Danske Bank — Earnings Release 2016

Feb 2, 2017

Danske Bank reports net profit of DKK 19.9 billion (EUR 2,671 million). Return
on shareholders' equity of 13.1%

Press release
2 February 2017

              Satisfactory result in a challenging market

Danske Bank reports net profit of DKK 19.9 billion (EUR 2,671 million). Return
on shareholders' equity of 13.1%

Danske Bank has announced its financial results for 2016.

“The year 2016 was another year of solid progress for Danske Bank. In a
challenging environment, we delivered satisfactory financial results while at
the same time strengthening our market position. With a return on equity of
13.1%, we delivered on our long-term target,” says Thomas F. Borgen, Chief
Executive Officer.

“The results reflect our diversified business model and our efforts to become a
more customer-centric, simple and efficient bank. We kept a high innovation
pace and launched a number of new advisory products and easy-to-use solutions.
We also saw a continued improvement in customer satisfaction and managed to
attract new customers and grow our volume, while maintaining high credit
quality and reducing costs.

We are satisfied with the progress and remain committed to continuing the
execution of our strategy and to realising the full potential of Danske Bank on
our journey to become recognised as the most trusted financial partner.”

The annual report is available at danskebank.com. Highlights are shown below:

2016 vs 2015

-- Danske Bank Group’s net profit for 2016 was DKK 19.9 billion (EUR 2,671
million). This represents a 12% increase from 2015, when net profit before
goodwill impairments was DKK 17.7 billion (EUR 2,375 million). The result
was driven by higher income resulting from, among
other things, a larger business volume, decreasing costs and very low
impairments. The result was also positively impacted by a number of special
items.

-- With a return on shareholders’ equity of 13.1% in 2016, against 11.6%
before goodwill impairments in 2015, we have delivered on our longer-term
ambition of at least 12.5% ahead of plan.

-- Total income was up 5% and amounted to DKK 48.0 billion (EUR 6,451
million), against DKK 45.6 billion (EUR 6,112 million) in 2015, driven by
higher net interest income, net trading income and other income.

-- Net interest income totalled DKK 22.0 billion (EUR 2,963 million) and was
3% higher than in 2015. Good volume growth offset the pressure on margins
that followed from the low interest rates and intense competition in all
markets.

-- Remortgaging activity normalised compared with the high level in especially
the first half of 2015, and the turbulence in the financial markets
resulted in lower customer activity within investment products. As a
result, net fee income was down 6% to DKK 14.2 billion (EUR 1,908 million).

-- Net trading income rose 26% to DKK 8.6 billion (EUR 1,158 million), partly
because of good customer activity particularly in the second half of the
year. Net trading income also benefited from the sale of VISA Europe and
Danmarks Skibskredit A/S.

-- Other income amounted to DKK 3.1 billion (EUR 422 million), up DKK 34%,
owing mainly to the sale of domicile properties and positive value
adjustment of shares in associated companies.

-- Despite higher activity levels, operating expenses were reduced 3% to DKK
22.6 billion (EUR 3,046 million). The main reasons for the decline were our
ongoing efforts to increase efficiency, a lower net contribution to the
Danish Resolution Fund and the Guarantee Fund, and lower depreciation on
intangible assets. The cost/income ratio before goodwill impairment charges
improved from 50.9% to 47.2%.

-- Loan impairment charges showed a net reversal of DKK 3 million (EUR 0.4
million) and remained low, primarily because of strengthened credit quality
and stable macroeconomic conditions.

-- At the end of December 2016, total lending was up 5% from the level at the
end of 2015. The reasons for the increase include higher customer inflow
and lending growth in Norway and Sweden.

Higher customer satisfaction

Customer satisfaction generally improved across the Group during the year,
bringing us in line with our ambitions in most areas. Customer satisfaction
remains a key priority.

Considerations about branchification in Finland

As part of our efforts to simplify the organisation and improve efficiency, we
are looking into the possibilities of merging our activities in Finland into a
single branch. In doing so, we would achieve a uniform organisational structure
across the Nordic markets. The change would be primarily of a technical nature
and would not change the way in which we serve our customers. We have initiated
a dialogue with the authorities, and during 2017, we expect to take initiatives
that may lead to branchification.

Capital position, dividends and share buy-back programme

Danske Bank has a strong capital position. At 31 December 2016, the common
equity tier 1 capital ratio and the total capital ratio were 16.3% and 21.8%,
respectively, against 16.1% and 21.0% at 31 December 2015.

The Board of Directors is therefore proposing a dividend of DKK 9.0 (EUR 1.2)
per share, or 45% of net profit for the year.

In addition, the Board of Directors has decided to initiate a share buy-back
programme of DKK 10 billion (EUR 1,345 million) in 2017. The purpose of the
share buy-back programme is to adjust the share capital to better reflect
Danske Bank’s capital targets. The share buy-back programme is described in
more detail in company announcement No. 8 of today's date.

Outlook for 2017

We expect net profit for 2017 to be in the range of DKK 17-19 billion (EUR
2,287-2,556 million).

We maintain our longer-term ambition for a return on shareholders’ equity of at
least 12.5%.

                              Danske Bank

Contact person: Kenni Leth, Group Press Officer, tel. +45 45 14 14 00

The annual report will be presented at a press conference at 9.00am CET and at
a conference call for analysts and investors at 2.30pm CET. The press
conference and conference call will be webcast live at danskebank.com. More
information about Danske Bank Group’s financial results is available at
danskebank.com/reports.

Danish kroner translated into euros at an exchange rate of 1:7.4343