Q4
RESULTS DNB GROUP
FOURTH QUARTER 2014
Rune Bjerke (CEO)
Bjørn Erik Næss (CFO)
Full year 2014
Pre-tax operating profit before impairment in NOK billion
28.7 (24.7)
Cost/income ratio in per cent
41.9 (45.7)
Return on equity in per cent
13.8 (13.1)
Earnings per share
12.67 (10.75)
Common equity Tier 1 capital ratio in per cent (transitional rules)
12.7 (11.8)
Proposed dividend in NOK
3.80 (2.70)
Figures in parentheses refer to 2013
2
05.02.2015
Profit figures last five years
Pre-tax operating profit before impairment
NOK million
Pre-tax operating profit before impairment
excl. basis swaps
NOK million
28 689
26 107
24 744
21 081
21 833
2010
2011
20 957
2012
20 514
2013
2014
2010
Profit for the period
28 295
22 643
18 802
2011
2012
2013
2014
Profit for the period
excl. basis swaps
NOK million
NOK million
20 617
18 493
17 511
14 062
2010
12 979
13 792
2011
2012
20 329
15 006
13 653
10 796
2013
3
2014
2010
2011
2012
2013
2014
05.02.2015
Return on equity and cost/income ratio last five years
Return on equity
Return on equity excl. basis swaps
Per cent
Per cent
13.6
11.4
11.7
13.1
13.8
13.2
12.7
13.9
13.6
2013
2014
9.5
2010
47.6
2010
2011
2012
2013
2014
2010
2011
2012
Cost/income ratio
Cost/income ratio excl. basis swaps
Per cent
Per cent
47.1
2011
49.1
2012
45.7
2013
4
48.3
50.8
47.2
41.9
2014
2010
2011
2012
44.4
42.2
2013
2014
05.02.2015
Earnings and dividend per share last five years
Earnings per share
Dividend per share
NOK
NOK
12.67
10.75
8.66
8.48
7.98
4.00
3.80
2.70
2010
2011
2012
2013
5
2014
2010
2.00
2.10
2011
2012
2013
2014
05.02.2015
Customer segments
NOK million
Full year 2014
Pre-tax operating profit after impairment
Full year 2013
10 914
9 795
9 342
8 586
3 343
Personal customers
3 551
Small and mediumsized enterprises
6
Large corporates and
international
customers
05.02.2015
Profit figures per quarter
Pre-tax operating profit before impairment
NOK million
Pre-tax operating profit before impairment
excl. basis swaps
NOK million
6 750
4Q13
7 377
1Q14
7 626
6 722
2Q14
3Q14
6 964
4Q14
7 570
7 973
6 689
4Q13
Profit for the period
1Q14
2Q14
7 177
6 456
3Q14
4Q14
Profit for the period
excl. basis swaps
NOK million
NOK million
5 700
6 290
5 620
5 478
4 553
4Q13
1Q14
2Q14
3Q14
7
5 913
4 965
4Q14
5 292
4 594
4 529
4Q13
1Q14
2Q14
3Q14
4Q14
05.02.2015
Return on equity and cost/income ratio per quarter
16.3
Return on equity
Return on equity excl. basis swaps
Per cent
Per cent
18.0
15.4
1Q14
2Q14
14.0
12.6
12.4
4Q13
16.6
14.8
3Q14
4Q14
12.3
4Q13
1Q14
2Q14
11.7
3Q14
4Q14
Cost/income ratio
Cost/income ratio excl. basis swaps
Per cent
Per cent
40.4
41.3
4Q13
1Q14
43.8
2Q14
40.4
42.2
3Q14
4Q14
8
37.9
39.4
4Q13
1Q14
43.9
41.8
2Q14
3Q14
44.1
4Q14
05.02.2015
Development in loans
NOK billion
1 439
1 357
1 341
1 298
1 307
1 298
31 Dec.12
31 March 13
30 June 13
30 Sept. 13
Loans at end of period
9
31 Dec.13
31 March 14
30 June 14
30 Sept. 14
31 Dec.14
Loans adjusted for exchange rate movements
05.02.2015
Development in deposits
– adjusted for short-term money market investments
NOK billion
914
854
850
797
832
797
31 Dec.12
31 March 13
30 June 13
30 Sept. 13
31 Dec.13
31 March 14
30 June 14
30 Sept. 14
31 Dec.14
Deposits adjusted for short-term money market investments
Deposits adjusted for short-term money market investments and exchange rate movements
10
05.02.2015
Development in average interest rate spreads
Per cent
2.18
2.21
1.22
1.20
(0.27)
(0.30)
4Q12
1Q13
2.32
2.42
2.42
2.39
1.30
1.25
1.27
(0.29)
(0.30)
(0.29)
(0.27)
3Q13
4Q13
1Q14
2Q14
1.28
1.29
(0.24)
2Q13
2.42
11
2.31
2.32
Lending spread
1.25
1.27
Combined spread
- weighted average
(0.17)
(0.15)
Deposit spread
3Q14
4Q14
05.02.2015
Development in commissions and fees last six years
NOK million
+ 6%
growth
7 901
7 891
2010
2011
7 429
2009
8 096
2012
8 445
1)
2013
8 969
2014
Sale of insurance products
Money transfer and banking services
Asset management and custodial services
Investment banking services
Real estate broking
Net commissions and fees
1) Figures for 2013 are exclusive of Svensk Fastighetsförmedling AB, which represented NOK 92 million.
12
05.02.2015
Income statement
Amounts in NOK million
4Q14
3Q14
2Q14
1Q14
4Q13
Full year
2014
Net interest income
Net commissions and fees
8 700
8 228
7 867
7 691
7 940
32 487
30 192
2 313
2 229
2 242
2 185
2 147
8 969
8 537
279
185
1 817
136
1 132
183
2 089
105
1 342
365
5 317
609
5 032
1 021
Net insurance result, DNB Skadeforsikring
Other operating income
Net other operating income, total
Total income
129
446
3 352
12 052
121
256
4 560
12 788
139
391
4 087
11 954
102
397
4 877
12 569
122
343
4 318
12 258
491
1 490
418
1 420
16 877
49 363
16 427
46 619
Operating expenses
Restructuring costs and non-recurring effects
5 045
42
5 088
74
5 150
5 168
24
5 163
20 452
20 186
223
682
0
0
0
0
0
0
6 964
42
821
7 626
13
6 722
(3)
0
0
7 377
0
0
557
6 750
153
0
0
28 689
52
450
557
24 744
151
554
6 165
1 600
80
7 297
36
6 868
1 639
27 102
2 185
22 709
1 236
183
7 456
1 828
16
4 965
(8)
5 620
(11)
4 553
1 799
(19)
5 478
1 177
9
5 700
6 463
(22)
20 617
5 202
4
Net gains on financial instruments at fair value
Net financial and risk result, DNB Livsforsikring
Expenses relating to debt-financed structured products
Impairment losses for goodwill and intangible assets
Pre-tax operating profit before impairment
Net gains on fixed and intangible assets
Impairment of loans and guarantees
Pre-tax operating profit
Tax expense
6 184
Profit from operations held for sale, after taxes
Profit for the period
13
83
(212)
Full year
2013
17 511
05.02.2015
Net gains on financial instruments
Change
Amounts in NOK million
Net gains on financial instruments at fair value
4Q14
279
3Q14
1 817
4Q13
1 342
508
449
(819)
-
-
705
1 368
1 456
549
454
459
Trading in foreign exchange/fixed income/equities in
DNB Markets
94
408
446
Changes in credit spreads on bonds in DNB Markets
(196)
200
120
Minor adjustments in valuation models
(242)
67
-
The bank's own equity investments
(146)
(38)
69
Other mark-to-market adjustments (incl. CVA/DVA)
(287)
277
362
Basis swaps
Valuation of the investment in Nets
Net gains on financial instruments at fair value, excl basis swap
Customer revenues in DNB Markets
14
(229)
4Q14 3Q14
4Q14 4Q13
(1 597)
(1 685)
05.02.2015
Changes in net interest income
From 3rd quarter 2014 to 4th quarter 2014
NOK million
101
144
92
50
(22)
Lending
and
deposit
spreads
Other
net
interest
income
Longterm
funding
8 700
108
8 228
3Q14
Exchange
rate
movements
Lending
and
deposit
volumes
15
Interest
rate
instruments
4Q14
05.02.2015
Changes in net other operating income
From 3rd quarter 2014 to 4th quarter 2014
NOK million
4 560
106
91
84
59
48
(1 597)
3 352
3Q14
Net gains on
investment
property
Other
operating
income
16
Net
commissions
and fees
Basis
swaps
Net
financial and
risk result from
DNB Livsforsikring
Net
gains on other
financial
instruments
4Q14
05.02.2015
Changes in operating expenses per quarter
Amounts in NOK million
Total adjusted operating expenses
4Q14
5 045
Income-related costs
Ordinary depreciation on operational leasing
19
Expenses directly related to operations
IT expenses
Performance-based pay
Properties and premises
Marketing
Other costs
Non-recurring effects
86
(102)
(81)
(33)
(6)
42
Restructuring costs - employees
Other restructuring costs and non-recurring effects
Impairment losses for goodwill and capitalised systems development
Reversal of provisions
IT restructuring
Operating expenses
17
Change
(117)
Change in
4Q13
per cent
5 163
(2.3)
86
(40)
0
(73)
70
5 088
(303)
345
45
57
(557)
83
70
(420)
41
(97)
557
(157)
0
5 508
(7.6)
05.02.2015
Changes in operating expenses per year
Amounts in NOK million
Total adjusted operating expenses
Full year
2014
20 452
Income-related costs
Ordinary depreciation on operational leasing
92
Expenses directly related to operations
IT expenses
External distribution channels
Other costs
Non-recurring effects
200
88
(114)
223
Restructuring costs - employees
Other restructuring costs and non-recurring effects
Provisions for debt-financed structured products Impairment losses for goodwill and capitalised systems development
Reversal of provisions
IT restructuring
Operating expenses
18
Change
266
Full year Change in
2013
per cent
20 186
1.3
239
(13)
0
0
(73)
70
20 675
(1 467)
1 690
(359)
(253)
(450)
(557)
83
70
(1 201)
598
240
450
557
(157)
0
21 875
(5.5)
05.02.2015
Impairment of loans and guarantees
Full year
2014
Full year
2013
4Q14
3Q14
2Q14
1Q14
4Q13
(63)
56
(5)
61
50
(16)
66
72
(141)
78
89
33
56
36
37
132
(129)
261
458
167
162
73
207
861
77
284
564
484
333
166
(21)
5
1
1
879
11
(3)
86
(116)
5
39
1
267
284
97
(17)
152
(2)
53
1
502
209
(56)
56
152
24
31
3
332
(43)
67
86
(271)
(17)
93
(3)
236
987
370
291
166
31
124
5
1 980
1 391
136
228
500
52
471
4
2 318
DNB excl. Baltics, Russia and Poland
Baltics, Russia and Poland
(49)
(79)
71
(227)
(171)
(284)
(13)
(9)
(5)
(19)
(25)
(29)
(58)
(119)
Total collective impairment of loans
Impairment of loans and guarantees
(58)
821
(84)
183
52
554
(252)
80
(200)
36
(341)
1 639
(133)
2 185
Amounts in NOK million
Individual impairment:
Personal customers
- Mortgage loans
- Consumer finance
Small and medium-sized enterprises
Large corporates and international customers
- Nordic Corporates Division
- International Corporates Divison
- Shipping, Offshore and Logistics Division
- Energy Division
- Baltics, Russia and Poland
- Other units
Total individual impairment
361
Collective impairment:
19
05.02.2015
Impairment in per cent of loans
Per cent
Total impairment in relation to average volumes
(annual basis)
- DNB excl. Baltics and Poland
- Baltics and Poland
20
4Q14
3Q14
2Q14
1Q14
4Q13
Full year
2014
Full year
2013
0.23
0.05
0.16
0.02
0.01
0.12
0.17
0.24
0.04
0.16
0.02
(0.01)
0.12
0.14
(0.05)
0.24
0.25
0.03
0.44
0.11
0.65
05.02.2015
Net non-performing and net doubtful loans and guarantees 1)
Per cent
1.71
1.55
1.71
1.50
1.50
1.70
1.48
1.38
1.19
1.39
1.37
1.05
1.10
1.16
19.1
18.4
0.91
23.3
NOK billion
19.5
19.7
22.9
31 Dec.
31 Dec.
31 Dec.
2009
2010
2011
2012
31 March
0.96
0.81
0.78
0.80
20.7
19.9
16.4
31 Dec.
1.01
1.10
1.10
0.88
1.05
30 June
30 Sept.
31 Dec.
31 March
14.9
30 June
2013
1) Includes non-performing commitments and commitments subject
to individual impairment. Accumulated individual impairment is deducted.
17.3
16.1
30 Sept.
31 Dec.
2014
Baltics and Poland
DNB Group excl. Baltics and Pola nd
As a percentage of net loans
As a percentage of net loans excl. Baltics and Poland
21
05.02.2015
Balance sheets
DNB Group
DNB Bank ASA
31 Dec.
2014
31 Dec.
2013
31 Dec.
2014
31 Dec.
2013
59
373
1 439
779
2 649
167
181
1 341
717
2 406
54
608
723
613
1 998
163
399
680
583
1 826
Due to credit institutions
Deposits from customers
214
942
234
868
269
903
281
849
Short-term debt securities issued
Long-term debt securities issued
207
605
184
528
207
160
184
169
523
159
2 649
450
142
2 406
332
128
1 998
228
115
1 826
65.4
63.5
64.7
63.7
124.8
121.0
124.9
122.9
2 936
2 656
1 998
1 826
Amounts in NOK billion
Deposits with central banks
Due from credit institutions
Loans to customers
Other assets
Total assets
Other liabilities and provisions
Equity
Total liabilities and equity
Ratio of deposits to net loans (%)
Adjusted ratio of deposits to net loans (%)
Total combined assets
1)
Currency-adjusted loans to customers
Currency-adjusted deposits from customers
1 391
686
900
865
1) Excluding short-term money market deposits
22
05.02.2015
Common equity Tier 1 capital ratio 1)
Transitional rules
Leverage ratio
Per cent
Per cent
11.9
11.8
12.1
31 Dec. 31 March 30 June
2013
2014
2014
12.6
12.7
5.3
30 Sept.
2014
31 Dec.
2014
31 Dec.
2013
Per cent
14.2
14.4
31 Dec. 31 March 30 June
2013
2014
2014
31 March 30 June
2014
2014
5.7
30 Sept.
2014
6.0
31 Dec.
2014
Estimate applying average weights
used by Swedish banks 2)
Future Basel III estimate
13.6
5.1
5.3
Per cent
15.0
15.1
16.3
30 Sept.
2014
31 Dec.
2014
31 Dec.
2013
17.5
17.3
31 March 30 June
2014
2014
18.0
18.3
30 Sept.
2014
31 Dec.
2014
1)
Common equity Tier 1 capital includes 50 per cent of interim profits in all quarters, apart from the Leverage Ratio figures.
Annual figures are exclusive of dividend payments
2) Average weights used by Swedish banks on corporate loans and loans secured by real estate
23
05.02.2015
Change in common equity Tier 1 capital ratio
Per cent
From 31 December 2013 to 31 December 2014
0.29
0.08
(0.29)
(0.43)
1.27
12.68
11.76
Common equity Tier 1
capital ratio as at 31
Dec. 2013
Increase in Tier 1
capital
Regulatory changes
24
Other effects
Volume growth
Increased volume from Common equity Tier 1
exchange rate
capital ratio as at 31
movements
Dec. 2014
05.02.2015
Financial ambitions – 2016 and 2017
Return on equity
> 12 per cent
Min. 14% CET1 ratio 1)
> 50% dividend
as capital plateau
when capital plateau is reached
1) Based on transitional rules
25
05.02.2015
The financial ambitions stay firm
Lending volumes expected to grow at an annual rate of around
3-4 per cent, subject to stable exchange rates
Stable development in volume-weighted spreads
Commissions and fees – underlying growth of 5 per cent
Flat nominal costs throughout 2015 (excluding restructuring costs)
Impairment expected to stay below normalised levels 1) in 2015
1) Normalised levels are around 20 bps of EaD (exposure at default), which corresponds to losses of approx. NOK 4 billion.
26
05.02.2015