DNB Group - Digital, Regulation and Macro Challenges Bjørn Erik Næss, CFO Morgan Stanley European Financials Conference London, March 26th

• DNB ambitions – deliver on financial promises

• DNB’s customers digital behaviour – impact for DNB

• DNB in a tough regulatory environment – DNB well

prepared for the future Basel 4

• DNB in a changing macro environment

2

AGENDA

> 12 per cent

Min. 14% CET1-ratio*

as capital plateau

> 50% dividend

when capital plateau is reached

Return on equity

Financial ambitions - 2016 and 2017

* Based on transitional rules 3

15.1

28.7

0.2 1.6

22.0 %

13.8 %

-20.0 %

-10.0 %

0.0 %

10.0 %

20.0 %

0

5

10

15

20

25

30

35

40

2007 2008 2009 2010 2011 2012 2013 2014

Pre-tax operating profit before impairment Impairment of loans and guarantees Return on equity

4

Pre-tax operating profit and ROE NOK billion

DNB delivers healthy profit growth

101,403

158,723

8.5

9.2 9.4

10.7

11.8

12.7

12.1

13.6

15.1

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

2009 2010 2011 2012 2013 2014

Equity

CET1-ratio transition rules

FL CET1-Basel 3/CRD IV

5 FL CET1-Basel 3/CRD IV = Best estimate for DNB’s future Fully loaded CET Basel 3 / CRD IV

Strong capital accumulation

CET1-ratio and Equity capital Per cent, NOK million

• DNB ambitions – deliver on financial promises

• DNB’s customers digital behaviour – impact for DNB

• DNB in a tough regulatory environment – DNB well

prepared for the future Basel 4

• DNB in a changing macro environment

6

AGENDA

7

Present in all channels

Bank i butikk – bank services in-store outlets

Mobile

Chat

In-store outlets

Internet banking

Branches (also open on Saturdays)

24h Telephone banking

Our customers prefer online banking

Digital 86%

Manual 14%

Savings agreements

Digital, 64%

Manual, 36%

Consumer loans

Digital, 50%

Manual, 50%

Car loans

Digital 11%

Manual 89%

Insurance

SMS, 25%

Internet bank, 30%

Branch office, 1%

Call Center, 2%

Mobile bank, 42%

Sales digital vs. traditional Share of customer traffic

8

9

100

39

Jan

2014

Feb

2014

Mar

2014

Apr

2014

May

2014

Jun

2014

Jul

2014

Aug

2014

Sep

2014

Oct

2014

Key takeaways Average number of manual transactions in

pilot branches (rebased)

Modernising the way we do banking - we expect 50-70 per cent reduction in manual transactions

• Fundamentally changing the way we

operate our branches:

o Eliminating manual cash-services

o Moving manual banking transactions to digital

channels

• Continued reduction in number of branches

Continuous efficiency improvements in distribution - number of branches reduced by more than 40% since 2007

244

137

2007 2008 2009 2010 2011 2012 2013 2014

10

• Optimising the balance between branches

and digital presence

• Customers are embracing digital banking

• Efficiency gains by reducing cost–to–serve

through use of digital channels

Key takeaways Development in number of DNB branches

in Norway

11

Increasing our cost/income ambition

40.0

45.0

50.0

55.0

60.0

65.0

70.0

75.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

European banks (top 50)* Nordic peer group DNB

Cost/income DNB vs peer groups Per cent

C/I ambition for 2017

~40% Combination of

top line growth and

cost focus

• DNB ambitions – deliver on financial promises

• DNB’s customers digital behaviour – impact for DNB

• DNB in a tough regulatory environment – DNB well

prepared for the future Basel 4

• DNB in a changing macro environment

12

AGENDA

4.5% 4.5% 4.5% 4.5%

2.5% 2.5% 2.5% 2.5%

2.0% 3.0% 3.0% 3.0%

1.0% 2.0%

1.0%

1.0% 11.8% 12.7%

13.6%

15.1%

2013 2014 2015 2016

CET1 Minimum Requirement Conservation Buffer Systemic Risk Buffer

SIFIs Countercyclical Buffer CET1-transition rules

Fully loaded CET1/CRD IV

13

DNB is well positioned for new capital requirements

9 %

10 %

13 %

12 % DNB’s

regulatory

CET1-ratio

14

DNB already well prepared for a tougher future regime

0%

20%

40%

60%

80%

100%

DNB Nordea SHB SEB Swedbank Danske

Corporate risk weights

RW PD/LGD Floors

0%

10%

20%

30%

40%

50%

DNB Nordea SHB SEB Swedbank Danske

Mortgage risk weights

RW LGD Floor 20% PD Floor 0.2% Pillar 2 requirement

DNB risk

weights –

transition

rules

???

Future risk

weights –

Basel 4 ? ???

Current

IRB

risk weights

15 * DNB’s risk weights are conservatively set due to requirements from the Norwegian FSA. Applying average risk weights

on mortgages and corporate portfolio as used by Swedish peers would increase DNB’s CET1 ratio.

15.1% 12.7 %

18.3 %*

11.7 %

15.1 %

10.1 %

16.3 %

10.4 %

15.7 %

10.6 %

21.2 %

8.7 %

20.4 %

DNB Danske Bank SEB Nordea Swedbank Handelsbanken

Common Equity Tier 1 ratio, transitional rules Common Equity Tier 1 ratio, Basel III

Strong capital position vs. peers

Capital adequacy figures as at 31 December 2014 – comparison with Nordic peers

Leverage

Basis

Risk

Weighted

Basis

6.0% 4.1% 4.8% 4.3% 4.5% 3.7%

42.3%

25.1% 23.3% 21.7% 19.5%

17.1%

DNB Group Danske Bank SEB Nordea Swedbank Handelsbanken

Leverage ratio RWAs (as % of total assets)

• DNB ambitions – deliver on financial promises

• DNB’s customers digital behaviour – impact for DNB

• DNB in a tough regulatory environment – DNB well

prepared for the future Basel 4

• DNB in a changing macro environment

16

AGENDA

17 Source: Statistics Norway/DNB Markets forecasts

2.5 2.5

3.5

4.3

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

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

Mainland GDP growth Unemployment rate

GDP growth and unemployment Year on year, per cent

Slower Economic Growth in Norway is Expected – Exports, private and public consumption will ensure a soft landing

18

Scenario: Lower oil price - What if oil price would stay at $50/bbl.?

2.5

0.6

4.3

5.2

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

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

Mainland GDP GDP $50/bbl-scenario Unemployment Unempl. $50/bbl-scen.

GDP growth and unemployment Year-on-year, per cent

Main assumptions and a downside $50/bbl.-scenario by DNB Markets

Sources: Statistics Norway, forecast and scenario by DNB Markets as of 29 Jan 2015

Fiscal policy

Large public wealth gives ample leeway to

smooth business cycles

19 Source: Thomson Datastream, DNB Markets

Two powerful tools to ensure a stable macro development

0

50

100

150

200

250

2001 2003 2005 2007 2009 2011 2013 2015e

Structural, non-oil deficit

4 per cent return on the fund capital

58

National budget structural, non-oil deficit 2015 prices, NOK billion

Monetary policy

Higher interest rates in Norway

than in the rest of Europe

0

1

2

3

4

5

6

7

2008 2010 2012 2014 2016 2018

ECB Sweden Norway

Central bank rates Per cent

2008 2010 2012 2014 2016e 2018e

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

31/1

2/2

013

31/3

/20

14

30/6

/20

14

30/9

/20

14

31/1

2/2

014

USD/NOK

20 * MTM: mark-to-market

Both income and capital ratios build up are sensitive to currency fluctuations

Currency

effects

NOK/USD

NOK/EUR + 15%

45 bps +

NOK/USD

NOK/EUR ÷ 15%

÷ 45 bps

Factors affecting the CET1 ratio 2016 effect, bps

+15%

+6%

The financial ambition of 12% ROE 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)

1) Normalised levels are around 20 bps of EaD (exposure at default), which corresponds to losses of approx. NOK 4 billion.

Impairment expected to stay below normalised levels 1) in 2015

21

Thank you

23

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.

DISCLAIMER

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS