Q4 CMD FINANCE

NORWAY CMD

LONDON, 10. MARCH 2016

CFO BJØRN ERIK NÆSS

03.03.2016

DNB has delivered strong profit growth

Net interest income NOK million

Pre-tax operating profit before impairment NOK million

Cost/income ratio Per cent

Profit for the period NOK million

2

25 252 27 216

30 192 32 487

35 358

2011 2012 2013 2014 2015

12 979 13 792

17 511 20 617

24 762

2011 2012 2013 2014 2015

47.1 49.1 45.7

41.9 36.9

2011 2012 2013 2014 2015

21 833 20 957 24 744

28 689

34 083

2011 2012 2013 2014 2015

Strong earnings and dividend development

Dividend per share NOK

Earnings per share NOK

3

7.98 8.48

10.75

12.67

14.98

2011 2012 2013 2014 2015

2.00 2.10

2.70

3.80

4.50

2011 2012 2013 2014 2015

1) Proposed by the Board of Directors

1)

Financial strength and ahead of schedule to deliver

above CET 1 requirement of 15% by end of 2016 Equity

NOK billion

Return on equity 1)

Per cent

Leverage ratio 2) Per cent

1) Return on equity is calculated on the assumption that additional Tier 1 capital is classified as a liability

2) Regulations for the calculation of Leverage Ratio changed during 2015 4

11.4 11.7 13.1

13.8 14.5

2011 2012 2013 2014 2015

117.8 127.2

141.9 158.7

190.1

2011 2012 2013 2014 2015

4.9 4.6 5.3

6.0 6.7

2011 2012 2013 2014 2015

CET 1 capital adequacy Per cent

9.4 10.7

11.8 12.7

14.4

2011 2012 2013 2014 2015

~15.5% CET1 2) in 2017

Requirement including

management buffer

>50% dividend

When the capital level is reached

5

> 12%

ROE

Overriding target

< 40%

C/I ratio 1)

Key performance indicator

Lending growth 2-3%

Stable volume-weighted spreads

Stable risk-weighted assets

2016-2018: Normalised impairment level,

uncertain timing

Minimum 3% annual growth in commissions

and fees

Financial ambitions 2016-2018 Guiding

Tax rate 24% in 2016-2017, and 21% in 2018

1) Towards 2018

2) Based on transitional rules 5

Slower speed ahead Increased unemployment but still growth in GDP

6 Source: Statistics Norway, DNB Markets forecasts

1.3

2.2

4.4

5.7

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

2004 2005 2006 2007 2008 2010 2011 2012 2013 2014 2015 2016e 2017e 2018e 2019e

Mainland GDP growth Unemployment rate

2009

GDP growth and unemployment Year on year, per cent

7

Development in Loan to Value, Residential Mortgages

15%

28%

35%

15%

7%

0%

5%

10%

15%

20%

25%

30%

35%

0-40 40-60 60-75 75-85 >85

30 June 2015

30 Sept. 2015

31 Dec. 2015

Per cent

Collateral categories

8

Loan Book EAD by segments as at 31 December 2015 1)

Commercial real

estate

11%

Shipping

7% Logistics

1%

Oil, gas and offshore

7%

Energy

3%

Other corporate

customers

6%

Public sector

2%

Fishing and fish

farming

2% Trade

3% Manufacturing

5%

Telecom and media

2%

Services

2%

Residential

mortgages

42%

Private individuals

7%

1) Exposure at default by customer segments as defined in DNB’s management reporting including net non-performing and net

doubtful loans and guarantees.

1,7

2,1

Large-caps, IG companies

Sub-investment grade

Seismic

LBOs challenged

LBOs less challenged

Other

26

21

OSV

Rig

FPSO/FSO

Subsea construction

Other

13,0

1,5

E&P large-caps and NOCs (IG)

E&P mid-caps (sub IG)

Reserve Based Lending

Exploration Financing Facilities

Midstream incl. LNG

Refining & petchem

Offshore EAD NOK 62.5 billion

Oilfield Services EAD NOK 36 billion

Oil & Gas EAD NOK 74 billion

DNB’s direct exposure to oil is manageable OSV and rig (2.4% of group EAD) are where we see the main challenges

9

IG: Investment grade, E&P: Exploration & Production, LBO: Leveraged Buyout, RBL: Reserve Based Lending, OSV: Offshore

Support Vessels,

NOCs: National Oil Companies, F(P)SO: Floating (Production,) Storage and Offloading vessels

Appendix

• DNB results cont.

• The Norwegian Economy

• Loan book and asset quality

Full year 2015

Pre-tax operating profit before impairment in NOK billion

34.1 (28.7)

Cost/income ratio in per cent

36.9 (41.9)

Return on equity in per cent

14.5 (13.8)

Common equity Tier 1 capital ratio in per cent (transitional rules)

14.4 (12.7)

Figures in parentheses refer to 2014

Earnings per share in NOK

14.98 (12.67)

Proposed dividend in NOK

4.50 (3.80)

12

Development in loans and risk weighted assets

NOK billion

13

1 341

1 439

1 543

1 341

1 391

1 438

1 089

1 121 1 129

31 Dec. 13 31 March 14 30 June 14 30 Sept. 14 31 Dec. 14 31 March 15 30 June 15 30 Sept. 15 31 Dec. 15

Loans at end of period Loans adjusted for exchange rate movements RWA

Development in average interest rate spreads –

customer segments Per cent

14

2.42 2.40 2.37 2.29 2.28 2.28

2.17 2.13 2.11

(0.33) (0.33) (0.31) (0.19) (0.17) (0.13)

(0.02) 0.08 0.12

1.35 1.31 1.31 1.31 1.31 1.34 1.32 1.32 1.32

4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Lending spread

Deposit spread

Combined spread

- weighted average

Impairment of loans and guarantees

15

1) Excluding the sale of non-performing loan portfolios, the ratio was (0.22) for 2015

Full year Full year

Amounts in NOK million 4Q15 3Q15 2Q15 1Q15 4Q14 2015 2014

Personal customers 24 942 (58) 34 67 942 (118)

- Mortgage loans 116 10 17 81 141 223 129

- Consumer finance (92) 932 (75) (46) (74) 719 (247)

Small and medium-sized enterprises (341) (129) (284) (308) (450) (1 062) (838)

Large corporates and international customers (686) (527) (425) (256) (496) (1 895) (1 024)

- Nordic Corporates Division 12 (6) 5 15 (333) 25 (370)

- International Corporates Division (72) (22) (93) 39 (166) (149) (291)

- Shipping, Offshore and Logistics Division (382) (379) (302) (242) 21 (1 305) (166)

- Energy Division (173) (88) (43) (12) (5) (317) (31)

- Baltics and Poland (58) (12) (47) (50) (1) (168) (124)

- Other units (12) (19) 56 (7) (13) 18 (42)

Total individual impairment (1 002) 285 (767) (530) (879) (2 015) (1 980)

Total collective impairment of loans (418) 106 101 (44) 58 (255) 341

Impairment of loans and guarantees (1 420) 392 (667) (575) (821) (2 270) (1 639)

Total impairment in relation to average volumes

(annualised) 1) (0.37 ) 0.10 (0.18) (0.16) (0.23) (0.15) (0.12)

Customer segments

Pre-tax operating profit after impairment NOK million

16

10 655

3 715

11 105

9 608

3 401

11 252

Full year 2015

Full year 2014

Personal customers Large corporates and

international customers

Small and medium-

sized enterprises

7 901 7 891 8 096

8 445 8 730 1) 8 815 1)

2010 2011 2012 2013 2014 2015

Sale of insurance products Money transfer and banking services

Asset management and custodial services Investment banking services

Real estate broking Net commissions and fees

1.1% growth

Development in commissions and fees

NOK million

1) The figures for 2014 and 2015 are adjusted for income from public sector activities

within life insurance that are in the process of being wound up 17

Profit development per quarter

Return on equity 1)

Per cent

Pre-tax operating profit before impairment NOK million

Cost/income ratio Per cent

Profit for the period NOK million

18

12.6

16.1

12.1

14.7 15.0

4Q14 1Q15 2Q15 3Q15 4Q15

6 964

9 273

7 396 8 125

9 290

4Q14 1Q15 2Q15 3Q15 4Q15

42.2 37.0

42.8 39.6

28.1

4Q14 1Q15 2Q15 3Q15 4Q15

4 965

6 533

5 062

6 363 6 804

4Q14 1Q15 2Q15 3Q15 4Q15

1) Return on equity is calculated on the assumption that additional Tier 1 capital is classified as a liability

Full year Full year

Amounts in NOK million 4Q15 3Q15 2Q15 1Q15 4Q14 2015 2014

Net interest income 9 062 8 981 8 728 8 587 8 700 35 358 32 487

Net commissions and fees 2 082 2 080 2 489 2 212 2 313 8 862 8 969

Net gains on financial instruments at fair value 2 164 1 945 1 174 3 400 279 8 683 5 317

Net financial and risk result, DNB Livsforsikring (662) 64 158 52 185 (390) 609

Net insurance result, DNB Forsikring 141 128 153 99 129 521 491

Other operating income 129 247 221 361 446 959 1 490

Net other operating income, total 3 853 4 463 4 194 6 124 3 352 18 635 16 877

Total income 12 915 13 444 12 923 14 711 12 052 53 993 49 363

Operating expenses (5 437) (5 103) (5 312) (5 215) (5 045) (21 068) (20 452)

Restructuring costs and non-recurring effects 1 811 (216) (215) (223) (42) 1 157 (223)

Pre-tax operating profit before impairment 9 290 8 125 7 396 9 273 6 964 34 083 28 689

Net gains on fixed and intangible assets (9) (3) 45 12 42 45 52

Impairment of loans and guarantees (1 420) 392 (667) (575) (821) (2 270) (1 639)

Pre-tax operating profit 7 860 8 514 6 774 8 710 6 184 31 858 27 102

Tax expense (1 084) (2 136) (1 695) (2 130) (1 236) (7 045) (6 463)

Profit from operations held for sale, after taxes 28 (14) (17) (47) 16 (51) (22)

Profit for the period 6 804 6 363 5 062 6 533 4 965 24 762 20 617

Profit attributable to shareholders 6 679 6 238 4 952 6 519 4 965 24 388 20 617

Income statement

19

1) Transfer from risk equalisation fund: (980)

2) Transition from defined-benefit to defined-contribution pension scheme: 1 969

3) Sale under the exemption model and lower tax rates

1)

2)

3)

Net gains on financial instruments

20

3Q15 - 4Q14 -

Amounts in NOK million 4Q15 3Q15 4Q14 4Q15 4Q15

Customer revenues in DNB Markets 628 508 549 121 80

Trading revenues in DNB Markets (excl. CVA/DVA) 782 474 94 308 688

Credit spread effects on bonds in DNB Markets (235) (582) (196) 347 (39)

Financial guarantees 187 228 232 (41) (45)

Basis swaps (4) 933 508 (937) (512)

CVA/DVA 367 (414) (489) 781 855

Other mark-to-market adjustments 439 798 (419) (359) 858

Net gains on financial instruments at fair value 2 164 1 945 279 219 1 885

Change

Changes in net interest income

21

From 4th quarter 2014 to 4th quarter 2015 NOK million

8 700

(88)

9 062 451

230 (41) (76)

(114)

4Q14 Exchange

rate

effects

Lending and

deposit

volumes

Other net

interest

income

Equity and

non-interest

bearing

items

Long-term

funding

Lending and

deposit

spreads

4Q15

From 4th quarter 2014 to 4th quarter 2015

Changes in net other operating income

22

NOK million

3 352

3 853

2 397 133 (84) (221) (232)

(980)

( 512)

4Q14 Net gains

on other

financial

instruments

Net financial and

risk result from

DNB Livsforsikring

Other

operating

income

Net realised

gains from

the sale of

loan portfolios

Net

commissions

and fees

Basis

swaps

Transfer of risk

equalisation fund

4Q15

DNB Livsforsikring – profit development and Solvency II

Solvency II margin

Per cent

86

113

171

192

3Q15 4Q15

Without transitional rules

With transitional rules

1)

1) At year-end 2015, provisions amounted to NOK 9.5 billion of the estimated total requried increase in

reserves of NOK 11.6 billion. Of the remaining required increase in reserves of NOK 2.1 billion, NOK 0.8

billion must be covered by the owner

Full year Full year

Amounts in NOK million 4Q15 4Q14 2015 2014

Upfront pricing of risk and guaranteed

rate of return 169 202 658 751

Return on corporate portfolio 117 99 548 707

Owner's share of administration result 133 84 347 224

Owner's share of risk result 147 215 518 520

Transferred from/(to) security reserve 19 3 (0) (18)

Owner's share of interest result 456 43 572 511

Pre-tax operating profit before provisions for

higher life expectancy 1 041 646 2 643 2 696

Provisions for higher life expectancy (440) (124) (820) (852)

Transfer of risk equalisation fund (980) - (980) -

Pre-tax operating profit (379) 522 843 1 844

Tax expense 730 65 692 (252)

Profit for the period 351 587 1 535 1 592

23

Full year Full year Change in

Amounts in NOK million 2015 Change 2014 per cent

Total adjusted operating expenses (21 068) (616) (20 452) (3.0)

Of which:

Exchange rate effects for units outside Norway (507)

Currency-adjusted operating expenses (20 560) (109) (20 452) (0.5)

Total adjusted operating expenses (21 068) (616) (20 452)

Income-related costs

Ordinary depreciation on operational leasing (81)

Expenses directly related to operations

Other costs 251

Properties and premises 177

Fees (77)

Pension expenses (187)

Salaries and other personnel expenses (191)

Exchange rate effects for units outside Norway (507)

Non-recurring effects 1 157 1 380 (223)

Restructuring costs, employees (390) (150) (239)

Other restructuring costs and non-recurring effects 1 781 1 695 86

IT restructuring (234) (164) (70)

Operating expenses (19 910) 764 (20 675) 3.7

Changes in operating expenses – full year

24

1) Primarily due to the transition from a defined-benefit pension scheme to a

defined-contribution pension scheme

1)

Net non-performing and net doubtful loans and

guarantees 1)

25

18.4 19.5 19.7

20.7

16.4 16.1 14.9

17.3

13.9 13.1 13.6 14.0

1.55 1.50 1.50

1.38

1.19

1.05 1.01 0.96

0.83 0.77 0.78 0.76

31 Dec 31 Dec 31 Dec 31 Dec 31 March 30 June 30 Sept. 31 Dec 31 March 30 June 30 Sept. 31 Dec

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.

Balance sheets

26

1) Excluding short-term money market deposits

31 Dec. 31 Dec. 31 Dec. 31 Dec.

Amounts in NOK billion 2015 2014 2015 2014

Deposits with central banks 19 59 16 54

Due from credit institutions 301 373 631 608

Loans to customers 1 543 1 439 706 723

Other assets 735 779 613 613

Total assets 2 599 2 649 1 965 1 998

Due to credit institutions 162 214 262 269

Deposits from customers 944 942 896 903

Short-term debt securities issued 160 207 160 207

Long-term debt securities issued 645 605 180 160

Other liabilities and provisions 498 523 315 332

Additional Tier 1 capital 8 8

Other equity 182 159 143 128

Total liabilities and equity 2 599 2 649 1 965 1 998

Ratio of deposits to net loans (%) 61.2 65.4 127.1 124.8

Adjusted ratio of deposits to net loans (%) 1) 60.5 63.5 125.5 121.0

Total combined assets 2 901 2 936 1 965 1 998

Currency-adjusted loans to customers 1 486 671

Currency-adjusted deposits from customers 904 859

DNB Group DNB Bank ASA

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) The calculations from end-June 2015 have been altered in accordance with the proposed new rules

3) Average weights used by Swedish banks on corporate loans and loans secured by real estate

Common equity Tier 1 capital ratio 1)

27

Leverage ratio 2)

Per cent

Estimate applying average weights

used by Swedish banks 2) 3) Per cent

Transitional rules Per cent

Future Basel III estimate 2) Per cent

12.7 12.7 13.0 13.1 14.4

31 Dec.

2014

31 March

2015

30 June

2015

30 Sept.

2015

31 Dec.

2015

15.1 14.6 15.2 15.4

16.2

31 Dec.

2014

31 March

2015

30 June

2015

30 Sept.

2015

31 Dec.

2015

6.0 5.7 5.8 5.7 6.7

31 Dec.

2014

31 March

2015

30 June

2015

30 Sept.

2015

31 Dec.

2015

18.3 18.8 19.8

20.3 21.7

31 Dec.

2014

31 March

2015

30 June

2015

30 Sept.

2015

31 Dec.

2015

Changes in the common equity Tier 1 capital ratio

28

Per cent

12.7

14.4

2.2

0.6

0.4 0.2 (0.3)

(0.7)

(0.7)

31 Dec. 2014 Profits for the

year prior

to dividend

Increased capital

efficiency

Other changes

in CET1

capital

Other effects Currency-

adjusted growth

Currency effect

on existing

portfolio

Dividend 31 Dec. 2015

From 31 Dec. 2014 to 31 Dec. 2015

Appendix

• DNB results cont.

• The Norwegian Economy

• Loan book and asset quality

Oil investments will stay high from a historical perspective Such fluctuations are not new

Source: Thomson Datastream, DNB Markets

Petroleum investments in Norway NOK billion, share of GDP in per cent

0

1

2

3

4

5

6

7

8

9

10

0

50

100

150

200

250

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Constant 2013 prices (lha) Share of Mainland-GDP (rha)

30

The sovereign wealth fund adds flexibility

31 Source: Ministry of Finance (National Budget 2016), DNB Markets, NBIM

Government Pension Fund Global Beginning of the year, NOK billion

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

2001 2004 2007 2010 2013 2016 2019

Oil income versus spending 2005 – 2016, NOK billion

0

100

200

300

400

500

600

2006 2008 2010 2012 2014 2016

Annual net petro cash flow

Annual return, GPFG

Annual actual "spending of oil-money"

Appendix

• DNB results cont.

• The Norwegian Economy

• Loan book and asset quality

33

Loan Book EAD by segments as at 31 December 2015 1)

Commercial real

estate

11%

Shipping

7% Logistics

1%

Oil, gas and offshore

7%

Energy

3%

Other corporate

customers

6%

Public sector

2%

Fishing and fish

farming

2% Trade

3% Manufacturing

5%

Telecom and media

2%

Services

2%

Residential

mortgages

42%

Private individuals

7%

1) Exposure at default by customer segments as defined in DNB’s management reporting including net non-performing and net

doubtful loans and guarantees.

Fragmented shipping market Dry bulk and container at cyclical lows, other segments higher in cycle

34

Dry bulk and container markets are

challenging – other earnings are satisfactory Clarkson index; rebased, average earnings

Dry bulk recovery postponed, at least to 2017

• Dry bulk outlook adjusted down again as

uncertainty increases. • Chinese demand is slowing down more than

expected while fleet growth will exceed

demand growth.

• Scrapping and lay-ups will increase. 14% of

cape fleet older than 15 years.

• Rates below operating cost and values have

fallen 20-30% since end October.

• Many bulk clients have diversified fleets.

• Container: Overcapacity gives record low freight

rates. Fleet growth slowing in 2016. Portfolio

focus on leading operators.

0

50

100

150

200

250

2008-jan 2009-jan 2010-jan 2011-jan 2012-jan 2013-jan 2014-jan 2015-jan

Tankers Bulkers

LPG Container

1,7

2,1

Large-caps, IG companies

Sub-investment grade

Seismic

LBOs challenged

LBOs less challenged

Other

26

21

OSV

Rig

FPSO/FSO

Subsea construction

Other

13,0

1,5

E&P large-caps and NOCs (IG)

E&P mid-caps (sub IG)

Reserve Based Lending

Exploration Financing Facilities

Midstream incl. LNG

Refining & petchem

Offshore EAD NOK 62.5 billion

Oilfield Services EAD NOK 36 billion

Oil & Gas EAD NOK 74 billion

DNB’s direct exposure to oil is manageable OSV and rig (2.4% of group EAD) are where we see the main challenges

35

IG: Investment grade, E&P: Exploration & Production, LBO: Leveraged Buyout, RBL: Reserve Based Lending, OSV: Offshore

Support Vessels,

NOCs: National Oil Companies, F(P)SO: Floating (Production,) Storage and Offloading vessels

Rigged for the downturn DNB’s clients relatively strong; preparing for challenging 2017

36

Day rates have fallen Average for deepwater rigs around USD 200k per day

• Deepwater rig utilization below 80%, expected

to fall below 70% in 2016.

• Many newbuilding cancellations/postponements

are positive to the balance.

• No improvement in overall market balance

expected until 2018. Need to see

• Oil price at higher level

• Results from oil co’s cost cutting

• Capacity (rigs) taken out

• 53 floaters older than 30 years

• DNB’s clients well equipped for 2016; a number

of restructurings required in 2017

E&P spending is falling; rig fleet is growing

OSV needs to restructure from 2016 Ongoing discussions to find balanced solutions

AHTS: Anchor Handling Tug Supply, PSV: Platform Supply Vessel

Source: Companies, DNB Markets, IHS Petrodata

OSV demand is falling towards 2010 level Historical and expected demand; number of ships 2000-2018e

• Reduced rig activity leads to reduced OSV

demand.

• Estimated utilisation 2016-18 around 60% for

AHTSs and below 50% for PSVs. Around 9-10%

of the fleet is lay-up.

• Weaker balance sheets and shorter contracts.

• Primarily leading operators with a long history

with DNB and a modern and flexible fleet.

• Most of our clients will encounter covenant

issues over next two years. Advanced discussions

and negotiations ongoing with clients facing

cash flow and financing issues in 2016.

• Individual differences with regard to war chests

and equity reserves.

Downturn hits earlier for OSV than for rigs

37

0

250

500

750

1 000

1 250

1 500

1 750

2000 2006 2012 2018e

AHTS PSV

38

DNB’s oil-related portfolio split by sub-segment By exposure (EaD) and risk grade

EaD: Exposure at Default, PD: Probability of default. Risk grade system, please see backup slide for details.

DNB's risk classification system, where 1 represents the lowest risk and 10 the highest risk. Figures from Fact book as at 31 Dec 2015.

Oil and Gas

Offshore Oilfield services

Total oil related segments

Oil-related portfolio 51 % is low risk, 38 % is medium risk and 9% is high risk

58

16

1 1

0

10

20

30

40

50

60

70

80

90

100 30 June 2014

30 Sept. 2014

31 Dec. 2014

31 March 2015

30 June 2015

30 Sept. 2015

31 Dec. 2015

Net non-performing

and net doubtful

commitments

NOK billion

PD 0.01% - PD 0.75% - PD 3.0% -

11

39

12

1

0

10

20

30

40

50

60

70

80

90

100 30 June 2014

30 Sept. 2014

31 Dec. 2014

31 March 2015

30 June 2015

30 Sept. 2015

31 Dec. 2015

Net non-performing

and net doubtful

commitments

NOK billion

PD 0.01% - PD 0.75% - PD 3.0% -

14

6 1 1

0

10

20

30

40

50

60

70

80

90

100 30 June 2014

30 Sept. 2014

31 Dec. 2014

31 March 2015

30 June 2015

30 Sept. 2015

31 Dec. 2015

Net non-performing

and net doubtful

commitments

NOK billion

PD 0.01% - PD 0.75% - PD 3.0% -

82

61

14

3

0

10

20

30

40

50

60

70

80

90

100 30 June 2014

30 Sept. 2014

31 Dec. 2014

31 March 2015

30 June 2015

30 Sept. 2015

31 Dec. 2015

Net non-performing

and net doubtful

commitments

NOK billion

PD 0.01% - PD 0.75% - PD 3.0% -

39

Q4 HERE FOR YOU.

EVERY DAY.

WHEN IT MATTERS

THE MOST.