
Upstream / integrated large-
caps and NOCs (IG) 17.2%
Upstream mid-caps (sub IG)
3.7%
RBL and other structured E&P
6.1%
Exploration Financing Facilities
2.5% Other Oil & Gas 1.6%
OSV 15.7%
Rig 10.5%
FPSO/FSO 2.8%
Subsea construction 2.6%
Other Offshore 1.5%
Large cap oilfield services co
11.5%
LBO-portfolio 4.9%
Seismic 0.7%
Other Oilfieldservices
2.4%
Total DNB Group loan exposures
EaD of NOK 1909n as of 31 Dec 14 In per cent of total
Total oil-related portfolios
EaD of NOK161bn as of 31 Dec 14 (FX adj NOK144bn) In per cent of NOK 161bn
EaD: Exposure at Default, IG: Investment Grade, NOCs: National Oil Companies, RBL: Reserved Based Lending, E&P:
Exploration & Production, F(P)SO: Floating (Production) Storage Offloading, LBO: Leverage Buyout, OSV: Offshore
Supply Vessel, LNG: Liquid Natural Gas
63
Oil & Gas, Offshore and Oilfield Services – An Overview
DNB Group as of 31 Dec 2014 Oil & Gas Offshore Oilfield Services
Total portfolio, EaD, NOK billion 74 53 33
Total portfolio, drawn amount, NOK billion 31 31 11
Average grade* 3.5 4.9 4.7
Expected loss 0.07% 0.19% 0.15%
Number of client groups 85 63 75
Number of employees in sector 24 23 17
No. of clients in grade 8-10 (PD > 3%) 3 4 2
EaD of clients in grade 8-10, NOK billion 0.2 0.3 0.3
10 largest client groups in % of total segment 36% 42% 51%
20 largest client groups in % of total segment 56% 64% 74%
64
Proactively Handling the Uncertainty and Market Turbulence
• Monitoring of our portfolio is given top priority in the current situation with oil price
turbulence
• We have reviewed our oil, gas, offshore and oilfield service portfolios
• We actively manage our credits/clients
• Those who are performing, but not in accordance with their business plans require
additional attention, and are placed on (the so-called) “Watch-list”,
it’s our early warning tool!
• Watch-listed companies are reviewed quarterly, as a minimum
• We allocate additional expertise and resources to clients and
sub-portfolios with higher risk
• We are continuously evaluating which clients to put on “Watch-list”,
and what actions to be taken
65
No Negative Migration by Year-end 2014 - 65% of portfolio is low risk and 33% is medium risk
66
Outstanding Loans to Oil, Offshore and Oil Service are 46% of EaD - Large part of remaining exposure is guarantees and revolving facilities to IG
67
Highly Profitable Portfolio - Within DNB’s Oil & Gas, Offshore and Oilfield Service sectors
* Oil, offshore and oilfield services units are all part of the business unit Large Corporate & International in DNB.
DNB’s oil-related portfolios - profit before impairments and tax for financial years 2011 until 2014
NOK billion
1.52
2.00
1.86 1.86
2011 2012 2013 2014
68
Historical Low Impairments in Absolute Levels - Robust to oil price movements, 60% of lending to investment grade
159 155 108
126 132
18 6
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
NOK million
69
Oil & Gas – It’s a Well Diversified Portfolio - Robust to oil price movements, 60% of lending to investment grade
• Large IG E&P/ integrated and national oil companies:
In general large, diversified companies with robust balance sheets
and ample liquidity that can sustain a significant drop in oil price
• Midstream incl. LNG:
Mainly companies with infrastructure (pipelines, terminals, etc.)
assets. 58% of EaD is IG. Limited sensitivity to commodity price
movements
• Exploration & Production (E&P) mid-caps:
Typically more robust than RBL
• Reserved based lending (RBL) :
Bank debt is based on certain assumptions (reserves/ production
volumes, commodity prices, capex, etc). Well structured, i.e. “very
early” covenants and collateral-based. Semi-annual re-
determinations of borrowing base and revision of price decks used
for lending purposes
• Refining & Petrochemical:
Cyclical, but primarily margin based business. 51% of EaD is IG
Less sensitive to commodity price movements.
• Exploration financing facilities (EFFs):
Secured financing of tax refund (related to exploration) from
the Norwegian State. No direct oil-price risk
Oil & Gas exposure - NOK74bn (3.9% of total Group EaD)
NOK bn and per cent of NOK74bn
Large IG E&P /
Integrated oil co's and NOCs 23.9 32%
Midstream incl LNG
23.9 32%
E&P midcaps
4.0 5%
RBL and other
structured E&P 8.4
11%
Refining & pet.chem
11.0 15%
EFFs 3.2 4%
RBL: Reserve Based Lending, IG: Investment grade, E&P: Exploration & Production, NOC: National Oil Companies,
EFF: Exploration financing facilities. LNG: Liquid Natural Gas. All figures as of 31 Dec 2014. FX NOK/USD as of 31 Dec
2014: 7.39 and as of 30 Sept 2014: 6.43, hence FX adjusted volume per 31 Dec 2014 was NOK67bn, if we used 30
Sept 2014 FX rates by 31 Dec 2014.
70
Offshore - Solid Companies and High Contract Coverage - The direct risk factor is not oil price, but the activity level and day-rates
OSV: Offshore Service Vessels, F(P)SO: Floating (Production) Storage Offloading. All figures as of 31 Dec 2014. FX
NOK/USD as of 31 Dec 2014: 7.39 and as of 30 Sept 2014: 6.43, hence FX adjusted volume per 31 Dec 2014 was
NOK46bn, if we used 30 Sept 2014 FX rates by 31 Dec 2014.
• Offshore service vessels (OSV):
Mainly corporates with modern fleets (6-8 years) and good
contract coverage (60% for 2015)
Substantial part of the fleet supports existing infrastructure
as well as activities related to inspection, maintenance &
repair (IRM)
• Rig:
More than 40% of EaD are either investment grade (IG)
companies or have full contract coverage. Primarily latest
generation rigs. 75% weighted average contract coverage
for 2015 (61% for 2016 and 43% for 2017)
• FPSO/FSO:
Primarily full contract coverage to strong counterparties
Mainly full amortisation during contract period
• Subsea constructions:
Low short term oil price dependency, as it’s linked to
approved field development projects
OSV 22.7
42.7%
Rig 17.6
33.0%
FPSO/FSO 5.2
9.8%
Subsea construction
4.2 7.9%
Other 3.5
6.6%
Offshore exposure - NOK53bn (2.8% of total Group EaD)
NOK bn and per cent of NOK53bn
71
Oilfield Services Exposure - Mainly low risk exposure
IG: Investment grade, LBO: Leverage Buyouts, All figures as of 31 Dec 2014. FX NOK/USD as of 31 Dec 2014: 7.39
and as of 30 Sept 2014: 6.43, hence FX adjusted volume per 31 Dec 2014 was NOK31bn, if we used 30 Sept 2014 FX
rates by 31 Dec 2014.
• Large caps investment grade companies:
~60% of EaD in large cap, global investment grade
companies. Primarily US based
• Non-investment grade oilfield services/other midcaps:
Wide range of companies through the oil and gas service
value chain. Medium/small caps only close to home
• Seismic:
Limited exposure and dominant part is short-term working
capital financing
• Leveraged buyout (LBO):
Mainly related to development and production. LBO
financing only close to home. Careful selection of
sponsors in the LBO space. Acceptance of higher financial
risk only if coupled with low operational risk. Prefer clients
with less dependence on oil companies’ CAPEX budgets
Large-caps, investment
grade companies
19.1 58%
Non IG / Other mid-
cap 5.3
16%
Seismic 1.2 4%
LBO-portfolio 7.4
22%
Other 0.1 0%
Oilfield Services - NOK 33bn (1.8% of total Group EaD)
NOK bn and per cent of NOK33bn
72
Appendix F:
Oil, Gas and Offshore Exposure
Q1 2015 update
Appendix
73
Some migration from low to medium risk - 60% of portfolio is low risk and 39% is medium risk
74
EaD: Exposure at Default, PD: Probability of default. Risk grade system, please see back up slide for details.
DNB's risk classification system, where 1 represents the lowest risk and 10 the highest risk.
DNB’s oil-related portfolio split by sub-segment in exposure (EaD) and by risk grade
NOK 169bn as of 31 Mar 2015 (and NOK 161bn as of 31 Dec 2014)
NOK billion
54
64 61
14 10
15 0.20
0.20 0.20
0.00 0.00 0.00
17
18 17
29 33
40
1.47 0.31 0.30 0.00 1.17 1.30
19
23 23
8 10
12
0.61 0.30 1.20 0.20 0.30 0.20
0
20
40
60
80
100
120
Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15
Grade 1-4 "Low risk" Grade 5-7 "Medium" Grade 8-10 "High" Grade 11-12 "Doubtful & NPL"
Oilfield Services
Offshore
Oil & Gas
19 25 26
6 6 10 0.14 0.20 0.20
0.00 0.00 0.00
6
9 8
19 21
25
1.45 0.31 0.00 0.00 1.17 1.30
4
4 4
6 7
8
0.47 0.20 0.80 0.19 0.20 0.20
90
105 101
51 53
67
2.28 0.81 1.70 0.20 1.47 1.50
0
20
40
60
80
100
120
0
20
40
60
80
100
120
Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15 Sep-14 Dec-14 Mar-15
Grade 1-4 "Low risk" Grade 5-7 "Medium" Grade 8-10 "High" Grade 11-12 "Doubtful & NPL"
Oilfield Services (34% drawn loans)
Offshore (59% drawn loans)
Oil & Gas (47% drawn loans)
Exposure (EaD)
Outstanding loans to oil, offshore and oil service are 49% of EaD - Large part of remaining exposure is guarantees and revolving facilities to IG
75
DNB’s oil-related portfolio: Drawn loans split by sub-segment and risk grade, total exposure by risk
grade (EaD) NOK 83bn and exposure (EaD) NOK 169bn as of 31 Mar 2015
NOK billion
EaD: Exposure at Default, PD: Probability of default. Risk grade system, please see back up slide for details. DNB's risk classification system,
where 1 represents the lowest risk and 10 the highest risk. Doubtful & NPL = Non performing loans, IG = investment grade companies
DNB has a well diversified oil-related portfolio - 8% of total Group EaD to oil related portfolios
76
OSV: Offshore Service Vessels, F(P)SO: Floating (Production) Storage Offloading.
LNG: Liquid Natural Gas. IG: Investment grade,, All figures as of 31 Mar 2015.
76
Investment grade or similar
22.2 60%
Sub-IG or similar
5.4 15%
Seismic 1.5 4%
Leverage Buy Out
(LBO) 7.7
21%
Other 0.1 0%
Oilfield Services - NOK 37bn
(1.8% of total Group EaD)
NOK bn and per cent of NOK37bn
7
6
Exploration &
Production IG
24.0 32%
Exploration & Prod. Sub-IG
4.6 6%
Reserve Based
Lending (RBL) 10.1 13%
Exploration Financing
(EFF) 2.7 4%
Midstream incl LNG
22.4 29%
Refining & petchem
12.2 16%
Oil & Gas exposure - NOK76 bn.
(3.7% of total Group EaD)
NOK bn. and per cent of NOK 76 bn.
76
OSV 22.7
42.7%
Rig 17.6
33.0%
FPSO/FSO 5.2
9.8%
Subsea construction
4.2 7.9%
Other 3.5
6.6%
Offshore exposure - NOK57 bn.
(2.8% of total Group EaD)
NOK bn. and per cent of NOK57 bn.
Appendix G:
Financial Performance and Capital
– Additional slides
Appendix
77
Profit figures
Pre-tax operating profit before impairment NOK million
Pre-tax operating profit before impairment
excl. basis swaps NOK million
Profit for the period NOK million
Profit for the period
excl. basis swaps NOK million
30.04.2015 78
5 478
4 553
5 6204 965
6 533
1Q14 2Q14 3Q14 4Q14 1Q15
5 913
4 5295 292
4 5945 211
1Q14 2Q14 3Q14 4Q14 1Q15
7 3776 722
7 6266 964
9 273
1Q14 2Q14 3Q14 4Q14 1Q15
7 973
6 6897 177
6 456
7 462
1Q14 2Q14 3Q14 4Q14 1Q15
Income statement
30.04.2015 79
Full year
Amounts in NOK million 1Q15 4Q14 3Q14 2Q14 1Q14 2014
Net interest income 8 587 8 700 8 228 7 867 7 691 32 487
Net commissions and fees 2 212 2 313 2 229 2 242 2 185 8 969
Net gains on financial instruments at fair value 3 400 279 1 817 1 132 2 089 5 317
Net financial and risk result, DNB Livsforsikring 52 185 136 183 105 609
Net insurance result, DNB Skadeforsikring 99 129 121 139 102 491
Other operating income 361 446 256 391 397 1 490
Net other operating income, total 6 124 3 352 4 560 4 087 4 877 16 877
Total income 14 711 12 052 12 788 11 954 12 569 49 363
Operating expenses 5 215 5 045 5 088 5 150 5 168 20 452
Restructuring costs and non-recurring effects 223 42 74 83 24 223
Pre-tax operating profit before impairment 9 273 6 964 7 626 6 722 7 377 28 689
Net gains on fixed and intangible assets 12 42 13 (3) 0 52
Impairment of loans and guarantees 575 821 183 554 80 1 639
Pre-tax operating profit 8 710 6 184 7 456 6 165 7 297 27 102
Tax expense 2 130 1 236 1 828 1 600 1 799 6 463
Profit from operations held for sale, after taxes (47) 16 (8) (11) (19) (22)
Profit for the period 6 533 4 965 5 620 4 553 5 478 20 617
Profit attributable to shareholders 6 519 4 965 5 620 4 553 5 478 20 617
Impairment of loans and guarantees
30.04.2015 80
Full year
Amounts in NOK million 1Q15 4Q14 3Q14 2Q14 1Q14 2014
Personal customers (34) (67) 84 53 48 118
- Mortgage loans (81) (141) 33 (5) (16) (129)
- Consumer finance 46 74 51 58 64 247
Small and medium-sized enterprises 308 450 165 157 65 838
Large corporates and international customers 256 496 18 292 219 1 024
- Nordic Corporates Division (15) 333 (3) 97 (56) 370
- International Corporates Divison (39) 166 86 (17) 56 291
- Shipping, Offshore and Logistics Division 242 (21) (116) 152 152 166
- Energy Division 12 5 5 (2) 24 31
- Baltics and Poland 50 1 39 53 31 124
- Other units 7 13 8 9 13 42
Total individual impairment 530 879 267 502 332 1 980
Total collective impairment of loans 44 (58) (84) 52 (252) (341)
Impairment of loans and guarantees 575 821 183 554 80 1 639
Total impairment in relation to average volumes
(annualised) 0.16 0.23 0.05 0.16 0.02 0.12
81
* Transitional rules, as per 31.03.15
Capital Adequacy Across the Key Relevant Entities – All three entities demonstrate a strong buffer to trigger
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
DNB Group DNB Bank Group DNB Bank ASA
CET1 Total Capital Ratio
Profit vs. Hypothetical AT1 Coupon Cost)
82
Estimated AT1 payments are very small in relation to earnings
• DNB’s intended payout ratio is >50% once it is above 14% CET1. At
a CET1 below 14% the dividend payout is likely to be reduced
• Dividend payments on ordinary shares and coupon payments on
Additional Tier 1 (AT1) instruments are at the discretion of the issuer
DNB’s End State (2016) CET1
requirements in the context of MDA
* Statement given at the DNB Capital Markets Day (27 November 2014)
0
5
10
15
20
25
30
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Profit Before Tax AT1 Coupon Payments Dividend
Estimated AT1
coupon
payments p.a
~3% of 2014 PBT
DNB will give due consideration to the
capital hierarchy and look to preserve the
seniority of claims going forward*
• Given that AT1 distributions are expected to
represent no more than 20% of normalised
earnings, in a profitable situation DNB would
need to fall to the bottom quartile (6.625% -
4.500%) for restrictions to formally apply in this
scenario
31 March 31 Dec. 31 March 31 Dec.
Amounts in NOK billion 2015 2014 2015 2014
Deposits with central banks 305 59 302 54
Due from credit institutions 203 373 457 608
Loans to customers 1 476 1 439 743 723
Other assets 806 779 639 613
Total assets 2 790 2 649 2 141 1 998
Due to credit institutions 263 214 333 269
Deposits from customers 963 942 918 903
Short-term debt securities issued 233 207 233 207
Long-term debt securities issued 620 605 168 160
Other liabilities and provisions 536 523 349 332
Additional Tier 1 capital 8 8
Other equity 166 159 131 128
Total liabilities and equity 2 790 2 649 2 141 1 998
Ratio of deposits to net loans (%) 65.2 65.4 123.6 124.8
Adjusted ratio of deposits to net loans (%) 1) 64.1 63.5 121.3 121.0
Total combined assets 3 089 2 936 2 141 1 998
Currency-adjusted loans to customers 1 459 731
Currency-adjusted deposits from customers 950 904
1) Excluding short-term money market deposits
DNB Group DNB Bank ASA
Balance sheets
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Disclaimer
• This material has been prepared on the basis of the information provided by DNB Bank ASA (referred to as "DNB Bank") under the Covered Bond program and public available sources. DNB ASA – the holding company of the DNB group is referred to as "DNB " in this presentation.
• This material does not constitute an offering circular in whole or part and you must read the actual offering circular related to the Covered Bond program and the notes which may be issued from time to time thereunder as referred to in this material (respectively the "Program" and the “Notes”) before making an investment decision. The offering circular for the Program is available from the Arranger. You should consult the offering circular for more complete information about DNB and the Program.
• This material is presented solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this material are subject to change without notice and DNB Bank is not under any obligation to update or keep current the information contained herein. In addition, institutions mentioned in this material, their affiliates, agents, directors, partners and employees may make purchases and/or sales of the Notes as principal or agent or may act as market maker or provide investment banking or other services in respect of the Program or the Notes which may be issued from time to time thereunder. DNB, the Arranger and the Dealers and their respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material.
• The Notes are not to be offered or sold in any jurisdiction in circumstances in which the distribution of this document or the Notes would be prohibited in such jurisdiction. This document must not be acted on or relied on by persons who are not eligible to invest in the Notes. Any investment or investment activity to which this communication relates is available only to persons eligible to invest in the Notes and will be engaged in only with such persons.
• Furthermore, you should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the suitability of an investment in the Notes which may be offered from time to time under the Program) based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this presentation.
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