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The full data:
Management's report
Financial statements
Financial highlights - Danske Bank Group
Executive summary
Financial review
Personal & Business Customers
Large Corporates & Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
3
4
6
14
16
19
21
23
25
Income statement
Statement of comprehensive income
Balance sheet
Statement of capital
Cash flow statement
Notes
Statements
Statement by the management
Definition of alternative performance
measures
27
Supplementary information
29
30
31
32
34
35
68
69
Financial highlights Danske Bank Group
Income statement
(DKK millions)
Net interest income
Net fee income*
Net trading income*
Net income from insurance business*
Other income
Total income
Operating expenses
of which resolution fund, bank tax etc.
of which impairment charges, other intangible assets
Profit before loan impairment charges
Loan impairment charges
Profit before tax, core
Profit before tax, Non-core
Profit before tax
Tax
Net profit
Attributable to additional tier 1 etc.
Balance sheet (end of period)
(DKK millions)
Due from credit institutions and central banks
Repo loans
Loans
Trading portfolio assets
Investment securities
Assets under insurance contracts
Total assets in Non-core
Other assets
Danske Bank / Interim report first quarter 2022 3/69
Q1
2021
Index
22/21
Q4
2021
Index
Q1/Q4
Full year
2021
Q1
2022
5,630
3,379
565
84
669
10,327
6,371
240
-
3,955
234
3,721
-14
3,707
862
5,450
3,402
1,266
491
195
10,805
6,273
160
-
4,531
497
4,034
20
4,054
914
2,845
3,139
81
115
282,777
259,145
336,606
276,908
1,843,815 1,827,873
652,541
302,638
532,470
1,913
141,952
616,570
306,538
591,837
2,078
150,193
103
99
45
17
-
96
102
150
-
87
47
92
-
91
94
91
70
5,551
3,824
1,015
512
174
11,076
6,789
164
36
4,286
-239
4,525
-25
4,500
846
101
88
56
16
-
93
94
146
-
92
-
82
56
82
102
22,049
13,525
4,126
2,088
797
42,584
25,663
687
36
16,921
348
16,573
-2
16,571
3,651
3,654
78
12,920
102
79
451
84
94
320,042
253,954
101 1,834,372
509,589
303,425
547,806
2,027
164,620
94
101
111
109
106
320,042
88
102
253,954
101 1,834,372
509,589
121
303,425
101
547,806
108
2,027
103
164,620
91
Total assets
4,052,954 4,072,903
100 3,935,834
103 3,935,834
Due to credit institutions and central banks
Repo deposits
Deposits
Bonds issued by Realkredit Danmark
Other issued bonds
Trading portfolio liabilities
Liabilities under insurance contracts
Total liabilities in Non-core
Other liabilities
Subordinated debt
Additional tier 1
Shareholders' equity
Total liabilities and equity
Ratios and key figures
Dividend per share (DKK)
Earnings per share (DKK)
Return on avg. shareholders' equity (% p.a.)
Net interest income as % p.a. of loans and deposits
Cost/income ratio (C/I), (%)
Total capital ratio (%)
Common equity tier 1 capital ratio (%)
Share price (end of period) (DKK)
Book value per share (DKK)
Full-time-equivalent staff (end of period)
108,268
235,731
111,284
250,403
1,176,842 1,229,654
771,138
358,195
419,881
574,696
2,538
146,355
38,253
8,615
161,890
738,609
320,386
477,005
625,953
2,547
151,184
38,917
5,736
171,776
101,786
97
94
193,391
96 1,167,638
770,661
96
355,757
89
374,958
114
588,736
109
100
2,529
164,354
103
39,321
102
67
5,497
171,207
106
101,786
106
122
193,391
101 1,167,638
770,661
355,757
374,958
588,736
2,529
164,354
39,321
5,497
171,207
96
90
127
106
101
92
99
104
100
4,052,954 4,072,903
100 3,935,834
103 3,935,834
-
3.2
6.4
0.75
61.7
21.7
17.6
112.6
202
21,854
-
3.5
7.5
0.72
58.1
23.4
18.1
118.7
190
21,978
2.0
4.2
8.4
0.74
61.3
22.4
17.7
113.0
201
21,754
99
2.0
14.6
7.6
0.73
60.3
22.4
17.7
113.0
201
21,754
100
*The financial highlights represent alternative performance measures that are non-IFRS measures. Note G3 provides an explanation of differences in the presentation between IFRS and the financial highlights. For
a description of the alternative performance measures used and definition of ratios, see Definition of Alternative Performance Measures on page 27.
Executive summary
The environment which we and our customers face is
changing rapidly. The changes are caused not only by
macroeconomic uncertainty and geopolitical turmoil but also
by the continuing effects of the COVID-19 pandemic,
including supply chain bottlenecks, changed social trends
and rising inflation, especially in relation to commodity and
energy prices. In this environment, we are confident that
Danske Bank as a well-capitalised financial institution with a
high level of expertise and a diversified, agile business model
is in a strong position to both adapt to the prevailing operating
environment and, more
to support our
customers in the challenging times that likely lie ahead.
importantly,
We are all deeply dismayed by the tragic events in Ukraine,
and we express our deepest compassion with everyone
affected by the Russian invasion. Danske Bank is following the
war in Ukraine closely, and our thoughts are with all those
carrying the human toll of the war. Our direct financial
exposure is very limited, and our main focus has therefore
been to engage closely with our customers to provide expert
advice and support. We have also increased the possibility
for all colleagues to use more of their work hours to do
voluntary work to support Ukraine through our corporate
volunteering programme. To support humanitarian efforts,
Danske Bank has donated to Save the Childrens (Red Barnet)
humanitarian aid programme for Ukraine.
As a bank and part of the global financial system, we play a
key role in enforcing the economic pressure on Russia, and
across the bank, we are implementing the sanctions imposed
by Denmark, the EU, the US and the UK and other relevant
sanctions in the markets where we operate. Danske Bank
has no physical presence in Russia, nor do we hold Russian
assets in our treasury portfolio. We will not acquire or invest
in such assets, and we exclude Russian government bonds
and Russian state-owned enterprises from our investment
portfolios and products. Furthermore, we will not
accommodate any trades in Russian securities that are not
already held in custody with us.
As the Nordic societies have reopened fully after the
lockdowns during the first quarter of 2022, we have seen the
negative impacts of the global pandemic decrease. While our
credit portfolio has remained strong, the pandemic has led to
lasting changes, and uncertainty persists, most recently in
the form of lockdowns in China, which could impact global
supply chains.
Following the reopening of societies, we have also seen solid
business credit demand relative to the same period last year.
Moreover, recalibration of global supply chains and potential
nearshoring of supply chains are expected to be positive
drivers for credit demand in the period to come. We are
committed to playing a key role in the upcoming repayment of
Danish government support packages expected to begin in
April and have launched a new and favourable loan product to
support business customers that wish to repay government
loans.
Danske Bank / Interim report first quarter 2022 4/69
As a strong financial institution, we are ready to partner up
with our customers, who have to navigate in an uncertain
operating environment. Combined with the key role we play in
the green transition, this means that our expert advisory
capabilities are in high demand. This further underpins the
importance of our strategic agenda, as the transformation to
become a better bank is crucial for us to continue to be able
to support customers and societies. During the first quarter
of 2022, we delivered structural progress towards our goals
to become a better bank. We can clearly see that our
execution across our key priorities
is progressing for
instance our focus on becoming a more simple bank and
rolling out new digital solutions to customers, all supporting
our positive commercial momentum.
Improving our personal customer business in Denmark
continues to be a top priority, and despite seasonality
quarter-over-quarter, we saw good activity in the first quarter
of 2022 in the home finance area, for instance high
remortgaging activity due to the rise in interest rate levels.
Our good progress within sustainability continued in the first
quarter of 2022. A large Swedish fund selector announced
that Danske Bank had won the award for Best Sustainable
Player a recognition that our hard work within sustainable
investing is yielding results. Large Corporates & Institutions
continued to be a top-ranked arranger of sustainable finance
with a leading position in Nordic sustainable bonds and
sustainability-linked loans league tables. Additionally, we
improved our green offering to personal customers as we
launched a new loan for home energy improvements that is
both cheaper and also helps customers respond to the rising
energy prices.
Financials
Danske Bank posted a net profit of DKK 2.8 billion for the first
quarter of 2022, against DKK 3.1 billion for the same period
in 2021, driven primarily by lower financial markets-related
income. The return on shareholders equity was 6.4%,
against 7.5% in the first quarter of 2021.
Our core banking activities continued to deliver commercial
progress in a changing operating environment with solid net
interest income and net fee income, while the net trading
income line was negatively affected by value adjustments in
the first quarter of 2022.
Net interest income was slightly higher despite fewer days in
the first quarter of 2022 than in the last quarter of 2021,
driven by volume growth and by the effect of our repricing
initiatives in Denmark for both personal and business
customers.
Capital markets and investment fees slowed during the first
quarter of 2022 from the record-high level in 2021, however,
total fee income in the first quarter proved resilient, helped by
a diversified business model and a continued increase in
activity-driven fees.
Danske Bank / Interim report first quarter 2022 5/69
Annual General Meeting and dividend
To ensure prudent capital management with a high degree
of flexibility in light of the Estonia matter, the general
meeting on 17 March 2022 adopted the proposal for an
initial dividend payment of DKK 2 per share that was paid out
in March. The remaining DKK 5.5 per share was intended to
be paid out in three tranches following the publication of the
interim reports in 2022, subject to a decision by the Board
of Directors.
Danske Bank is now in initial discussions with U.S. and
Danish authorities on resolution of the Estonia matter.
Consequently, the Board of Directors has decided that
Danske Bank will not pay out dividends in connection with
the announcement of the interim report for the first quarter
of 2022.
Danske Bank is not yet able to reliably estimate the
timing, form of resolution or amount of a potential
settlement or fines, which is likely to be material, and will
not comment on discussions with authorities.
Outlook for 2022
We expect net profit to be in the range of DKK 1315
billion, including
Bank
International and Danica Pension in Norway.
the gains
from MobilePay, Danske
We expect income from core banking activities to be
higher in 2022 due to good economic activity and progress
towards our 2023 financial ambitions.
from
income
Net
trading
activities are expected to be at a normalised level, subject
to financial market conditions.
insurance business and
We expect costs in 2022 to reflect our continued focus on
cost management and to be around DKK 25 billion due
to elevated remediation costs and the inclusion of the
Swedish bank tax and regulatory expenses of around DKK
0.4 billion. Loan impairments are expected to be below the
normalised level, given stable macroeconomic conditions
and our overall strong credit quality.
We maintain our ambition for a return on shareholders
equity of 8.5-9% in 2023.
The outlook is subject to uncertainty and depends on
economic conditions and does not include any effect from a
potential settlement of the Estonia matter in 2022.
Relative to the same period in 2021, net trading income in
the first quarter of 2022 was lower, adversely affected by
negative value adjustments and challenging market
conditions, however, customer activity held up well at both
Personal & Business Customers and Large Customers &
Institutions. Through the challenging market conditions, we
remained focused on supporting our customers in managing
their financial risks by providing advice and access to the
markets as spreads widened.
Net income from insurance business was significantly down,
with the decline caused by the volatility in the financial
markets that led to negative investment results on life
insurance products where Danica Pension has
the
investment risk as well as by a lower result of the health and
accident business.
Total expenses in the first quarter of 2022 were higher than
in the same period last year as our planned investments in
compliance and remediation continued, but also because of
the new Swedish bank tax. The underlying efficiency
continued to improve, driven by a decline in the number of
FTEs.
Credit quality continued to be strong as we reco gnised
impairments of DKK 0.2 billion in the first quarter of 2022,
less than in the same period last year, related mainly to
macroeconomic uncertainty. Post-model adjustments made
during 2020 to cover pandemic-related tail risks remain in
place, but a portion of the pandemic-related post-model
adjustments has been repurposed
to cover global
uncertainty.
The execution of our Better Bank 2023 plan continued to
proceed according to plan in the first quarter, and as
announced on 7 January 2022, we will increase our
commercial focus and accelerate the execution of our Better
Bank plan by dividing the current Personal & Business
Customers unit into two business units. This means that, no
later than May 2022, our commercial activities will be
organised in three business units headed by Berit Behring
(Large Customers &
Institutions), Christian Bornfeld
(Personal Customers) and Johanna Norberg (Business
Customers).
Capital and funding
Our total capital position was slightly lower at 21.7%
whereas our core capital position was almost in line with the
previous quarter with a CET1 capital ratio of 17.6%.
At the end of March 2022, the Group had
issued
covered bonds of DKK 7.1 billion, senior debt of DKK 0.6
billion and non-preferred senior debt of DKK 6.6 billion,
bringing total long-term wholesale funding to DKK 14.3
billion. In line with our capital planning, the Norwegian
counter-cyclical buffer will be raised to 2.5% effective from
31 March 2023. This is reflected in our fully phased-in
capital requirements, where the basis so far has been
2%, hence there is a modest additional Group impact of
around 0.06%.
Danske Bank / Interim report first quarter 2022 6/69
Loan impairment charges
Credit quality remained strong in the first quarter of 2022.
Loan impairment charges in core activities were at a lower
level in the first quarter than in the same period of 2021,
amounting to DKK 234 million (Q1 2021: DKK 497 million).
Impairments mainly reflected macroeconomic uncertainty
created by the war in Ukraine, resulting in increased
inflationary pressures and increased expectations of interest
rate hikes. On the other hand, COVID 19-related uncertainty
decreased as the new virus variants were found to be less
life-threatening and not leading to widespread lockdowns as
previously anticipated. While the macroeconomic landscape
remains uncertain, the Group observed a positive underlying
movement in the credit quality of individual customers
across the core portfolio.
A review of post-model adjustments resulted in a new post-
model adjustment of DKK 1.0 billion for Global tension to
address idiosyncratic risks in the portfolios stemming from
rapid price increases on commodities due to the war in
Ukraine. The changes in the quarter also led to a reduction in
the COVID-19-related share of post-model adjustments
associated with the property segment and process-related
risks spread across industry portfolios and retail customers.
Personal & Business Customers accounted for the main part
of the loan impairment charges in the first quarter of 2022,
which were made against individual customer exposures due
to the changes in macroeconomic scenarios to account for
higher inflation expectations and interest rate hikes. We
continue to see more normalised impairment levels than in
the same period in 2021, although on a quarterly basis,
impairments were up slightly due to macroeconomic
uncertainty.
At Large Corporates & Institutions, loan impairment charges
increased slightly in the first quarter of 2022 from the level
observed in the first quarter of 2021 owing to changes in
post-model adjustments and macroeconomic scenarios that
address the risks associated with the ongoing war in Ukraine.
The effects of the new macroeconomic scenarios were
driven primarily by changes in interest rates and reinforced
inflationary pressure as a result of rapid price increases on
commodities such as energy, metals and agricultural
produce. The scenario weights from the fourth quarter of
2021 were maintained in the first quarter of 2022 as
follows: The base-case scenario has a probability of 70%
(2021: 70%), the upside scenario has a probability of 10%
(2021: 10%), and the downside scenario has a probability of
20% (2021: 20%).
Financial review
First quarter 2022 vs first quarter 2021
Net profit decreased to DKK 2,845 million (Q1 2021:
DKK 3,139 million). Higher net interest income and other
income, combined with lower loan impairments charges
achieved on the basis of strong credit quality, could not
compensate for the effect of the market turmoil on net
trading income and net income from insurance business.
Income
Net interest income increased to DKK 5,630 million (Q1
2021: DKK 5,450 million). Net interest income saw a
positive impact from higher lending volumes and higher
deposit margins within Large Corporates & Institutions
combined with higher UK interest rates and related pricing
actions in Northern Ireland.
Net fee income decreased slightly to DKK 3,379 million (Q1
2021: DKK 3,402 million). We have seen good remortgaging
activity as a result of the rise in interest rate levels at
Personal & Business Customers, on the other hand, activity
in both debt and equity capital markets slowed down following
the escalation of the war
in Ukraine. Assets under
management increased slightly from the level in the first
quarter of 2021, which also had a positive impact on net fee
income.
Net trading income decreased to DKK 565 million (Q1 2021:
DKK 1,266 million). Customer-driven trading income held up
well, but the item was adversely affected by a negative value
adjustment of the derivatives portfolio (xVA) and challenging
market conditions.
Net income from insurance business amounted to DKK 84
million (Q1 2021: DKK 491 million). Net income from
insurance business was affected by
the negative
developments in the financial markets in the first quarter of
2022. The underlying business and the risk result improved
due to fewer claims and a reduction of technical provisions
as a result of the decline in claims.
Other income amounted to DKK 669 million (Q1 2021:
DKK 195 million). The increase was due partly to the sale of
our activities in Luxembourg, which generated a one-off gain
of DKK 421 million.
Operating expenses
Operating expenses amounted to DKK 6,371 million (Q1
2021: DKK 6,273 million). Underlying expenses continued to
progress according to plan, which helped to mitigate elevated
IT
remediation costs. The
expenses due to a one-off in relation to a new mainframe
agreement and higher costs for compliance and remediation.
Furthermore, the Resolution fund, bank tax etc.
item
increased DKK 80 million as a result of the Swedish bank tax
that came into force on 1 January 2022.
level mainly reflects higher
Loan impairment charges
Q1 2022
Q1 2021
(DKK millions)
Charges
% of net
credit
exposure1
% of net
credit
exposure1
Charges
Personal & Business
Customers
Large Corporates
& Institutions
Northern Ireland
Group Functions
Total core
110
0.03
435
0.11
88
19
17
234
0.12
0.13
1.76
0.05
69
-7
1
497
0.09
-0.06
0.12
0.10
1 Defined as net credit exposure from lending activities in core segments,
excluding exposures related to credit institutions and central banks and loan
commitments.
Lending and deposits
Lending amounted to DKK 1,843.8 billion, an increase of 1%
from the level at the end of 2021. At Personal & Business
Customers, an increase in lending at Personal Customers
Nordic was offset by a decrease in lending in Asset Finance
and at Personal Customers Denmark, as customers repaid
bank loans faster and switched to mortgage loans. The
increase in lending at Large Corporates & Institutions was
driven partly by higher volumes in Denmark and Sweden,
reflecting our strategic ambition to grow the number of core
customer relationships in Sweden. Outside General Banking,
bridge financing and underwrite-to-distribute activity in Loan
Capital Markets further contributed to the increase.
Mortgage lending at nominal value from Realkredit Danmark
increased 2% from the first quarter of 2021. Measured at
fair value, however, the high interest rate level drove the
volume down.
Deposits amounted to DKK 1,176.8 billion, up 1% from the
level at the end of 2021. Deposits continued to be affected by
low consumer spending, direct government support to
customers and business customers having secured backup
liquidity.
In Denmark, new gross
loans,
amounted to DKK 24.6 billion. Lending to personal
customers accounted for DKK 6.8 billion of this amount.
lending, excluding repo
Our market share of lending decreased in Denmark, Finland
and Norway. In Denmark, our market share of lending,
excluding repo loans, decreased to 24.7% at the end of
February 2022 (end-2021: 24.8%). In Sweden, our market
share of lending increased from the end-2021 level.
In Denmark, our market share of deposits decreased to
29.0% at the end of February 2022 (end-2021: 29.1%). In
Finland and Norway, our market share of deposits was on par
with the level at end-2021, whereas in Sweden, our market
share of deposits was lower than at the end of 2021.
Danske Bank / Interim report first quarter 2022 7/69
Q4 2021 vs Q3 2021
Q1 2022 vs Q4 2021
Net profit decreased to DKK 2,845 million (Q4 2021:
DKK 3,654 million), due mainly to lower income.
Net interest income increased to DKK 5,630 million
(Q4 2021: DKK 5,551 million). Lending volumes
increased during the first quarter, primarily at Large
Corporates & Institutions. Furthermore, the effect of
our repricing initiatives in Denmark for both personal
and business customers had a positive effect on net
interest income. The decrease in the number of interest
days had a negative impact on net interest income.
Net fee income amounted to DKK 3,379 million (Q4
2021: DKK 3,824 million), as activity on the capital
markets and investment activity slowed down following
the escalation of the war in Ukraine.
Net trading income decreased to DKK 565 million (Q4
2021: DKK 1,015 million), driven mainly by the
challenging market conditions
in rates markets
combined with a negative value adjustment of the
derivatives portfolio (xVA).
Net income from insurance business amounted to
DKK 84 million (Q4 2021: DKK 512 million) due to
lower results of the life insurance business and the
health and accident business. The underlying business
and risk result improved due to fewer claims and a
reduction of technical provisions as a result of the
decline in claims, but the investment result decreased.
Operating expenses amounted to DKK 6,371 million
(Q4 2021: DKK 6,789 million). The decrease was due
primarily to lower costs for premises, and the fourth
quarter of 2021 included higher costs for holiday pay
and for employee bonus pools and other bonuses due to
higher activity, combined with a provision of DKK 190
million for taxation of business travellers.
Loan impairment charges in the first quarter amounted
to DKK 234 million (Q4 2021: net reversal of DKK 239
million). This mainly
reflects macroeconomic
uncertainty associated with the war in Ukraine as well
as
inflationary pressures across the
markets. On the other hand, credit quality continued to
improve. Impairment reversals relating to individual
customer exposures subject to credit deterioration
amounted to DKK 422 million.
increasing
DKK 2,845 million
Net profit
for the first quarter of 2022
Credit exposure and credit quality
Credit exposure from lending activities in core segments
decreased to DKK 2,669 billion (end-2021: DKK 2,716
billion), as higher activity among personal customers in
Norway was more than offset by lower exposure to personal
customers in Denmark in particular, which was due to the net
negative effect of fair value adjustments combined with lower
deposits with central banks. Credit exposure directly related
to customers in or from Russia, Ukraine and the Baltic
countries is very limited.
Risk Management 2021, section 3, which is available at
danskebank.com/ir, provides details on Danske Banks credit
risks.
Credit quality
Credit quality remained strong in the first quarter of 2022,
supported by a positive rating trend. However, we remain
vigilant for any possible deterioration related to the above-
mentioned risk related to the war in Ukraine and global
tension.
Large Corporates & Institutions has actively reduced its net
oil-related exposure (excluding oil majors) by 55% since the
end of 2019.
Stage 3 loans in core segments
(DKK millions)
Gross exposure
Allowance account
Net exposure
Collateral (after haircut)
31 Mar.
2022
31 Dec.
2021
35,840
9,942
46,012
12,397
25,898
33,615
23,433
30,143
Stage 3 coverage ratio (%)
80
78
The stage 3 coverage ratio is calculated as allowance account stage 3
exposures relative to gross stage 3 exposure net of collateral (after
haircuts).
Total gross credit exposure in stage 3 was DKK 35.8 billion,
corresponding to 1.3% of total gross credit exposure. Stage
3 exposure was concentrated on personal customers,
shipping, oil and gas, commercial property and agriculture,
which combined accounted for 71% of total gross exposure
in stage 3. The development in stage 3 exposure since the
end of 2021 was impacted primarily by the technical
implementation of the new definition of default that is now
aligned with EBA requirements and write-offs.
Accumulated impairments decreased to 1.01% (end-2021:
1.15%) of lending and guarantees due to the lower allowance
account.
Danske Bank / Interim report first quarter 2022 8/69
Allowance account
by business units
(DKK millions)
Personal & Business
Customers
Large Corporates
& Institutions
Northern Ireland
Group Functions
31 Mar. 2022
Accum.
impairm.
charges
% of credit
exposure1
31 Dec. 2021
Accum.
impairm.
charges
% of credit
exposure1
15,359
0.99
15,840
1.01
3,607
763
34
1.06
1.33
1.18
5,227
850
17
1.84
1.44
0.36
Total
19,762
1.01
21,935
1.15
1 Defined as credit exposure from lending activities in core segments,
excluding exposures related to credit institutions and central banks as
well as loan commitments.
Capital ratios and requirements
At the end of March 2022, the Groups total capital ratio was
21.7%, and its CET1 capital ratio was 17.6%, against 22.4%
and 17.7%, respectively, at the end of 2021. The movement
in the capital ratios in the first quarter of 2022 was driven by
an increase in the capital deduction for Danica Pension and a
IFRS 9 add-back, which was partly
decline
counterbalanced by realised net profit and a decrease in the
total REA. The total capital ratio was further affected by the
redemption of additional tier 1 capital instruments of EUR
750 million in April 2022.
in the
During the first quarter of 2022, the total REA decreased
slightly, approximately DKK 4 billion. This movement was
attributable to a decrease in REA for credit risk, partially
countered by an increased REA for market risk.
Danske Banks capital management policies are based on the
Internal Capital Adequacy Assessment Process (ICAAP). In
this process, Danske Bank determines its solvency need
ratio. The solvency need ratio consists of the 8% minimum
capital requirement under Pillar I and an individual capital
add-on under Pillar II.
At the end of March 2022, the Groups solvency need ratio
was 11.4%, largely unchanged from the level at the end of
2021.
The solvency need still includes the DKK 10 billion required
under the orders issued by the Danish FSA in 2018 as a
consequence of the Estonia matter. The amount is covered
by common equity tier 1 (CET1) capital, as ordered by the
Danish FSA.
A combined buffer requirement (CBR) applies to financial
institutions in addition to the solvency need ratio. At the end
of March 2022, the Groups CBR was 5.6%.
Announced increases to the national countercyclical buffer
rates in Denmark, Norway and Sweden will increase the
Groups CBR by 1.7 percentage points. Consequently, the
fully phased-in countercyclical buffer requirement will be
1.8%, bringing the fully phased-in CET1 requirement to
14.2%. This is a 0.3 percentage points increase from the
Danske Bank / Interim report first quarter 2022 9/69
level at the end of 2021, which is largely driven by the
recently announced
the national buffer
increase of
requirement in Denmark from 2.0% to 2.5%, effective from
31 March 2023.
At the end of March 2022, the subordination requirement
was equivalent to DKK 221 billion. Subordinated MREL-
eligible liabilities stood at DKK 253 billion.
Capital ratios and requirements
(% of the total REA)
Capital ratios
CET 1 capital ratio
Total capital ratio
Capital requirements (incl. buffers)**
CET 1 requirement
- portion from countercyclical buffer
- portion from capital conservation buffer
- portion from SIFI buffer
Solvency need ratio
Total capital requirement
Excess capital
CET 1 capital
Total capital
31 March
2022
Fully
phased-in*
17.6
21.7
12.6
0.1
2.5
3.0
11.4
17.0
5.0
4.7
17.4
21.5
14.2
1.8
2.5
3.0
11.4
18.7
3.1
2.8
* Based on fully phased-in rules and requirements including the fully
phased-in impact of IFRS 9.
** The total capital requirement consists of the solvency need ratio and
the combined buffer requirement. The fully phased-in countercyclical
capital buffer is based on the buffer rates announced at the end of March
2022.
Note: The requirement and eligible funds are adjusted for Realkredit Dan-
marks capital and debt buffer requirements.
The calculation of the solvency need ratio and the combined
capital buffer requirement is described in more detail in
section 6 of Risk Management 2021, which is available at
www.danskebank.com/ir.
Leverage ratio
At the end of March 2022, the Groups leverage ratio was
4.7% under the transitional rules and 4.6% under the fully-
phased in rules.
Minimum requirement for own funds and eligible liabilities
On 20 December 2021, the Group received the Danish FSAs
annual decision, effective from 1 January 2022, on the
minimum requirement for own funds and eligible liabilities
(MREL) based on data from the fourth quarter of 2020.
The requirement is set at two times the solvency need and
one time the SIFI buffer and the capital conservation buffer
(CBR). Further, the CBR must be met in addition to the MREL.
At the end of March 2022, the point-in-time requirement
including the CBR was equivalent to DKK 253 billion, or
34.0% of the REA adjusted for Realkredit Danmark. The
backward-looking MREL at the end of March 2022, set by the
Danish FSA, was 29.6% of the REA adjusted for Realkredit
Danmark. Taking the deduction of capital and debt buffer
requirements for Realkredit Danmark into account, MREL
eligible liabilities amounted to DKK 288 billion.
The transition to the full MREL has been relatively shorter for
the Group than for its peers. In combination with a relatively
high Danish MREL, the Group has issued a significant amount
of non-preferred senior debt over the past couple of years.
The Danish FSA has set the subordination requirement as
the higher of 8% of total liabilities and own funds (TLOF) and
two the times the solvency need plus one time the CBR.
Capital targets
The CET1 capital ratio target was kept at above 16% in the
short term to ensure a sufficiently prudent buffer in relation
to the capital requirement. The total capital target was kept
at above 20%. Danske Bank fully meets these capital targets.
The Board of Directors will continue to adapt its capital
targets to regulatory developments in order to ensure a
strong capital position.
Capital distribution policy
To ensure prudent capital management with a high degree of
flexibility in light of the Estonia matter, the general meeting
on 17 March 2022 adopted the proposal for an initial
dividend payment of DKK 2 per share that was paid out in
March. The remaining DKK 5.5 per share was intended to
be paid out in three tranches following the publication
of the interim reports in 2022, subject to a decision by
the Board of Directors.
Danske Bank is now in initial discussions with U.S. and Danish
authorities on resolution of the Estonia matter. Consequently,
the Board of Directors has decided that Danske Bank will not
pay out dividends in connection with the announcement of
the interim report for the first quarter of 2022.
Danske Bank is not yet able to reliably estimate the
timing, form of resolution or amount of a potential
settlement or
Danske Bank / Interim report first quarter 2022 10/69
The Supervisory Diamond
The Danish FSA has identified a number of specific risk
indicators for banks and mortgage institutions and set
threshold values with which all Danish banks must comply.
The requirements are known as the Supervisory Diamond.
At the end of March 2022, Danske Bank was in compliance
with all threshold values. A separate report is available at
danskebank.com/ir.
Realkredit Danmark also complies with all threshold values.
New regulation
As part of the EU Banking Package 2021 and in order to im-
plement Basel IV, the European Commission adopted pro-
posals in October 2021 to amend, inter alia, Regulation (EU)
No 575/2013 (CRR) and Directive 2013/36/EU (CRD). The
proposals include some adjustments to the Basel IV stand-
ard, and the output floor is subject to a transitional arrange-
ment that means that the output floor must be fully imple-
mented by 1 January 2030.
In order to estimate any effects that the finally adopted regu-
lation and directive may have on the Group, the Group contin-
uously monitors the legislative negotiations and conducts im-
pact assessments. On the basis of the Groups current and
updated analysis of the EU Banking Package 2021, the
Groups current capital planning takes into account the ex-
pected REA impact of the initial implementation expected in
2025. The fully phased-in impact of the EU Banking Package
2021 on the Group depends on the final outcome of the EU
legislative process, including the calibration of the output
floor. Taking into account the proposed transitional arrange-
ments with regards to the output floor, the Group currently
expects the output floor to restrict the Group at the earliest
in 2033, when the transitional arrangements are set to
lapse.
The outcome of the EU legislative negotiations on the pro-
posals is uncertain and may result in further adjustments.
Environmental, Social and Governance (ESG) ratings
On 12 February 2022, ISS ESG downgraded Danske Bank to
C Prime from C+ Prime, as a result of an updating of its rating
criteria.
fines, which is likely to be material, and will not comment on
discussions with authorities.
Danske Banks general dividend policy remains unchanged,
and it is our ambition to pay out 40-60% of net profit for the
year.
Danske Bank has strong capital and liquidity positions, and
the Board of Directors remains committed to returning
excess capital to shareholders.
Funding and liquidity
At the beginning of the first quarter of 2022, market
attention continued to shift away from the impact of the
COVID-19 pandemic to inflation and central bank monetary
responses. As the crisis between Russia and Ukraine
escalated into war, the credit market deteriorated, although
it remained open at wider spreads.
At the end of March 2022, the Group had issued covered
bonds of DKK 7.1 billion, senior debt of DKK 0.6 billion and
non-preferred senior debt of DKK 6.6 billion, bringing total
long-term wholesale funding to DKK 14.3 billion. This ex-
cludes USD 2 billion in non-preferred senior debt issued in
April.
We plan for regular issues in the EUR benchmark format in
covered bonds, senior and non-preferred senior bonds as
well as issues in the domestic USD market for senior and
non-preferred senior bonds in the Rule 144A format. Our
strategy of securing more funding directly in our main lending
currencies, including the NOK and SEK, remains in place. The
benchmark issues are expected to be supplemented by pri-
vate placements of bonds.
From time to time, we will make issues in GBP, JPY, CHF and
other currencies when market conditions allow. Issuance
plans for subordinated debt in either the additional tier 1 or
tier 2 formats will depend on balance-sheet growth and re-
demptions on the one side and our capital targets on the
other. Any issuance of subordinated debt may cover part of
our funding need. Note G6 provides more information about
bond issues in 2022.
Danske Banks liquidity position remained robust. Stress
tests show that we have a sufficient liquidity buffer well be-
yond 12 months. At the end of March 2022, our liquidity cov-
erage ratio stood at 164% (31 December 2021: 164%),
with an LCR reserve of DKK 627 billion (31 December 2021:
DKK 687 billion).
The requirement for the net stable funding ratio forms an in-
tegral part of our funding planning, and we are already com-
fortably adhering to the requirement.
At 31 March 2022, the total nominal value of outstanding
long-term funding, excluding equity-accounted additional tier
1 capital and debt issued by Realkredit Danmark, was
DKK 369 billion (31 December 2021: DKK 381 billion).
Estonia matter
Investigation
On 28 April 2022 Danske Bank announced that it had en-
tered into initial discussions with US and Danish Authorities
on the resolution of the Estonia matter.
Danske Bank is not yet able to reliably estimate the timing,
form of resolution or amount of a potential settlement or
fines, which is likely to be material, and will not comment on
discussions with authorities.
Danske Bank continues to cooperate with various authorities
regarding the terminated non-resident portfolio at Danske
Banks former branch in Estonia. This includes criminal and
regulatory investigations by authorities in Estonia, Denmark,
France and the US.
Danske Bank reports to, responds to and cooperates with
various authorities, including the Danish Special Crime Unit
(SCU) (formerly the Danish State Prosecutor for Serious
Economic and International Crime), the U.S. Department of
Justice (DOJ) and the U.S. Securities and Exchange Commis-
sion (SEC), in relation to the Estonia matter.
The internal investigation work that was planned for comple-
tion in 2020 has been finalised, and Danske Bank has re-
ported the findings to the relevant authorities investigating
Danske Bank. We continue to fully cooperate and will provide
the authorities with further information if and when re-
quested.
Civil claims
Danske Bank is also subject to ongoing litigation in relation to
the Estonia matter. This includes, inter alia, an action against
Danske Bank and Danske Markets, Inc. (and other defend-
ants) in the United States District Court for the Eastern Dis-
trict of New York and a number of court cases initiated
against Danske Bank in Denmark. Danske Bank intends to de-
fend itself against the various claims. The timing of comple-
tion of any such lawsuits (pending or threatening) and their
outcome are uncertain and could be material.
Debt collection issue
In our efforts to become a better bank, we have in recent
years systematically improved compliance, risk and control
capabilities and processes and sought to foster a culture un-
der which potential issues are raised and addressed.
In connection with this work, several issues have been identi-
fied. These include the debt collection issues. At the end of
October 2021, we had reviewed all of the 197,000 customer
cases in our debt collection systems for which there is a risk
of overcollection as a result of the data errors originally iden-
tified. The review has shown that actual overcollection has
taken place for approximately 7,800 of these customers.
Danske Bank / Interim report first quarter 2022 11/69
As we have communicated on an ongoing basis, our investi-
gation of the data errors originally identified has also uncov-
ered a number of potential additional issues that we are still
investigating, which means that the number of customers
who are expected to be eligible for compensation is increas-
ing. Furthermore, we are now exploring new approaches in or-
der to accelerate the timeline in which we will be able to pro-
vide clarity for debt collection customers. We will continue to
update affected customers and other stakeholders on our
progress on the debt collection matter.
We welcome the continued impartial investigation, and will
continue the cooperation with the Danish FSA.
Market monitoring
In June 2020, the Danish FSA filed a criminal complaint
against Danske Bank A/S for violation of the Market Abuse
Regulation on account of inadequate market monitoring and
market manipulation in respect of self-matching trades, and
on 25 June 2021, Danske Bank was preliminarily charged
with this alleged violation. Danske Bank has a dialogue with
and cooperates with the SCU, but cannot comment further as
long as the SCU is investigating the case.
Private banking activities in Luxembourg
On 1 July 2021, we announced that Danske Bank had en-
tered into an agreement with Union Bancaire Privée, UBP SA,
on the sale of the business activities of Danske Bank Interna-
tional S.A. in Luxembourg. At the end of January 2022, the
sale was finalised, and the activities were successfully mi-
grated to UBP.
Changes to the Board of Directors
On 8 February 2022, it was announced that Karsten Dybvad
would not stand for re-election at the Annual General
Meeting.
On 1 March 2022, the result of the election of employee
representatives to the Board of Directors was announced,
and the following were elected to the Board for a four-year
term following the Annual General Meeting: Bente Bang (re-
elected), Kirsten Ebbe Brich
(re-elected), Aleksandras
Cicasovas and Louise Aggerstrøm Hansen.
On 17 March 2022, the Annual General Meeting elected
three new members to the Board of Directors: Jacob Dahl,
Allan Polack and Helle Valentin. The remaining members of
the Board of Directors were re-elected. Following the Annual
General Meeting, the Board elected Martin Blessing as
Chairman and Jan Thorsgaard Nielsen as Vice Chairman of
the Board of Directors.
The Board of Directors thus now consists of Martin Blessing
(Chairman), Jan Thorsgaard Nielsen (Vice Chairman), Lars-
Erik Brenøe, Jacob Dahl, Raija-Leena Hankonen-Nybom,
Bente Avnung Landsnes, Allan Polack, Carol Sergeant, Helle
Valentin, Bente Bang, Kirsten Ebbe Brich, Aleksandras
Cicasovas and Louise Aggerstrøm Hansen.
Danske Bank / Interim report first quarter 2022 12/69
New Head of Personal Customers Christian Bornfeld and
new Head of Business Customers Johanna Norberg will join
the Executive Leadership Team on 1 May 2022 and replace
Glenn Söderholm who will step down from the Executive
Leadership Team when the changes take effect. Berit Behring
will continue to head Large Corporates & Institutions.
The interim report for the first half of 2022 will reflect the
new structure, and comparative figures for 2021 will be re-
stated.
The table below shows the new business segments with ad-
justed Q1 2022 and full-year 2021 figures. The split between
the new business units Personal Customers and Business
Customers is disclosed with some uncertainty (5-10%), as
the new business unit structure has not yet been fully imple-
mented.
Changes to segment reporting in 2022
As the next step in our ongoing transformation, we an-
nounced in January 2022 a further fine-tuning of the organi-
sation that will take effect no later than May 2022.
We will divide the current Personal & Business Customers
unit into two business units, and going forward, our commer-
cial activities will thus be organised in three units, each focus-
ing on a customer segment: Personal Customers, Business
Customers and Large Corporates & Institutions:
The Personal Customers unit will serve our per-
sonal customers across all markets and will include
our Danica Pension and Realkredit Danmark sub-
sidiaries.
The Business Customers unit will serve our small
and medium-sized business customers across all
markets and will include our Asset Finance opera-
tions.
The Large Corporates & Institutions unit will serve
the largest Nordic corporate and institutional cus-
tomers. The unit will remain unchanged.
Adjusted Q1 2022 and full year 2021 figures for the new business units
(DKK millions)
Net interest income
Net fee income
Net trading income
Other income
Total income
Operating expenses
Profit before loan impairment charges
Loan impairment charges
Profit before tax
Cost/income ratio (%)
Loans, excluding reverse transactions
Deposits, excluding repo transactions
Full time equivalent staff end of period
Personal
Customers
Q1 2022
Business
Customers
Q1 2022
P&B
Customers
Q1 2022
Personal
Customers
FY 2021
Business
Customers
FY 2021
P&B
Customers
FY 2021
1,936
1,340
105
463
3,844
2,537
1,307
4
1,973
475
109
199
2,756
1,344
1,412
106
3,909
1,815
213
663
6,600
3,881
2,720
110
1,303
1,306
2,609
66.0
859,365
410,363
4,832
48.8
639,672
290,063
1,695
58.8
1,499,038
700,426
6,527
7,879
4,917
322
211
13,329
10,046
3,283
80
3,203
75.4
878,079
407,904
4,850
7,785
1,599
351
580
10,315
5,207
5,108
406
4,702
15,664
6,516
673
791
23,644
15,253
8,391
486
7,905
50.5
643,896
292,530
1,716
64.5
1,521,975
700,434
6,565
Danske Bank / Interim report first quarter 2022 13/69
Danske Bank / Interim report first quarter 2022 14/69
Personal & Business Customers
In the first quarter of 2022, Personal & Business Customers continued to see progress and commercial momentum with good
customer activity especially within mortgage finance in Denmark. Customer activity was also supported by the reopening of the
markets and societies in the Nordic countries following the discontinuation of COVID-19 restrictions. However, uncertainty
persisted in relation to the next phase of the COVID-19 pandemic, for instance new lockdowns in China that could impact global
supply chains. Moreover, the war in Ukraine has cast new uncertainty on the financial markets, while unprecedented sanctions put
businesses to the test and soaring fuel and food expenses reduce the purchasing power of households on average.
Profit before tax in the first quarter of 2022 was DKK 2,609 million, an improvement of 37% from the level in the same period in
2021, due primarily to a one-off gain from the sale of the customer portfolio in Luxembourg and lower loan impairment charges.
Personal & Business Customers
(DKK millions)
Net interest income
Net fee income
Net trading income
Other income
Total income
Operating expenses
of which resolution fund, bank tax etc.
Profit before loan impairment charges
Loan impairment charges
Profit before tax
Loans, excluding reverse transactions before impairments
Allowance account, loans
Deposits, excluding repo deposits
Covered bonds issued
Allocated capital (average)
Net interest income as % p.a. of loans and deposits
Profit before loan impairment charges as % p.a. of allocated capital
Profit before tax as % p.a. of allocated capital (avg.)
Cost/income ratio (%)
Full-time-equivalent staff
Assets under management
(DKK millions)
Assets under custody
Q1
2022
3,909
1,815
213
663
6,600
3,881
98
2,720
110
Q1
2021
Index
22/21
Q4
Index
2021 Q1/Q4
Full year
2021
3,879
1,750
150
196
5,975
3,638
69
2,337
435
101
104
142
-
110
107
142
116
25
3,909
1,711
177
177
5,974
4,420
73
1,554
31
100
106
120
-
110
88
134
175
-
15,664
6,516
673
791
23,644
15,253
290
8,391
486
2,609
1,903
137
1,522
171
7,906
13,459
700,426
1,512,496 1,529,183
13,925
696,439
1,008,506 1,046,385
73,009
71,788
0.71
15.2
14.5
58.8
6,527
0.71
12.8
10.4
60.9
6,853
99 1,536,121
14,146
97
700,434
101
96 1,040,484
73,006
98
-
-
-
-
95
0.71
8.5
8.3
74.0
6,565
98 1,536,121
14,146
95
700,434
100
97 1,040,484
73,861
98
-
-
-
-
99
0.71
11.4
10.7
64.5
6,565
655,718 601,757
109 713,745
92 713,745
Fact Book Q1 2022 provides financial highlights at customer type level for Personal & Business Customers. Fact Book Q1 2022 is available at
danskebank.com/ir.
Business initiatives and strategy
The reopening of the markets and societies in the Nordic
countries have had a positive effect on customer activity. Ac-
tivity increased both within transactional services and cur-
rency exchange related to travel activity, for example. How-
ever, with the war in Ukraine and the significant international
sanctions imposed on Russia, we see increased uncertainty
yet again. This is a difficult time for many of our customers
also on a deeply human level and we have provided infor-
mation and held webinars about the war in Ukraine in order
to help our customers understand the implications. More
than 1,000 customers have participated in the webinars, and
the feedback has been positive.
We continued to see good customer activity in Personal
Banking DK, especially in the home finance area where meet-
ing activity increased and there was good refinancing and re-
mortgaging activity, the latter not least due to the rise in in-
terest rate levels. In terms of nominal value, we saw an in-
crease in mortgage lending from Realkredit Danmark of 2%
from the first quarter of 2021. Measured at fair value, how-
ever, the high interest rate level drove the volume down.
The repayment of the Danish government COVID-19 support
loans is expected to begin in April, and in order to support our
small business customers, we launched a new and favoura-
ble loan product that allows customers to borrow at a cost up
to 50% less than the terms of the government instalment
agreement. Customer interest in this loan type has been
lower than expected, which to us signals that businesses in
Denmark are resilient even in turbulent times.
In mid-February, we launched a new feature in Danske Mobile
Banking, enabling our personal customers in Denmark to
conveniently open a Danske Konto account directly in the
Mobile Banking app. In the first quarter, almost 10,000 new
Danske Konto accounts were opened using the new function,
which corresponds to more than 30% of all new Danske
Konto accounts. The feature will be scaled to also cover our
Private Banking customers in Denmark.
First quarter 2022 vs first quarter 2021
Profit before tax amounted to DKK 2,609 million (Q1 2021:
DKK 1,903 million), due mainly to a one-off gain from the sale
of the customer portfolio in Luxembourg and a decrease in
loan impairment charges.
Net interest income increased slightly, driven by a repricing
of deposits, which was partly offset by continued margin pres-
sure on lending and a challenged interest rate environment
across the Nordic countries.
Net fee income stood at DKK 1,815 million, an increase of
4% (Q1 2021: DKK 1,750 million). This was driven by an in-
crease in service fees as well as good refinancing and remort-
gaging activity as a result of the rise in interest rate levels.
Net trading income increased to DKK 213 million (Q1 2021:
DKK 150 million), driven by foreign exchange activity.
Other income amounted to DKK 663 million (Q1 2021:
DKK 196 million). The increase was due primarily to a one-off
gain from the sale of the customer portfolio in Luxembourg.
Operating expenses increased 7%, as the changes to the al-
location of costs between the business units related to the
reorganisation at the beginning of 2021 were implemented
mainly at the end of 2021. Underlying, we continue to see a
decrease in transformation costs related to the implementa-
tion of the Better Bank plan.
In the first quarter of 2022, loan impairment charges
amounted to DKK 110 million (Q1 2021: DKK 435 million),
and impairments thus continued the trend from 2021, re-
turning to a more normalised level. The impairment charges
for the first quarter of 2022 were driven mainly by changes
in the macroeconomic outlook due to the ongoing war in
Ukraine as well as changes in overlays.
The number of full-time-equivalent staff has decreased 326
since the end of the first quarter of 2021.
Danske Bank / Interim report first quarter 2022 15/69
Q1 2022 vs Q4 2021
Profit before tax in the first quarter increased to DKK 2,609
million, driven primarily by lower operating expenses and a
one-off gain from the sale of the customer portfolio in
Luxembourg.
Net interest income was flat and stood at DKK 3,909
million (Q4 2021: DKK 3,909 million).
Net fee income
increased 6%, driven by higher
refinancing and remortgaging activity, the latter not
least as a result of a rise in interest rate levels.
Operating expenses declined 12% due to
lower
transformation costs related to the Better Bank plan,
but also because of the changes to the models for cost
allocation between the business units that were
implemented primarily in the fourth quarter of 2021.
The first quarter of 2022 saw loan impairment
charges of DKK 110 million (Q4 2021: DKK 31 million).
The increase in impairment charges was attributable to
changes in macroeconomic scenarios as well as to a
slight deterioration in credit quality.
Lending volumes decreased 2%, mainly as a result of
the sale of the customer portfolio in Luxembourg and
negative value adjustments of mortgage
in
Denmark.
loans
Deposit volumes decreased, due primarily to the sale of
the customer portfolio in Luxembourg.
DKK 2,609 million
Profit before tax
for the first quarter of 2022
Danske Bank / Interim report first quarter 2022 16/69
Large Corporates & Institutions
The war in Ukraine, combined with the beginning of global monetary tightening, has led to a challenging operating environment for
our customers. Danske Bank is wellcapitalised, and we stand ready to support our customers with liquidity, credit, advisory
services and risk management. Lending increased, although so far, we have not seen as high demand for extra liquidity as we did
during the corona crisis, but we have an ongoing dialogue with our customers on how best to support them. Danske Bank has no
physical presence in Russia following our exit in 2019, and we have decided to exclude Russian government bonds and Russian
state-owned enterprises from our investment portfolios and products. Furthermore, we will not accommodate any trades in Russian
securities that are not already held in custody with us. As a leading Nordic wholesale bank, we also play an important role in ensuring
that the sanctions against Russia are applied in a timely and expedient manner.
Profit before tax in the first three months of 2022 was DKK 1,703 million, a decline from the same period last year due to lower
trading income amid challenging rates and credit markets.
Large Corporates & Institutions
(DKK millions)
Net interest income
Net fee income
Net trading income
Other income
Total income
Operating expenses
of which resolution fund, bank tax etc.
Profit before loan impairment charges
Loan impairment charges
Profit before tax
Loans, excluding reverse trans. before impairments
of which loans in General Banking
Allowance account, loans (incl. credit institutions)
Deposits, excluding repo deposits
of which deposits in General Banking
Covered bonds issued
Allocated capital (average)
Net interest income as % p.a. of loans and deposits
Profit before loan impairment charges as % p.a. of allocated capital
Profit before tax as % p.a. of allocated capital (avg.)
Cost/income ratio (%)
Full-time-equivalent staff
Total income
(DKK millions)
General Banking
Markets
of which xVA*
Asset Management
of which performance fees
Investment Banking & Securities (IBS)
Total income
Q1
Index
2021 22/21
Q4
Index
2021 Q1/Q4
Full year
2021
Q1
2022
1,284
1,514
737
1
3,535
1,744
116
1,791
88
1,216
1,599
1,102
1
3,918
1,851
75
2,067
69
106
95
67
100
90
94
155
87
128
1,179
2,057
720
3
3,959
1,463
84
2,495
-243
1,703
1,998
85
2,738
291,266
243,461
2,562
381,753
333,948
25,424
40,906
0.79
17.5
16.7
49.3
2,226
259,102
233,641
3,989
448,560
407,243
21,663
44,565
0.71
18.6
17.9
47.2
2,506
1,625
891
-130
577
20
442
1,564
1,190
94
554
24
610
112
104
64
85
82
117
92
-
-
-
-
89
104
75
-
104
83
72
264,824
232,890
4,363
383,547
340,477
26,055
41,915
0.76
23.8
26.1
37.0
2,684
1,555
1,005
50
912
305
487
109
74
102
33
89
119
138
72
-
62
110
105
59
100
98
98
98
-
-
-
-
83
105
89
-
63
7
91
4,732
6,777
3,137
5
14,650
7,025
360
7,625
-13
7,638
264,824
232,890
4,363
383,547
340,477
26,055
43,591
0.73
17.5
17.5
48.0
2,684
6,203
3,909
104
2,653
385
1,886
3,535
3,918
90
3,959
89
14,650
*The xVA acronym covers Credit (CVA), Debit (DVA), Funding (FVA) and Collateral (ColVA) Valuation Adjustments to the fair value of the derivatives portfolio.
Danske Bank has a centralised xVA desk responsible for quantifying, managing and hedging xVA risks. The PnL result of the xVA desk is thus the combined
effect of the net xVA position, and funding and collateral costs of the trading book.
Assets under management
(DKK millions)
Institutional clients
Retail clients
469,299
301,546
477,037
294,909
98
102
487,560
325,025
96
93
487,560
325,025
Total assets under management1
770,846 771,946
100 812,585
95 812,585
1 Includes assets under management from Group entities.
Strategy and business initiatives
The Russian attack on Ukraine has triggered the biggest
geopolitical crisis in Europe since the Second World War.
Commodity prices have soared from elevated levels and
added to the inflationary pressure visible already last year.
This has reawakened fears of stagflation, or even a global
recession, as central banks are beginning to tighten
monetary policy amid a challenging outlook with increasing
price pressure and the risk of lower economic growth.
Combined with renewed supply chain bottlenecks, the
operating environment has become more challenging, and
more uncertain, for our customers.
As a result, customer demand for products to hedge risk
increased in the first quarter as illustrated by increasing
volumes within foreign exchange. While we continue the work
to become more efficient in how we allocate capital, Large
Corporates & Institutions remains a leading risk facilitator in
the Nordic financial market with the capacity to support our
customers also during periods of elevated market volatility
as witnessed during the first quarter in the money markets
and fixed income markets in particular.
The volatile financial markets also impacted demand for
capital markets advisory services, with primary markets
activity coming to a near halt during the first quarter. Activity
slowed within Equity Capital Markets (ECM) especially, in
which 2021 was a record year in the Nordic countries, with
transactions being postponed. Advisory services within
Mergers & Acquisitions (M&A) are less sensitive to the
current situation, and we continued to see good momentum.
Activity in the primary Debt Capital Markets (DCM) was also
impacted by the challenging market conditions, and while the
sustainable finance market continues to grow rapidly,
primary issuance did slow during the first quarter. Activity
began to pick up towards the end of March, and we are proud
to have assisted Kommuninvest in Sweden in entering the
EUR market with their inaugural EUR 500 million Green Bond
benchmark bond.
Within sustainable investments, we continued to expand and
strengthen our offering, which is translating into new tailor-
made sustainability-related mandates from our customers,
and we are proud to have won the award for Best
Sustainable Player by the large Swedish fund selector
Söderberg & Partners. Our Responsible
Investment
Committee decided in February, after careful consideration
and a thorough analysis of sustainability factors, to exclude
Russia and Russian state-owned enterprises from our
investment portfolios and products. This decision
is
implemented and executed in a way and at a pace that is
consistent with our fiduciary duty and will among other
things be subject to client contracts and mandates, fund
boards and other formal approvals as well as the ability to
transact in the market.
Danske Bank / Interim report first quarter 2022 17/69
First quarter 2022 vs first quarter 2021
Profit before tax declined to DKK 1,703 million (Q1 2021:
DKK 1,998 million) as a result of lower net trading income.
Net interest income increased to DKK 1,284 million (Q1
2021: DKK 1,216 million) due to higher lending volumes,
higher activity-driven net interest income and higher deposit
margins, which more than offset the lower deposit volumes.
Lending volumes in General Banking increased 4% from the
level at the end of the first quarter of 2021, as the positive
momentum from the second half of last year continued and
the challenging environment contributed to higher demand.
For example, we supported term loans to customers as the
corporate bond market became less attractive. Some of
these will likely be repaid if market conditions improve.
Lending growth was driven especially by higher volumes in
Denmark and Sweden also reflecting our strategic ambition
to grow the number of core customer relationships in
Sweden. Outside General Banking, bridge financing and
underwrite-to-distribute activity within Loan Capital Markets
further contributed to the positive trend in lending.
Net fee income declined to DKK 1,514 million (Q1 2021:
DKK 1,599 million), as fee income from capital markets
activities was very high in the first quarter of 2021. Income
in Asset Management increased despite a reduction in
assets under management from the end-of-year level. Net
sales in the retail segment were lower than in previous
quarters, albeit still positive, and institutional net sales were
also positive in the first quarter. Net fee income from
everyday banking products, such as FX and cash
management, sustained the positive trend seen in recent
quarters.
Net trading income declined 33% to DKK 737 million (Q1
2021: DKK 1,102 million), due mainly to a negative valuation
adjustment of the derivatives portfolio (xVA) but also to lower
income from market-making activities within Rates & Credit.
Operating expenses decreased DKK 107 million, mainly as a
result of the changes to the allocation of costs between the
business units implemented in the fourth quarter of 2021
lower performance-based
but also as a result of
compensation. The Resolution fund, bank tax etc. item
increased DKK 41 million as a result of the Swedish bank tax
that came into force on 1 January 2022.
The number of full-time equivalent staff decreased, as the 1st
line Financial Crime Risk unit was moved from Large
Corporates & Institutions to the new Chief Administration
Officer (CAO) area at Group Functions.
Overall credit quality remained strong in the first quarter,
amid a generally positive rating trend. Loan impairments in
the first quarter of 2022 amounted to a charge of DKK 88
million, a small increase from the first quarter of 2021
(DKK 69 million). In 2021, the impact of the corona crisis on
the portfolio was limited, and this impact has decreased
further
in 2022, whereas the macroeconomic outlook
following the outbreak of war in Ukraine is contributing to a
higher level of impairment charges.
Danske Bank / Interim report first quarter 2022 18/69
Q1 2022 vs Q4 2021
Profit before tax declined to DKK 1,703 million (Q4 2021:
DKK 2,738 million) as a result of lower income, higher costs
and higher loan impairments.
Net interest income increased to DKK 1,284 million (Q4
2021: DKK 1,179 million), due mainly to higher activity-
driven net interest income from, for example, Loan Capital
Markets and Markets.
Net fee income amounted to DKK 1,514 million (Q4
2021: DKK 2,057 million), a decline from the high level in
the fourth quarter, which was positively impacted by
performance fees in Asset Management.
Net trading income increased slightly to DKK 737 million
(Q4 2021: DKK 720 million) as a result of higher
underlying trading income amid volatile markets in both
quarters.
Operating expenses increased as a result of the changes
to the allocation of costs between the business units
implemented in the fourth quarter, but the effect of this
was partly offset by
lower performance-based
compensation. Further, the Resolution fund, bank tax etc.
item also increased as the Swedish bank tax came into
force on 1 January 2022.
in post-model adjustments
Loan impairment charges amounted to DKK 88 million
(Q4 2021: a reversal of DKK 243 million). Loan
impairments in the first quarter were due mainly to
to
changes
impairments against sectors sensitive to the rapid
increases in the prices of commodities as a result of the
war in Ukraine, as well as changes to macroeconomic
scenarios that consider more general increases in
inflation and interest rates.
relating
DKK 1,703 million
Profit before tax
for the first quarter of 2022
Danske Bank / Interim report first quarter 2022 19/69
Danica Pension
Due to the turmoil in the financial markets, the result for the first quarter of 2022 was DKK 84 million, driven by negative investment
results on life insurance products where Danica Pension has the investment risk as well as by a lower result of the health and
accident business. The underlying business is still healthy, and the health and accident business continued to see a decline in claims.
Danica Pension
(DKK millions)
Result, life insurance
Result, health and accident insurance
Return on investments, shareholders' equity etc.
Net income before tax in Danica Pension1
Included within Group Treasury2
Net income from insurance business
Premiums, insurance contracts
Premiums, investment contracts
Provisions, insurance contracts
Provisions, investment contracts
Allocated capital (average)
Net income as % p.a. of allocated capital
Solvency coverage ratio
Full-time-equivalent staff
Asset under management
Life insurance
Health and accident insurance
Total1
1Figures are for the Danica Group.
Q1
2021
Index
22/21
Q4
2021
Index
Q1/Q4
Full year
2021
Q1
2022
496
-385
-111
-
84
84
784
-290
-
494
-3
491
10,102
947
8,599
649
427,100
20,130
427,885
32,317
63
133
-
-
-
17
117
146
100
62
780
-236
5
549
-37
512
10,416
1,936
449,344
20,847
64
163
-
-
-
16
97
49
95
97
2,642
-438
-20
2,184
-96
2,088
37,617
5,563
449,344
20,847
19,701
13,834
142
12,317
160
12,918
1.7
202
954
14.2
202
821
-
-
116
16.6
210
960
-
-
99
16.2
210
960
426,691
17,297
449,037
16,483
95
105
462,930
17,449
92
99
462,930
17,449
443,987 465,520
95 480,379
92 480,379
2 Includes the difference between the actual return on the investment of shareholders equity (net of interest on subordinated debt) and the sum of interest on allocated capital and allocated capital
costs. Special allotments are also included (page 155 of Annual Report 2021 provides further information).
Business initiatives and strategy
Geopolitical turmoil and declining global markets had a nega-
tive impact on the returns many of our customers got in the
first quarter of 2022, and assets under management de-
creased 8% as a result of the negative trends in the financial
markets.
Danica Pension saw growth in premiums of 19% from the
level in the same period last year, reflecting a strong position
in the market and the fact that more business customers
have chosen Danica Pension. The strong position is due to a
very attractive value proposition based on solid long-term in-
vestment returns, a strong advisory services platform, a
leading portfolio of health solutions and a focus on sustaina-
ble investments.
The new health package launched in 2021 continues to be
popular with customers, and we see an increase in the use of
the solution, which provides customers with quick and easy
access to online doctors, psychologists and dieticians. The
number of consultations surpassed 20,000 in the first quar-
ter, and customer satisfaction was at a high level.
It is Danica Pensions ambition that the early involvement of
health personnel will reduce long-term illness and ultimately
have a positive effect on our health and accident results.
In this regard, the increase in preventive care as well as on-
going efforts to refine the preventive efforts in our health in-
surance system have resulted in a much improved position
for Danica Pension in relation to cover for loss of earning ca-
pacity, as we have seen a decrease in new cases.
To help achieve its goals for responsible investments, Danica
Pension has announced a new initiative in which it aims to
submit its own proposals at the general meetings of the com-
panies it invests in. Through this initiative, Danica Pension will
take a leading role in helping to encourage these companies
to adopt more sustainable business models.
First quarter 2022 vs first quarter 2021
Danica Pension was affected by the negative developments
in the financial markets in the first quarter of 2022. The
underlying business is still healthy, and in the first quarter of
2022, we saw a decline in claims in the health and accident
business.
Net income from insurance business decreased to DKK 84
million (Q1 2021: DKK 491 million), due primarily to the neg-
ative developments in the financial markets.
The result of the life insurance business decreased to
DKK 496 million (Q1 2021: DKK 784 million), driven by neg-
ative investment results on life insurance products where
Danica Pension has the investment risk.
The result of the health and accident business declined to a
loss of DKK 385 million (Q1 2021: a loss of DKK 290 million).
The underlying business and the risk result improved due to
fewer claims and a reduction of technical provisions as a
result of the decline in claims, but the investment result
decreased considerably from the level in the first quarter of
2021, which included a provision for pension yield tax of
DKK 200 million
The return on investments allocated to shareholders equity
etc. decreased DKK 111 million from the level in the first
quarter of 2021, mainly because of lower investment results
on investment assets and liabilities allocated to sharehold-
ers equity.
Total premiums increased 19%, driven mainly by an increase
in single premiums due to an inflow of new business custom-
ers.
Assets under management decreased DKK 22 billion, driven
by a reclassification of assets under management regarding
Danica Norway to assets held for sale.
Danske Bank / Interim report first quarter 2022 20/69
Q1 2022 vs Q4 2021
Net income from insurance business decreased to DKK 84
million (Q4 2021: DKK 512 million) due to lower results of
the life insurance business and the health and accident
business.
The result of the life insurance business decreased 36%
due to negative investment results on life insurance
products where Danica Pension has the investment risk.
The result of the health and accident business declined
in the first quarter of 2022. The underlying business and
risk result improved due to fewer claims and a reduction
of technical provisions as a result of the decline in claims
but the investment result decreased.
The return on investments allocated to shareholders
equity etc. decreased to a loss of DKK 111 million due to
lower returns on assets allocated to shareholders equity.
Total premiums decreased 11%, mainly because of a
decrease in single premiums from investment contracts.
Assets under management decreased DKK 36 billion,
due mainly to the negative developments in the financial
markets.
DKK 84 million
Net income from
insurance business
for the first quarter of 2022
Danske Bank / Interim report first quarter 2022 21/69
Northern Ireland
In the first quarter of 2022, the economic recovery in Northern Ireland continued as disruption from the pandemic eased. Net
interest income and net fee income improved year-on-year, though profitability fell in the first three months of 2022, driven by
trading income volatility.
Northern Ireland
(DKK millions)
Net interest income
Net fee income
Net trading income
Other income
Total income
Operating expenses
Profit before loan impairment charges
Loan impairment charges
Profit before tax
Loans, excluding reverse transactions before impairments
Allowance account, loans
Deposits, excluding repo deposits
Allocated capital (average)*
Net interest income as % p.a. of loans and deposits
Profit before tax as % p.a. of allocated capital (avg.)
Cost/income ratio (%)
Full-time-equivalent staff
* Allocated capital equals the legal entitys capital.
Business initiatives and strategy
UK central bank interest rates rose during the quarter from
0.25% to 0.75% in response to inflationary pressures, sup-
porting increased net interest income. Increasing market ex-
pectations of further interest rate increases had a negative
impact on trading income in the quarter, which primarily re-
flects mark-to-market movements on the banks hedging
portfolio. These movements will reverse over the life of the
portfolio.
Our strategic focus in Northern Ireland is to remain a stable,
strong and risk-astute bank, consolidating our leading posi-
tion in the Northern Ireland market alongside prudent and se-
lected low-cost growth opportunities in the rest of the UK.
Our ambition is to deliver a strong future for the bank as a
more efficient, geographically diverse and digitally orientated
business, achieving sustainable and responsible growth.
As we look to maintain our position as the leading bank in
Northern Ireland, small business lending remained strong in
the first quarter of 2022, with an improving pipeline in mort-
gages. Lending to larger businesses remained subdued, as
many customers in this segment continue to carry excess li-
quidity.
As a challenger in England, we launched mortgage lending
through brokers in southern England during the first quarter
and were active in the social housing market in England.
Q1
2022
Q1
2021
Index
22/21
Q4
2021
Index
Q1/Q4
Full year
2021
379
76
-143
3
315
308
7
19
-12
331
60
-20
3
374
275
99
-7
106
56,234
724
99,094
6,106
0.96
-0.8
97.8
1,257
56,743
964
92,432
6,516
0.91
6.5
73.5
1,345
115
127
-
100
84
112
7
-
-
99
75
107
94
93
346
87
-53
2
382
380
2
-31
33
55,848
802
98,980
6,682
0.87
2.0
99.5
1,268
110
87
270
150
82
81
-
-
-
101
90
100
91
99
1,341
288
-66
12
1,576
1,317
259
-127
386
55,848
802
98,980
6,713
0.87
5.8
83.6
1,268
We continued to build on our digital proposition, focusing in
the first quarter of 2022 on improving self-service function-
ality and process automation.
We also remain focused on supporting the climate change
agenda. We have the largest team of corporate and business
banking relationship managers in Northern Ireland, and in the
first quarter of 2022, they all completed carbon literacy
training accredited by the Carbon Literacy project. This up-
skilling complements our work to help business customers
become more carbon literate through the Climate Action
Programme we co-developed with Business in the Commu-
nity. We have committed to supporting 60 local businesses
through this programme by the end of the year.
In a further development, we launched a Danske Bank home
energy saving tool on our website in partnership with the En-
ergy Saving Trust, which allows homeowners to create a tai-
lored action plan for improving the energy efficiency of their
home to date, this tool has been accessed by around 1,000
people.
We are also working hard on colleague experience, and are
benchmarking ourselves through the UK Best Companies
Survey and Index. In the first quarter of 2022, we entered the
Top100 national ranking for the first time (at number 39), the
second-highest ranked company from Northern Ireland and
the fourth best financial services sector company across the
whole of the UK.
First quarter 2022 vs first quarter 2021
Profit before tax decreased to a loss of DKK 12 million (Q1
2021: DKK 106 million), with improved net interest income
and net fee income offset by net trading income and in-
creased costs related to the new cost allocation model.
While balance sheet growth remained subdued, lending ac-
tivity began to improve, with net interest income increasing
15% to DKK 379 million (Q1 2021: DKK 331 million), driven
by higher UK interest rates and related pricing actions.
Net fee income grew 27% to DKK 76 million (Q1 2021:
DKK 60 million), as activity levels recovered post-COVID-19
and we benefited from pricing actions.
Net trading income was negative in the first quarter due to
adverse mark-to-market movements on the hedging portfolio
given increased expectations of rising UK interest rates.
Operating expenses were up 12% and stood at DKK 308 mil-
lion (Q1 2021: DKK 275 million), reflecting the increased
costs for Group supplied services.
Loan impairment charges for the quarter primarily reflect a
revised economic outlook that incorporates the impacts of
the Ukraine invasion.
Customer lending to large businesses remained subdued, but
the effect of this was partially offset by increasing momentum
in mortgage lending and continually strong demand from
small businesses. Large businesses have continued to delay
investment decisions and are holding additional liquidity, as
reflected in deposit growth over the period.
Danske Bank / Interim report first quarter 2022 22/69
Q1 2022 vs Q4 2021
In the first quarter, profit before tax decreased to a loss of
DKK 12 million (Q4 2021: DKK 33 million), driven by lower
trading income, partially offset by improved net interest
income and lower costs.
Net interest income increased to DKK 379 million (Q4
2021: DKK 346 million), driven by higher UK interest
rates and related pricing actions.
Net fee income decreased to DKK 76 million (Q4 2021:
DKK 87 million) in the quarter given some seasonality,
with underlying commercial activity levels improving
post-COVID-19.
Net trading income was negative in both quarters due
to adverse mark-to-market movements on the hedging
portfolio given increased expectations of rising UK
interest rates.
Operating expenses decreased to DKK 308 million (Q4
2021: DKK 380 million), reflecting additional costs in
the fourth quarter of 2021 related to the new cost
allocation model.
Lending activity remained subdued, with many large
business customers continuing to delay investment
decisions and to hold additional liquidity.
DKK -12 million
Profit before tax
for the first quarter of 2022
Danske Bank / Interim report first quarter 2022 23/69
Non-core
Non-core mainly comprises legacy credit exposures as well as non-strategic private equity investments. The winding up of the Non-
core activities is proceeding according to plan. Profit before tax in the first quarter of 2022 amounted to a loss of DKK 14 million,
against a gain of DKK 20 million in the first quarter of 2021. Total lending increased to DKK 2.3 billion at the end of March 2022,
from DKK 2.1 billion at the end of December 2021, due to the transfer to Non-core of the remaining activities in Luxembourg.
Q1
2021
Index
22/21
Non-core
(DKK millions)
Total income
Operating expenses
Profit before loan impairment charges
Loan impairment charges
Profit before tax
Loans, excluding reverse transactions before impairments*
Allowance account, loans
Deposits, excluding repo deposits
Allocated capital (average)
Net interest income as % p.a. of loans and deposits
Profit before tax as % p.a. of allocated capital (avg.)
Cost/income ratio (%)
Full-time-equivalent staff
Q1
2022
14
26
-12
2
-14
2,309
875
2,198
736
-0.11
-7.6
-
33
-5
31
-35
-55
20
2,628
810
2,197
1,092
0.58
7.3
-
29
Loan impairment charges
(DKK millions)
Non-core banking**
Non-core conduits etc.
Total
-
2
2
-102
47
-55
Q4
2021
2
152
-149
-124
-25
2,123
811
2,191
735
-0.10
-13.6
-
25
-124
-
-124
Index
Q1/Q4
Full year
2021
-
17
8
-
56
109
108
100
100
132
25
234
-210
-207
-2
2,123
811
2,191
872
0.38
-0.2
-
25
-
-
-
-254
47
-207
-
84
34
-
-
88
108
100
67
114
-
4
-
* Loans, excluding reverse transactions before impairments includes loans held for sale in the Baltics.
** Non-core banking encompasses the Groups activities in Lithuania, Non-core Ireland and Luxembourg.
in the first quarter of 2021 related to the sale of a Latvian
portfolio of commercial loans held by the Lithuanian branch.
At the end of March 2022, total lending amounted to
DKK 2.3 billion. The sale of most of the Baltic loan portfolios
resulted in a reduction of total lending at Non-core from the
level at the end of March 2021. However, due to the transfer
to Non-core of the remaining Luxembourg activities in the
first quarter of 2022, lending increased from the level at 31
December 2021.
Strategy and initiatives
The Non-core unit focuses on actively managing down legacy
assets and portfolios by way of divestment, refinancing with
other credit institutions or amortisation.
In the first quarter of 2022, the remaining part of the Luxem-
bourg activities was transferred to Non-core, increasing
lending by DKK 205 million and deposits by DKK 61 million
at the end of the first quarter of 2022.
The only portfolio remaining at the Lithuanian branch is a
small portfolio of commercial loans to local customers, which
will be fully amortised by the first quarter of 2023.
First quarter 2022 vs first quarter 2021
Profit before tax amounted to a loss of DKK 14 million (Q1
2021: a gain of DKK 20 million). An increase in total income
and a continued reduction in operating expenses in the first
quarter of 2022 improved profit before loan impairment
charges by DKK 23 million. The positive development was,
however, more than offset by the development in loan impair-
ments, with impairments amounting to an expense of DKK 2
million against a reversal in the first quarter of 2021. This
resulted in a decrease in profit before tax of DKK 34 million
from the first quarter of 2021. The loan impairment reversal
Danske Bank / Interim report first quarter 2022 24/69
Q1 2022 vs Q4 2021
The Non-core unit posted a loss before tax of DKK 14 million
in the first quarter of 2022 (Q4 2021: a loss of DKK 25 mil-
lion). The improved result was due to an increase in total in-
come and a decrease in operating expenses, with the posi-
tive effect being partly offset by loan impairments, which
amounted to a net expense in the first quarter of 2022
against a net reversal in the fourth quarter of 2021.
Total income amounted to DKK 14 million (Q4 2021:
DKK 2 million). The
increase was due to value
adjustments relating to the Luxembourg portfolio and
an increase in total income from the Non-core part of
the Groups private equity investments.
Operating expenses amounted to DKK 26 million (Q4
2021: DKK 152 million). The decrease reflects the fact
that the fourth quarter of 2021 was affected by non-
recurring operating expenses related to the closing of
the subsidiary bank in Luxembourg and the branch in
Hamburg.
Loan impairment charges amounted to DKK 2 million
(Q4 2021: a net reversal of DKK 124 million). The
fourth quarter of 2021 benefited from loan impairment
reversals related to portfolio divestments in Ireland and
Lithuania.
DKK -14 million
Profit before tax
for the first quarter of 2022
Danske Bank / Interim report first quarter 2022 25/69
Group Functions
Group Functions includes Group Treasury, Technology & Services and other Group functions. In addition, Group Functions includes
eliminations.
In the first quarter of 2022, the loss before tax increased DKK 200 million from the level in the first quarter of 2021, due primarily
to a decrease in net trading income.
Group Functions
(DKK millions)
Net interest income
Net fee income
Net trading income
Other income
Total income
Operating expenses
of which resolution fund, bank tax etc.
of which impairment charges, other intangible assets
Profit before loan impairment charges
Loan impairment charges
Profit before tax
Full-time-equivalent staff
Q1
2022
Q1
2021
Index
22/21
Q4
2021
Index
Q1/Q4
Full year
2021
58
-26
-242
2
-207
439
26
-
-646
17
-663
24
-8
34
-4
46
509
17
-
-463
1
-464
242
-
-
-
-
86
153
-
140
-
143
117
-31
171
-9
249
525
7
36
-277
4
-280
50
84
-
-
-
84
-
-
233
-
237
312
-56
381
-10
627
2,068
37
36
-1,442
2
-1,444
10,856
10,423
104
10,252
106
10,252
Profit before tax
(DKK millions)
Group Treasury
Own shares and issues
Additional tier 1 capital
Group support functions
Total Group Functions
-185
-34
81
-525
-663
195
-175
116
-600
-464
-
19
70
88
143
319
1
101
-702
-280
-
-
80
75
599
-67
451
-2,427
237
-1,444
Strategy and initiatives
Group Functions supports the business units by allocating
capital, interest-bearing capital and long-term funding costs
through the Group Treasury setup that is established to han-
dle, for example, the pricing of funding. Group Treasury also
manages the Groups liquidity bond portfolio and the invest-
ment of shareholders equity for Danica Pension and
Realkredit Danmark. Operating expenses related to the sub-
units within Group Functions are allocated to the business
units. This is done to ensure cost efficiency throughout the
Group.
The establishment of the new Chief Administration Officer
(CAO) Area at Group Functions led to the transfer of 1st line
Financial Crime Risk staff from Large Corporates & Institu-
tions to the new area.
First quarter 2022 vs first quarter 2021
Group Functions posted a loss before tax of DKK 663 million
(Q1 2021: a loss of DKK 464 million), due primarily to a de-
crease in net trading income.
Net interest income increased to DKK 58 million (Q1 2021:
DKK 24 million), due among other things to interest expenses
for corporate back tax in the first quarter of 2021.
Net trading income decreased to a loss of DKK 242 million
(Q1 2021: a gain of DKK 34 million) as Group Treasurys fair
value bond portfolios were negatively affected by market
value adjustments of Danish mortgage bond investments in
the first quarter of 2022. Further, a gain of DKK 227 million
on the sale of shares in the Groups private equity portfolio
had a positive effect on net trading income for the first quar-
ter of 2021.
Operating expenses, after allocation to the business units, fell
from the level in the first quarter of 2021 and amounted to
DKK 439 million (Q1 2021: DKK 509 million). The first quar-
ter of 2021 was affected by a one-off investment of DKK 122
million to ensure good working from home conditions.
The number of full-time-equivalent staff has
increased
around 400 since the end of the first quarter of 2021, which
is due mainly to the transfer of around 500 full-time-equiva-
lent staff from Large Corporates & Institutions to the CAO
Area.
Danske Bank / Interim report first quarter 2022 26/69
Q1 2022 vs Q4 2021
Group Functions posted a loss before tax of DKK 663 mil-
lion (Q4 2021: loss of DKK 280 million). Despite lower op-
erating expenses, the loss before tax increased, as the lower
operating expenses were more than offset by a decrease in
net trading income as well as in net interest income.
Net interest income amounted to DKK 58 million (Q4
2021: DKK 117 million), with the result for the fourth
quarter of 2021 benefiting from a decrease in central
bank funding costs in connection with the Groups
borrowing from the European Central Bank.
Net trading income amounted to a loss of DKK 242
million (Q4 2021: a gain of DKK 171 million) due to a
lower valuation of the Groups private equity portfolio,
just as the fourth quarter of 2021 recorded a gain of
DKK 180 million on the sale of Aiia to Mastercard.
Moreover, Group Treasurys fair value bond portfolios
were negatively affected by market value adjustments
of Danish mortgage bond investments in the first
quarter of 2022.
Operating expenses decreased to DKK 439 million (Q4
2021: DKK 525 million). The fourth quarter of 2021
was affected by a provision for taxation of business
travellers.
DKK -663 million
Profit before tax
for the first quarter of 2022
Danske Bank / Interim report first quarter 2022 27/69
Definition of alternative performance measures
Danske Banks management believes that the alternative performance measures (APMs) used in the Managements report provide valuable information to readers of
the financial statements. The APMs provide a more consistent basis for comparing the results of financial periods and for assessing the performance of the Group and
each individual business unit. They are also an important aspect of the way in which Danske Banks management defines operating targets and monitors performance.
Throughout the Managements report, performance is assessed on the basis of the financial highlights and segment reporting, which represent the financial information
regularly provided to management. The differences between the financial highlights and the IFRS financial statements relate to certain changes in the presentation. Net
profit is the same in the financial highlights and in the IFRS income statement. Note G3 to the financial statements describes the differences between the financial
highlights and the IFRS financial statements, and each line item in the financial highlights is reconciled with the consolidated financial statements prepared under IFRS.
Definitions of additional ratios presented on page 3 and in other sections of the Managements report:
Ratios and key figures
Definition
Dividend per share (DKK)
The dividend per share proposed in the annual report and paid to shareholders in the subsequent year plus
any additional dividend payments approved by the Board of Directors and paid to shareholders during the
year.
Return on average shareholders equity (% p.a.)
Net profit as disclosed in the financial highlights divided by the average of the quarterly average sharehold-
ers equity (beginning and end of each quarter) within the year. Net profit and shareholders equity are
stated as if the equity-accounted additional tier 1 capital was classified as a liability. In the numerator, net
profit is reduced by interest expenses of DKK 81 million (full-year 2021: DKK 451 million). The denomina-
tor represents equity, excluding additional tier 1 capital and other non-controlling interests equal to a re-
duction in the average of the quarterly average of equity of DKK 5,616 million (2021: 7,733 million) com-
pared to a simple average of total equity (beginning and the end of the period).
Net interest income as % p.a. of loans and deposits
Net interest income in the financial highlights divided by the daily average of the sum of loans and deposits.
If the ratio was calculated applying the sum of loans and deposits end of period, the ratio for Q1 2022
would still be 0.75% (full-year 2021: 0.73%) even though the daily average of the sum of loans and depos-
its is DKK 25 billion lower (2021: DKK 5.4 billion higher) than calculating the ratio by applying the end of
period sum of loans and deposits. The purpose of the ratio is to show if the growth in net interest income
follows the growth in loans and deposits. The daily average is a more faithful representation of the growth
in loans and deposits.
Cost/income ratio (C/I), (%)
Operating expenses and impairment charges on goodwill divided by total income. All amounts are from the
financial highlights.
C/I, excluding impairment on intangible assets (%)
Operating expenses, excluding impairment charges on other intangible assets, divided by total income. All
amounts are from the financial highlights.
Book value per share
Shareholders equity (that is, excluding equity-accounted additional tier 1 capital) divided by the number of
Loan impairment charges as % of net credit exposure
Allowance account as % of credit exposure
shares outstanding at the end of the period.
This ratio is calculated on the basis of loan impairment charges and loans and guarantees in core seg-
ments. The numerator is the loan impairment charges of DKK 234 million (full-year 2021: DKK 348 mil-
lion) from the financial highlights and annualised. The denominator is the sum of Loans at amortised cost
of DKK 1,026.1 billion (2021: DKK 1,022.7 billion), Loans at fair value of DKK 809.9 billion (2021: DKK
816.3 billion) and guarantees of DKK 81.0 billion (2021: DKK 71.7 billion) at the beginning of the year, as
disclosed in the column Lending activities core in the Breakdown of credit exposure table in the notes
to the financial statements. The ratio is calculated for each business unit.
This ratio is calculated on the basis of the allowance account and loans and guarantees in core segments.
The numerator is the allowance account of DKK 19.8 billion (2021: DKK 21.9 billion) at the end of the
period, as disclosed in the Allowance account in core activities broken down by segment table in the notes
to the financial statements. The denominator is the sum of Loans at amortised cost of DKK 1,066.6 billion
(2021: DKK 1,026.1 billion), Loans at fair value of DKK 778.8 billion (2021: DKK 809.9 billion), guarantees
of DKK 82.4 billion (2021: DKK 81.0 billion) and the allowance account, at the end of the period, as dis-
closed in the column Lending activities core in the Breakdown of credit exposure table in the notes to
the financial statements. The ratio is calculated for each business unit.
Market shares of lending and deposits
Market shares are based on data from central banks at the time of reporting. Comparative information is
updated on the basis of the latest available data, for example Annual Report 2021 included November
2021 data for Finland and Norway as December 2021 data was not available at the time of publication of
Annual Report 2021. This has been updated to December 2021 data in Interim report first quarter
2022.
Danske Bank / Interim report first quarter 2022 28/69
Income statement
Statement of comprehensive income
Balance sheet
Statement of capital
Cash flow statement
Notes
Note G1: Significant accounting policies and estimates
Note G2: Changes in accounting policies,
29
30
31
32
34
35
financial highlights and segment reporting
37
Note G3: Business segments
38
41
Note G4: Income
Note G5: Loan impairment charges and reconciliation of total allowance account 42
43
Note G6: Issued bonds, subordinated debt and additional tier 1 capital
44
Note G7: Assets held for sale and Liabilities in disposal groups held for sale
45
Note G8: Other assets and other liabilities
46
Note G9: Foreign currency translation reserve
46
Note G10: Guarantees, commitments and contingent liabilities
49
Note G11: Assets provided or received as collateral
50
Note G12: Fair value information for financial instruments
53
Note G13: Group holdings and undertakings
54
Risk Management
54
Breakdown of credit exposure
55
Credit exposure from core lending activities
Credit exposure from Non-core lending activities
64
Counterparty credit risk and credit risk from trading and investment securities 65
65
Bond portfolio
Income statement Danske Bank Group
Note
(DKK millions)
G4
G4
G4
G4
G4
G4
Interest income calculated using the effective interest method
Other interest income
Interest expense
Net interest income
Fee income
Fee expenses
Net trading income or loss
Other income
Net premiums
Net insurance benefits
Operating expenses
Profit before loan impairment charges
Loan impairment charges
G5
Profit before tax
Tax
Net profit
Portion attributable to
Shareholders of Danske Bank A/S (the Parent Company)
Additional Tier 1 capital holders
Net profit
Earnings per share (DKK)
Diluted earnings per share (DKK)
Proposed dividend per share (DKK)
Danske Bank / Interim report first quarter 2022 29/69
Q1
2022
6,023
9,048
9,236
5,835
4,662
1,570
-12,495
2,289
9,982
-2,885
7,645
3,943
236
3,707
862
2,845
2,765
81
2,845
3.2
3.2
-
Q1
2021
5,414
9,483
8,340
6,557
4,660
1,494
7,712
1,505
8,485
15,473
7,456
4,496
443
4,054
914
3,139
3,025
115
3,139
3.5
3.5
-
Full year
2021
22,077
35,601
30,904
26,774
18,495
6,378
36,600
5,733
37,518
71,208
30,822
16,712
141
16,571
3,651
12,920
12,469
451
12,920
14.6
14.6
2.0
Statement of comprehensive income Danske Bank Group
Danske Bank / Interim report first quarter 2022 30/69
(DKK millions)
Net profit
Other comprehensive income
Remeasurement of defined benefit pension plans
Tax*
Items that will not be reclassified to profit or loss
Items that are or may be reclassified subsequently to profit or loss
Translation of units outside Denmark
Hedging of units outside Denmark
Unrealised value adjustments of bonds at fair value (OCI)
Realised value adjustments of bonds at fair value (OCI)
Tax*
Items that are or may be reclassified subsequently to profit or loss
Total other comprehensive income
Total comprehensive income
Portion attributable to
Shareholders of Danske Bank A/S (the Parent Company)
Additional Tier 1 capital holders
Total comprehensive income
* A positive amount is a tax expense, and a negative amount is a tax income
Q1
2022
2,845
70
-19
89
360
-139
-621
12
-54
-334
-245
Q1
2021
Full year
2021
3,139
12,920
286
33
253
1,319
-912
-182
4
-54
283
537
-90
-146
56
1,708
-1,270
-326
6
-152
270
326
2,600
3,676
13,246
2,519
81
2,600
3,561
115
3,676
12,795
451
13,246
Danske Bank / Interim report first quarter 2022 31/69
31 March
2022
31 December
2021
31 March
2021
259,759
75,843
616,572
306,908
1,068,022
990,142
71,667
591,837
23,972
8,998
4,871
34,364
293,386
71,156
509,590
303,777
1,027,442
1,024,461
76,654
547,806
28,800
8,819
4,510
39,433
312,347
92,428
652,544
302,638
1,027,304
1,017,053
84,891
532,470
311
8,800
3,908
38,208
Balance sheet Danske Bank Group
Note
(DKK millions)
Assets
Cash in hand and demand deposits with central banks
Due from credit institutions and central banks
Trading portfolio assets
Investment securities
Loans at amortised cost
Loans at fair value
Assets under pooled schemes and unit-linked investment contracts
Assets under insurance contracts
Assets held for sale*
Intangible assets
Tax assets
Other assets*
G7
G8
G6
G6
G7
G8
G6
G6
G9
G6
Total assets
4,052,954
3,935,834
4,072,903
Liabilities
Due to credit institutions and central banks
Trading portfolio liabilities
Deposits
Issued bonds at fair value
Issued bonds at amortised cost
Deposits under pooled schemes and unit-linked investment contracts
Liabilities under insurance contracts
Liabilities in disposal groups held for sale*
Tax liabilities
Other liabilities*
Non-preferred senior bonds
Subordinated debt
Total liabilities
Equity
Share capital
Foreign currency translation reserve
Reserve for bonds at fair value (OCI)
Retained earnings
Proposed dividends
Shareholders of Danske Bank A/S (the Parent Company)
Additional tier 1 capital holders
Total equity
Total liabilities and equity
185,586
477,007
1,337,452
746,317
207,850
72,320
625,953
22,868
2,860
53,483
104,829
38,917
172,976
374,959
1,292,030
794,909
223,854
76,982
588,736
29,577
1,864
56,268
107,654
39,321
214,945
419,884
1,383,053
784,834
235,858
86,263
574,696
7
1,874
54,089
108,641
38,253
3,875,442
3,759,130
3,902,397
8,622
-391
-575
164,120
-
171,776
5,736
8,622
-612
34
161,439
1,724
171,207
5,497
8,622
-643
177
153,735
-
161,890
8,615
177,512
176,704
170,505
4,052,954
3,935,834
4,072,903
* Since 31 December 2021, Assets held for sale and Liabilities in disposal groups held for sale are presented separately from Other assets and Other liabilities respectively. The com-
parative information at 31 March 2021 has been restated.
Danske Bank / Interim report first quarter 2022 32/69
Statement of capital Danske Bank Group
Changes in equity
Shareholders of Danske Bank A/S (the Parent Company)
Foreign
currency
translation
reserve
Reserve for
bonds at fair
value (OCI)
Retained
earnings
Proposed
dividends
Additional
tier 1
capital
Total
Total
(DKK millions)
Total equity as at 1 January 2022
Net profit
Other comprehensive income
Remeasurement of defined benefit pension plans
Translation of units outside Denmark
Hedging of units outside Denmark
Unrealised value adjustments
Realised value adjustments
Tax
Total other comprehensive income
Total comprehensive income
Transactions with owners
Dividends paid
Acquisition of own shares and additional tier 1
capital
Sale of own shares and additional tier 1 capital
Tax
Share
capital
8,622
-
-
-
-
-
-
-
-
-
-
-
-
-
-612
-
-
360
-139
-
-
-
221
221
-
-
-
-
34
-
161,439
2,765
1,724
-
171,207
2,765
5,497
81
176,704
2,845
-
-
-
-621
12
-
70
-
-
-
-
73
-609
143
-609
2,908
-
-
-
-
-
-
-
-
70
360
-139
-621
12
73
-245
-
-
-
-
-
-
-
70
360
-139
-621
12
73
-245
2,519
81
2,600
19
-1,724
-1,705
-
-1,705
-7,254
7,010
-1
-
-
-
-
-7,254
7,010
-1
-
158
-
-7,254
7,168
-1
171,776
5,736
177,512
Total equity as at 31 March 2022
8,622
-391
-575
164,120
Total equity as at 1 January 2021
Net profit
Other comprehensive income
Remeasurement of defined benefit pension plans
Translation of units outside Denmark
Hedging of units outside Denmark
Unrealised value adjustments
Realised value adjustments
Tax
Total other comprehensive income
Total comprehensive income
Transactions with owners
Paid interest on additional tier 1 capital
Dividends paid
Acquisition of own shares and additional tier 1
capital
Sale of own shares and additional tier 1 capital
Tax
8,622
-
-1,050
-
354
-
150,521
3,025
1,724
-
160,171
3,025
8,508
115
168,679
3,139
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,319
-912
-
-
-
407
407
-
-
-
-
-
-
-
-
-182
4
-
-177
286
-
-
-
-
21
307
-177
3,332
-
-
-
-
-
-
-
-
-
16
-
-1,724
-6,063
5,946
-18
-
-
-
-
286
1,319
-912
-182
4
21
537
-
-
-
-
-
-
-
286
1,319
-912
-182
4
21
537
3,561
115
3,676
-
-1,708
-6,063
5,946
-18
-35
-
-
28
-
-35
-1,708
-6,063
5,974
-18
161,890
8,615
170,505
Total equity as at 31 March 2021
8,622
-643
177
153,735
Dividend
To ensure prudent capital management with a high degree of flexibility in light of the Estonia matter, the general meeting adopted the proposal for an
initial dividend payment of DKK 2 per share that was paid out in March. The remaining DKK 5.5 per share was intended to be paid out in three tranches
following the publication of the interim reports in 2022, subject to a decision by the Board of Directors.
Danske Bank is now in initial discussions with U.S. and Danish authorities on resolution of the Estonia matter. Consequently, the Board of Directors has
decided that Danske Bank will not pay out dividends in connection with the announcement of the interim report for the first quarter of 2022.
Danske Bank is not yet able to reliably estimate the timing, form of resolution or amount of a potential settlement or fines, which is likely to be material,
and will not comment on discussions with authorities.
-
-
-
-
-
-
-
-
-
Statement of capital Danske Bank Group
(DKK millions)
Share capital (DKK)
Number of shares
Number of shares outstanding
Average number of shares outstanding for the period
Average number of shares outstanding, including dilutive shares, for the period
Total capital and total capital ratio
(DKK millions)
Total equity
Revaluation of domicile property at fair value
Tax effect of revaluation of domicile property at fair value
Total equity calculated in accordance with the rules of the Danish FSA
Additional tier 1 capital instruments included in total equity
Accrued interest on additional tier 1 capital instruments
Common equity tier 1 capital instruments
Adjustment to eligible capital instruments
IFRS 9 reversal due to transitional rules
Prudent valuation
Prudential filters
Expected/proposed dividends
Intangible assets of banking operations
Minimum Loss Coverage for Non-Performing Exposures
Deferred tax on intangible assets
Deferred tax assets that rely on future profitability, excluding temporary differences
Defined benefit pension plan assets
Statutory deduction for insurance subsidiaries
Common equity tier 1 capital
Additional tier 1 capital instruments
Tier 1 capital
Tier 2 capital instruments
Total capital
Total risk exposure amount
Common equity tier 1 capital ratio (%)
Tier 1 capital ratio (%)
Total capital ratio (%)
Danske Bank / Interim report first quarter 2022 33/69
31 March 2022 31 December 2021
8,621,846,210
862,184,621
851,299,756
852,593,608
853,934,676
8,621,846,210
862,184,621
853,649,376
853,138,154
853,470,424
31 March 2022 31 December 2021
177,512
200
-23
177,689
-5,577
-159
171,954
-44
1,970
-1,155
-353
-6,449
-5,584
-55
254
-35
-2,330
-7,485
150,688
14,678
165,366
20,837
186,203
856,640
17.6%
19.3%
21.7%
176,704
200
-23
176,881
-5,419
-78
171,384
-104
2,593
-983
-173
-6,466
-5,325
-51
198
-35
-2,220
-6,882
151,935
19,933
171,868
20,888
192,757
860,173
17.7%
20.0%
22.4%
Total capital and the total risk exposure amount are calculated in accordance with the rules applicable under the Capital Requirements Regulation (CRR),
taking transitional rules into account as stipulated by the Danish Financial Supervisory Authority.
In terms of the transitional arrangements for the impact of IFRS 9 on regulatory capital, the Group applies the so-called dynamic approach in accordance
with the CRR.
The Internal Capital Adequacy Assessment Report provides more details about the Groups solvency need. The report is available at danskebank.com/in-
vestorrelations/reports.
Cash flow statement Danske Bank Group
(DKK millions)
Cash flow from operations
Profit before tax
Tax paid
Adjustment for non-cash operating items
Cash flow from operations before changes in operating capital
Changes in operating capital
Amounts due to/from credit institutions and central banks
Trading portfolio
Acquisition/sale of own shares and additional tier 1 capital
Investment securities
Loans at amortised cost and fair value
Deposits
Issued bonds at amortised cost and fair value
Assets/liabilities under insurance contracts
Other assets/liabilities
Cash flow from operations
Cash flow from investing activities
Acquisition/sale of businesses
Acquisition of intangible assets
Acquisition of tangible assets
Sale of tangible assets
Cash flow from investing activities
Cash flow from financing activities
Issue of subordinated debt
Redemption of subordinated debt
Issue of non-preferred senior bonds
Redemption of non-preferred senior bonds
Dividends paid
Redemption of equity accounted additional tier 1 capital
Paid interest on equity accounted additional tier 1 capital
Principal portion of lessee lease payments
Cash flow from financing activities
Cash and cash equivalents as at 1 January
Foreign currency translation
Change in cash and cash equivalents
Cash and cash equivalents, end of period
Cash and cash equivalents, end of period
Cash in hand
Demand deposits with central banks
Amounts due from credit institutions and central banks within three months
Total
Danske Bank / Interim report first quarter 2022 34/69
Q1
2022
3,707
-2,084
470
2,093
12,514
-4,935
-86
-3,131
-6,497
45,422
-63,462
-6,814
1,886
Q1
2021
Full Year
2021
4,054
-438
-3
3,613
529
-49,046
-89
-5,869
3,131
49,272
-6,638
-3,996
3,223
16,571
-2,459
4,916
19,028
-38,509
48,984
-82
-7,007
-4,114
-41,751
-7,596
-5,291
-1,224
-23,010
-5,870
-37,562
561
-371
-152
1
39
-
-
6,633
-10,593
-1,705
-
-
-158
-5,823
362,997
-241
-28,794
-
-191
-76
4
-263
5,577
-
-
-
-1,708
-
-35
-165
3,669
400,889
1,874
-2,464
-
-885
-686
8
-1,563
10,102
-3,718
4,352
-6,309
-1,708
-3,000
-466
-654
-1,401
400,889
2,634
-40,526
333,962
400,299
362,997
6,591
253,168
74,203
5,928
306,419
87,952
6,765
286,621
69,611
333,962
400,299
362,997
Danske Bank / Interim report first quarter 2022 35/69
Notes Danske Bank Group
G1. Significant accounting policies and estimates
(a) General
The report has been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU, and additional Danish disclosure require-
ments for listed financial companies. The report is condensed and should be read in conjunction with the Groups Annual Report 2021.
On 1 January 2022, the Group implemented the amendments to IAS 1, IAS 16, IAS 37, IFRS 3 and Annual Improvements to IFRS Standards 2018 -
2020. Further information on the changes to accounting policies and presentation in 2021 can be found in note G2(a). Except for these changes, the
Group has not changed its significant accounting policies from those applied in Annual Report 2021. Annual Report 2021 provides a full description of
the significant accounting policies.
Financial statement figures are stated in Danish kroner and whole millions, unless otherwise stated. As a result, rounding discrepancies may occur
because totals have been rounded off and the underlying decimals are not presented to financial statement users. The interim report for the first three
months of 2022 has not been audited or reviewed.
(b) Significant accounting estimates and judgements
The preparation of financial information requires, in some cases, the use of judgements and estimates by management. This includes judgements made
when applying accounting policies. The most significant judgements made when applying accounting policies relate to the classification of financial assets
and financial liabilities under IFRS 9, especially related to the business model assessment, and the SPPI test (further explained in note G15 of the Annual
Report 2021) and the designation of financial liabilities at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch
(further explained in note G16 of the Annual Report 2021). An overview of the classification and measurement basis for financial instruments can be
found in note G1(c) of the Annual Report 2021.
The determination of the carrying amounts of some assets and liabilities requires the estimation of the effects of uncertain future events on those assets
and liabilities. The estimates are based on premises that management finds reasonable but which are inherently uncertain and unpredictable. The prem-
ises may be incomplete, unexpected future events or situations may occur, and other parties may arrive at other estimated values. In view of the inherent
uncertainties and the high level of subjectivity and judgement involved in the recognition and measurement of the items listed below, it is possible that
the outcomes in the next reporting period could differ from those on which managements estimates are based.
Measurement of expected credit losses on loans, financial guarantees and loan commitments, and bonds measured at amortised cost or fair value
through other comprehensive income
The three-stage expected credit loss impairment model in IFRS 9 depends on whether the credit risk has increased significantly since initial recognition.
If the credit risk has not increased significantly, the impairment charge equals the expected credit losses resulting from default events that are possible
within the next 12 months (stage 1). If the credit risk has increased significantly, the loan is more than 30 days past due, or the loan is in default or
otherwise impaired, the impairment charge equals the lifetime expected credit losses (stages 2 and 3). In determining the impairment for expected credit
losses, management exercises judgement and uses estimates and assumptions as explained below.
The expected credit losses are calculated for all individual facilities as a function of probability of default (PD), exposure at default (EAD) and loss given
default (LGD) and incorporate forward-looking information. The estimation of expected credit losses involves forecasting future economic conditions over
a number of years. Such forecasts are subject to management judgement and those judgements may be sources of measurement uncertainty that have
significant risk of resulting in a material adjustment to a carrying amount in future periods. The incorporation of forward-looking elements reflects the
expectations of the Groups senior management and involves the creation of scenarios (base case, upside and downside), including an assessment of the
probability for each scenario. The purpose of using multiple scenarios is to model the non-linear impact of assumptions about macroeconomic factors on
the expected credit losses.
With the new suite of scenarios, the base case scenario enters with a probability of 70% (31 December 2021: 70%), the upside scenario with a proba-
bility of 10% (31 December 2021: 10%) and the downside scenario with a probability of 20% (31 December 2021: 20%). On the basis of these assess-
ments, the allowance account as at 31 March 2022 amounted to DKK 20.6 billion (31 December 2021: DKK 22.7 billion). If the base case scenario was
assigned a probability of 100%, the allowance account would decrease DKK 1.9 billion (31 December 2021: 1.7 billion). Compared to the base case
scenario, the allowance account would increase DKK 9.7 billion (31 December 2021: DKK 8.5 billion), if the downside scenario was assigned a probability
of 100%. The increase reflects primarily the transfer of exposures from stage 1 to stage 2 and increased expected credit losses within stage 2. If instead
the upside scenario was assigned a probability of 100%, the allowance account would decrease DKK 0.2 billion (31 December 2021: DKK 0.2 billion)
compared to the base case scenario.
Management applies judgement when determining the need for post-model adjustments. As at 31 March 2022, the post-model adjustments amounted
to DKK 5.6 billion (31 December 2021: DKK 6.3 billion) which are predominantly linked to economic uncertainties arising from the outbreak of war in
Ukraine, the corona crisis and other sector-specific factors that ensure prudent coverage of expected credit losses for the Groups credit exposures. On
the types of risks covered by post-model adjustments, more information can be found in the risk management notes.
The Groups credit exposure directly related to customers in or from Russia and Ukraine is very limited.
Further information on the Groups accounting treatment of the impacts on expected credit losses from the corona crisis can be found on page 66 of
Annual Report 2021.
Note G15 of the Annual Report 2021 and the section on credit risk in the risk management notes provide more details on expected credit losses. As at
31 March 2022, financial assets covered by the expected credit loss model accounted for about 53.0% of total assets (31 December 2021: 54.2%).
Danske Bank / Interim report first quarter 2022 36/69
Notes Danske Bank Group
(b) Significant accounting estimates continued
Fair value measurement of financial instruments
At the end of March 2022, no unusual challenges in obtaining reliable pricing apart from insignificant parts of the portfolio remained. The majority of
valuation techniques continues to employ only observable market data, and there has been no significant increase in financial instruments measured on
the basis of valuation techniques that are based on one or more significant unobservable inputs. The latter continues to include only unlisted shares,
certain bonds and some long-dated derivatives for which there is no active market. On the derivatives portfolio, the Group makes fair value adjustments
to cover changes in counterparty risk (CVA and DVA) and to cover expected funding costs (FVA and ColVA) on derivatives, bid-offer spreads on the net
open position of the portfolio of assets and liabilities with offsetting market risk recognised at mid-market prices, and model risk on level 3 derivatives.
As at 31 March 2022, the adjustments totalled DKK 0.7 billion (31 December 2021: DKK 1.0 billion), including the adjustment for credit risk on deriva-
tives that are credit impaired. Note G11 of this report and note G33(a) of the Annual Report 2021 provides more details on the fair value measurement
of financial instruments.
The Group uses derivatives to hedge the fixed interest rate on some financial assets and liabilities, thus converting the fixed interest rates on the financial
instruments to variable interest rates by the use of swaps. The ongoing Interest Rate Benchmark Reform will replace existing benchmark interbank
offered rates (IBORs) with alternative risk-free rates. The Groups IBOR Transition Programme successfully managed the cessation of the LIBOR interest
rate indexes for GBP, EUR, CHF and JPY at 31 December 2021, and is now focused of the transition of USD LIBOR contracts ahead of the June 2023
deadline. In addition, the Programme is also providing oversight on how the introduction of the DESTR and SWESTR indexes could affect its core Nordic
customer base. As a result of these developments, accounting judgement is involved in determining whether certain hedge accounting relationships that
hedge the interest rate risk due to changes in IBORs continue to qualify for hedge accounting. Following IASBs project Interest Rate Benchmark Reform
for the assessment of effectiveness of such hedges, it is assumed that the interest rate benchmark is not altered as a result of the reform. For further
information, see note G12(d) of the Annual Report 2021.
Measurement of goodwill
Goodwill is tested for impairment once a year or more frequently if indications of impairment exist. Impairment testing requires management to estimate
the present value of future cash flows. A number of factors affect the value of such cash flows, including discount rates, changes in the economic outlook,
customer behaviour and competition. At 31 March 2022, goodwill amounted to DKK 6.1 billion (31 December 2021: DKK 6.1 billion).
In connection with the quarterly reporting, management performs an impairment review to assess whether there are indications that goodwill might be
impaired. This includes a review of decline in income, increase in loan impairment charges, decline in the market value of assets under management,
major restructurings, macroeconomic developments etc. Since the outbreak of the coronavirus pandemic, the assessment of whether indications of
impairment exists has been considered at a more detailed level than usual. This assessment has been performed as a high level update of the 2021 test.
It was concluded that no indications of impairment were noted at the end of March 2022.
The goodwill in Danica Pension of DKK 1.6 billion (31 December 2021: DKK 1.6 billion) is sensitive to changes in solvency capital requirements, growth
in the terminal period and the discount rate.
The remaining goodwill mainly consists of DKK 2.1 billion (31 December 2021: DKK 2.1 billion) in Markets, DKK 1.8 billion (31 December 2021: DKK
1.8 billion) in Asset Management and DKK 0.5 billion (31 December 2021: DKK 0.5 billion) in General Banking (all part of the business segment Large
Corporates & Institutions) showing significant amounts of excess value in the impairment tests in 2021.
Note G19 of the Annual Report 2021 provides more information about impairment testing and sensitivity to changes in assumptions.
Measurement of liabilities under insurance contracts
Liabilities under insurance contracts are measured at the present value of expected benefits for each insurance contract. The measurement is based on
actuarial computations that rely on estimates of a number of variables, including mortality and disability rates, and on the discount rate. The future
mortality rates are based on the Danish FSAs benchmark, while other variables are estimated based on data from the Groups own portfolio of insurance
contracts. Note G18 and the risk management notes of the Annual Report 2021 provide more information on the measurement of insurance liabilities
and sensitivity to changes in assumptions.
Danske Bank / Interim report first quarter 2022 37/69
Notes Danske Bank Group
G2. Changes in accounting policies, financial highlights and segment reporting
(a) Changes in accounting policies
On 1 January 2022, the Group implemented the amendments to IAS 1, IAS 16, IAS 37, IFRS 3 and Annual Improvements to IFRS Standards 2018 -
2020. The implementation of the amendments to IFRSs had no impact on the financial statements. The sections below explain in further details the
changes to accounting policies and presentation implemented.
The Group has changed the presentation of Assets held for sale and Liabilities in disposal groups held for sale to be presented separately on the face of
the balance sheet rather than within Other assets and Other liabilities respectively.
Amendment to IAS 1, Presentation of financial statements
The amendment to IAS 1 provides a more general approach to the classification of liabilities under IAS 1, based on the contractual arrangements in place
at the reporting date. In particular, the amendment clarifies that if an entity has a right at the end of the reporting period to defer the settlement of a
liability for at least 12 months, then the liability is classified as non-current, regardless of whether the entity expects to settle within 12 months.
The amendment has no impact on the financial statements.
Amendment to IAS 16, Property, plant and equipment
The amendment clarifies that if items are produced while bringing an item of property, plant and equipment into use, the proceeds from sale of that item
cannot be deducted from the cost of the asset. The proceeds must instead be recognised in profit or loss.
The amendment has no impact on the financial statements.
Amendment to IAS 37, Provisions, contingent liabilities and contingent assets
The amendment clarifies that when assessing whether a contract is onerous, costs to be included are those that are directly related to the contract, and
include the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling the contract.
The amendment has no impact on the financial statements.
Amendment to IFRS 3, Business combinations
IFRS 3 has been amended to refer to the updated contractual framework. The amendment has no impact on the financial statements.
Annual Improvements to IFRS Standards 2018 2020 Cycle
The annual improvements contain amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41. In IFRS 1, the amendment provides a subsidiary that becomes a
first-time adopter of IFRS later than its parent with an exemption relating to the measurement of its assets and liabilities. In IFRS 9, the amendment
clarifies that, when applying the 10% per cent test for derecognition of financial liabilities and determining the fees paid net of fees received, a borrower
should include only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the
others behalf. The amendment to IFRS 16 is to one of its illustrative examples. Finally, the amendment to IAS 41 removes the requirement to exclude
cash flows for taxation when measuring fair value.
None of these amendments has any impact on the financial statements.
b) Changes in financial highlights and segment reporting
From 2022 the Group has changed the presentation of Resolution fund, bank tax etc to be presented as a separate element of Operating expenses in
the financial highlights and segment reporting. Comparative information in note G3 has therefore been restated to reflect this change in presentation.
The change in presentation does not affect the presentation in the IFRS income statement.
During the first quarter of 2022, Danske Bank settled the sale of its business activities in Luxembourg. The residual activities in Luxembourg have been
moved to Non-core in the first quarter of 2022, and this change is reflected in the 2022 financial highlights and segment reporting. There is no impact
on 2021 financial highlights nor segment reporting.
Danske Bank / Interim report first quarter 2022 38/69
Notes Danske Bank Group
G3. Business segments
(a) Business model and business segmentation
The Groups commercial activities are organised in four reporting business units:
Personal & Business Customers, which serves personal customers and small and medium-sized business customers across all Nordic markets
Large Corporates & Institutions, which serves large corporates and institutional customers across all Nordic markets
Danica Pension, which specialises in pension schemes, life insurance policies and health insurance policies in Denmark
Northern Ireland, which serves retail and commercial customers through a network of branches and business centres in Northern Ireland alongside
digital channels.
Besides the four commercial business units, the Groups reportable segments under IFRS 8 include Non-core and Group functions.
Business segments Q1 2022
Personal &
Business
Customers
Large Cor-
porates &
Institutions
Northern
Group
Danica
Ireland Non-core
Functions Eliminations
(DKK millions)
Net interest income
Net fee income
Net trading income
Net income from insurance
business
Other income
Net premiums
Net insurance benefits
Total income
Operating expenses
hereof resolution fund,
bank tax etc.
Profit before loan impair-
ment charges
Loan impairment charges
Profit before tax, core
Profit before tax, Non-core
3,909
1,815
213
-
663
-
-
1,284
1,514
737
-
1
-
-
6,600
3,881
3,535
1,744
98
116
2,720
110
2,609
-
1,791
88
1,703
-
Profit before tax
2,609
1,703
-
-
-
84
-
-
-
84
-
-
84
-
84
-
84
379
76
-143
-
3
-
-
315
308
-
7
19
-12
-
-12
-
-
-
-
-
-
-
-
-
-
-
-
-
-14
-14
60
23
-227
-
625
-
-
481
493
26
-11
17
-28
-
-28
Financial
highlights
Reclassifi-
cation
IFRS
financial
statements
5,630
3,379
565
205
-287
-13,060
5,835
3,092
-12,495
84
669
-
-
10,327
6,371
-84
1,620
9,982
-2,885
1,262
1,274
-
2,289
9,982
-2,885
11,588
7,645
-2
-49
-15
-
-622
-
-
-689
-54
-
240
-240
-
-635
-
-635
-
3,955
234
3,721
-14
-12
2
-14
14
3,943
236
3,707
-
-635
3,707
-
3,707
Loans, excluding reverse
transactions
Other assets
Total assets in Non-core
1,499,038
288,704
521,084 2,905,178
-
-
-
716,737
-
55,510
61,377
-
-
29,921
- 4,155,690
-
2,078
-29,357 1,843,815
-6,153,006 2,207,061
2,078
-
1,434 1,845,249
644 2,207,705
-
-2,078
Total assets
2,020,122 3,193,881 716,737 116,887
2,078 4,185,611 -6,182,363 4,052,954
- 4,052,954
Deposits, excluding repo
deposits
Other liabilities
Allocated capital
Total liabilities in Non-core
700,426
381,753
1,248,923 2,770,183
41,946
-
70,772
-
-
693,202
23,535
-
99,094
12,015
5,779
-
-
7,089
- 4,148,309
29,745
-
-
2,547
-11,519 1,176,842
-6,170,844 2,701,789
171,776
2,547
-
-
2,198 1,179,040
349 2,702,138
171,776
-
-
-2,547
Total liabilities and equity
2,020,122 3,193,881 716,737 116,887
2,547 4,185,142 -6,182,363 4,052,954
- 4,052,954
Profit before tax as % p.a.
of allocated capital (avg.)
Cost/income ratio (%)
Full-time-equivalent staff,
end of period
14.5
58.8
16.7
49.3
1.7
-
-0.8
97.8
-
-
-0.3
102.5
6,527
2,226
954
1,257
33
10,856
-
-
-
8.6
61.7
21,854
-
-
-
8.6
66.0
21,854
Danske Bank / Interim report first quarter 2022 39/69
Notes Danske Bank Group
G3. Business segments continued
Business segments Q1 2021
Personal &
Business
Customers
Large Cor-
porates &
Institutions
Northern
Group
Danica
Ireland Non-core
Functions Eliminations
Financial
highlights
Reclassifi-
cation
IFRS
financial
statements
(DKK millions)
Net interest income
Net fee income
Net trading income
Net income from insurance
business
Other income
Net premiums
Net insurance benefits
Total income
Operating expenses
hereof resolution fund,
bank tax etc.
Profit before loan impair-
ment charges
Loan impairment charges
Profit before tax, core
Profit before tax, Non-core
3,879
1,750
150
-
196
-
-
1,216
1,599
1,102
-
1
-
-
5,975
3,638
3,918
1,851
69
75
2,337
435
1,903
-
2,067
69
1,998
-
-
-
-
491
-
-
-
491
-
-
491
-
491
-
Profit before tax
1,903
1,998
491
331
60
-20
-
3
-
-
374
275
-
99
-7
106
-
106
-
-
-
-
-
-
-
-
-
-
-
-
-
20
20
24
-8
162
-
132
-
-
310
550
17
-240
1
-241
-
-241
-
-
-128
-
-136
-
-
-264
-41
5,450
3,402
1,266
491
195
-
-
10,805
6,273
1,107
-236
6,446
-491
1,310
8,485
15,473
1,148
1,183
6,557
3,166
7,712
-
1,505
8,485
15,473
11,952
7,456
-
160
-160
-
-223
-
-223
-
4,531
497
4,034
20
-223
4,054
-35
-55
20
-20
-
4,496
443
4,054
-
4,054
Loans, excluding reverse
transactions
Other assets
Total assets in Non-core
1,515,257
255,128
541,545 3,501,647
-
-
-
644,404
-
55,779
54,844
-
32,621
-
- 3,927,789
-
1,913
-30,912 1,827,873
-6,427,114 2,243,116
1,913
-
1,810
103
-1,913
1,829,683
2,243,220
-
Total assets
2,056,802 3,756,775 644,404 110,623
1,913 3,960,410
-6,458,026 4,072,903
- 4,072,903
Deposits, excluding repo
deposits
Other liabilities
Allocated capital
Total liabilities in Non-core
696,439
448,560
1,285,687 3,263,013
45,203
-
74,676
-
-
630,348
14,056
-
92,432
11,569
6,622
-
-
1,896
- 3,936,557
21,332
-
-
2,538
-9,673 1,229,654
-6,448,353 2,678,821
161,890
2,538
-
-
2,197
341
-
-2,538
1,231,851
2,679,162
161,890
-
Total liabilities and equity
2,056,802 3,756,775 644,404 110,623
2,538 3,959,786
-6,458,026 4,072,903
- 4,072,903
Profit before tax as % p.a.
of allocated capital (avg.)
Cost/income ratio (%)
Full-time-equivalent staff,
end of period
10.4
60.9
17.9
47.2
14.2
-
6.5
73.5
-
-
-4.4
177.4
6,853
2,506
821
1,345
29
10,423
-
-
-
10.1
58.1
21,978
-
-
-
10.1
62.4
21,978
* Comparative information has been restated, as described in note G2(b).
Danske Bank / Interim report first quarter 2022 40/69
Notes Danske Bank Group
G3. Business model and business segmentation continued
(b) Reconciliation of the financial highlights and segment reporting to the IFRS financial statements
The Reclassification column in the tables above shows the reconciliation between the presentation in the financial highlights and segment reporting and
the presentation in the IFRS financial statements. The policies for the reclassifications between the financial highlights and the IFRS financial statements
are disclosed on page 75 in Annual Report 2021. Net income from insurance business is presented before elimination of intra-group transactions. The
decomposition of the reclassification between the IFRS income statement and Financial highlights is shown in the tables below.
Reclassification Q1 2022
(DKK millions)
Net interest income
Net fee income
Net trading income
Net income from insurance business*
Other income
Net premiums
Net insurance benefits
Total income
Operating expenses
Profit before loan impairment charges
Loan impairment charges
Profit before tax, core
Profit before tax, Non-core
Profit before tax
Reclassification Q1 2021
(DKK millions)
Net interest income
Net fee income
Net trading income
Net income from insurance business*
Other income
Net premiums
Net insurance benefits
Total income
Operating expenses
Profit before loan impairment charges
Loan impairment charges
Profit before tax, core
Profit before tax, Non-core
Profit before tax
IFRS financial
statements Operating leases
Markets, Invest-
ment Banking &
Securities and
Group Treasury
Danica
Pension
Non-core
Total
reclassification
Financial
highlights
5,835
3,092
-12,495
-
2,289
9,982
-2,885
11,588
7,645
3,943
236
3,707
-
3,707
-
-
-
-
-959
-
-
-959
-959
-
-
-
-
-
388
-18
-371
-
-
-
-
-
-
-
-
-
-
-
-594
307
13,434
84
-654
-9,982
2,885
-289
-289
-
-
-
-
-
1
-3
-3
-
-8
-
-
-14
-26
12
-2
14
-14
-
-205
287
13,060
84
-1,620
-9,982
2,885
-1,262
-1,274
12
-2
14
-14
-
5,630
3,379
565
84
669
-
-
10,327
6,371
3,955
234
3,721
-14
3,707
IFRS financial
statements Operating leases
Markets, Invest-
ment Banking &
Securities and
Group Treasury
Danica
Pension
Non-core
Total
reclassification
Financial
highlights
6,557
3,166
7,712
-
1,505
8,485
15,473
11,952
7,456
4,496
443
4,054
-
4,054
-
-
-
-
-870
-
-
-870
-870
-
-
-
-
-
-244
3
239
-
2
-
-
-
-
-
-
-
-
-
-856
234
-6,685
491
-452
-8,485
-15,473
-282
-282
-
-
-
-
-
-6
-1
-
-
11
-
-
5
-31
35
55
-20
20
-
-1,107
236
-6,446
491
-1,310
-8,485
-15,473
-1,148
-1,183
35
55
-20
20
-
5,450
3,402
1,266
491
195
-
-
10,805
6,273
4,531
497
4,034
20
4,054
* Comparative information has been restated, as described in note G2(b).
Danske Bank / Interim report first quarter 2022 41/69
Notes Danske Bank Group
G4. Income
(a) Interest income and interest expense
Negative interest income during the period ending March 2022 amounted to DKK 527 million (31 March 2021: DKK 426 million). Negative interest
expenses amounted to DKK 1,120 million (31 March 2021: DKK 854 million). In the income statement, negative interest income is recognised as interest
expenses and negative interest expenses are recognised as interest income.
(b) Fee income
Note G6 of the Annual Report 2021 provides additional information on the Groups accounting policy for fee income, including the description by fee type.
Fee income Q1 2022
(DKK millions)
Investment
Money transfers, account fee, cash management and other fees
Lending and Guarantees
Capital markets
Total
Fee income Q1 2021
(DKK millions)
Investment
Money transfers, account fee, cash management and other fees
Lending and Guarantees
Capital markets
Total
(c) Other income
Financial
highlights
- net fee income
1,295
929
804
351
3,379
Reclassifica-
tions
IFRS
- net fee income
Fee expense
IFRS - gross fee
income
-114
-56
166
-282
-287
1,181
873
970
69
1,226
317
27
-
3,092
1,570
2,406
1,190
997
69
4,662
Financial
highlights
- net fee income
Reclassifica-
tions
IFRS
- net fee income
Fee expense
IFRS - gross fee
income
1,333
764
766
538
3,402
39
-36
140
-379
-236
1,373
729
906
158
1,084
333
76
-
2,457
1,062
982
158
3,166
1,494
4,660
Other income amounted to DKK 2,289 million for the three months ending 31 March 2022 (31 March 2021: DKK 1,505 million). Other income includes
income from lease assets, investment property and real estate brokerage, gain or loss on sale of disposal groups, and income from holdings in associates.
Danske Bank / Interim report first quarter 2022 42/69
Notes Danske Bank Group
G5. Loan impairment charges and reconciliation of total allowance account
Loan impairment charges include impairment charges for expected credit losses on loans, lease receivables, bonds at amortised cost and fair value
through other comprehensive income, certain loan commitments and financial guarantee contracts as well as fair value adjustments of the credit risk on
loans measured at fair value.
Loan impairment charges
(DKK millions)
ECL on new assets
ECL on assets derecognised
Impact of net remeasurement of ECL (incl. changes in models)
Write-offs charged directly to income statement
Received on claims previously written off
Interest income, effective interest method
Total
Reconciliation of total allowance account
(DKK millions)
ECL allowance account as at 1 January 2021
Transferred to stage 1 during the period
Transferred to stage 2 during the period
Transferred to stage 3 during the period
ECL on new assets
ECL on assets derecognised
Impact of net remeasurement of ECL (incl. changes in models)
Write-offs debited to the allowance account
Foreign exchange adjustments
Other changes
31 March 2022
31 March 2021
1,302
-2,154
509
690
-49
-61
236
1,311
-3,300
951
1,593
-54
-58
443
Stage 1
Stage 2
Stage 3
Total
2,267
1,844
-180
-120
646
-632
-942
-5
21
-182
7,459
-1,605
649
-872
1,282
-1,491
1,172
-
54
160
13,617
-239
-469
993
1,839
-4,578
1,058
-
328
675
23,342
-
-
-
3,768
-6,701
1,287
-5
402
653
ECL allowance account as at 31 December 2021
2,717
6,807
13,223
22,746
Transferred to stage 1 during the period
Transferred to stage 2 during the period
Transferred to stage 3 during the period
ECL on new assets
ECL on assets derecognised
Impact of net remeasurement of ECL (incl. changes in models)
Write-offs debited to the allowance account
Foreign exchange adjustments
Other changes
699
-219
-14
418
-303
-188
-
1
-18
-653
478
-290
270
-422
325
-
5
212
-46
-258
303
615
-1,429
372
-1,852
76
-188
-
-
-
1,302
-2,154
509
-1,852
81
6
ECL allowance account as at 31 March 2022
3,091
6,732
10,815
20,638
The movements on the allowance account are determined by comparing the classification and amount in the balance sheet at the beginning and the end
of the period. For further information on the decomposition of the allowance account on facilities in stages 1-3 under IFRS 9, see the notes on credit risk.
Notes Danske Bank Group
G6. Issued bonds, subordinated debt and additional tier 1 capital
Issued bonds at fair value
(DKK millions)
Bonds issued by Realkredit Danmark (covered bonds)
Commercial papers and certificates of deposits
Structured retail notes
Issued bonds at fair value, total
Issued bonds at amortised cost
(DKK millions)
Commercial papers and certificates of deposits
Preferred senior bonds
Covered bonds
Issued bonds at amortised cost, total
Non-preferred senior bonds
Danske Bank / Interim report first quarter 2022 43/69
31 March 31 December
2021
2022
738,609
3,917
3,791
770,661
24,248
-
746,317
794,909
31 March 31 December
2021
2022
940
56,265
150,645
1,488
65,221
157,145
207,850
223,854
104,829
107,654
Further information on issued bonds at fair value through profit or loss can be found in note G16 of the Annual Report 2021. The issuance and redemption of
bonds (including commercial papers and certificates of deposits at fair value) during the year are presented in the tables below.
Nominal value
(DKK millions)
Commercial papers and certificate of deposits
Preferred senior bonds*
Covered bonds
Non-preferred senior bonds
1 January
2022
23,712
67,724
165,067
108,104
Issued
Redeemed
308
592
7,070
6,644
19,463
6,823
9,163
10,564
Foreign
currency
translation
101
2,893
-3,002
1,021
31 March
2022
4,659
64,386
159,972
105,205
Other issued bonds
364,607
14,614
46,013
1,013
334,221
*Preferred senior bonds includes structured retail notes.
Nominal value
(DKK millions)
Commercial papers and certificate of deposits
Preferred senior bonds
Covered bonds
Non-preferred senior bonds
1 January
2021
22,515
63,352
168,445
105,028
Issued
Redeemed
53,067
27,282
33,344
4,371
52,783
27,717
34,037
6,422
Foreign
currency 31 December
2021
translation
913
4,805
-2,685
5,126
23,712
67,724
165,067
108,104
Other issued bonds
359,340
118,066
120,959
8,159
364,607
Subordinated debt and additional tier 1 capital
As at 31 March 2022, the nominal value of subordinated debt, including liability accounted additional tier 1 capital, amounted to DKK 39,967 million (31
December 2021: DKK 39,649 million) and the nominal value of equity accounted additional tier 1 capital to DKK 5,579 million (31 December 2021: DKK
5,577 million). During the three months ended 31 March 2022, the Group did not issue or redeem any additional tier 1 or tier 2 capital instruments. During
2021, the Group redeemed DKK 3,000 million of additional tier 1 capital accounted for as equity. The Group also issued DKK 5,577 million and redeemed
DKK 3,718 million of tier 2 capital in 2021, and issued USD 750 million (DKK 4,565 million) of liability accounted additional tier 1 capital.
For the additional tier 1 capital, Danske Bank A/S may, at its sole discretion, omit interest payments to bondholders. Any interest payments are paid out of
distributable items, which primarily consist of retained earnings in Danske Bank A/S and Danske Bank Group (see section 6.4.3 of Risk Management 2021
for further information). As at 31 March 2022, distributable items for Danske Bank A/S amounted to DKK 138.4 billion (31 December 2021: DKK 133.2
billion). The additional tier 1 capital will be temporarily written down or converted into a variable number of ordinary shares, depending on the terms of each
issued bond, if the common equity tier 1 capital ratio falls below 7% for Danske Bank A/S or Danske Bank Group. As at 31 March 2022 the common equity
tier 1 capital ratio was 20.3% (31 December 2021: 20.9%) for Danske Bank A/S. The ratios for the Danske Bank Group are disclosed in the Statement of
capital.
Danske Bank / Interim report first quarter 2022 44/69
Notes Danske Bank Group
G7. Assets held for sale and Liabilities in disposal groups held for sale
Assets held for sale and Liabilities in disposal groups held for sale include assets and liabilities that fall under IFRS 5.
(DKK millions)
Assets held for sale
Loans held for sale
Assets under insurance contracts
Other
Total
Liabilities in disposal groups
Deposits held for sale
Insurance liabilities
Total
31 March 31 December
2021
2022
-
23,750
222
4,539
23,979
282
23,972
28,800
-
22,868
6,453
23,124
22,868
29,577
In December 2021, Danske Bank entered into an agreement for the sale of Danica Pensjonforsikring AS (Danica Pension business segment in Norway)
to Storebrand. The sale is subject to approval by the Norwegian authorities. Assets and liabilities in Danica Pensjonforsikring AS primarily include
assets and liabilities under insurance contracts of DKK 23,750 million and DKK 22,868 million respectively, which are classified as assets held for
sale and liabilities in disposal groups.
Loans held for sale and associated deposits consists of loan portfolios where the Group has entered into sales agreements. In July 2021, Danske Bank
entered into a binding contract for the sale of the business activities of Danske Bank International in Luxembourg (part of the business segment Per-
sonal & Business Customers) to Union Bancaire Privée SA. The sale, which included loans, assets under management and deposits, settled in the first
quarter of 2022.
Assets held for sale also includes lease assets (where the Group acts as lessor) put up for sale at the end of the lease and properties taken over by the
Group under non-performing loan agreements. The Group expects to sell the properties through a real estate agent within 12 months from the date of
acquisition. The properties comprise properties in Denmark and in other countries.
Notes Danske Bank Group
G8. Other assets and Other liabilities
Other assets and Other liabilities
(DKK millions)
Other assets
Accrued interest and commissions due
Prepayments, accruals and other amounts due
Defined benefit pension plan, net assets
Investment property
Tangible assets
Right of use lease assets
Holdings in associates
Total
Other liabilities
Sundry creditors
Accrued interest and commissions due
Defined benefit pension plans, net liabilities
Other staff commitments
Lease liabilities
Loan commitments and guarantees etc.
Reserves subject to a reimbursement obligation
Other provisions, including litigations
Total
Danske Bank / Interim report first quarter 2022 45/69
31 March 31 December
2021
2022
3,811
14,361
2,568
1,981
8,343
3,090
210
3,450
18,558
2,451
2,263
8,583
3,922
206
34,364
39,433
39,223
5,840
448
1,618
3,068
2,579
5
701
41,191
5,845
441
1,986
3,909
2,335
5
557
53,483
56,268
In the table above showing the decomposition of Other liabilities, the line item Sundry creditors included provisions for customer remediation of DKK 494
million (31 December 2021: DKK 603 million), provisions for restructuring costs of DKK 311 million (31 December 2021: DKK 327 million) and the
provision of DKK 1.5 billion (31 December 2021: DKK 1.5 billion) for the donation of the estimated gross income from the non-resident portfolio at the
Estonian branch. Any confiscated or disgorged gross income will be deducted from the donation.
Danske Bank / Interim report first quarter 2022 46/69
Notes Danske Bank Group
G9. Foreign currency translation reserve
The Group has granted loans to its branches in Sweden, Norway and Finland in the currency of the foreign unit for a total of DKK 36,595 million (31 December
2021: DKK 35,698 million). The loans are part of the net investment in those units and the foreign currency gains/losses on these loans are recognised in
Other comprehensive income. The funding of the loans is partly done in DKK in order to create a so-called structural FX hedge position in accordance with
banking regulations, i.e. to reduce the impact on capital ratios resulting from changes in the risk exposure amount due to changes in currency rates. With
effect from 1 January 2021, the Groups net investment in its subsidiaries Danske Hypotek AB (Sweden) and Danske Mortgage Bank Plc (Finland) has been
included in the structural FX hedge position to extend the hedge to the risk exposure amount measured by currency for EUR, NOK and SEK across the entire
Group balance sheet, although with constraints to the size of the loans to the foreign branches and the net investments in the foreign subsidiaries. This
strategy of partly hedging the sensitivity to capital ratios from volatility in foreign currency rates, increases the volatility in Other comprehensive income and
the Foreign currency translation reserve in equity under IFRS since it decreases the hedge of the currency risk on the net investments in those units. As at
31 March 2022, the structural FX hedge position totalled DKK 41,339 million (31 December 2021: DKK 39,749 million) and a gain of DKK 226 million has
been recognised in Other comprehensive income during the first quarter of 2022, primarily due to appreciation of NOK against DKK throughout the first
quarter of 2022. During the first quarter of 2021, a loss of DKK 371 million related to the structural FX hedge position was recognised in Other comprehen-
sive income due to a significant weakening of NOK against DKK throughout the first quarter of 2021.
G10. Guarantees, commitments and contingent liabilities
Contingent liabilities consist of possible liabilities arising from past events. The existence of such liabilities will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the Groups control. Contingent liabilities that can, but are not likely to, result in
an outflow of economic resources are disclosed.
The Group uses a variety of loan related financial instruments to meet customers financial requirements. Instruments include loan offers and other
credit facilities, guarantees and instruments not recognised in the balance sheet. If an instrument is likely to result in a payment obligation, a liability is
recognised under Other liabilities corresponding to the present value of expected payments.
(a) Guarantees
(DKK millions)
Financial guarantees
Other guarantees
Total
(b) Commitments
(DKK millions)
Loan commitments shorter than 1 year
Loan commitments longer than 1 year
Other unutilised commitments
Total
31 March 31 December
2021
2022
6,342
76,074
6,267
74,733
82,415
81,000
31 March 31 December
2021
2022
268,171
191,851
15,662
271,862
205,503
16,183
475,683
493,549
In addition to credit exposure from lending activities, loan offers made and uncommitted lines of credit granted by the Group amounted to DKK 205 billion
(31 December 2021: DKK 194 billion). These items are included in the calculation of the total risk exposure amount in accordance with the CRR.
(c) Regulatory and legal proceedings
Estonia matter
Danske Bank remains in dialogue with various authorities regarding the terminated non-resident portfolio at the Banks Estonian branch. This includes crimi-
nal and regulatory investigations by authorities in Estonia, Denmark, France and the United States. The Bank continues to cooperate with all authorities.
In 2018, the Estonian Office of the Prosecutor General opened a criminal investigation into former employees of the Estonian branch.
In November 2018, Danske Bank was preliminary charged by the Danish Special Crime Unit (SCU) (formerly the Danish State Prosecutor for Serious Eco-
nomic and International Crime) with violating the Danish AML Act on four counts all relating to the Estonian branch in the period from 1 February 2007 to
the end of January 2016. In October 2020, SCU added violation of Section 71 of the Danish Financial Business Act for governance and control failures in the
period from 1 February 2006 to the end of 2017 to the preliminary charges.
In February 2019, Danske Bank was placed under formal investigation by an investigating judge of the Tribunal de Grande Instance de Paris in the context of
an on-going French criminal investigation and on the grounds of money laundering suspicions relating to certain transactions in the terminated portfolio of
non-resident customers of the Banks Estonian branch, amounting to around DKK 160 million and performed between 2007 and 2014. The Bank has posted
bail in the amount of DKK 80 million.
Danske Bank / Interim report first quarter 2022 47/69
Notes Danske Bank Group
G10. Guarantees, commitments and contingent liabilities continued
The Bank is reporting to, responding to and cooperating with various authorities, including SCU, the U.S. Department of Justice (DOJ) and the U.S. Securities
and Exchange Commission (SEC), relating to the Banks Estonian branch. The internal investigation work that the Bank had planned to complete during 2020
has been finalised and the Bank has reported the findings to relevant authorities. The Bank continues to fully cooperate and will provide the authorities
with further information if and when requested. On 28 April 2022, the Bank announced that it had entered into initial discussions with US and Danish
Authorities on the resolution of the Estonia matter. The overall timing of the authorities investigations remains unknown and is not within the Banks
control. It is not yet possible to reliably estimate the timing, form of resolution, or amount of potential settlement or fines, which is likely to be material.
Based on orders from the Danish FSA, Danske Banks solvency need has been increased in 2018 by a Pillar II add-on of in total DKK 10 billion to ensure
adequate capital coverage of the increased compliance and reputational risks in relation to the Estonian AML matter.
On 3 March 2019, a court case was initiated against Danske Bank for approval of a class action led by a newly formed association with the aim to
represent former and current shareholders in a liability action relating to the Estonian AML matter. On 21 January 2021, the court dismissed the case
because it did not fulfil the criteria for being approved as a class action. The decision to dismiss was confirmed by the Eastern High Court on appeal on 1
April 2022. The claimants have applied for permission to appeal the Eastern High Courts decision to the Supreme Court. In March 2019, October 2019,
January 2020, March 2020, September 2020, and February 2021 a total of 320 separate cases were initiated and are still ongoing against the Bank
with a total claim amount of approximately DKK 7.9 billion. On 27 December 2019 and 4 September 2020, two separate claims were filed by 93 inves-
tors against the Bank with a total claim amount of approximately DKK 1.6 billion. On 2 September 2020, 20 separate claims were filed by 20 investors
against the Bank with a total claim amount of approximately DKK 1.1 billion. On 18 September 2020, a separate claim was filed by 201 investors against
the Bank with a total claim amount of approximately DKK 2.1 billion. On 18 September 2020, one case was filed against the Bank and Thomas F. Borgen
by two investors with a total claim amount of DKK 10 million, which was increased to approximately DKK 147 million on 3 January 2022. These court
actions relate to alleged violations in the Banks branch in Estonia of the rules on prevention of money laundering and/or alleged failure to timely inform
the market of such violations (and in one claim, also market manipulation). A total of 200 cases have been referred to the Eastern High Court, while the
remaining cases are stayed or pending before the Copenhagen City Court. The Bank is defending itself against these claims. The timing of completion of
any such lawsuits (pending or threatening) and their outcome are uncertain.
On 20 February 2020 and 12 March 2021, two cases were initiated against Thomas F. Borgen by 76 institutional investors, and funded by the litigation
funder Deminor Recovery Services. The total claim amount is approximately DKK 3.2 billion. The main hearing was scheduled to be held in September
2021, but this hearing was cancelled after a default judgement was issued on 14 September 2021. The case was subsequently resumed on 15 Septem-
ber 2021, and the main hearing has been rescheduled for September and October 2022. Danske Bank has received procedural notifications in respect
of both cases. Under Danish law, the purpose of a procedural notification is to make a formal reservation of rights to bring a potential claim against the
notified party. On 12 November 2021, the Bank received a joinder statement of claim from the claimants requesting that Danske Bank be joined to the
case initiated on 20 February 2020 against Thomas F. Borgen. The claim amount is currently limited to DKK 10 million with a reservation to increase
this to the full amount of the claim initiated against Thomas F. Borgen on 20 February 2020. The court has stayed the claim against the Bank pending
resolution of the claims pending before the Eastern High Court. The court has stated that the claim against the Bank will not be joined to the claim against
Thomas F. Borgen and will instead continue on a standalone basis.
On 5 August 2021, an action was filed in the United States District Court for the Eastern District of New York by approximately 500 plaintiffs, comprising
U.S. military members and U.S. civilians who allegedly were killed or wounded while serving in Afghanistan between 2011 and 2016 and their families,
against the Bank and Danske Markets, Inc., as well as various branches of Deutsche Bank and Standard Chartered Bank and two money remitters Placid
Express and Wall Street Exchange. Plaintiffs claim that the defendant banks and money remitters allegedly aided and abetted a terrorist syndicate that
sponsored violence in Afghanistan, in violation of the Anti-Terrorism Act, through the facilitation of certain transactions that allegedly allowed funds to
ultimately be transferred to the terrorist organisations. The complaint seeks unspecified punitive and compensatory damages. On 18 March 2022, the
defendants separately filed motions seeking dismissal of this action. Those motions remain pending. The timing of the completion of the lawsuit and the
outcome are uncertain.
Other
Owing to its business volume, Danske Bank is continually a party to various other lawsuits and disputes and has an ongoing dialogue with public authori-
ties, such as the Danish FSA and the Danish Tax A gency on other matters. The Danish Data Protection Agency has filed a criminal complaint against
Danske Bank for the violation of the General Data Protection Regulation (GDPR) and recommends that the Danish prosecution service impose a fine of
DKK 10 million on Danske Bank. In general, Danske Bank does not expect the outcomes of any of these other pending lawsuits and disputes or its dialogue
with public authorities to have any material effect on its financia l position. Provisions for litigations are in cluded in Other liabilities, see note G8.
Danske Bank / Interim report first quarter 2022 48/69
Notes Danske Bank Group
G10. Guarantees, commitments and contingent liabilities continued
(d) Further explanation
A limited number of employees are employed under terms which, if they are dismissed before reaching their normal retirement age, grant them a sever-
ance and/or pension payment in excess of their entitlement under ordinary terms of employment. As the sponsoring employer, the Group is also liable
for the pension obligations of a number of company pension funds.
The Group participates in the Danish Guarantee Fund and the Danish Resolution Fund. The funds capital must amount to at least 0.8% and 1%, respec-
tively, of the covered deposits of all Danish credit institutions by 31 December 2024. The Danish Guarantee Fund is currently fully funded, but if the fund
subsequently does not have sufficient means to make the required payments, extraordinary contributions of up to 0.5% of the individual institutions
covered deposits may be required. Extraordinary contributions above this percentage require the consent of the Danish FSA. The first contribution to the
Danish Resolution Fund was made in December 2015. Danske Bank A/S and Realkredit Danmark A/S make contributions to the Resolution Fund on the
basis of their size and risk relative to other credit institutions in Denmark. The contribution to the Danish Resolution Fund is recognised as operating
expenses.
If the Resolution Fund does not have sufficient means to make the required payments, extraordinary contributions of up to three times the latest annual
contributions may be required. In addition, Danish banks participate in the Danish Restructuring Fund, which reimburses creditors if the final dividend is
lower than the interim dividend in respect of banks that were in distress before 1 June 2015. Similarly, Danish banks have made payment commitments
(totalling DKK 1 billion) to cover losses incurred by the Danish Restructuring Fund for the withdrawal of distressed banks from data centres etc. Payments
to the Danish Restructuring Fund are calculated on the basis of the individual credit institutions share of covered deposits relative to other credit insti-
tutions in Denmark. However, each institutions contribution to the Danish Restructuring Fund may not exceed 0.2% of its covered deposits.
The Group is a member of deposit guarantee schemes and other compensation schemes in Norway, the UK and Luxembourg. As in Denmark, the contri-
butions to the schemes in these countries are annual contributions combined with extraordinary contributions if the means of the schemes are not
sufficient to cover the required payments.
Danske Bank A/S is taxed jointly with all Danish entities of Danske Bank Group and is jointly and severally liable with these for payment of Danish corpo-
ration tax and withholding tax, etc.
Danske Bank A/S is registered jointly with all significant Danish entities of Danske Bank Group for financial services employer tax and VAT, for which
Danske Bank A/S and the entities are jointly and severally liable.
Danske Bank / Interim report first quarter 2022 49/69
Notes Danske Bank Group
G11. Assets provided or received as collateral
As at 31 March 2022, the Group had deposited securities (including bonds issued by the Group) worth DKK 53.9 billion as collateral with Danish and
international clearing centres and other institutions (31 December 2021: DKK 42.1 billion).
As at 31 March 2022, the Group had provided cash and securities (including bonds issued by the Group) worth DKK 87.1 billion as collateral for deriv-
atives transactions (31 December 2021: DKK 73.2 billion).
As at 31 March 2022, the Group had registered assets (including bonds and shares issued by the Group) under insurance contracts and unit-linked
investment contracts worth DKK 478.5 billion (31 December 2021: DKK 514.5 billion) as collateral for policyholders savings of DKK 470.0 billion (31
December 2021: DKK 493.1 billion).
As at 31 March 2022, the Group had registered loans at fair value and securities (including bonds issued by the Group) worth a total of DKK 785.5 billion
(31 December 2021: DKK 818.9 billion) as collateral for bonds issued by Realkredit Danmark. Similarly, the Group had registered loans and other assets
worth DKK 318.0 billion (31 December 2021: DKK 325.1 billion) as collateral for covered bonds issued under Danish, Finnish and Swedish law.
The table below shows assets provided as collateral for liabilities or contingent liabilities. Assets provided as collateral under repo transactions are
shown separately whereas the types explained above are included in the column Other.
31 March 2022
31 December 2021
(DKK millions)
Repo
Other
Total
Repo
Other
Total
Due from credit institutions
Trading and investment securities
Loans at fair value
Loans at amortised cost
Assets under insurance contracts and unit-
linked investment contracts
Other assets
-
227,847
-
-
-
-
25,600
94,851
778,830
336,866
405,247
61
25,600
322,698
778,830
336,866
405,247
61
-
193,258
-
-
-
-
29,928
70,857
809,872
339,183
433,672
50
29,928
264,115
809,872
339,183
433,672
50
Total
Own issued bonds
227,847
37,757
1,641,456
80,825
1,869,302
118,582
193,258
32,592
1,683,562
90,192
1,876,820
122,784
Total, including own issued bonds
265,604
1,722,280
1,987,884
225,850
1,773,754
1,999,604
Securities provided as collateral under agreements that entitle the counterparty to sell the securities or provide them as collateral for other loans
amounted to DKK 227.8 billion as at 31 March 2022 (31 December 2021: DKK 193.3 billion).
As at 31 March 2022, the Group had received securities worth DKK 303.4 billion (31 December 2021: DKK 297.8 billion) as collateral for reverse repo
transactions, securities lending, derivatives transactions and other transactions entered into on the standard terms for such transactions. As the party
receiving the collateral, the Group is entitled in most cases to sell the securities or provide the securities as collateral for other loans in exchange for
returning similar securities to the counterparty at the expiry of the transactions. As at 31 March 2022, the Group had sold securities or provided secu-
rities as collateral worth DKK 152.4 billion (31 December 2021: DKK 133.0 billion).
The Group also receives many other types of assets as collateral in connection with its ordinary lending activities. The Group has not received the own-
ership of these assets. The risk management notes of the Annual Report 2021 provide more details on assets received as collateral in connection with
ordinary lending activities.
Danske Bank / Interim report first quarter 2022 50/69
Notes Danske Bank Group
G12. Fair value information for financial instruments
Financial instruments are recognised in the balance sheet at fair value or amortised cost.
(DKK millions)
Financial assets
Cash in hand and demand deposits with central banks
Due from credit institutions and central banks
Trading portfolio assets
Investment securities
Loans at amortised cost
Loans at fair value
Assets under pooled schemes and unit-linked investment contracts
Assets under insurance contracts
Loans held for sale
31 March 2022
31 December 2021
Fair value
Amortised cost
Fair value
Amortised cost
-
46,474
616,572
157,182
-
990,142
71,667
564,375
-
259,759
29,369
-
149,725
1,068,022
-
-
-
-
-
39,462
509,590
157,056
-
1,024,461
76,654
522,184
-
293,386
31,694
-
146,721
1,027,442
-
-
-
4,539
Total
2,446,413
1,506,875
2,329,407
1,503,781
Financial liabilities
Due to credit institutions and central banks
Trading portfolio liabilities
Deposits
Issued bonds at fair value
Issued bonds at amortised cost
Deposits under pooled schemes and unit-linked investment contracts
Liabilities held for sale
Non-preferred senior bonds
Subordinated debt
Loan commitments and guarantees
90,534
477,007
172,834
746,317
-
72,320
-
-
-
-
95,052
-
1,164,618
-
207,850
-
-
104,829
38,917
2,579
84,763
374,959
134,332
794,909
-
76,982
-
-
-
-
88,213
-
1,157,698
-
223,854
-
6,453
107,654
39,321
2,335
Total
1,559,011
1,613,845
1,465,945
1,625,529
Investment securities at fair value includes bonds measured at fair value through other comprehensive income, see the table on bonds in the Risk ma-
nagement notes. All other financial assets in the column Fair value are mandatorily measured at fair value through profit or loss under IFRS 9. Except
for trading portfolio liabilities, all other financial liabilities are measured at fair value through profit or loss using the fair value option.
Financial instruments at fair value
Note G33(a) of the Annual Report 2021 provides more information about fair value calculation methods for financial instruments.
Financial instruments valued on the basis of quoted prices in an active market are recognised in the Quoted prices category. Financial instruments valued
substantially on the basis of other observable input are recognised in the Observable input category. This category covers instruments such as derivatives
valued on the basis of observable yield curves and exchange rates and illiquid mortgage bonds valued by reference to the value of similar, liquid bonds.
Other financial instruments valued substantially on the basis of non-observable input are recognised in the Non-observable input category. This category
covers instruments such as unlisted shares, some unlisted bonds and a very limited portion of the derivatives portfolio.
If, at the balance sheet date, a financial instrument's classification differs from its classification at the beginning of the year, the classification of the
instrument changes. Changes are considered to have taken place at the balance sheet date. Developments in the financial markets have resulted in re-
classification between the categories. Some bonds have become illiquid and have therefore been moved from the Quoted prices to the Observable input
category, while other bonds have become liquid and have been moved from the Observable input to the Quoted prices category. The amounts transferred
are insignificant.
Financial instruments at amortised cost
Note G33(b) in Annual Report 2021 provides information on the difference between the carrying amount and the fair value of financial instruments rec-
ognised at amortised cost. No significant change to this difference has occurred during the first three months of 2022.
Danske Bank / Interim report first quarter 2022 51/69
Notes Danske Bank Group
G12. Fair value information for financial instruments continued
(DKK millions)
31 March 2022
Financial assets
Due from credit institutions and central banks
Derivatives
Trading portfolio bonds
Trading portfolio shares
Investment securities, bonds
Investment securities, shares
Loans at fair value
Assets under pooled schemes and unit-linked investment contracts
Assets under insurance contracts, bonds
Assets under insurance contracts, shares
Assets under insurance contracts, derivatives
Quoted prices
Observable
input
Non-observable
input
-
4,741
256,422
9,913
127,574
-
-
71,667
170,040
144,779
-
46,474
322,026
22,328
-
28,424
-
990,142
-
19,287
5,037
172,371
-
1,000
-
142
-
1,185
-
-
4,344
46,714
1,803
Total
46,474
327,767
278,750
10,055
155,998
1,185
990,142
71,667
193,671
196,530
174,174
Total
785,136
1,606,089
55,188
2,446,413
Financial liabilities
Due to credit institutions and central banks
Derivatives
Obligations to repurchase securities
Deposits
Issued bonds at fair value
Deposits under pooled schemes and unit-linked investment contracts
Total
(DKK millions)
31 December 2021
Financial assets
Due from credit institutions and central banks
Derivatives
Trading portfolio bonds
Trading portfolio shares
Investment securities, bonds
Investment securities, shares
Loans at fair value
Assets under pooled schemes and unit-linked investment contracts
Assets under insurance contracts, bonds
Assets under insurance contracts, shares
Assets under insurance contracts, derivatives
-
4,719
150,406
-
746,317
-
90,534
318,514
2,000
172,834
-
72,320
-
1,349
20
-
-
-
90,534
324,582
152,426
172,834
746,317
72,320
901,441
656,201
1,369
1,559,011
Quoted prices
Observable
input
Non-observable
input
Total
-
3,925
226,350
11,977
132,415
-
-
76,654
176,479
156,574
-
39,462
254,193
10,933
-
23,411
-
1,024,461
-
23,610
4,998
107,636
-
2,106
-
106
-
1,230
-
-
5,300
45,353
2,234
39,462
260,224
237,283
12,083
155,826
1,230
1,024,461
76,654
205,389
206,925
109,870
Total
784,374
1,488,704
56,329
2,329,407
Financial liabilities
Due to credit institutions and central banks
Derivatives
Obligations to repurchase securities
Deposits
Issued bonds at fair value
Deposits under pooled schemes and unit-linked investment contracts
-
3,929
130,396
-
794,909
-
84,763
236,240
2,443
134,332
-
76,982
-
1,835
116
-
-
-
84,763
242,004
132,955
134,332
794,909
76,982
Total
929,234
534,760
1,951
1,465,945
Danske Bank / Interim report first quarter 2022 52/69
Notes Danske Bank Group
G12. Fair value information for financial instruments continued
Financial instruments valued on the basis of non-observable input
The tables below shows financial instruments valued on the basis of non-observable input.
(DKK millions)
31 March 2022
Unlisted shares
allocated to insurance contract policyholders
other
Illiquid bonds
Derivatives, net fair value
31 December 2021
Unlisted shares
allocated to insurance contract policyholders
other
Illiquid bonds
Derivatives, net fair value
Carrying amount
Increase
Decrease
Sensitivity (change in fair value)
Gains/losses for the period
Realised
Unrealised
46,714
1,307
4,344
1,455
45,353
1,220
5,300
2,504
-
131
88
-
-
122
101
-
-
131
88
-
-
122
101
-
1,366
18
-
-
3,950
125
120
-
391
-7
2
35
7,802
-12
117
-909
For unlisted shares allocated to insurance contract policyholders, the policyholders assume most of the risk on the shares. Therefore, changes in the fair
value of those shares will only to a limited extent affect the Groups net profit. The Groups remaining portfolio of unlisted shares consists primarily of
banking-related investments and holdings in private equity funds. The sensitivity of the fair value measurement to changes in the unobservable input
disclosed in the table is calculated as a 10% increase or 10% decrease in fair value. Under current market conditions, a 10 % decrease in the fair value
is considered to be below a possible alternative estimate of the fair value at the end of the period. The unrealised adjustments in the three month period
ended 31 March 2022 were attributable to various unlisted shares.
The estimated fair value of illiquid bonds depends significantly on the estimated credit spread. In the table, the sensitivity of the fair value measurement
to changes in non-observable input is calculated as a 50bps widening or narrowing of the credit spread.
A substantial number of derivatives valued on the basis of non-observable input are hedged by similar derivatives or are used for hedging the credit risk
on bonds also valued on the basis of non-observable input. Changing one or more of the non-observable inputs to reflect reasonable, possible alternative
assumptions would not change the fair value of the derivatives significantly above what is already covered by the reserve related to fair value adjustment
for model risk.
Shares, bonds and derivatives valued on the basis of non-observable input
Reconciliation from beginning to end of period
31 March 2022
31 December 2021
(DKK millions)
Shares
Bonds
Derivatives
Shares
Bonds
Derivatives
Fair value at 1 January
Value adjustment through profit or loss
Acquisitions
Sale and redemption
Transferred from quoted prices and observable input
Transferred to quoted prices and observable input
46,573
1,768
3,104
-3,424
-
-
5,300
2
44
-1,002
-
-
2,504
35
-53
-35
-8
-988
36,028
11,865
9,556
-10,611
-
-265
7,438
237
122
-2,497
-
-
3,083
-909
-191
161
-2
363
Fair value end of period
48,021
4,344
1,455
46,573
5,300
2,504
The value adjustment through profit or loss is recognised under Net trading income or loss. The transfer of derivatives to the Observable input category
consists primarily of maturity reductions, implying that the yield curves have become observable.
Danske Bank / Interim report first quarter 2022 53/69
Notes Danske Bank Group
G13. Group holdings and undertakings
(a) Disposal of MobilePay A/S in exchange for an interest in Vipps AS
In June 2021, Danske Bank entered into an agreement with OP Financial Group in Finland and the consortium of banks behind Vipps in Norway to merge
the three mobile payment providers MobilePay, Vipps and Pivo into one comprehensive digital wallet serving 11 million users and over 330,000 shops
and web shops.
The merger is expected to result in a one-off gain for Danske Bank of approximately DKK 400 500 million once it is approved by the relevant authorities.
Final approval is expected Q2 or Q3 2022. After the merger, Danske Bank will own 25% of the new parent company, Vipps AS.
Danske Bank / Interim report first quarter 2022 54/69
Notes Danske Bank Group
Risk Management
The consolidated financial statements for 2021 provide a detailed description of the Groups risk management practices.
Breakdown of credit exposure
Lending activities
Total
Core
Non-core
Counterparty
credit risk
Trading and
investment
securities
Customer-
funded
investments
(DKK billions)
31 March 2022
Balance sheet items
Demand deposits with central banks
Due from credit institutions and central banks
Trading portfolio assets
Investment securities
Loans at amortised cost
Loans at fair value
Assets under pooled schemes and unit-linked investment contracts
Assets under insurance contracts
Assets held for sale
Off-balance-sheet items
Guarantees
Loan commitments shorter than 1 year
Loan commitments longer than 1 year
Other unutilised commitments
Total
31 December 2021
Balance sheet items
Demand deposits with central banks
Due from credit institutions and central banks
Trading portfolio assets
Investment securities
Loans at amortised cost
Loans at fair value
Assets under pooled schemes and unit-linked investment contracts
Assets under insurance contracts
Assets held for sale
Off-balance-sheet items
Guarantees
Loan commitments shorter than 1 year
Loan commitments longer than 1 year
Other unutilised commitments
253.2
75.8
616.6
306.9
1,068.0
990.1
71.7
591.8
23.7
82.4
268.2
191.9
15.7
253.2
29.4
-
-
1,066.6
778.8
-
-
-
82.4
266.6
191.9
-
4,556.0
2,668.8
286.6
71.2
509.6
303.8
1,027.4
1,024.5
76.7
547.8
28.5
81.0
271.9
205.5
16.2
286.6
31.7
-
-
1,026.1
809.9
-
-
4.5
81.0
270.3
205.5
-
-
-
-
-
1.4
-
-
-
-
-
1.6
-
-
3.0
-
-
-
-
1.3
-
-
-
-
-
1.6
-
-
2.9
-
46.5
327.8
-
-
211.3
-
-
-
-
-
-
-
-
-
288.8
306.9
-
-
-
-
-
-
-
-
0.1
-
-
-
-
-
-
71.7
591.8
23.7
-
-
-
15.5
585.6
595.8
702.8
-
39.5
260.2
-
-
214.6
-
-
-
-
-
-
-
-
-
249.4
303.8
-
-
-
-
-
-
-
-
0.1
-
-
-
-
-
-
76.7
547.8
24.0
-
-
-
16.0
514.3
553.3
664.5
Total
4,450.5
2,715.6
In addition to credit exposure from lending activities, Danske Bank had made uncommitted loan offers and granted uncommitted lines of credit of DKK
205 billion at 31 March 2022 (31 December 2021: DKK 194 billion). These items are included in the calculation of the total risk exposure amount in
accordance with the Capital Requirements Directive.
The Groups direct exposure to Russia and Ukraine amounted to less than DKK 0.2 billion at 31 March 2022, and is therefore very limited.
Danske Bank / Interim report first quarter 2022 55/69
Notes Danske Bank Group
Credit exposure
Credit exposure from core lending activities
Credit exposure from lending activities in the Groups core banking business includes loans, amounts due from credit institutions and central banks,
guarantees and irrevocable loan commitments. The exposure is measured net of expected credit losses and includes repo loans at amortised cost. For
reporting purposes, all collateral values are net of haircuts and capped at the exposure amount. The credit exposure from Non-core lending activities is
disclosed further on in these notes.
The Group implemented a new Definition of Default in January 2022 in order to align the existing definition of default for accounting with the regulatory
purposes. According to the new definition of default, all exposures in stage 3 are considered default. As a result, all non-performing loans are now con-
sidered default, and hence equal to the total of stage 3 exposures.
For further details about the Groups credit risk management and the use of information on expected credit losses for risk management purposes, see
Risk Management 2021.
Credit portfolio in core activities broken down by rating category and stages
The table below breaks down the credit exposure by rating categories and stages. Further information on classification of customers can be found on
page 162 in Annual report 2021.
31 March 2022
(DKK billions)
PD level
Upper
Lower
Gross exposure
Stage 1 Stage 2 Stage 3
Expected credit loss
Stage 1 Stage 2 Stage 3
Net exposure
Stage 1 Stage 2 Stage 3
Net exposure, ex collateral
Stage 1 Stage 2 Stage 3
1
2
3
4
5
6
7
8
9
10
11 (default)
Total
0.01
-
0.03
0.01
0.06
0.03
0.14
0.06
0.31
0.14
0.63
0.31
1.90
0.63
1.90
7.98
7.98 25.70
25.70 99.99
100.00 100.00
118.6
320.7
563.3
638.7
491.1
274.8
103.2
11.9
2.1
0.4
0.2
0.1
0.2
1.1
1.9
3.9
17.2
44.5
37.3
4.1
16.9
0.5
-
-
-
-
-
-
-
-
-
-
35.8
-
-
0.1
0.2
0.4
0.6
1.0
0.5
-
-
0.1
-
-
-
-
-
0.2
1.7
2.5
0.9
1.3
-
-
-
-
-
-
-
-
-
-
-
9.9
118.6
320.7
563.2
638.4
490.6
274.2
102.2
11.4
2.1
0.4
-
0.1
0.2
1.1
1.9
3.9
16.9
42.7
34.8
3.1
15.7
0.5
-
-
-
-
-
-
-
-
-
-
25.9
101.7
197.3
260.9
293.3
156.9
100.1
33.5
3.7
1.3
0.1
0.1
0.1
0.1
0.6
0.8
1.3
5.8
14.2
7.8
0.5
3.1
0.1
-
-
-
-
-
-
-
-
-
-
2.5
2,525.0
127.7
35.8
3.1
6.7
9.9
2,521.9
121.0
25.9
1,148.6
34.5
2.5
31 December 2021
(DKK billions)
1
2
3
4
5
6
7
8
9
10
11 (default)
Total
PD level
Net exposure, ex collateral
Lower Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
Expected credit loss
Gross exposure
Net exposure
Upper
-
0.01
0.03
0.06
0.14
0.31
0.63
1.90
7.98
25.70
0.01
0.03
0.06
0.14
0.31
0.63
1.90
7.98
25.70
99.99
100.00 100.00
264.7
207.3
570.6
637.2
485.0
275.7
103.0
16.5
0.6
0.4
-
0.1
0.6
1.9
2.5
4.0
17.1
46.6
40.0
5.1
12.6
0.2
-
0.4
1.5
2.3
2.1
1.1
1.0
0.3
0.1
22.5
14.6
-
-
0.1
0.1
0.3
0.5
0.9
0.6
0.1
-
0.1
-
-
-
-
-
0.2
1.4
2.9
1.1
1.2
-
-
-
-
-
-
-
-
0.1
-
4.9
7.3
264.7
207.3
570.6
637.0
484.7
275.1
102.1
16.0
0.5
0.4
0.1
0.1
0.6
1.9
2.5
4.0
16.9
45.2
37.1
4.0
11.4
0.2
-
0.4
1.4
2.2
2.1
1.1
1.0
0.2
0.1
17.7
7.3
245.1
80.6
264.9
287.3
150.3
94.6
30.1
3.8
0.1
0.1
0.1
-
0.2
0.9
0.8
0.9
5.9
13.8
11.0
0.5
3.4
-
-
-
-
0.1
0.1
-
-
-
-
3.0
0.2
2,560.9
130.6
46.0
2.7
6.8
12.4 2,558.2
123.8
33.6
1,156.8
37.5
3.5
Exposures, expected credit losses and collateral in default have increased compared to the end of 2021 due to the implementation of the new definition
of default in January 2022. At the same time, stage 3 decreased primarily due to 1) final adjustments of staging during the implementation of new
definition of default that is now aligned to European Banking Authority requirements and 2) write-offs. The stage 3 coverage ratio is 80%.
Danske Bank / Interim report first quarter 2022 56/69
Notes Danske Bank Group
Credit exposure continued
Credit portfolio in core activities broken down by industry (NACE) and stages
The table below breaks down credit exposure by industry. The industry segmentation is based on the classification principles of the Statistical Classifi-
cation of Economic Activities in the European Community (NACE) standard that has been adapted to the Groups business risk approach used for the
active management of the credit portfolio.
31 March 2022
(DKK billions)
Gross exposure
Expected credit loss
Net exposure
Net exposure, ex collateral
Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
Stage 1 Stage 2 Stage 3
Public institutions
Financials
Agriculture
Automotive
Capital goods
Commercial property
Construction and building materials
Consumer goods
Hotels, restaurants and leisure
Metals and mining
Other commercials
Pharma and medical devices
Private housing co-ops and non-
profit associations
Pulp, paper and chemicals
Retailing
Services
Shipping, oil and gas
Social services
Telecom and media
Transportation
Utilities and infrastructure
Personal customers
298.2
121.0
55.6
31.1
72.7
287.3
48.6
65.8
8.1
13.6
20.4
43.0
203.1
40.2
30.5
57.7
31.2
25.8
21.9
14.2
86.3
948.7
1.3
1.9
7.6
1.4
6.0
19.8
4.5
4.9
6.2
0.4
1.3
5.2
4.4
1.5
1.8
3.8
2.6
0.9
0.5
2.3
3.4
45.9
-
0.4
3.8
0.2
1.2
4.4
1.4
0.7
1.2
-
0.2
-
0.8
0.2
2.0
0.7
5.4
0.7
0.2
0.5
-
11.8
-
0.1
0.3
0.1
0.2
0.5
-
-
-
-
0.2
-
0.1
-
-
0.2
0.2
-
-
-
0.1
1.0
-
0.2
1.3
0.1
0.4
1.4
0.2
0.2
0.2
-
-
0.1
0.1
-
0.1
0.2
0.3
0.1
-
0.2
0.1
1.5
-
0.1
1.0
0.1
0.5
1.0
0.6
0.3
0.4
-
-
-
0.2
0.1
0.7
0.3
1.2
0.1
0.1
0.1
-
3.1
298.2
120.9
55.2
31.0
72.5
286.8
48.5
65.8
8.1
13.6
20.3
42.9
203.0
40.2
30.5
57.5
31.0
25.8
21.9
14.1
86.2
947.7
1.3
1.7
6.3
1.2
5.6
18.4
4.3
4.8
6.0
0.4
1.3
5.1
4.3
1.5
1.7
3.6
2.3
0.8
0.5
2.1
3.3
44.4
-
0.3
2.7
0.2
0.8
3.4
0.8
0.4
0.8
-
0.2
-
0.6
0.1
1.3
0.4
4.2
0.5
0.1
0.4
-
8.7
295.4
112.8
12.4
25.6
63.9
60.4
35.5
50.8
3.4
10.8
16.7
40.8
34.5
28.3
21.0
46.8
18.5
10.1
20.0
6.4
65.4
169.1
-
1.1
1.0
0.5
4.6
1.6
2.1
2.6
1.1
0.3
0.2
4.6
0.7
0.4
1.0
2.3
1.5
0.3
0.3
0.9
2.5
4.8
-
-
0.1
0.1
0.3
0.3
0.2
0.1
0.1
-
-
-
-
-
0.5
0.1
-
0.4
-
0.1
-
-
Total
2,525.0
127.7
35.8
3.1
6.7
9.9
2,521.9
121.0
25.9
1,148.6
34.5
2.5
As at 31 March 2022, oil and gas exposures (within the Shipping, oil and gas industry) represent a gross exposure of DKK 17.7 billion (31 December
2021: DKK 18.3 billion) and expected credit losses of DKK 0.9 billion (31 December 2021: DKK 1.8 billion). Those exposures represent the majority of
the exposures in stage 3 within the Shipping, oil and gas industry at the end of March 2022.
Danske Bank / Interim report first quarter 2022 57/69
Notes Danske Bank Group
Credit exposure continued
31 December 2021
(DKK billions)
Gross exposure
Expected credit loss
Net exposure
Net exposure, ex collateral
Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
Public institutions
Financials
Agriculture
Automotive
Capital goods
Commercial property
Construction and building materials
Consumer goods
Hotels, restaurants and leisure
Metals and mining
Other commercials
Pharma and medical devices
Private housing co-ops and
non-profit associations
Pulp, paper and chemicals
Retailing
Services
Shipping, oil and gas
Social services
Telecom and media
Transportation
Utilities and infrastructure
Personal customers
332.8
122.0
57.6
25.3
71.4
291.2
46.1
71.1
8.5
12.6
13.3
53.1
207.4
39.0
28.4
57.9
31.3
25.5
22.2
14.3
76.1
953.9
1.4
2.8
5.6
1.6
6.9
19.6
4.5
4.3
5.4
0.4
1.1
5.5
4.2
1.5
1.7
3.3
3.2
0.9
0.5
2.0
4.6
49.6
-
0.4
4.8
0.3
1.6
5.5
1.9
1.0
1.9
0.1
0.1
-
0.9
0.2
2.4
0.8
6.6
1.0
0.2
0.5
-
15.9
-
0.1
0.3
-
-
0.5
-
-
-
-
0.2
-
0.1
-
-
0.2
0.1
-
-
-
-
1.1
-
0.2
0.9
0.1
0.3
1.5
0.4
0.3
0.2
-
-
0.1
0.2
-
0.1
0.2
0.3
0.1
-
0.2
0.1
1.6
- 332.8
0.2 122.0
57.3
1.2
25.3
0.1
0.6
71.3
1.2 290.7
46.1
0.7
71.0
0.3
8.5
0.4
12.6
-
13.1
-
53.1
-
0.2 207.3
39.0
0.1
28.4
1.0
57.7
0.4
31.2
2.4
25.4
0.3
22.2
0.1
14.3
0.1
76.0
-
3.1 952.8
1.4
2.5
4.7
1.5
6.7
18.1
4.1
4.0
5.2
0.4
1.1
5.5
4.0
1.5
1.6
3.2
2.9
0.8
0.5
1.8
4.4
48.0
-
0.2
3.6
0.2
1.0
4.3
1.2
0.7
1.4
-
0.1
-
0.7
0.1
1.4
0.5
4.2
0.7
0.1
0.4
-
12.8
330.1
107.9
12.2
19.9
62.6
59.3
32.8
53.0
3.0
10.0
9.1
50.7
34.1
27.8
18.1
46.9
16.8
9.3
20.3
6.5
56.4
170.1
0.1
1.4
0.8
0.7
5.7
1.9
1.9
2.6
0.8
0.1
0.2
4.5
0.5
0.3
1.0
1.9
1.4
0.4
0.3
0.8
4.2
5.8
-
-
0.1
0.1
0.5
0.6
0.5
-
0.2
-
-
-
0.1
-
0.2
0.1
-
0.4
-
0.1
-
0.5
Total
2,560.9
130.6
46.0
2.7
6.8
12.4 2,558.2 123.8
33.6
1,156.8
37.5
3.5
Collateral
The Group uses a number of measures to mitigate credit risk, including collateral, guarantees and covenants. The main method is obtaining collateral. In
Annual Report 2021, a table showing collateral by type (after haircut) is included. The mitigating effect from collateral at the end of March 2022 can be
found as the difference between the columns Net exposure and Net exposure, ex collateral and amounted to DKK 1,483.2 billion at 31 March 2022
(31 December 2021: DKK 1,517.8 billion).
The Group uses guarantee schemes offered by the governments in our markets to mitigate the economic consequences of the corona crisis. The out-
standing amount of loans originated under such guarantee schemes was DKK 4.3 billion (31 December 2021: DKK 4.9 billion) with the guarantees
covering DKK 3.9 billion of the loans (31 December 2021: DKK 4.0 billion). A large part of the guarantees relates to Northern Ireland.
Danske Bank / Interim report first quarter 2022 58/69
Notes Danske Bank Group
Credit exposure continued
The table below breaks down credit exposure by core business unit and underlying segment.
31 March 2022
Gross exposure
Expected credit loss
Net exposure
Net exposure, ex collateral
(DKK billions)
Stage 1
Stage 2 Stage 3
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Personal & Business
Customers
Personal Customers
Denmark
Personal Customers
Nordic
Business Customers
Asset Finance
Other
517.7
25.2
7.7
1.0
1.1
2.1
516.8
24.1
5.6
67.3
2.4
-
419.4
659.7
49.0
-
15.9
48.6
12.1
-
3.3
14.2
1.1
-
Total
1,645.8
101.8
26.4
Large Corporates &
Institutions
Northern Ireland
Group Functions
565.5
21.1
92.0
221.7
4.5
0.3
7.6
1.9
-
0.2
1.0
0.1
-
2.3
0.6
0.2
-
0.3
3.8
0.4
-
5.6
1.0
0.1
-
0.8
4.3
0.3
-
419.3
658.6
48.9
-
15.6
44.8
11.7
-
2.5
10.0
0.8
-
99.9
190.4
19.0
-
1.9
11.3
2.3
-
7.4
1,643.6
96.2
18.9
376.6
18.0
-
1.3
0.1
-
1.4
2.0
564.8
20.1
5.6
497.3
15.5
1.0
0.5
91.8
-
221.7
4.5
0.2
1.4
53.6
-
221.0
0.7
0.2
-
-
Total
2,525.0
127.7
35.8
3.1
6.7
9.9
2,521.9
121.0
25.9
1,148.6
34.5
2.5
31 December 2021
(DKK billions)
Personal & Business
Customers
Personal Customers
Denmark
Personal Customers
Nordic
Business Customers
Asset Finance
Other
Gross exposure
Expected credit loss
Net exposure
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Net exposure, ex collateral
Stage 1
Stage 2
Stage 3
532.7
23.4
12.0
0.9
1.2
2.3
531.8
22.2
9.8
63.9
2.3
0.3
400.8
663.6
48.8
4.0
20.1
45.3
10.7
0.2
3.2
17.7
0.9
0.1
Total
1,650.0
99.7
33.9
Large Corporates &
Institutions
560.5
25.4
10.1
Northern Ireland
Group Functions
93.7
256.7
5.4
0.1
2.0
-
0.2
1.0
0.1
-
2.2
0.3
0.1
-
0.3
3.7
0.4
-
5.6
1.1
0.1
-
0.6
4.9
0.2
-
400.6
662.6
48.8
4.0
19.8
41.6
10.3
0.2
2.6
12.8
0.7
0.1
103.8
176.3
17.5
0.9
2.9
11.0
2.0
0.1
8.0 1,647.7
94.2
25.9
362.5
18.3
3.8
560.2
24.2
6.3
482.2
18.4
0.6
93.6
-
256.7
5.3
0.1
1.4
55.9
-
256.3
0.7
0.1
0.2
1.9
0.1
-
2.4
0.9
0.1
-
Total
2,560.9
130.6
46.0
2.7
6.8
12.4 2,558.2
123.8
33.6
1,156.8
37.5
3.5
Danske Bank / Interim report first quarter 2022 59/69
Notes Danske Bank Group
Credit exposure continued
Exposures subject to forbearance measures
The Groups forbearance practices is described on page 169 in Annual Report 2021.
During the corona crisis, the Group has granted concessions to assist customers affected by the crisis. Such concessions represent an increase in gross
exposure of around DKK 23 billion, of which around DKK 8 billion (net of expected credit losses) is considered forbearance measures, see note G1(b)
section Accounting treatment of the impacts on expected credit losses from the corona crisis in Annual report 2021 for the definition of when such
concessions are considered to be a forbearance measure. At the end of 2021, such concessions represented an increase in gross exposure of DKK 13
billion, of which around DKK 13 billion (net of expected credit losses) was considered forbearance measures. The concessions considered forbearance
measures relate primarily to Personal customers and the shipping, oil and gas, Hotels, restaurants and leisure, Consumer goods and Retailing industries.
In our Nordic markets, such concessions are made on a voluntary basis, while in Northern Ireland, the Bank was selected by the UK Government to
provide concessions through the UK government-backed lending schemes.
Exposures subject to forbearance measures
(DKK millions)
Active forbearance
Under probation
Total
*These loans are part of the total stage 3 loan amount.
31 March 2022
31 December 2021
Performing Non-performing*
Performing
Non-performing*
2,388
13,830
16,219
7,713
-
7,713
7,348
13,993
21,341
7,317
-
7,317
Notes Danske Bank Group
Credit exposure continued
Allowance account in core activities
(DKK millions)
ECL allowance account as at 1 January 2021
Transferred to stage 1 during the period
Transferred to stage 2 during the period
Transferred to stage 3 during the period
ECL on new assets
ECL on assets derecognised
Impact of net remeasurement of ECL (incl. changes in models)
Write-offs debited to the allowance account
Foreign exchange adjustments
Other changes
Danske Bank / Interim report first quarter 2022 60/69
Stage 1
Stage 2
Stage 3
Total
2,263
1,843
-180
-120
646
-629
-923
-5
21
-182
7,438
-1,604
649
-864
1,282
-1,483
1,172
-
54
160
12,853
-239
-469
984
1,839
-4,377
1,011
-
268
527
22,554
-
-
-
3,767
-6,489
1,259
-5
343
505
ECL allowance account as at 31 December 2021
2,733
6,804
12,397
21,935
Transferred to stage 1 during the period
Transferred to stage 2 during the period
Transferred to stage 3 during the period
ECL on new assets
ECL on assets derecognised
Impact of net remeasurement of ECL (incl. changes in models)
Write-offs debited to the allowance account
Foreign exchange adjustments
Other changes
698
-219
-14
417
-301
-213
-
1
-13
-653
476
-285
270
-416
327
-
5
202
-46
-257
299
615
-1,423
377
-1,849
58
-229
-
-
-
1,302
-2,140
492
-1,850
64
-40
ECL allowance account as at 31 March 2022
3,090
6,730
9,942
19,762
Notes Danske Bank Group
Credit exposure continued
Allowance account in core activities broken down by segment
(DKK millions)
ECL allowance account as at 1 January 2021
ECL on new assets
ECL on assets derecognised
Impact on remeasurement of ECL (incl. change in models)
Write-offs debited to allowance account
Foreign currency translation
Other changes
Danske Bank / Interim report first quarter 2022 61/69
Personal &
Business
Customers
Large
Corporates &
Institutions
Northern
Ireland
Group
Functions
Allowance
account
Total
15,773
2,292
-2,887
1,238
-
14
-590
5,777
1,215
-3,333
152
-
257
1,159
990
259
-266
-135
-5
71
-63
850
23
-41
42
-104
-6
-
763
15
2
-3
4
-
-
-1
17
4
-1
14
-
-
-
34
22,554
3,767
-6,489
1,259
-5
343
505
21,935
1,302
-2,140
492
-1,850
64
-40
19,762
ECL allowance account as at 31 December 2021
15,840
5,227
ECL on new assets
ECL on assets derecognised
Impact on remeasurement of ECL (incl. change in models)
Write-offs debited to allowance account
Foreign currency translation
Other changes
739
-845
124
-455
8
-52
536
-1,253
312
-1,290
61
13
ECL allowance account as at 31 March 2022
15,359
3,607
The method used for calculating expected credit losses is described in detail in note G15 of the Annual Report 2021.
Macroeconomic scenarios
The incorporation of forward-looking elements reflects the expectations of the Groups senior management and involves the creation of scenarios (base
case, upside and downside scenarios), including an assessment of the probability for each scenario. The purpose of using multiple scenarios is to model
the non-linear impact of assumptions about macroeconomic factors on the expected credit losses.
The forward-looking information is based on a three-year forecast period converging to steady state in year seven. That is, after the forecast period, the
macroeconomic scenarios revert slowly towards a steady state.
The applied scenarios that drive the expected credit loss calculation in the first quarter of 2022 have been updated with the latest macroeconomic data.
Compared to the end of 2021, the base and the upside scenarios have been revised to reflect expectations of higher inflation and interest rate hikes
fuelled by the war in Ukraine. The scenario weighting remained unchanged from the end of 2021.
The base case is an extension of the Groups official view of the Nordic economies (the Nordic Outlook report). At 31 March 2022, the base case scenario
reflects an expectation of higher inflation and interest rates fuelled by the war in Ukraine. This results in a weaker GDP growth than previously anticipated
due to soaring energy costs, skills shortages and wage pressures that affect consumers and businesses in the Nordic economies. Unemployment rates
have been revised downwards, which is reflective of a stronger performance of the labour market in recent months
The upside scenario represents a slightly better outlook than the base case scenario across the macroeconomic parameters. In this scenario, consumers
spend a large proportion of the substantial savings accumulated during the pandemic. There is a consumer-led global recovery, and in this scenario there
is slightly more support for the housing market. GDP is about 1 per cent higher by the end of this scenario compared to the base case. In this scenario,
the European Central Bank / Danish central bank is no longer expected to keep rates unchanged throughout the forecast period, but hikes are still not
expected to materialize before 2024. The Group expects a slightly faster policy normalisation in Norway and additional rate hikes in Sweden in 2024.
The Groups downside scenario is a severe recession scenario, calibrated to a level of severity resembling the recession in 2008-2009, however with a
slightly less steep decline in GDP and other variables reflecting that the economy is no longer on top of the economic cycle. A trigger of the economic
setback could be new mutations of coronavirus and challenges linked to high business costs. This adversely impacts the labour market, results in higher
and more persistent unemployment, sending inflation to plummet. This would lead to a severe slowdown in the economies in which the Group is repre-
sented.
Forecasts are produced for the coming three years. After this period, the outlook returns to a steady-state level after a further four years. The macroe-
conomic parameters in the base case and downside scenario entering into the ECL calculation for the forecast horizon as an average across the Groups
core markets are included below.
Danske Bank / Interim report first quarter 2022 62/69
Notes Danske Bank Group
Credit exposure continued
31 March 2022
GDP
Industrial Production
Unemployment
Inflation
Consumption Expenditure
Property prices - Residential
Interest rate - 3 month
Interest rate - 10 year
Base-case
2023
2022
2024
Downside
2023
2022
2024
2022
Upside
2023
2024
2.8
3.5
4.8
4.0
4.0
2.5
0.5
1.4
2.0
2.4
4.5
1.5
2.4
2.0
0.9
1.7
1.6
2.2
4.1
2.0
1.8
2.4
0.9
1.7
-3.1
-4.6
8.0
-0.3
-3.5
-15.1
-0.3
-0.5
-1.5
-2.3
9.5
0.6
-0.6
-10.3
-0.4
-0.4
0.3
0.5
10.0
0.6
-0.1
-1.5
-0.5
0.2
3.8
4.9
4.6
2.7
5.3
3.9
0.1
1.0
2.2
3.0
4.1
2.0
2.0
3.0
0.3
1.2
1.5
1.5
3.9
2.0
1.6
3.4
0.7
1.2
At 31 December 2021, the following base case and downside scenarios were used:
31 December 2021
GDP
Industrial Production
Unemployment
Inflation
Consumption Expenditure
Property prices - Residential
Interest rate - 3 month
Interest rate - 10 year
Base case
2023
2022
2024
2022
Downside
2023
2024
2022
2023
2024
Upside
3.4
4.4
5.0
1.6
4.3
2.6
0.2
0.9
1.9
2.6
4.9
1.6
2.0
2.3
0.3
1.1
1.8
2.6
4.8
1.6
1.8
2.4
0.4
1.2
-1.5
-2.2
9.9
-0.7
-0.7
-8.3
-0.6
-1.1
0.3
0.5
10.4
-0.1
-0.6
-1.5
-0.6
-0.7
0.2
0.4
10.6
0.1
-0.2
-0.3
-0.7
-0.7
4.5
5.9
4.7
2.3
5.4
3.6
0.3
1.1
1.7
2.4
4.6
1.9
1.5
3.3
0.3
1.5
1.6
2.2
4.6
1.9
1.6
2.4
0.7
1.5
The base case scenario enters with a probability of 70% (31 December 2021: 70%), the upside scenario with a probability of 10% (31 December 2021:
10%) and the downside scenario with a probability of 20% (31 December 2021: 20%). On the basis of these assessments, the allowance account as at
31 March 2022 amounted to DKK 19.8 billion (31 December 2021: 21.9 billion). If the base case scenario was assigned a probability of 100%, the
allowance account would decrease DKK 1.9 billion (31 December 2021: 1.7 billion). Compared to the base case scenario, the allowance account would
increase DKK 9.7 billion (31 December 2021: 8.5 billion), if the downside scenario was assigned a probability of 100%. The increase reflects primarily
the transfer of exposures from stage 1 to stage 2 and increased expected credit losses within stage 2. If instead the upside scenario was assigned a
probability of 100%, the allowance account would decrease by DKK 0.2 billion (31 December 2021: 0.2 billion) compared to the base case scenario. It
should be noted that the expected credit losses in the individual scenarios (i.e. without the weighting) do not represent forecasts of expected credit losses
(ECL).
Post-model adjustments
Management applies judgement when determining the need for post-model adjustments. At 31 March 2022, the post-model adjustments amounted to
DKK 5.6 billion (31 December 2021: 6.3 billion). The post-model adjustments primarily relate to the following types of risks:
specific macroeconomic risks on certain industries not fully captured by the expected credit loss model, for instance the Agriculture industry. For
such industries, supplementary calculations are made in order to ensure sufficient impairment coverage. This also includes post-model adjustments
relating to secondary effects from the war in Ukraine and the corona crisis
non-linear downside risk, for instance on the property market in Copenhagen and other high growth areas for which the macroeconomic forecasts
used in the models are based on the property market as a whole
portfolios where the credit risk assessment process has identified an underestimation of the expected credit losses
upcoming model changes that will impact the expected credit loss model.
Following the significant impact on the expected credit losses from post-model adjustments, the table below provides more information about the adjust-
ments.
Notes Danske Bank Group
Credit exposure continued
Post-model adjustments by type and mostly impacted industries
(DKK billions)
Coverage of individual industries and types
Agriculture
Capital goods
Commercial Property
Oil & Gas
Personal customers (including other retail exposures)
Others**
Coverage of individual industries and types, total
Model changes
Total
Danske Bank / Interim report first quarter 2022 63/69
31 March
2022
31 December
2021*
1.2
0.4
1.3
0.2
1.2
1.3
5.6
-
5.6
0.9
0.2
1.5
0.2
1.7
0.9
5.4
0.9
6.3
* Post-model adjustments for Capital goods and Oil & Gas are now presented separately in 2022 (previously included within Others. In addition, DKK 2.2 billion of process related post-model
adjustments as at 31 December 2021 have been redistributed between the individual industries. As such, 2021 post-model adjustments have been restated. There is no change to the total value
of post-model adjustments at 31 December 2021.
** No individual industry included in Others exceeds DKK 0.1 billion at 31 March 2022 (31 December 2021: DKK 0.1 billion).
In first quarter of 2022, the total balance of post-model adjustments has been reduced by a net amount of DKK 0.7 billion compared to the end of
2021. A reduction of DKK 0.9 billion was due to a release of the post-model adjustment reserved to cover the model changes for the new Definition of
Default that was implemented in January 2022. At the same time, the current macroeconomic uncertainties characterized by the supply chain disrup-
tions, labour shortages and price rises have been exacerbated by the break out of war in Ukraine giving rise to a new set of challenges that affect eco-
nomic and business activity.
In light of these developments, the Group has formulated a new post-model adjustment of DKK 1.0 billion to address the uncertainties presented by the
secondary effects from the economic sanctions affecting specific industries such as Agriculture, Capital goods, etc. The post-model adjustment cuts
across industries that are sensitive to prices rises on energy, agriculture and metals, which have been assessed for idiosyncratic risks to ensure a
prudent coverage of expected credit loss in the Groups portfolios.
On the other hand, Covid-related uncertainties have been reduced from the end of 2021, as the new virus variants did not result in prolonged lock-
downs or high hospitalisation rates as previously anticipated, while business activity continued to rise. This has been the main driver behind reduction
of DKK 0.9 billion in post-model adjustments associated with the property segment (commercial property and retail mortgages) and process related
risks spread across industry portfolios and retail exposures.
Overall, the changes have resulted in a net increase of DKK 0.2 billion to post-model adjustments associated with uncertainties in specific industries that
reflect continued caution in the risk outlook.
Danske Bank / Interim report first quarter 2022 64/69
Notes Danske Bank Group
Credit exposure from Non-core lending activities
Credit portfolio in non-core activities broken down by industry (NACE) and stages
31 March 2022
(DKK millions)
Non-core banking
Personal customers
Commercial customers
Public Institutions
Non-core conduits etc.
Gross exposure
Expected credit loss
Net exposure
Net exposure, ex collateral
Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
80
-
76
4
2,818
4
-
4
-
43
13
-
13
-
955
-
-
-
-
1
1
-
-
-
-
2
2
-
-
-
-
872
80
-
76
4
2,817
872
2,897
4
-
4
-
40
45
13
-
13
-
82
4
-
-
4
141
95
145
1
-
1
-
7
9
-
-
-
-
49
49
Total
2,898
47
968
31 December 2021
(DKK millions)
Non-core banking
Personal customers
Commercial customers
Public Institutions
Non-core conduits etc.
Total
Gross exposure
Expected credit loss
Net exposure
Net exposure, ex collateral
Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
126
-
121
5
2,771
2,897
6
-
5
-
-
6
14
6
9
-
817
831
-
-
-
-
-
-
2
-
2
-
-
2
14
6
9
-
795
126
-
120
5
2,771
809
2,897
3
-
3
-
-
3
-
-
-
-
22
33
-
27
5
122
22
154
-
-
-
-
-
-
-
-
-
-
19
19
Credit portfolio in non-core activities broken down by rating category and stages
31 March 2022
PD level
Gross exposure
Expected credit loss
Net exposure
Net exposure, ex collateral
(DKK millions)
Upper
Lower Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
1
2
3
4
5
6
7
8
9
10
11 (default)
Total
-
0.01
0.03
0.06
0.14
0.31
0.63
1.90
7.98
25.70
0.01
0.03
0.06
0.14
0.31
0.63
1.90
7.98
25.70
99.99
100.00 100.00
621
1,008
1,195
-25
2
94
2
-
-
-
1
-
-
-
-
4
2
-
22
1
18
-
-
-
-
-
-
-
-
-
-
-
967
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
872
621
1,008
1,195
-25
2
94
2
-
-
-
1
-
-
-
-
3
2
-
20
1
18
-
-
-
-
-
-
-
-
-
-
-
95
137
8
-
-
-
-
-
-
-
-
-
2,898
47
968
1
2
872
2,897
45
95
145
-
-
-
-
3
-
-
6
-
-
-
9
-
-
-
-
-
-
-
-
-
-
49
49
31 December 2021
(DKK millions)
1
2
3
4
5
6
7
8
9
10
11 (default)
Total
PD level
Net exposure, ex collateral
Lower Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
Expected credit loss
Gross exposure
Net exposure
Upper
-
0.01
0.03
0.06
0.14
0.31
0.63
1.90
7.98
25.70
0.01
0.03
0.06
0.14
0.31
0.63
1.90
7.98
25.70
99.99
100.00 100.00
587
1,026
1,086
127
2
48
20
-
-
-
1
2,897
-
2
-
-
-
2
-
-
-
18
809
831
-
-
-
-
2
-
2
-
-
-
6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
-
-
-
2
-
-
-
-
-
-
-
-
-
5
804
587
1,026
1,085
127
2
48
20
-
-
-
1
809
2,897
-
-
-
-
-
2
-
-
-
-
-
3
-
2
-
-
-
2
-
-
-
13
5
122
14
3
1
-
-
15
-
-
-
-
22
154
-
-
-
-
-
-
-
-
-
-
-
-
-
2
-
-
-
-
-
-
-
13
4
19
Danske Bank / Interim report first quarter 2022 65/69
Notes Danske Bank Group
Counterparty credit risk and credit exposure from trading and investment securities
(DKK billions)
Counterparty credit risk
Derivatives with positive fair value
Reverse transactions and other loans at fair value¹
Credit exposure from other trading and investment securities
Bonds
Shares
Other unutilised commitments²
Total
31 March 31 December
2021
2022
327.8
257.8
584.5
11.2
0.1
260.2
254.1
539.8
13.3
0.1
1,181.4
1,067.6
1 Reverse transactions and other loans at fair value included as counterparty credit risk are loans at the trading units of Large Corporates & Institutions. These loans consist of reverse transactions
of DKK 257.5 billion (31 December 2021: DKK 252.3 billion), of which DKK 46.2 billion relates to credit institutions and central banks (31 December 2021: DKK 37.7 billion), and other primarily
short-term loans of DKK 0.2 billion (31 December 2021: DKK 1.7 billion), of which DKK 0.2 billion (31 December 2021: DKK 1.7 billion) relates to credit institutions and central banks.
2 Other unutilised commitments comprise private equity investment commitments and other obligations.
Derivatives with positive fair value
(DKK millions)
Derivatives with positive fair value before netting
Netting (under accounting rules)
Carrying amount
Netting (under capital adequacy rules)
Net current exposure
Collateral
Net amount
Derivatives with positive fair value after netting for accounting purposes:
Interest rate contracts
Currency contracts
Other contracts
31 March
2022
31 December
2021
897,675
569,908
327,767
247,074
80,693
68,187
654,261
394,037
260,224
183,395
76,829
59,732
12,506
17,098
242,237
84,067
1,463
187,176
72,468
580
327,767
260,224
Total
Bond portfolio
(DKK millions)
31 March 2022
Held-for-trading (FVPL)
Managed at fair value (FVPL)
Held to collect and sell (FVOCI)
Held to collect (AMC)
Central and
local govern-
ment bonds
Quasi-
government
bonds
Danish
mortgage
bonds
Swedish
covered
bonds
177,745
4,090
14,385
53,695
4,839
909
4,562
7,185
26,813
25,848
70,062
81,128
52,901
798
10,072
6,248
Other
covered
bonds
5,978
517
21,688
1,470
Corporate
bonds
10,474
2,096
971
-
Total
278,750
34,258
121,740
149,725
Total
249,915
17,495
203,850
70,018
29,653
13,541
584,473
31 December 2021
Held-for-trading (FVPL)
Managed at fair value (FVPL)
Held to collect and sell (FVOCI)
Held to collect (AMC)
174,732
4,342
14,620
50,051
3,305
921
4,822
5,307
11,113
27,360
69,859
82,903
38,878
819
10,116
6,694
3,576
670
19,640
1,766
5,679
2,417
239
-
237,283
36,530
119,296
146,721
Total
243,744
14,356
191,236
56,507
25,652
8,335
539,830
At 31 March 2022, the Group had an additional bond portfolio, including bond-based unit trust certificates, worth DKK 193,671 (31 December 2021:
DKK 205,389 million) recognised as assets under insurance contracts and thus not included in the table above. The section on insurance risk in Annual
Report 2021 provides more information. For bonds classified as hold-to-collect, fair value exceeded amortised cost as at 31 March 2022 and 31 De-
cember 2021, see note G12.
Danske Bank / Interim report first quarter 2022 66/69
Notes Danske Bank Group
Bond portfolio continued
Bond portfolio broken down by geographical area
(DKK millions)
31 March 2022
Denmark
Sweden
UK
Norway
USA
Spain
France
Luxembourg
Finland
Ireland
Italy
Portugal
Austria
Netherlands
Germany
Belgium
Other
Total
31 December 2021
Denmark
Sweden
UK
Norway
USA
Spain
France
Luxembourg
Finland
Ireland
Italy
Portugal
Austria
Netherlands
Germany
Belgium
Other
Total
Central and
local govern-
ment bonds
Quasi-
government
bonds
Danish
mortgage
bonds
Swedish
covered
bonds
Other
covered
bonds
Corporate
bonds
63,857
74,125
4,687
11,926
16,598
4,420
13,984
-
9,151
3,669
2,009
50
5,731
6,539
31,164
1,712
294
-
-
-
-
4,514
-
20
5,883
2,751
-
-
-
-
7
-
3,710
610
203,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70,018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,561
25,502
-
1
120
-
563
-
-
-
15
22
316
1
551
2,304
4,291
585
3,370
5
-
339
84
1,003
8
4
-
64
805
500
-
180
Total
270,012
148,433
7,833
40,798
21,118
4,421
14,463
5,967
13,468
3,677
2,013
50
5,809
7,373
31,980
5,422
1,636
249,915
17,495
203,850
70,018
29,653
13,541
584,473
79,233
72,787
4,300
5,249
16,581
2,627
12,939
-
6,684
2,100
2,475
46
4,674
5,526
27,564
655
304
-
-
-
-
3,628
-
15
5,982
1,908
-
-
-
-
6
-
2,265
551
191,236
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56,507
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,128
21,612
-
1
159
-
766
3
-
-
-
27
687
1
268
2,498
2,106
274
1,737
6
-
112
66
760
17
4
-
57
489
38
-
168
272,967
131,400
6,701
28,599
20,215
2,628
13,226
6,048
10,119
2,120
2,479
46
4,731
6,047
28,289
2,921
1,291
243,744
14,356
191,236
56,507
25,652
8,335
539,830
The Group has no exposure to government bonds issued by Russia or Ukraine at 31 March 2022.
Danske Bank / Interim report first quarter 2022 67/69
Notes Danske Bank Group
Bond portfolio continued
Bond portfolio broken down by external ratings
(DKK millions)
31 March 2022
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
Sub. "investment-grade" or unrated
Central and
Quasi-
local govern- government
bonds
ment bonds
Danish
mortgage
bonds
Swedish
covered
bonds
Other
covered
bonds*
Corporate
bonds
199,800
12,202
21,600
5,741
294
7,439
-
562
777
1,282
-
-
-
217
13,946
38
3,512
-
-
-
-
-
-
-
-
-
-
-
203,404
-
-
-
-
442
-
-
4
-
-
-
-
-
70,002
-
16
-
-
-
-
-
-
-
-
-
-
-
29,336
63
147
-
-
107
-
-
-
-
-
-
-
-
840
1
2,127
126
316
3,407
1,148
1,688
2,424
465
376
427
25
170
Total
517,327
12,304
27,403
5,867
610
11,396
1,148
2,251
3,205
1,747
376
427
25
387
Total
249,915
17,495
203,850
70,018
29,653
13,541
584,473
31 December 2021
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
Sub. "investment-grade" or unrated
203,216
9,186
19,022
4,731
304
3,263
-
1,465
455
2,065
-
-
-
36
12,061
15
2,279
-
-
-
-
-
-
-
-
-
-
-
190,753
-
-
-
-
473
-
-
10
-
-
-
-
-
56,491
-
16
-
-
-
-
-
-
-
-
-
-
-
25,090
87
3
-
-
472
-
-
-
-
-
-
-
-
334
3
1,718
87
41
1,641
956
1,005
1,363
415
324
183
30
233
487,946
9,292
23,038
4,818
345
5,848
956
2,470
1,828
2,481
324
183
30
269
Total
243,744
14,356
191,236
56,507
25,652
8,335
539,830
*Comparative information has been restated as the amounts were exchanged in the annual report 2021.
Danske Bank / Interim report first quarter 2022 68/69
Statement by the management
The Board of Directors and the Executive Leadership Team (the management) have considered and approved Interim report first
quarter 2022 of the Danske Bank Group.
The consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as
adopted by the EU. Furthermore, the interim report has been prepared in accordance with Danish disclosure requirements for
interim reports of listed financial institutions.
In our opinion, the interim financial statements give a true and fair view of the Groups assets, liabilities, total equity and financial
position at 31 March 2022 and of the results of the Groups operations and the consolidated cash flows for the period starting on
1 January 2022 and ending on 31 March 2022. Moreover, in our opinion, the managements report includes a fair review of
developments in the Groups operations and financial position and describes the significant risks and uncertainty factors that may
affect the Group.
Copenhagen, 29 April 2022
Executive Leadership Team
Carsten Rasch Egeriis
CEO
Magnus Agustsson
Berit Behring
Karsten Breum
Stephan Engels
Glenn Söderholm
Philippe Vollot
Frans Woelders
Board of Directors
Martin Blessing
Chairman
Jan Thorsgaard Nielsen
Vice Chairman
Lars-Erik Brenøe
Jacob Dahl
Raija-Leena Hankonen-Nybom
Bente Avnung Landsnes
Allan Polack
Carol Sergeant
Helle Valentin
Bente Bang
Elected by the employees
Kirsten Ebbe Brich
Elected by the employees
Aleksandras Cicasovas
Elected by the employees
Louise Aggerstrøm Hansen
Elected by the employees
Supplementary information
Danske Bank / Interim report first quarter 2022 69/69
Financial calendar
22 July 2022
28 October 2022
Contacts
Claus Ingar Jensen
Head of Investor Relations
Links
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Denmark
Finland
Sweden
Norway
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Ireland
Realkredit Danmark
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Danica Pension
Interim report first half 2022
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Danske Banks financial statements are available online at danskebank.com/Reports.