Jeppe Christiansens indlæg

Asset Management

Capital Markets Day6 December 2001

2

Agenda

• Achievements in 2001

• Industry trends and outlook - Nordic region

• Strategy within Asset Management

• Objectives and targets

3

Danske Bank

BG Bank

Fokus Bank

Östgöta Enskilda Bank

Realkredit Danmark

DanicaPension

Danske Capital

Danske Invest

BG Invest

Firstnordic

Danske PrivateEquity

Danske Bank

Danske Markets

Retail Wholesale

RetailBanking

MortgageFinance

Life andPension

InvestmentManagement

WholesaleBanking

InvestmentBank

GroupGroup Services Services

Danske Bank

Danske Securities

Danske Bank - September 2001

Presentedfigures andachievementsbased on oldorganisationalstructure

4

Achievements in 2001… core earnings under pressure

Core Earnings Before Provisions

464

899763

44

Q1 - Q3 1999 Q1 - Q3 2000 Q1 - Q3 2001

(BGI Lux)

• Top line growth affected negatively by lower trading-income

• Substantial improvement in profitability compared to earlier years; apart from 2000 which was extraordinary

Core earnings Q1-Q3 Q1-Q3 Variance Index(mill.dkr.) 2001 2000 01-00 01/00Core income 1.442 1.546 (104) 93 Costs and depreciations 679 647 32 105 Core earnings 763 899 (136) 85

Cost/income ratio 0,47 0,42

Assets under management 516.000 552.000 (36.000) 93

5

Achievements in 2001… improved quality of top line

• 22%-increase in stock income. New business lines in Denmark and abroad explain the increase.

Assets under Management

362 355 358 370 353

189 185 175 171 162

Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001

Bn. DKK

Discretionary Mandates Custody

Core income Q1-Q3 Q1-Q3 Variance Index(mill.dkr.) 2001 2000 01-00 01/00Stock income 786 643 144 122 Flow income 656 813 (157) 81 Core income (excluding BGI Luxembourg) 1.442 1.456 (13) 99 BGI Luxembourg - 91 (91)

Core income 1.442 1.546 (104) 93 Explanations to increase in stock income

Danske Private Equity 31 Danske Capital Finland 21 Danske Capital Denmark 53 Other areas 39 Changes in stock income 144

6

Achievements in 2001 -… asset allocation affected by stock market crisis

Sept 00 Sept 01Assets Under Management 552 516

September 2000

283,3

134,9

78,2

18,136,8

September 2001

296,4

100,8

55,4

18,944,5

Fixed Income (domestic)Foreign EquitiesDomestic EquitiesCashFixed Income (foreign)

7

Achievements in 2001 -… retail customers still a substantial part of total AuM

Sept 00 Sept 01Assets Under Management 552 516

September 2001

143

142

89

73

68

Life InsuranceMutual FundsInvestment ServicesPrivate BankingInstitutional

September 2001

149

143107

87

65

8

Achievements in 2001 -… still positive net inflow on mutual funds

Net inflow 2000 - 2001 in Denmark

6,6

117,5

2,7 2,8

Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001

Bn. D

KK

• Net inflow still positive in spite of difficult market conditions

• Institutional customers generate a substantial part of net inflow in 2001

9

Achievements in 2001… very strong position in Denmark

Denmark

Sweden

Norway

Finland

.. challenges in the other Nordic countries

Market share - AuM end 2000

Mutual funds Institutional

40%

1%

2%

0%

11% (e)

-

1% (e)

7% (e)

Total

18% (e)

1% (e)

2% (e)

4% (e)

10

Achievements in 2001.. overall satisfying position on mutual funds

TotalOverall Ranking

1. Carnegie WorldWide

2. Uni-invest

2. Danske Invest

4. BankInvest

5. Sparinvest

15. Alm. Brand Invest

51

51

56

46

41

22

Points

Source: Investeringsdata/Børsens Nyhedsmagasin

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Achievements in 2001.. however still challenges on equity investment performance

Investment Performance

Danish equities

European Equities

Far East

Global Equities

Target - top quartile

Sharpe ratio3 years Ranking AuM

in bn. dkr.

0,32 3 of 16 4,1

0,08 5 of 17 2,2

0,20 9 of 20 0,5

0,38 7 of 9 0,4

• Further offensive initiatives on niches - IT, Health Care, Biotech, Baltic, East European equities and Private Equity

Source: Investeringsdata/Børsens Nyhedsmagasin

12

Achievements in 2001.. investment performance on bonds has been good

Investment Performance

Short-term Danish bonds

Other Danish bonds

Global bonds

Index-linked bonds

Target - top quartile

Return3 years Ranking AuM

in bn. dkr

16% 1 of 10 1,3

18% 1 of 14 8,1

8% 5 of 7 0,2

21% 3 of 7 0,4

• Further offensive initiatives on European credit bondsSource: Internal statistics

13

Achievements in 2001

We have increased quality in core

income and consolidated our strong competitive

position on the Nordic market

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Agenda

• Achievements and initiatives in 2001




15

Industry trends and outlook - Nordic region

Areas of importance

Market growth

Customer needsand preferences

Products and services

Distribution channels

Employees and management

Organisation

Trends and outlook Comments

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Areas of importance Trends and outlook

Market growth





Organisation

• Creation of wealth• Increased savings• Pension schemes

Comments

Still a growth market;however with lower growth rates

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Market growth




Organisation


Comments

Still a growth market;however, with lower growth rates

• Sophistication of demands from institutional and retail customers

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• Investment philosophy and processes

• Focus on ALM and asset allocation

• Performance (relative to benchmark) is a keycompetitive parameter

• Increasing services and reportingrequirements

• Less loyalty - also among small, institutionalclients

• 10-20% in alternative investments

Institutional Clients

Competence

Performance

Superior advisory services

Image

Client services and reporting

Essential success criteria

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• Branding of products and distributors

• Increasing demand for advisory services andconcepts

• A growing differentiation of services providedfor retail and VIP clients - partly by means ofe-solutions

• Focus on rating and absolute return

• Clients demand more options

Retail Clients

Image/brand

Client services and concepts

Rating and performance

Competence

Superior advisory services

Essential success criteria

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Market growth




Organisation


Comments



Quality and performance combined with unique “client focus” are key parameters

21




Market growth

Customer needs and preferences



Organisation


Comments



Quality and performance combined with unique “client focus” are key parameters

• More complexity in products and services• Increased number of investment alternatives

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Past FuturePresent

ALM-allocation

Assets

TacticalStrategic

Liabilities

Cash Cash

Bonds Bonds

Equity Equity

Private Equity

Cash

Bonds

Equity

Private Equity

Hedge Funds

23




Market growth




Organisation


Comments



Quality and performance combined with unique “client focus” are decisive parameters


Concepts and innovative products instead of traditional product focus

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Market growth




Organisation


Comments

Still a growth market;however, with lower growth rates





• Physical distribution combined with powerful e-solution

25



Employees andmanagement

Market growth




Organisation


Comments







• Top skilled employees seek high-profile asset management companies

Value-based management

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Organisation

Market growth






Comments







• Separation of production and distribution• Open architecture

• Top skilled employees seek high-profile asset management companies

Value-based management

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Summary

A more complex world, where the overall challenge will be to meet your customers

demands with adequate customised solutions….. provided by yourselves or by

somebody else

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Agenda





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Vision

Preferred Nordic Asset Manager

Client-driven and value creating organisation

supported by innovative concepts

and focused production

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Preferred Nordic Asset Manager… how do we use corporate values ?

Ø Client focus- accessibility

- integrity

Ø Innovative concepts- value creation

- commitment

Ø Focused production- expertise

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Ø Client focus- accessibility, integrity

• dedicated and personal

• customised advisory services

• comprehensive and consistent view

Ø Innovativeconcepts- value creation- commitment

Ø Focusedproduction- expertise

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Ø Client focus- accessibility- integrity

• investment concepts based on in-depth and thorough portfolio analysis

• presentation of consistent concepts

• value always visible to the client

Ø Innovative concepts- value creation- commitment

Ø Focusedproduction- expertise

• dedicated andpersonal


• comprehensiveand consistentview

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Ø Client focus- accessibility- integrity

• investment concepts based on in-depth and thorough

portfolio analysis

• presentation of consistent concepts

• value always visible to the client

Ø Innovativeconcepts- value creation- commitment

• dedicated andpersonal


• comprehensiveand consistentview

• in-house production only withinareas of competence

• never compromise on product quality

• “best practice”

Ø Innovative concepts- expertise

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Strategy within Danske Bank… new organisational structure distinguishes between P&D

Danske Invest

Danica Link

Danske Markets

External providers

Danske Securities

Retail Denmark

Retail Sweden

Retail Norway

Etc.

Production Distribution

Danske Capital

Distribution decideswhere to buy ..

35

Strategy within Danske Bank… new organisational structure reflects an open architecture

Internal Production

Firstnordic

Danske Private Equity

Danske Capital

Retail Denmark

Retail Sweden

Retail Norway

Etc.

Production Distribution

Danske Invest

External Production

End-CustomerInstitutional

End-CustomerRetail

HNWI/affluentCorporate

36

Strategy within Asset Management- future growth created by four-stringed strategy

Consolidate market share

• brand and top-class performance

• intensive support to distribution

• broad product range

• alternative distribution, (unit link)

Retail - mutual funds Institutional

Increase market share• intensive support to distribution

• broad product range

• top-class performance

Increase market share - Tier I+II

• top-class performance and investment processes

• customer focus and top-class reporting/communication

• innovative products (niche products)

Increase market share - Tier II• strong global and local position

• top-class performance

• niche competence

37

Strategy within Asset Management- mutual funds will still be a key driver

Reasons for mutual funds

Customer view-point

• Risk diversification

• Cost effective

Banking view-point

• Quality in earnings

Mutual funds in Scandinavia 1996-2001bill. Euro

0

20

40

60

80

100

120

140

160

180

1996 1997 1998 1999 2000 2001

Denmark Sweden Norway Finland

Source: Official market statistics

38

Strategy within Asset Management- further improvement in top-line quality through mutual funds

Flow income

Retail

• Underwriting commission

• Trading by the customer

Asset Management

• Portfolio management by the asset manager

Stock income

Fees on outstanding volume

Retail

Asset Management

• Sales fees on outstanding volume

• Advisory fee for portfolio management

39

Agenda





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Objectives And Targets… Asset Management value creation

Core Earnings 10-15% Annual Growth

År 1999 År 2000 År 2001 År 2004

• To consolidate our existing retail-market share in Denmark and create higher efficiency

41



År 1999 År 2000 År 2001 År 2004

• To consolidate our existing retail-market share in Denmark with higher efficiency

• To create a platform for further expansion, especially in Sweden; presumably by organic growth

42



År 1999 År 2000 År 2001 År 2004



• To deliver investment results in the Top-quartile

43



År 1999 År 2000 År 2001 År 2004



• To deliver investment results in the Top-quartile

• To implement an open architecture with top-class external providers of products outside our core competence's

Asset Management

Capital Markets Day6 December 2001

Documents

Jeppe Christiansens indlæg