Financial results - first half 2021
Presentation for Conference Call
Carsten Egeriis | Stephan Engels | |
Chief Executive Officer | Chief Financial Officer |
Financial results - first half 2021
Agenda
01. | Summary | 2 |
02. | Group income statement | 4 |
03. | Business unit results | 5 |
04. | Key lines | 8 |
05. | Capital | 13 |
06. | Financial outlook for 2021 | 14 |
07. | Q&A | 15 |
08. | Appendix | 16 |
Financial results - first half 2021
Rebound in economies led to high customer activity and lower impairments in H1, while we continue to build a better bank
Total income up for the first half of 2021 driven by almost all income lines. NII stable and positively impacted by repricing, however, margin pressure continues
Strong credit quality given improved macro conditions, which support significantly lower loan impairment charges and improved outlook
Record-high customer activity in capital markets - our offering supports customers in their sustainability transition
On 8 July, the outlook for 2021 was revised upwards to a net profit of more than DKK 12 billion
Execution of cost management visible in H1, as total underlying expenses continued to decrease (-7%) from the same period last year
We continue to deliver on our Better Bank 2023 ambitions and will continue to execute on our commercial priorities
Profit development H1-21 vs H1-20 (DKK m) |
7,783 |
Lending, deposit growth (DKK m)
Group cost/income ratio* (%) |
4,532 | ||||||||||||||
252 | ||||||||||||||
1,894 | 1,181 | 85 | ||||||||||||
162 | ||||||||||||||
H1-20 | NII | Fee/ | Insurance | Expenses | Impairments | H1-21 | ||||||||
PBT, core | trading/ | business | PBT, core | |||||||||||
other | ||||||||||||||
Lending | |
-1% | |
1,823 | 1,810 |
H1-20 | H1-21 |
Deposits | |
+10% | |
1,198 | |
1,092 | |
H1-20 | H1-21 |
65 | 66 | 60 | ||||
H1-20 | H2-20 | H1-21 |
* Excl. impairment charges on intangible assets | 2 |
Financial results - first half 2021
First impression as incoming CEO: A strong foundation and momentum towards becoming a Better Bank; strong efforts to sharpen the commercial initiatives
Compliance function taken to | Improving and digitising | |
the next level | customer journeys | |
On the forefront of supporting customers' commercial and sustainability ambitions
Rebuilt compliance organisation with an operating model built on best practice and led by profiles with extensive and international experience
Launched comprehensive Financial Crime Plan covering all initiatives required by regulation and recommended by best practice
Significantly upgraded IT systems and processes from an E2E perspective, including ODD and transaction monitoring
Fundamentally changed the entire Danske Bank development organisation, while maintaining momentum on deliveries
Prioritised all development resources according to E2E journeys with a focus on taking our digital platforms even further by improving the time to market for products
Continuous improvement on digitalisation; 95% of mortgage applications in Sweden run digitally, solid results for new digital car loan process in Norway and widening toolbox for homeowners in Denmark
Continuously supporting our customers' sustainability transition through innovative products and our leading position in sustainable finance; good progress towards our 2023 sustainability targets
Strong momentum with corporate customers; leading CSAT position and significant capital raising activity for customers across debt and equity capital markets
Solid offerings within Asset Management resulting in positive net sales for several quarters and above benchmark performance in the majority of our funds
3
Financial results - first half 2021
Group: Higher customer activity, stringent cost focus and strong credit quality drive improved performance
Income statement and key figures (DKK m)
H1-21 | H1-20 | Index | Q2-21 | Q1-21 | Index | ||
Net interest income | 10,965 | 11,127 | 99 | 5,515 | 5,450 | 101 | |
Net fee income | 6,595 | 5,956 | 111 | 3,193 | 3,402 | 94 | |
Net trading income | 2,291 | 1,897 | 121 | 1,025 | 1,266 | 81 | |
Net income from insurance business | 982 | 897 | 109 | 491 | 491 | 100 | |
Other income | 457 | 309 | 148 | 262 | 195 | 134 | |
Total income | 21,291 | 20,185 | 105 | 10,486 | 10,805 | 97 | |
Expenses | 12,770 | 13,022 | 98 | 6,497 | 6,273 | 104 | |
Profit before loan impairment charges | 8,521 | 7,163 | 119 | 3,989 | 4,531 | 88 | |
Loan impairment charges | 737 | 5,269 | 14 | 240 | 497 | 48 | |
Profit before tax, core | 7,783 | 1,894 | - | 3,750 | 4,034 | 93 | |
Profit before tax, Non-core | 17 | -446 | - | -3 | 20 | - | |
Profit before tax | 7,801 | 1,449 | - | 3,747 | 4,054 | 92 | |
Tax | 1,869 | 413 | - | 955 | 914 | 104 | |
Net profit | 5,932 | 1,036 | - | 2,792 | 3,139 | 89 | |
RoE (%) | C/I *(%) | CET1 (%) | REA (DKK bn) | EPS | |||||
Q2-21 | 6.6 | Q2-21 | 62 | Q2-21 | 18.0 | Q2-21 | 816 | Q2-21 | 3.1 |
Q1-21 | 7.5 | Q1-21 | 58 | Q1-21 | 18.1 | Q1-21 | 798 | Q1-21 | 3.5 |
Q4-20 | 3.4 | Q4-20 | 69 | Q4-20 | 18.3 | Q4-20 | 784 | Q4-20 | 1.6 |
Key points, H1-21 vs H1-20
- Total income up 5% driven by higher customer activity and supportive market conditions, which was positive for almost all income lines
- Net interest income benefited from deposit repricing during 2021, however, the positive effect was offset by margin pressure across the Nordic countries
- Other income up, driven by stronger housing market activity in Denmark
- Underlying costs down approx. 7% adjusted for one-offs
- Number of FTEs reduced by around 700 from the peak in Q3-2020, with AML, Estonia costs trending down according to plan
Key points, Q2-21 vs Q1-21
- Total income slightly down, primarily as fee income in Q2 was lower due to lower refinancing activity at Realkredit Danmark and trading income was seasonally high in Q1
- Fee and trading income reflect high customer activity and market conditions. Q1 was impacted by one-off sale of VISA (DKK 0.2 bn) and larger transactions at LC&I
- Expenses in Q2 were impacted by a one-off of DKK 0.4 bn related to the VAT setup in Sweden and higher performance based compensation
- Strong credit quality and low level of actual credit deterioration
* Excl. impairment charges on intangible assets | 4 |
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Danske Bank A/S published this content on 23 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 July 2021 05:37:09 UTC.