barclays global financial services conference - dnb · pdf file- combined with share buybacks...
TRANSCRIPT
Barclays Global Financial Services Conference 12 September 2017 New York
Kjerstin Braathen, CFO
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DNB is in a new phase, after years of capital build-up - increased dividend
16% 9.3%
260
112
NOK Billion
7.2
5.0 4.7
4.4 4.1
4.8
Stable and increasing cash dividend going forward - combined with share buybacks to distribute excess capital
3
Dividend per share NOK
2.10
2.70
3.80
4.50
5.70
2012 2013 2014 2015 2016
1) According to an agreement, the Norwegian government will redeem shares on a proportionate basis so that its current holding will remain unchanged at 34 per cent 2) The Norwegian FSA has approved the authorisation, provided that the targeted capital level is met and that the sum of the amounts spent on dividends and the
repurchase of shares does not exceed 75 per cent of the annual profit for 2016
Dividend policy: > 50 per cent payout ratio Stable and increasing cash dividend per share
Buybacks: Completed 0.5 per cent of registered shares 1) 2) DNB may decide to initiate further buybacks up to the
approved limit of 1.5 per cent
Return on Equity above 12 per cent remains our main priority
4
NOK Billion
1)
1) Peer average equity is calculated using peer leverage ratio.
90
58
51
46
Norway
United Kingdom
Germany
EU
Percentage of population using online banking
Fewer branch offices Number of branches per year
Transforming the way we do business - digitalisation and automation
More visits to our mobile banking platform Million visits per year
7
22% of all new savings agreements
300 000 daily transactions
59% of population users*
June Jan. Feb. Mar. Apr.
22% fee-based transactions
180 000 users
Savings app
57 million mobile bank logins (2Q17)
2010 2015 2016 2017 annualised
2011 2012 2013
Transforming the way we do business – building future mobile platforms
2014
*Norwegian population > age 15
July
Growth in personal customer and SME segments - despite changes in distribution network
8
200
225
250
275
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Small and medium-sized enterprises Average loan volumes, NOK billion
46 %
54 %
2Q 2015
Mortgages and other exposures, personal customers corporate loans
Aiming to reduce volatility and increase profitability - through rebalancing of the portfolio
9
50 % 50 %
2Q 2017
Reducing exposure in cyclical industries USD billion
Rebalancing between LCI and PC
Corporate loans
19 19
20 19
16
15
21
19 18
15
13 12
8
10
12
14
16
18
20
22
2012 2013 2014 2015 2016 1H2017
Oil, gas and offshore Shipping
1) Reduction of Oil, gas and offshore started in 2015
1)
Efficiency is key – automation gives further potential
10
34 38
40 42 42
47 49
54 52
50
19 19 19 20 21 22 21 22 21 21
43%
46%
30%
40%
50%
60%
0
20
40
60
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Cost/Income NOK billion
Income bNOK (lhs) Costs bNOK (lhs) C/I (rhs) Avg Peer C/I1) 12 month rolling average for 2017 numbers 2) Adjusted for one-time effect of NOK 1969 million related to change of the Group’s pension scheme
1) 2)
Asset quality is improving – no spillover effects
11
NOK million
Per cent
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
-200
300
800
1300
1800
2300
2800
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Total new/increased individual impairment Change in collective impairment of loans
Total impairment in relation to average volumes, annualised (rhs)
Unemployment is down and is expected to decrease further Interest rates are expected to remain low Growth in housing market is levelling off
Norwegian macro is improving
12 Source: SSB/Norwegian Labour and Welfare Administration/DNB Markets
Index (2006=100)
NOK Billion
Unemployment rate by county July 2017 vs July 2016
Significant increase
Slight increase
Lower
Norwegian GDP is picking up - Sovereign Wealth Fund – an important stabilising mechanism
13 Source: Ministry of Finance (Revised National Budget 2017), DNB Markets, NBIM
Norwegian Sovereign Wealth Fund 2001 – 2017, NOK billion
-2
-1
0
1
2
3
4
5
6
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
e
2019
e
2020
e
Mainland-GDP, YoY Unemployment rate
Per cent
Main messages
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ROE> 12%
INCREASED DIVIDEND
IMPROVING NORWEGIAN
MACRO
IMPROVING ASSET QUALITY
REDUCED VOLATILITY
DIGITALISATION AND AUTOMATION
FURTHER COST- EFFICIENCY POTENTIAL FEE GENERATION
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DISCLAIMER - CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS The statements contained in this presentation may include forward-looking statements such as statements of future expectations. These statements are based on the management’s current views and assumptions and involve both known and unknown risks and uncertainties. Although DNB believes that the expectations reflected in any such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results, performance or events may differ materially from those set out or implied in the forward-looking statements. Important factors that may cause such a difference include, but are not limited to: (i) general economic conditions, (ii) performance of financial markets, including market volatility and liquidity (iii) the extent of credit defaults, (iv) interest rate levels, (v) currency exchange rates, (vi) changes in the competitive climate, (vii) changes in laws and regulations, (viii) changes in the policies of central banks and/ or foreign governments, or supra-national entities. DNB assumes no obligation to update any forward-looking statement.
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