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Annual Report
2022
Danske Bank Group
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
2
Annual Report 2022 consists – in accordance with the requirements of the ESEF
Regulation – of a zip file danskebank-2022-12-31-en.zip that includes an XHTML
file. The XHTML file is the official version of Annual Report 2022. This PDF version of
Annual Report 2022 is a copy of the XHTML file. In case of discrepancies, the XHTML
file prevails.
DANSKE BANK / ANNUAL REPORT 2022 Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
3
Contents
MANAGEMENT’S REPORT
4
Letter to our stakeholders
6
8
9
12
16
28
30
36
39
41
44
46
49
52
55
58
60
62
64
Danske Bank 2022 at a glance
Financial highlights - Danske Bank Group
Executive summary
Strategy execution
Sustainability
Estonia and remediation matters
Financial review
Capital and liquidity management
Investor Relations
Organisation and management
Business units
Personal Customers
Business Customers
Large Corporates & Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of alternative performance measures
FINANCIAL STATEMENTS
68
69
70
71
74
75
Income statement
Statement of comprehensive income
Balance sheet
Statement of capital
Cash flow statement
Notes
STATEMENTS
230 Statement by the management
231
Independent auditor’s report
MANAGEMENT AND DIRECTORSHIPS
236 Board of Directors
242 Executive Leadership Team
244 Supplementary information
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
4
DANSKE BANK / ANNUAL REPORT 2022
Letter to our stakeholders
Contents
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
5
The year 2022 will go down in history as a year marred by
Russia’s invasion of Ukraine as well as the energy and cost-
of-living crises that have affected households and businesses
around the world.
Russia’s aggression has caused suffering and injustice for the
people of Ukraine. It has brought war to the European continent
and has led to insecurity and geopolitical uncertainty by
disrupting a world order that has been shaped since the end of
the Cold War.
Dealing with the pandemic helped us devise better and more
flexible ways of working, to the benefit of employees and the
bank as a whole, and from this we have developed new digital
solutions that make it easier and more convenient for our
customers to engage with us. In 2022, we made it even easier
for our customers to do their day-to-day banking on the go by
making it possible for them to make international transfers,
open new accounts and create or edit regular transfers through
Danske Mobile Banking, which now has more than 725,000
daily logons.
Danske Bank has joined the global effort to isolate Russia from
the financial markets. We have been in close dialogue with
our customers to offer advice and support on how to handle
the consequences of the war, and we have expanded our
corporate volunteering programme to give our colleagues more
opportunities to spend working hours carrying out voluntary work
in support of Ukraine. We have also responded by launching a
new green loan on attractive terms for homeowners who want
to retire their oil or gas heater or invest in other energy-efficiency
improvements.
Over the past year, we also engaged in a closer-than-usual
dialogue with our customers to help them deal with the
challenges of soaring inflation and higher interest rates, similar to
when we helped them navigate the challenges and uncertainties
caused by the COVID-19 pandemic.
For Danske Bank, 2022 was also a turning point – and we can
now focus more on becoming the bank we aspire to be. In
late summer, we presented a solution to the debt collection
case, which will accelerate the closure of this matter. And
in December, we reached final resolutions with US and
Danish authorities following the investigations into the non-
resident portfolio at Danske Bank’s former Estonia branch.
These resolutions mark the end of the investigations into
Danske Bank by US and Danish authorities. Although we
are relieved that we can now fully shift our attention to the
opportunities ahead, we also regret having to inform our
shareholders that due to the fines that we have agreed to pay to
reach the resolution, we feel obligated to propose to the general
meeting in March that no dividend be paid for 2022, despite our
enduring intention to honour our shareholders for their trust in us.
Our progress towards putting our legacy cases behind us is one
outcome of our focus on getting compliance under control. This
is one of the key areas of the strategy that we announced in
2019 with the purpose of becoming a better bank for customers,
employees, shareholders and the societies we are part of.
And thanks to the hard work of our dedicated and purpose-driven
employees, we are making strong progress in reaching the goals
we have set for the end of 2023.
In addition to the substantial investments we have made to get
compliance under control, we have seen good commercial
momentum with increased demand for the products and
advisory services we provide to customers to help them
navigate the challenging times. Our core banking activities
have seen solid momentum with increased lending, seven
consecutive quarters of increased net interest income, and
an improving underlying cost base. We have made progress
across the board in Denmark, and our business customer units
in particular have delivered strong results across the Nordic
markets. Furthermore, our Large Corporates & Institutions unit
had a higher level of customer satisfaction than any other bank in
the Nordic countries for the seventh consecutive year.
We also continued our efforts to become a more inclusive and
purposeful workplace with engaged and motivated employees.
The Satisfaction & Motivation score among employees increased
to 76, only one point short of our goal of reaching 77 by the end
of 2023.
Over the past year, our dialogue with customers on building
greater financial resilience and averting the negative
consequences of the current energy crisis also helped us to
accelerate the sustainability dialogue we want to have with all
customers – households as well as businesses.
At Danske Bank, we see the sustainability transition as the
defining challenge and opportunity of the 21st century. We have
a clear ambition to be the leading bank for sustainable finance
in Denmark and among the market leaders in the other Nordic
countries. And over the past year, we have continued to make
significant progress.
Among other initiatives, we launched new home loans for energy-
efficiency improvements, green concept loans for renewable
energy and electric transportation, and new sustainable
investment funds. We signed the Finance for Biodiversity Pledge,
and in January 2023, we unveiled Danske Bank’s Climate Action
Plan, which sets comprehensive climate targets for the entire
bank in accordance with the Science Based Targets initiative.
With a current tally of DKK 273 billion, we are now close
to fulfilling our commitment to provide DKK 300 billion in
sustainable financing by the end of 2023. We remain the
leading Nordic arranger of sustainable bonds, and we attained a
top-20 ranking last year in Bloomberg’s global ranking for green
bonds. The Bloomberg Intelligence research unit also ranked
Danske Bank number one among 54 international banks for
best performance on measuring the carbon emissions from our
lending activities.
Becoming a better bank is an ongoing effort, and while we
continue to work on reaching our 2023 goals, we are getting
ready to present our updated goals and strategy for the period
beyond 2023.
As the largest financial services provider in Denmark and one
of the largest financial institutions in the Nordic countries, we
recognise that it is both our responsibility and in our interest to
contribute to the sustainable growth and development of the
societies we are part of. This recognition lies at the heart of how
we lead and develop Danske Bank.
During 2023, we will give investors an update on our mid-term
financial targets as well as our plans for delivering long-term
value for all stakeholders – our customers, our employees, our
shareholders, and the societies we are part of.
Martin Blessing
Chairman of the Board
of Directors
Carsten Egeriis
Chief Executive Officer
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
6
DANSKE BANK / ANNUAL REPORT 2022
Danske Bank 2022 at a glance
Key figures 2022
DKK 41,203 million
Total income
DKK -5,068 million
Net profit
-3.1%
Return on shareholders’ equity
For Danske Bank, 2022 was a turning point – and we can now focus more on becoming the bank we aspire to be. In
late summer, we presented a solution to the debt collection case, which will accelerate the closure of this matter. And
in December, we reached final resolutions with US and Danish authorities following the investigations into the non-
resident portfolio at Danske Bank’s former Estonia branch.
Our 2023 financial ambitions
Cost/income ratio in the mid-50s
Strategic focus
Our strategic focus is to become a better bank for everyone, and we have four ambitions towards 2023.
Customers
To become the
preferred bank for our
customers today and
for generations
to come.
Employees
Satisfaction
& Motivation
score of 77
in 2023.
Investors
Achieve a return
on shareholders’
equity of 8.5-9%
and a cost/income
ratio in the mid-50s.
Society
Operate sustainably,
ethically and
transparently – and
have a positive impact
on the societies
we are part of.
Return on shareholders’ equity of 8.5-9%
Contents
Letter to our
stakeholders
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
7
Danske Bank’s take on sustainability
At Danske Bank, we see the sustainability transition as the defining
challenge and opportunity of the 21st century. As Denmark’s largest
bank and one of the largest financial institutions in the Nordic countries,
we have both the responsibility and the financial ability to make a
difference. We do this by advising, supporting and financing our customers’
transition to a more sustainable future – and by actively supporting
the green transition of the Nordic societies”
Carsten Egeriis, Group CEO
Focus on
biodiversity loss
In December 2022, Danske Bank
joined the Finance for
Biodiversity Pledge, and we
committed to measuring and
setting biodiversity targets for
our corporate lending and
investments.
Commitment to science-
based climate targets
In January 2023, Danske Bank
committed to the Science Based
Target initiative (SBTi), and we
will align the carbon emissions
from our lending and investment
portfolios and from our own
operations with net-zero targets
by 2050 or sooner.
Sustainability training
of all employees
To integrate sustainability into our
processes and solutions, Danske Bank
has a mandatory sustainability finance
eLearning module for all employees,
designed to support our common
understanding of how we create the
greatest societal impact through
our core business activities.
The power of finance
Danske Bank is committed to using the power of finance to create sustainable progress, and managing the impact from our
financing and investment activities is at the core of our sustainability efforts.
2022 performance, DKK billion
Financing
Sustainable financing, including granted green loans and arranged sustainable bonds
2022 status
2023 target
2030 target
273
300
Lending
Investment
Investments in the green transition by Danica Pension
37.7
50
100
Asset ownership
Investment
Investments in funds with a sustainable investment objective
52
150
Asset management
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
8
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.
Provision for Estonia matter
Impairment charges on goodwill
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 year)
(DKK millions)
Due from credit institutions and central banks
Repo loans
Loans
Trading portfolio assets
Investment securities
Assets under insurance contracts
Other assets (including Non-core)
Total assets
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
Other liabilities (including Non-core)
Subordinated debt
Additional tier 1 capital holders
Shareholders' equity
Total liabilities and equity
Ratios and key figures
Dividend per share (DKK)
Earnings per share (DKK)
Return on avg. shareholders' equity (%)
Adj. return on avg. shareholders' equity (% p.a.)*
Net interest income as % of loans and deposits
Cost/income ratio (C/I), (%)
Adj. cost/income ratio (C/I), (%)*
Total capital ratio (%)
Common equity tier 1 capital ratio (%)
Share price (end of year) (DKK)
Book value per share (DKK)
Full-time-equivalent staff (end of year)
2022
2021
Index
22/21
2020
2019
2018
25,188
12,590
1,426
63
1,936
41,203
26,478
962
13,800
1,627
-703
1,568
-2,271
-13
-2,284
2,784
-5,068
86
191,853
247,752
1,803,955
638,799
302,613
455,416
122,611
3,762,999
91,159
137,920
1,169,879
685,238
298,068
554,321
487,422
140,325
38,350
-
160,318
3,762,999
-
-6.1
-3.1
6.2
0.84
101.7
64.3
22.1
17.8
137.3
188.4
21,022
22,049
13,525
4,126
2,088
797
42,584
25,663
687
-
-
16,921
348
16,573
-2
16,571
3,651
12,920
451
320,042
253,954
1,834,372
509,589
303,425
547,806
166,647
3,935,834
101,786
193,391
1,167,638
770,661
355,757
374,958
588,736
166,882
39,321
5,497
171,207
3,935,834
2.0
14.6
7.6
7.6
0.73
60.3
60.3
22.4
17.7
113.0
200.6
21,754
114
93
35
3
243
97
103
140
-
-
-
-
-
-
-
76
-
19
60
98
98
125
100
83
74
96
90
71
100
89
84
148
83
84
98
-
94
96
97
22,151
12,217
4,297
1,669
594
40,928
27,027
606
-
-
13,901
7,001
6,900
-596
6,304
1,715
4,589
551
345,938
257,883
1,838,126
682,945
296,769
545,708
141,862
4,109,231
125,267
223,973
1,193,173
775,844
360,127
499,331
591,930
138,571
32,337
8,508
160,171
4,109,231
2.0
4.7
2.6
2.6
0.76
66.0
66.0
23.0
18.3
100.7
187.6
22,376
22,104
12,636
4,350
2,385
1,059
42,534
25,900
-
-
803
15,831
1,516
14,315
-493
13,822
-1,249
15,072
786
174,377
346,708
1,821,309
495,313
284,873
494,992
143,477
3,761,050
98,828
232,271
962,865
795,721
350,190
452,190
535,891
130,853
31,733
14,237
156,271
3,761,050
-
16.7
9.6
10.1
0.81
62.8
60.9
22.7
17.3
107.8
183.1
22,006
23,571
15,258
4,570
-
966
44,365
23,511
-
1,500
-
19,354
-650
20,004
-282
19,722
4,548
15,174
781
201,435
316,362
1,769,438
415,811
276,424
377,369
221,629
3,578,467
148,095
262,181
894,495
741,092
330,477
390,222
417,279
208,257
23,092
14,300
148,976
3,578,467
8.5
16.5
9.8
10.8
0.88
56.4
53.0
21.3
17.0
128.9
174.3
20,683
The financial highlights have been restated as explained in note G3(a). 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 64.
*Adjusted return on average shareholders’ equity and Adjusted cost/income ratio exclude the effect of the provision for the Estonia matter and the impairment charges on goodwill.
See Definition of Alternative Performance Measures for more detail.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Strategy
execution
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
Executive summary
9
2022 was truly an unusual year with the re-emergence of
intense geopolitical tension, a pandemic becoming endemic,
financial markets volatility at a level not seen since the financial
crisis and asset repricing as a result of monetary tightening to
bring down inflation. Soaring inflation, especially energy price
inflation driven partly by the war in Ukraine, led to a decline
in real incomes and meant that 2022 became “the year of
inflation”. These conditions continued in the last quarter of
2022, which saw a continually deteriorating macroeconomic
outlook, and mean that we will most likely see lower economic
activity in 2023.
Having said that, towards the end of the year, there was
increased risk appetite among investors in the financial
markets, albeit from low levels, and some signs point towards
both energy prices and the rate hikes by central banks having
peaked, at least for now. In addition, labour markets and
consumer spending in the Nordic countries remain resilient,
providing a strong starting point for weathering the coming
economic slowdown.
As our customers have had to navigate the most challenging
environment in decades, our position as a strong Nordic bank
with solid credit quality and adequate capital and liquidity
buffers has enabled us to support customers and societies
in navigating these challenging conditions. We are therefore
continuously in close dialogue with our customers across
segments to provide advisory services and to remain their
preferred financial partner. At Business Customers, we
implemented a new service model that tailors services to
customers’ unique needs. Large Corporates & Institutions
remains the leading Nordic wholesale banking operation;
top-ranked in transaction league tables and in customer
satisfaction as reflected in the independent Nordic Prospera
research by Kantar.
Closing the books on 2022 also marks an important turning
point for Danske Bank, as final resolutions with the US
Department of Justice (DoJ), the US Securities and Exchange
Commission (SEC) and the Danish Special Crime Unit (SCU)
following the investigations of the Estonia matter were reached
and a solution to the debt collection case that provided clarity
for our customers was announced. This means that we can now
focus more on becoming the bank we aspire to be, to the benefit
of customers and society.
As we proceed with our ambition to be one of the leading banks
in the Nordic countries for sustainable finance, we continued on
our net-zero pathway. In January 2023, we published Danske
Bank’s Climate Action Plan, which outlines our targets and
actions for achieving the goal of limiting future global warming
to 1.5°C. Danske Bank has also taken a strong lead among
international banks when it comes to helping customers to
reduce their carbon emissions. This was shown by a survey
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
10
from the Bloomberg Intelligence research unit, which recently
ranked Danske Bank number one among 54 international
banks when it comes to setting targets for reducing the carbon
emissions of our lending activities.
resident portfolio at Danske Bank’s former Estonia branch.
Under the terms of the coordinated resolution and as part of
a cross-crediting agreement between the agencies, the total
settlement amount is fixed at DKK 15,300 million.
Throughout 2022, our business model delivered a reinforced
commercial momentum, and net interest income improved,
driven primarily by deposit repricing initiatives, positive trends
in volumes and higher interest rates. Fee income was resilient,
although weakening towards the end of the year, with especially
activity-driven fees holding up well and good customer demand
for our risk advisory solutions.
While total costs continued to be impacted by high remediation
costs given our efforts to close legacy issues, we saw
underlying costs continuing to trend lower as our efforts to
make Danske Bank more efficient also continued to result in a
decrease in the number of FTEs.
While the deteriorating macroeconomic outlook and higher
interest rates are expected to impact both businesses and
households, the quality of our lending book remained strong
with low loan impairment charges. We further note that we
have taken a conservative approach in recent years with regard
to the Commercial Real Estate segment, applying concentration
limits and caps to certain sub-segments and geographies,
which is expected to limit the downside risk.
MobilePay transaction
In the fourth quarter of 2022, the merger between MobilePay
and Vipps was approved by the EU commission. The sale of our
shares in MobilePay generated a gain of DKK 415 million.
Capital
For 2022, our total capital ratio was 22.1% and our CET1
capital ratio was 17.8%, against 22.4% and 17.7%,
respectively, at the end of 2021.
Dividend
In 2022, Danske Bank made an additional provision of
DKK 13,800 million related to the Estonia matter.
Consequently, the Board of Directors will propose to the annual
general meeting in 2023 that no dividend be paid out for 2022.
Danske Bank’s dividend policy remains unchanged, targeting
a dividend of 40-60% of net profit. Danske Bank has strong
capital and liquidity positions, and the Board of Directors
remains committed to our capital distribution policy.
Estonia matter
On 13 December 2022, Danske Bank announced that it had
reached final co-ordinated resolutions with the US Department
of Justice (DoJ), the US Securities and Exchange Commission
(SEC) and the Danish Special Crime Unit (SCU) following the
investigations into failings and misconduct related to the non-
Debt collection case
In the third quarter, we announced an accelerated solution for
our debt collection customers that entails setting the debt of
approximately 90,000 customers at zero and compensating
customers for any potential overcollection as a result of the
issues with our debt collection systems. In the fourth quarter,
we began communicating to customers whose debt is set to
zero.
The solution we have chosen means that we will inform the
customers whose debt is written off, and that we will start to
pay out compensation in 2023.
In the third quarter, it was announced that further sample
checks related to the customer compensation model were
needed, and this work has resulted in our taking a more
conservative approach, which is to the benefit of our debt
collection customers. This approach impacts our provisions by
a further DKK 310 million, taking the increase in provisions in
2022 to a total of DKK 1,560 million.
Danske Bank continues to have a dialogue with and report
progress with the debt collection case to the impartial reviewers
appointed by the Danish FSA.
Financials
Danske Bank posted a net loss of DKK 5,068 million in 2022,
against a net profit of DKK 12,920 million in 2021. The
return on shareholders’ equity was a negative 3.1% for 2022
and 10.5% for the fourth quarter. Excluding the provision for
the Estonia matter of DKK 13,800 million and the goodwill
impairment charge of DKK 1,627 million, net profit was
DKK 10,359 million and the return on shareholders’ equity was
6.2%.
Our core banking activities continued to deliver good progress,
with solid business lending growth at Large Corporates &
Institutions and with deposit repricing leading to higher net
interest income. Net fee income from everyday banking
products maintained the positive trend throughout 2022.
We saw good remortgaging activity as a result of the rise in
interest rate levels as well as increasing service fees due to
repricing. Investment fees decreased as customer activity
within capital markets was significantly lower, and income in
Asset Management fell following a decline in assets under
management and lower performance fees.
Net trading income recovered in the second half of the year,
as market conditions became more supportive. However, the
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Strategy
execution
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
11
We expect core income lines to grow in 2023, driven by
higher net interest income and our continued efforts to drive
commercial momentum.
Despite a high degree of uncertainty, we expect income from
trading and insurance activities to recover from the levels in
2022.
We expect costs in 2023 to be in the range of DKK 25 – 25.5
billion, despite inflationary pressure, reflecting our continued
focus on cost management. The outlook includes sustained
elevated remediation costs of around DKK 1.1 billion.
We expect loan impairment charges of up to DKK 3 billion (18
bp), driven primarily by a weaker macroeconomic outlook that
will affect model-driven impairments.
The outlook is subject to uncertainty and depends on volume
growth and macroeconomic conditions.
extraordinarily high volatility and lower liquidity in the Nordic
fixed income markets made market-making services and
the management of the risk held to support our fixed income
franchise challenging. Net trading income decreased to
DKK 1,426 million in 2022, primarily as a result of losses in
our Rates & Credit business at Large Corporates & Institutions.
Income from insurance business also saw a negative
effect from the financial market turmoil in 2022. We saw a
stabilisation of the result, driven by value adjustments as the
interest rate environment normalised in the fourth quarter. The
underlying business is strong, and the underlying loss on the
health and accident business was reduced. However, some of
the negative effect was offset by the gain of DKK 415 million on
the sale of Danica Norway.
Underlying expenses continued to progress according to plan,
which helped mitigate elevated remediation costs and costs
related to the Estonia matter. Furthermore, operating expenses
were impacted by a one-off amount of DKK 910 million due
to provisions for the debt collection case. The number of FTEs
continued to decrease and stood at 21,022 at the end of 2022
(end-2021: 21,754).
In 2022, Danske Bank made an additional provision of
DKK 13,800 million related to the Estonia matter. In addition
to the provision booked in 2022, a provision of DKK 1,500
million was booked in 2018.
At Danica Pension, goodwill amounting to DKK 1,627 million
related to the acquisition of SEB Pension Danmark was
assessed to be impaired due to increasing discount rates and
the current turbulence in the financial markets.
Impairments reflect the macroeconomic uncertainty and
slowing economic growth due to increased inflationary
pressure as well as interest rate hikes, while COVID-19-
related uncertainty decreased. Although the macroeconomic
landscape remains uncertain and develops at a fast pace, the
credit quality of individual customers was strong across the
core loan portfolios as a result of the post-pandemic economic
recovery. The accelerated solution to the debt collection
case led to a one-off increase in loan impairment charges of
DKK 650 million in the third quarter. This covers part of the
remediation costs related to compensating customers for
potential overcollection.
Outlook for 2023
Net profit is expected to be in the range of DKK 15 – 17 billion,
including the impact of the new Danish bank tax. The outlook is
in line with our 2023 financial ambitions.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
12
Strategy execution
Introduction
The challenging environment we observed in the first half of
the year turned out to continue throughout the second half of
2022. We stayed close to our customers and successfully
helped them navigate the turbulence, while demonstrating our
important role in the financial markets during a year of extreme
volatility, as we provided much-needed liquidity to our business
and corporate customers. In the last year of our current
strategy cycle, we remain focused on following through on our
plans for 2023, while taking the first steps in developing the
vision, ambitions and targets that will elevate Danske Bank to
an even stronger position in the next strategy cycle.
At the outset of the Better Bank plan, we had a clear ambition
to simplify our business, improve efficiency, increase
digitalisation and strengthen compliance, as well as to
sharpen our commercial focus. 2022 was a year of many
accomplishments, including the reorganisation of our Personal
Customers and Business Customers units made to create
an end-to-end value chain perspective crucial for long-term
success, significant progress with our remediation efforts and
consistent steps towards fully digital banking solutions across
our segments.
Amid unresolved geopolitical tension and heightened volatility
in the financial markets, we are satisfied with the commercial
momentum as evidenced across our core banking lines. An
increase in net interest income as rates returned to positive
territory and positive trends in volumes fuelled top-line growth.
Fee income remained resilient, and we are therefore well on
track to meet our 2023 ambition of a return on shareholders’
equity of 8.5-9%.
Customer satisfaction
We proceed with unabashed determination to become the
preferred bank for our customers today and for generations to
come. It has become clear that customer satisfaction trends
considerably higher when a transaction or interaction with an
adviser is involved, as opposed to satisfaction based on pure
perception. To understand our customer satisfaction scores
more accurately, we have adjusted our measurements to
capture the concrete value delivered to our focus segments.
Our former ambition of being in the top two across all segments
has therefore been replaced by more specific and nuanced
goals.
Building on the improvements of the past few years, we are
now looking ahead to a new phase of the journey towards
becoming a better Danske Bank.
Subsequent to the launch of our new commercial organisation
in May and the integration of the new teams, we further
adjusted our organisation to benefit from the optimised
structure. In addition to the organisational structure, we
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
13
continued our efforts to simplify our processes and the product
portfolio. As part of this initiative, we have strengthened the
foundational processes for product management and are
continuing to streamline Danske Bank’s product offering while
upholding high risk management requirements.
Sustainability
In 2022, we continued to develop and make progress on our
sustainability agenda across the Group. This included our
launch of new home loans for energy-efficiency improvements,
green concept loans for renewable energy and electric
transportation, and new sustainable investment funds. We
maintained our strong position within sustainable finance,
including our position as the Nordic leader for the arrangement
of sustainable bonds, and we received recognition for our
sustainability reporting and for our efforts to reduce the
carbon footprint of our lending activities. We enhanced
our sustainability commitments by signing the Finance for
Biodiversity Pledge, and we set emission reduction targets
based on the methodologies outlined by the Science Based
Targets initiative (SBTi) which are laid out in Danske Bank’s
Climate Action Plan and sent to SBTi for validation. Looking
ahead, we will further support and enable our customers’
sustainable transition journeys by continuing to develop our
offerings across segments and by remaining at the forefront of
this evermore important agenda.
People, culture, and engagement
2022 was a year of building on the momentum achieved in
2021 in terms of engagement and leadership and of becoming
a purposeful and inclusive workplace. We continued to invest
in developing our leaders’ capacity to drive strategic execution
with clear direction and accountability, while remaining
committed to leading in accordance with our purpose and
culture commitments. We celebrated the first anniversary
of our purpose and culture commitments with stories from
employees that show how we are united in our purpose and
culture and all play our part in Danske Bank’s contribution to
customers and society. We built further on this momentum
with the launch of a Pondus Award – given each quarter to
an individual or a team who role-model how our purpose and
culture commitments drive business and engagement results.
For the inaugural award, we had more than 1,000 nominations.
Internally, our employee engagement increased again in 2022
to reach a Satisfaction & Motivation index score of 76, and we
are thus well on our way to reaching the 2023 engagement
target of 77.
Compliance
Our work to protect society and the integrity of the financial
markets in which we operate remains central to our values
and our aim to maintain a sound business culture. In terms of
strengthening the robustness of our compliance and financial
crime frameworks, we are seeing vast improvements from the
hand-held remediation efforts of recent years towards efficient
automated processes. Areas of progress span conduct risk,
market integrity, sanctions and transaction monitoring. While
we will remain focused on remediation activities in 2023, we
expect our improving risk management processes and controls
to enable faster identification of, and responses to, future
compliance issues.
Personal Customers
In recent years, we have strengthened our compliance
setup and remediated legacy issues while strengthening our
commercial platform. During 2022, the progress within our
compliance setup enabled us to increasingly focus on fully
leveraging our position to regain commercial momentum, and
we see a positive trajectory in this regard.
The improved momentum we saw in 2022 was a result of
multiple initiatives taken to sharpen our value proposition.
In Denmark, the positive trend for our market position that
we have seen over the past years continued in 2022. In
most quarters, we continued to narrow the gap between our
mortgage front and back books, while additionally seeing a
highly increased preference for the Danske Bolig Fri product
– an alternative to a mortgage loan - which increased more
than 60% from the level at the end of 2021. Further, given
the challenges consumers face in adapting to a changing cost
of living and in managing their investments when markets are
volatile, we increasingly directed our efforts towards providing
expert advisory services for existing customers in Denmark as
well as in the other Nordic countries. Additionally, in Denmark,
we took another step towards a differentiated business model,
for example by tailoring offers for private banking customers
with complex needs through a new unified Private Banking
structure that will take effect in March 2023.
In parallel, demand for digital convenience continued to grow
across all our markets. To cater for our customers’ needs
and capitalise on this trend, we continued to invest in and
strengthen our digital value proposition, which will become an
increasingly important cornerstone of future retail banking.
We have seen solid progress in terms of both innovation
and simplification of the digital experience. For example, we
introduced digital account opening in Danske Mobile Banking
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
14
in 2022, and by the end of the year, 53% of all new savings
and transaction accounts were opened digitally. During 2022,
we also saw an increase in the proportion of customers who
no longer use Danske eBanking but only Danske Mobile
Banking from 36% to 44%. Notable new features implemented
in Danske Mobile Banking in 2022 include the possibility
to set up, delete and edit regular transfers as well as to
transfer money abroad. We also introduced the possibility of
adding a Dankort card to Apple Pay and in general simplified
our everyday banking offering. These initiatives marked an
initial step towards a fully digital setup, and they are already
enhancing the customer experience and pushing the standard
across the industry. In 2022, 70% of our meetings were
conducted online – the highest proportion in our peer group –
with an average online meeting satisfaction score of 8.35/10,
against 8.23 for our peer group1.
Going forward, strengthening digital value chains and deploying
our expert advice at the right moments in our customers’ lives
will be at the heart of our work towards achieving a structurally
lower cost base and improving our efficiency. Digitalisation and
advisory services will be the foundation of our value proposition
through which we aim to strengthen our market position.
Across the other Nordic countries, our focus on commercial
execution and optimisation of our service models, for example
for mortgages, will allow for faster processing times and
quicker responses to customers. To further enhance our ability
to deliver swift and high-quality assistance to customers via
telephone, email and chat, we gathered our contact centres
across Finland, Norway and Sweden under joint leadership
to better leverage technical capabilities and processing skills.
This initiative also allows us to accelerate the adoption of
new technology and simplify customers’ everyday banking
processes. The extension of our strong partnership with
Akademikerne in Norway resulted in an improved value
proposition and enhanced profitability, which will enable us to
align our business activities with the cost of capital.
Across all our markets, we continuously aim to enhance our
value propositions within sustainability and to make it easier for
our customers to make sustainable choices. In Denmark, we
aim to ensure that we offer attractive prices on green financing
for home and car loans, and we have teamed up with external
partners to offer market-leading advice on environmentally- and
climate-friendly home renovations.
Our must-win areas to reach this overall objective include
optimising our pricing and increasing capital productivity,
growing our market share and establishing a cost-efficient
service model.
During 2022, we optimised our pricing, with positive effects on
both deposit margins and on the profitability of products and
services. Repricing primarily targeted changes in the business
packages and trade finance fees. Moreover, we executed on
capital efficiency initiatives, improving our capital utilisation
well above our original ambitions. Cross-selling activities saw
successful results throughout the year, along with an increase
in ancillary income.
In mid-2022, the Business Customers unit was restructured
to further release the potential of the new cost-efficient service
model that was launched at the end of 2021. The intention
of the new service model is to focus advisory services on
customers with more complex needs, while customers with
less complex needs are offered digital self-service options.
This is a significant step in our digital-first approach, along with
enhancing our digital value propositions. In 2022, we released
Marketplace for our small business customers in Sweden who
use District, our financial platform. With Marketplace, more
than 60,000 customers can now order our 12 most popular
products in District. The adoption of our digital services is thus
picking up, with 9% of available products and services now
being ordered digitally. We continue our efforts to raise the
adoption rate into 2023. These efforts are already beginning
to pay off, and our advisory services are now ranked number
one in Norway and Sweden (among business customers with a
turnover of >EUR 5 million), and our everyday banking services
are ranked number one in Denmark and Norway (among
business customers with a turnover of <EUR 5 million).
In addition, the implementation of our Nordic commercial
real estate strategy, comprising the optimisation of capital
utilisation, customer segment prioritisation and commercial
real estate specialisation among advisers, saw good progress.
We see a challenging environment for our customers ahead,
but our tiered service model makes us well positioned to
cater for the different needs of our diverse customer base.
Several digital releases are planned for 2023, such as District
adaptations for customers with less complex needs. We will
continue to introduce market-leading solutions for our business
customers, while also closing identified digital gaps.
Business Customers
The overall objective of our Business Customers unit is to be
the preferred bank for businesses with complex needs and to
offer an attractive value proposition to all businesses across
the Nordic countries, underpinned by a solid digital foundation.
Large Corporates & Institutions
In 2022, we continued to see an inflow of customers in our
market in Sweden, a cornerstone in strengthening our position
outside Denmark. The repricing initiatives for our everyday
banking services taken throughout the year had a positive
1 Source: Market Benchmark Satisfaction Survey, PCDK,
October 2022. 6-month rolling average. Peer group: Jyske Bank, Nordea, Nykredit and Sydbank.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
15
impact on income. Within advisory services and investment
business, despite the challenging market conditions that
significantly affected the Equity Capital Market space, we
focused our efforts and resources on our M&A advisory
services. This resulted in a top-five position in the Nordic M&A
Bloomberg league table, with leading positions in terms of deal
value in Denmark, Finland and Norway. Furthermore, our strong
focus on growing our Debt Capital Market business resulted in
a leading position within Nordic issuance, and we maintained
our leading position among Nordic banks in terms of volumes
supported in the European debt capital markets.
Efficient use of capital continued to be a key focus area in
2022, with risk/reward considerations being at the centre of
balance sheet decisions. This included an ongoing focus on
reallocating capital to improve profitability, which will continue
as part of our 2023 ambitions. In 2022, we supported
our customers’ increasing demand for bridge financing, as
the capital markets were volatile. Moreover, we have been
supporting our customers in the utility sector, where we saw
an increasing demand for liquidity over the summer as energy
prices spiked, which led to increasing working capital needs in
combination with significant margin calls.
We continued to enhance our value proposition within the area
of sustainability and supported our customers in a substantial
number of transactions. Our good traction resulted in a leading
position within Nordic Green, Social and Sustainability bonds
issuance as well as a leading position in the Nordic countries
in the Bloomberg sustainability-linked loans league table.
We also focused on setting targets for reducing the carbon
emissions of our lending activities. Our efforts were recognised
by the Bloomberg Intelligence research unit, which ranked
Danske Bank as number one among 54 international banks
in terms of achieved reduction in financed CO2 emissions and
future emission targets.
In the area of responsible investments, we further enhanced
our processes, disclosures and reporting to continuously
align with the expectations of society and our investors and
with the evolving agenda. To ensure transparency and better
accommodate customers’ sustainability preferences, we have,
for instance, established a model for identifying sustainable
investments in portfolios across our product range. On the
product side, we launched our new multi-asset product, Global
Ansvarlig Portefølje (Global Responsible Portfolio, GRP), which
has a high proportion of sustainable investments and ensures a
good level of diversification across equities and bonds.
Our development efforts in 2022 focused on improving
processes, resulting in freed-up capacity and cost optimisation
and improved services for our customers. Some key examples
of improved services for customers include a new account
management feature in District as well as the roll-out of
the Cash Flow Forecast tool we have developed. Moreover,
we further strengthened our compliance, risk and control
processes and capabilities, with highlights including the
stabilisation and automation of payment systems and
simplification of our depositary setup.
We accomplished major improvements of our markets platform
and digital self-service solutions in the corporate space, making
everyday banking even easier and safer for our customers. To
accelerate the execution of our digital corporate strategy, we
also launched several strategic partnerships during the year
with Altapay, Axeptia and Zenegy, among others.
Overall, we achieved strong traction on the various commercial
initiatives, as proved by the increase in lending volumes and
the continually strong momentum and growth within corporate
everyday banking services. In addition, our continued focus on
supporting customers and improving our offering resulted in
very positive customer satisfaction scores, as reflected in the
independent Nordic Prospera research by Kantar that ranks
us Nordic number one in the ‘Prospera Grand Total’ report for
the seventh consecutive year. Hence, we are confident that
we are on the right track to meet our 2023 ambitions, as we
now focus on concluding our Better Bank strategy cycle with
positive results.
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
16
DANSKE BANK / ANNUAL REPORT 2022
Sustainability
The development of sustainable societies requires a
massive step-up in capital investment across sectors and
industries over the coming decades. As a large financial
institution, Danske Bank can play a pivotal role in enabling
this transformation by bringing about a shift in how capital
is deployed and by supporting customers in instigating
sustainable change. Over the past couple of years, we have
seen a fast-growing demand for sustainable products, solutions
and operations across sectors.
Financial sector leadership in sustainability
At Danske Bank, we want to play a leading role in the
sustainability transformation – and we have a clear ambition
to lead on sustainable finance in the Nordic countries and
to be the leading bank for sustainable finance in Denmark.
Sustainable finance covers financial activities that support
economic growth while simultaneously reducing negative
impacts and increasing positive impacts on environmental,
social and governance (ESG) factors.
To enable us to achieve this ambition and to create societal
and business value, sustainable finance is placed at the core
of Danske Bank’s 2023 Group Sustainability Strategy. This
strategy addresses five additional focus areas that cover
themes of importance to our stakeholders and for our role as a
bank in society. We monitor our progress against set targets,
and we have a strategic focus on five of the 17 UN Sustainable
Development Goals (SDGs). Through our sustainable finance
offerings, we have a potential positive or negative impact on all
17 SDGs, determined by underlying activities.
As we embark on the final year of our current strategy and
Better Bank transformation programme, we are developing
a new overall Group strategy that further integrates our
sustainability ambitions, climate transition plan and new focus
on biodiversity.
Net-zero bank by 2050 Through Danske Bank’s membership of the Net-Zero Banking Alliance, we have committed to aligning the carbon emissions of our lending and investment portfolios with net-zero targets by 2050 or sooner. We have also committed to setting intermediate 2030 targets for all high-emitting sectors in which we have significant financial exposures and to reporting annually on our progress.On the basis of the mapping of our financed emissions and the tools and know-how we have accumulated over the past years, we in 2022 developed a comprehensive Group-wide climate action plan with further future commitments, which we launched in January 2023. This includes committal to the Science Based Targets initiative (SBTi) and intermediate 2030 science-based targets covering our lending and investment portfolios and our own operations. Targets are considered science based when they align with what the latest scientific research deems necessary for meeting the objectives of the Paris Agreement, which are to limit global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. We expect the submitted targets to be validated by the SBTi during the first half of 2023, and we plan to report on these from 2023. Read more in Danske Bank’s Climate Action Plan. Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
17
2023 Group Sustainability Strategy
Sustainable finance
We help our customers achieve their sustainability ambitions through financing and investing.
2023 targets – financing
DKK 300 billion in sustainable financing,
including granted green loans and arranged
sustainable bonds since 2019.
Paris-aligned carbon emission reduction targets
set for our lending portfolio.
2023 and 2030 targets – investment
DKK 150 billion invested in funds with
sustainability objectives by 2030 since 2021.
DKK 50 billion invested in the green transition
by Danica Pension by 2023 – and DKK 100
billion by 2030 since 2019.
Entrepreneurship
We support new businesses in
creating sustainable growth.
2023 target
10,000 start-ups and scale-
ups supported with growth
and impact tools, services
and expertise since 2016.
Entrepreneurship Financial confidence
Financial confidence
We help people become finan-
cially confident.
2023 target
2 million people supported
with financial literacy tools
and expertise since 2018.
y
t
i
s
r
e
v
i
e
e
y
plo
m
E
g & d
well-bein
Governance & integrity
We operate in a responsible
and transparent manner.
2023 target
Over 95% of our employees
trained annually in risk and
compliance.
&
i
n
t
e
g
G
o
v
e
r
n
a
n
ce
rity
Sustainable
finance
Environmental
footprint
Environmental footprint
We minimise our own
environmental footprint.
2023 and 2030 target
40% carbon emission
reductions by 2023 – and
60% by 2030 in relation to
2019.
Employee well-being & diversity
We foster well-being, diversity
and inclusion in our workplace.
2023 target
Minimum of 35% women in
senior leadership positions.
Minimum score of 77 in
employee engagement survey.
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
18
Sustainable finance
Danske Bank is committed to using the power of finance
to create sustainable progress, and managing the impact
from our financing and investment activities is at the core
of our sustainability efforts. Our efforts are reflected in the
Bloomberg Intelligence’s Carbon Score, in which Danske Bank
is recognised as the lender with best performance on financed
CO2 emissions among global banks. Also, by year-end 2022
we remained the leading Nordic arranger of sustainable bonds
in Bloomberg’s league table, and we secured a 16th place in
Bloomberg’s global ranking for green bonds.
Despite the slowdown in the economy and turmoil in the
financial markets in 2022, both of which affected our overall
progress, we remain cautiously optimistic that we can achieve
our sustainable finance volume targets, which were updated in
2021.
Our Group-wide sustainable finance framework helps to ensure
that we work in an effective and consistent manner as we
develop our offerings and products. Both the framework and
our Sustainable Finance Policy are inspired by the Principles for
Responsible Banking and are subject to regular updates in line
with the ongoing phase-in of sustainable finance regulation.
Danske Bank’s Position Statements detail our stance on
material sustainability issues across sectors and themes,
and they are subject to approval by our Business Integrity
Committee. In March 2022, we updated our stance on
agriculture and forestry. Both sectors are central to the climate
change and biodiversity loss crises and represent potential
transition risks.
We continue to follow how the ongoing implementation of the
EU Taxonomy supports our offering of sustainable finance
products. We have initiated the journey of integrating the EU
Taxonomy Regulation, although guidance and enhancements
to the regulation are still being discussed in the EU and
its advisory bodies. In 2022, we updated our Green Bond
Framework and renamed it as the Green Finance Framework.
Consequently, Danske Bank now broadly aligns with the
Technical Screening Criteria of the EU Taxonomy, and the
scope of activities to be financed by the issuance of green
bonds has been extended. In our Sustainability Report 2022,
we disclose the proportion of taxonomy-eligible and taxonomy-
non-eligible activities related to the environmental objectives
of climate change adaptation and climate change mitigation in
accordance with Article 8 of the EU Taxonomy Regulation and
the underlying Disclosures Delegated Act.
In 2022, we also worked to develop our approach to
assessing companies’ transition plans, both within lending
and investment. The methods we use to drive change differ.
Within corporate lending, we typically have close long-term
relationships and can drive change through these. Within
investments, we use active ownership to drive change by
securing solid returns for our pension and business customers
through investments that take ESG factors into account and
through financing of new green technologies and solutions.
Read more on our climate-related risks and opportunities in the
TCFD section below.
Financing
Lending
Investment
Asset management
Asset ownership
2023 target
2030 target
2023 target
2030 target
2022 status
2022 status
2022 status
273
0
50
100 150 200 250 300 350
DKK billion
0
52
50
100
150
200
DKK billion
0 10 20 30 40 50 60 70 80 90 100
DKK billion
37.7
Sustainable financing, including granted green
loans and arranged sustainable bonds.
Investments in funds with a sustainable invest-
ment objective.
Investments in the green transition by Danica
Pension.
Data is accumulated from 2019.
Data is accumulated from 2021.
Data is accumulated from 2019.
In 2022, we saw an increase of 42% in our
sustainability financing volumes from 2021,
due mainly to our continuous successes in
sustainable bond arranging. The data does not
include sustainability-linked loans and bonds.
In 2022, our investments decreased
substantially 20% from 2021, due to the
general market turmoil. Similarly, equities and
fixed income simultaneously posted significant
negative returns.
In 2022, our green investments increased
12% from 2021, due mainly to growth in green
bonds investments and a larger percentage of
sustainability-certified real estate projects.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
19
Biodiversity as our second impact area
The Principles for Responsible Banking serve as a framework for how banks should align their businesses with societal goals
to contribute to a sustainable future, including the UN SDGs and the Paris Agreement. As a founding signatory, Danske Bank
in 2019 committed to identifying the most significant positive and negative impacts of our lending portfolio and to setting
targets for two significant impact areas. Climate change was our first area, and on the basis of a comprehensive impact
assessment conducted in 2022, we identified biodiversity and healthy eco-system as our next area of focus and have joined
the Partnership for Biodiversity Accounting Financials and the Finance for Biodiversity Pledge.
Governance and integrity
Danske Bank continues to develop and embed a strong
compliance culture that sets clear expectations for the
conduct of employees and of the Group. This is achieved
by setting a clear tone from the top, by promoting individual
accountability and risk-awareness through appropriate policies
and training, and by supporting open communication through
accessible tools, behavioural standards and reward structures.
Furthermore, our Code of Conduct Policy outlines the principles
that govern our behaviour and way of doing business.
Our mandatory eLearning training provides essential knowledge
to empower employees to do the right thing for customers,
colleagues and society. All employees must complete annual
courses on a range of risk and compliance topics related to our
policies, processes and applicable regulation. In 2022, 97%
of employees completed and passed the risk and compliance
training (2021: 96%), which is in line with our annual target of
over 95%.
Furthermore, all employees must also undergo our annual
sustainability eLearning course to ensure that they know how
we are working with sustainability and how they can use this
insight when they engage in discussions with colleagues,
customers and partners.
To prevent and detect financial crime, we are continuing to
enhance Danske Bank’s financial crime framework to ensure
that we have the right people, structures and controls in place.
In 2022, substantial progress was made with this Group-
wide plan, which remains on track for completion by the end
of 2023. The plan is set to enable a holistic management of
financial crime risks and covers risks associated with money
laundering, terrorist financing, sanctions, fraud, tax evasion and
facilitation of tax evasion, and bribery and corruption.
Communicating openly and sharing concerns with colleagues,
managers and/or HR are key to ensuring a sound business
culture, and such behaviour is guided and promoted by
our Code of Conduct and by our Culture Commitments.
We encourage employees to speak up about suspected
wrongdoing, and our escalation procedures and processes are
designed to help employees recognise potentially significant
issues and take immediate and appropriate action. Through
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
20
DANSKE BANK / ANNUAL REPORT 2022
Danske Bank’s whistleblowing scheme, employees can submit
their concerns anonymously without fear of retaliation. The
scheme also applies to external stakeholders. In 2022, the
number of reports submitted was 52% higher than in 2021,
indicating that the scheme is well established.
To help build a resilient and sustainable supply chain, we
in 2022 finalised the implementation of our new improved
supplier ESG assessment process. In 2022, approximately
40% of our total active supplier base was invited for ESG
assessment, and our ambition is that all active suppliers
handled through Group Procurement & Premises will be
ESG-assessed by 2023.
Diversity & Inclusion
Danske Bank is working to create a more diverse workforce and
inclusive culture as one of the key drivers in building a better
workplace. In 2022, we continued our efforts to advance our
Diversity & Inclusion (D&I) agenda, both at Danske Bank and
towards society in general. Following up on our D&I mission
statement and governance structure, we updated our D&I
Policy in anticipation of new legislation in Denmark, and we
raised the profile our D&I team to elevate and integrate our
efforts more broadly and deeper across the organisation. In our
aim for gender equality, we focus on preventing biases and on
developing gender-balanced recruitment processes. With a
gender balance of 34% women in senior leadership positions in
2022 (2021: 32%), we maintain our focus to ensure that we
reach our target of more than 35% women in senior leadership
positions by 2023. We also further improved LGBTQ+ rights
and conditions, and in 2022, Danske Bank was ranked
amongst the world’s top 100 employers for these efforts.
Employee well-being
We are working to become an even more attractive and
inclusive workplace where everybody feels that they belong
and that offers employees flexibility in their work and support
in their professional development. Introduced in 2021,
our Purpose and our Culture Commitments foundational
frameworks guide our ways of working and shape the
culture across Danske Bank. In 2022, we invested heavily in
leadership development to ensure that all leaders are able to
lead in line with our Purpose and our Culture Commitments.
A third of all leaders participated in leadership development
programmes focused on purposeful leadership, increasing
self-awareness and awareness of context, choices and
unconscious bias.
Danske Bank’s flexible working model has had a positive
impact on employee engagement and well-being, and in 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
21
Human rights due diligence
In support of the UN Guiding Principles on Business and Human Rights and to further strengthen our human rights due
diligence framework, we in 2022 conducted a high-level review to identify potential salient risks in Danske Bank’s business
activities, including in our own operations, our financing activities and our supply chain. The review and strengthening of
measures to mitigate salient human rights risks also ensure our alignment with upcoming legislation such as the Norwegian
Transparency Act, the minimum social safeguards of the EU Taxonomy, the Corporate Sustainability Due Diligence Directive,
and the Corporate Sustainability Reporting Directive.
we continued to enable more hybrid and flexible settings by
building upon the lessons we have learned from working at
home and from the office.
our in-class guest lectures after a two-year hiatus caused
by COVID-19. In 2023, we will also focus on fostering good
money habits in children through entrepreneurship.
Environmental footprint
Reducing carbon emissions from our premises and our travel
activities is a central element in our efforts to minimise our
environmental footprint. In 2022, our operations resulted in
6,979 tonnes of CO2 equivalent (CO2e) emissions2 across
scopes 1, 2 and 3 (2021: 4,733 tonnes CO2e), which is a
55% decrease from 2019, and we are well on our way to
meeting our target of a 40% reduction by 2023 – and a 60%
reduction by 2030. The 2022 figure includes additional
scope 3 carbon emissions as we now include emissions from
employees working from home to reflect the redistribution of
operational emissions from our office locations to employees’
home locations. In 2023, we plan to also include emissions
from employee commuting and from waste in our operations as
part of scope 3.
Entrepreneurship
Danske Bank helps growth companies across our business and
market areas to develop into viable businesses and increase
their positive societal impact. Since 2016, we have supported
7,231 start-ups and scale-ups with growth and impact tools
(2021: 6,329), services and expertise. However, the ongoing
COVID-19 pandemic and the current uncertain economic
situation are affecting job growth among start-ups, and this
affects our ability to reach our target of having supported
10,000 start-ups by 2023. However, we have previously seen
that start-ups adapt quickly to changes in their environment
and over time will bounce back.
Financial confidence
Since 2018, we have supported almost 2.1 million children,
young people and parents with financial literacy tools and
expertise (2021: 1.6 million), and we have thereby reached
and exceeded our target of supporting 2 million one year ahead
of time.
This is an essential part of our efforts to help people across our
markets to achieve greater financial confidence. In 2022, we
further developed our school programmes, and we resumed
More information
Throughout 2022, integration of ESG and sustainability
considerations into our enterprise risk management framework
continued, and our work in this area is covered in our Risk
Management 2022 report.
ESG ratings cover a range of analytical activities that address a
business’s societal impact. Danske Bank has chosen to focus
on dialogue with five providers, who have been selected on the
basis of their importance to our investors. This is described
further in the Capital and liquidity management section.
Danske Bank’s Sustainability Report 2022 meets proposal
14, cf. the 25 proposals by Finance Denmark’s Anti-money
Laundering Task Force, and ensures compliance with sections
135a and b of the Danish Executive Order on Financial
Reports for Credit Institutions and Investment Companies,
etc. It also represents our disclosures related to Article 8 of
the EU Taxonomy and underlying delegated acts. The report
is supplemented by our Sustainability Fact Book 2022
and Danske Bank’s self-assessment for progress with the
implementation of the Principles for Responsible Banking.
All of these publications are available for download at
www.danskebank.com/sustainability.
New regulation
As part of the European Commission’s Action Plan on
Sustainable Growth, the Corporate Sustainability Reporting
Directive (CSRD), which amends the current Non-Financial
Reporting Directive (NFRD), was adopted in the fourth quarter
of 2022. The CSRD modernises and strengthens the rules
about the social and environmental information that should
be reported in accordance with the upcoming European
Sustainability Reporting Standards (ESRSs). The requirements
include reporting on all material sustainability impacts, risks
and opportunities in a sustainability statement in the Group’s
annual report, from the financial year ending 2024. Final
ESRSs are expected to be issued in the first half of 2023. The
Group is currently evaluating the CSRD and the draft ESRSs.
2 CO2 equivalent (CO2e) is a metric used to compare the emissions of different greenhouse gases, taking into account their different global warming potentials. The greenhouse gas
amounts are converted into equivalent amounts of carbon dioxide with the global warming potential remaining the same.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
22
Task Force on Climate-related Financial Disclosures
Since 2019, Danske Bank has been reporting in line with
the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD). With each year, we aim to further
develop and improve our disclosures to reflect our increasing
climate ambitions and actions. Our approach to the TCFD
recommendations is to embed climate considerations into our
core business activities in line with our sustainability strategy.
To this end, we collaborate across the Danske Bank Group
to share and develop best practices. In 2022, advancing our
approach to managing climate-related risks and opportunities
continued to be a key focus area. During the year, we refined
existing climate targets for all business activities and related
climate actions, established a framework for assessing high-
emitting customers’ transition plans and executing these,
worked on setting science-based emission reduction targets,
and extended our sustainable product offerings. Furthermore,
to continuously enhance our expertise and contribute to
sharing knowledge across the financial sector, Danske Bank
participates in various industry-wide collaborations and
knowledge-sharing forums.
Governance
To reflect this ambition and to drive our climate agenda, climate-
related aspects are integrated into our governance structure at
different levels.
Board oversight
The Board of Directors (BoD) has the overall responsibility for
the Danske Bank Group’s sustainability strategy and exerts
oversight over climate-related issues in a variety of manners
– both as routinely scheduled items at board meetings and
when important matters arise. The BoD approves and reviews
progress on sustainability strategy execution and related
policies, and it reviews the annual external sustainability
reporting. In addition to monitoring climate-related risks, the
BoD also takes into consideration environmental, social and
governance (ESG) aspects when it evaluates the Group’s sector
risk and risk appetite. In 2022, the BoD engaged in discussions
about Danske Bank’s Climate Action Plan, transition plan
assessments, commercial approach to sustainability, and the
integration of climate-related KPIs into executive remuneration,
and it addressed the topic of leadership ambitions in the area
of sustainable finance – all of which serve as key inputs for the
Group strategy beyond 2023.
Management role
Our management, understood as both our Executive
Leadership Team and the broader senior leadership, plays an
important role in our climate governance. Their involvement
takes place both within governance structures within specific
business units and functions and through various committees
and councils across the organisation with which climate-related
aspects are anchored.
Committees and councils
The Business Integrity Committee (BIC) has a direct escalation
line to the Board of Directors. It consists of all members of the
Executive Leadership Team and is chaired by Danske Bank’s
CEO, Carsten Egeriis. The BIC is responsible for endorsing
the sustainability strategy and related policies, which involves
addressing climate-related issues, driving strategy execution
and monitoring progress on a regular basis. This responsibility
Overview of the Group’s climate-related governance structure
Board of Directors (BoD)
Responsibility for the sustainability strategy and oversight
of climate-related issues
Group CEO and Executive Leadership Team (ELT)
Strategic execution and operational oversight
ELT level committees
Business Integrity Committee
Advancing the execution of the sustainability
strategy and monitoring progress
Group All Risk Committee
Deciding on material risks related to the business
model and activities – and monitoring of these
Group Credit Committee
Focusing on credit approvals and consideration
of ESG risks in the credit approval process
ESG
Integration
Council
Responsible
Investment
Committee
Sustainable
Finance
Theme
Committee
Sustainable
Finance
Council
Sub-committees and councils
Various topic-specific committees and
councils, e.g. Green Bond Committee
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
23
includes management of climate-related risks and
opportunities, which are a central element in the sustainable
finance focus area of the Group’s sustainability strategy.
Additionally, the BIC has partial duties to review and make
decisions on ESG risks and to approve the climate-related
position statements, and it is also responsible for Danske
Bank’s approach to climate-related products and services and
the Group’s implementation of TCFD recommendations. BIC
meetings take place quarterly, as a minimum, and during the
five meetings held in 2022, the BIC engaged in key climate-
related decisions and discussions regarding the Group’s
Climate Action Plan, including the bank’s commitment to the
Science Based Targets initiative, the Finance for Biodiversity
Pledge, the sustainable finance governance, the commercial
sustainability approach, and Danske Bank’s position
statements on forestry and agriculture. The BIC also has
two subcommittees that deal with climate-related issues:
the Responsible Investment Committee and the Regulatory
Sustainable Finance Theme Steering Committee (see details
below).
The Group All Risk Committee includes all members of
the Executive Leadership Team (ELT). This committee is
responsible for making decisions on material risks related to
the Group’s business model and activities and is responsible
for monitoring these. These risks cover all risk categories,
business units, functions and geographical regions aligned
with the Group’s Enterprise Risk Management framework.
Sustainability risks, including climate-related risks, are
considered as a cross-taxonomy driver with an impact on
the majority of the Group’s risk categories. Risk efforts are
prioritised where the impact on the Group is deemed material.
The committee convenes at least nine times per year and
addresses climate-related issues during, for example, sector
reviews and discussions on the topics of risk appetite.
The Group Credit Committee is a committee consisting
of ELT members that focuses on credit approvals. For all
credit applications presented to the Committee, an ESG risk
assessment also covering climate-related risk is carried out
that includes credit and reputational questions concerning
the credit exposure. In recent years, increasingly mature ESG
risk assessments have been seen by the Committee. For
customers in high-risk or high-emitting sectors, customer
transition plans are included in the assessment process. The
ESG risk assessment is considered in the credit approval
process and the lack of a credible transition plan can lead to
rejection of lending. Credit cases are endorsed by the Group
Credit Committee and approved by the Board of Directors.
The Responsible Investment Committee (RIC) sets the ambition
level and develops and oversees the implementation of the
Group’s responsible investment strategy. This committee
makes decisions related to responsible investments and
ensures that decisions align with the long-term Group
sustainability strategy. The ESG Integration Council is a
subcommittee of the RIC and is responsible for endorsing and
advising on responsible investment-related matters such as
the incorporation of sustainability and climate-related risks
into investment analysis and decision-making processes and
the inclusion of sustainability- and climate-related issues in
ownership guidelines and practices.
The overall responsibility of the Sustainable Finance Theme
Steering Committee is to manage and monitor progress within
the Sustainable Finance Theme, which includes climate-related
regulation such as the EU Taxonomy Regulation, Capital
Requirements Regulation and Pillar 3 disclosure requirements.
The committee oversees alignment between the regulatory
implementation and the strategic priorities related to the
regulation in scope.
The Sustainable Finance Council – which includes sustainability
experts from all business units, Group Sustainability,
Group Risk Management, the CFO area, Compliance and
Communications – advises the BIC on sustainable finance
and climate-related matters. The Sustainable Finance Council
holds monthly meetings to enable regular discussions and
continuous advancement of the sustainable finance agenda,
including climate-related aspects.
Business units and Group functions
Climate-related responsibilities are integrated across the
organisation, with specific responsibilities being assigned
to specific units. For example, the Group Sustainability unit
functions as a centre of excellence regarding all sustainability-
related issues, including climate, and it is responsible for the
Sustainability Report; developing the Group’s sustainability
strategy, KPIs and targets; and enabling and monitoring
strategy execution. Group Risk Management is responsible for
setting out principles and standards for identifying, assessing
and managing climate-related risks, including providing
oversight and challenge. Regarding Danske Bank’s own
operations, Technology & Services has the overall governance
for the carbon footprint management, and Procurement &
Premises is responsible for collecting and providing relevant
data, reporting and key category management towards the
net-zero strategy. In addition, there are other Group functions
that work with climate-related risks and opportunities, such as
Group Compliance, Group Legal and the CFO area.
The business units integrate the Group-level sustainability
strategy, including its climate-related aspects, into individual
business unit strategies, and they implement the strategy in
product offerings, advisory services, processes and policies.
Business units develop and execute action plans to achieve
the respective sustainability- and climate-related targets at
business unit level.
For more information about our sustainability governance and
an overview of Group functions that work with climate-related
aspects, please see our Sustainability Report 2022.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
24
Climate strategy
Given that climate-related risks and opportunities have
important strategic implications for Danske Bank and for our
customers, they are important for our business in the short,
medium and long term. The financial industry plays a key
role in the net-zero transition, and Danske Bank assumes the
responsibility associated with its position as a major financial
institution in the Nordic countries. Consequently, climate-
related considerations are an important pillar of our strategy.
Through our customer advisory services and financial solutions
offering, we can support the green transition to a low-carbon
society. This responsibility towards the societies we are part
of is at the core of Danske Bank and it is reflected in our
Danske Bank purpose of “releasing the potential in people and
businesses by using the power of finance to create sustainable
progress today and for generations to come”. To fulfil our
responsibility, we continued to increase our efforts in relation
to the net-zero transition throughout 2022. In support of this,
we developed Danske Bank’s Climate Action Plan, published
in January 2023, which outlines our targets and actions for
achieving the goal of limiting future global warming to 1.5°C.
Identified risks and opportunities
As a financial institution, Danske Bank interacts with the
entire economy, including multiple sectors and customer
segments. As a result, we face various climate-related risks
and opportunities through our business activities and across all
customer segments. However, the magnitude and time scale
of climate-related risks associated with the net-zero transition
vary greatly across sectors as each sector faces individual
challenges and differing transition paths.
Climate-related risks
Danske Bank takes a risk-based approach by focusing its
climate-related risk efforts on highly exposed sectors –
primarily high-emitting sectors. For example, emissions can
predominantly be attributed to sectors such as shipping and oil
and gas. Approaches for identifying relevant transition risks in
Danske Bank’s portfolios include carbon emission estimates
and climate scenario analyses.
Relevant physical risks are also identified, especially for our
property portfolio. Flooding risk is the primary physical risk
hazard to be taken into consideration in the Nordic countries.
This includes analysing the risks arising from projected sea
level rises and the increased frequency and severity of storms.
For more details on climate-related risks, please see our Risk
Management 2022 report.
Climate-related opportunities
Climate-related risks also represent opportunities for Danske
Bank to support customers across all segments. As a major
Nordic bank and through our services and products, we
have the opportunity to empower our customers and the
societies we are part of. Although many of our customers have
already started their transition journey, significant amounts
of additional capital will be needed to realise the net-zero
transition across all sectors. We are committed to supporting
and engaging with customers undertaking the necessary
transition.
We have further expanded our sustainable product offering,
for example with green concept loans for renewable energy,
green investments products, and sustainability-linked loans.
Additionally, we collaborate with partners to develop joint
products to best serve our customers in the green transition.
For example, we have teamed up with energy and climate
partners to help our personal customers determine the
most beneficial energy improvement investments for their
homes. Overall, we see a further increase in demand for these
products, and through our advisory services and product
offerings, we will continue to focus our efforts to support our
customers in navigating the transition to net zero.
Impact on business, strategy and financial planning
Climate-related considerations have material implications
for our business, strategy and financial planning. These
implications can affect Danske Bank’s customer acquisition
and retention, competitive position, balance sheet health, and
the market value of our investments. In addition, transition
and physical risks have a direct impact on customers, and
consequently have implications for our business. Because
of this, climate-related considerations are integrated into our
business processes and are a key pillar of Danske Bank’s
strategy.
To future-proof our business and enhance collaboration across
the industry, we have committed to various net-zero initiatives,
including the Net-Zero Banking Alliance, the Net Zero Asset
Managers Initiative and the Net-Zero Asset Owner Alliance,
and we have engaged in various collaboration initiatives and
working groups. We are supporting the goal of global net-
zero greenhouse gas emissions by 2050 or sooner, and we
have worked on setting science-based targets, including
specific intermediate and long-term targets, aligned with
the methodologies of the Science Based Targets initiative
(SBTi) and the 1.5°C trajectory. Specifically, we have worked
on emission reduction targets for high-emitting portfolios,
including for our lending, asset management, and life insurance
and pension activities, as well as for own operations.
To achieve our targets and deliver on our strategy, we integrate
climate considerations into business processes. For our lending
portfolio, we conduct a transition assessment of corporate
customers that have high transition risks, and this informs our
customer engagement and dialogue. We also perform ESG risk
due diligence for new and existing customers. For investments,
ESG factors are integrated into decision-making, which includes
identifying and making investment decisions based on, for
example, climate-related transition and physical risks and
opportunities. Additionally, we actively engage with companies
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
25
to influence and support them in reducing their emissions
and in participating in the net-zero transition as we believe we
can better address climate-related issues in our investments
by leveraging active ownership activities. On a product and
advisory services level, we adapt offerings to meet customer
needs and facilitate the transition to a low-carbon society.
Climate-related risks and opportunities are also taken into
account in the Group’s financial planning process. Climate-
related risks are included for consideration as part of the
Group’s annual internal capital adequacy assessment process,
primarily in terms of credit risk and whether the residual risks
from climate change are sufficiently captured through usual
credit parameters or through additional impairments booked
to the allowance account. Business units have sustainable
finance as a core opportunity in their strategic roadmaps and
as an integral part of their financial planning. We will continue
to further integrate climate-related risk and opportunity
considerations into our financial and capital efforts.
To deliver on our own climate agenda, we are continuously
developing our capabilities and increasing our efforts to
capitalise on climate-related opportunities and mitigate risks.
Across the Group, more than 120 employees in dedicated
roles work with sustainability, including climate-related
aspects. This represents a significant increase on the previous
year’s number of approximately 90 employees. Moreover,
all staff at Danske Bank are trained in sustainability-related
matters, including climate change, and are provided with
role-specific training, particularly for frontline staff, to further
embed sustainability considerations into everything we do.
Sustainability, including climate-related aspects, is also
integrated into the incentive programme of our executive and
senior leadership and is part of the remuneration process for
our portfolio managers.
Resilience of organisation strategy
Maintaining a robust level of resilience against potential
climate-related risks requires sensitivity assessments and
continuous monitoring of transition progress. The findings
of these are an important pillar for the overall strategy
development and specific portfolio exposure strategies, and
they support the development of target-setting measures.
Therefore, transition and physical risk scenario analyses are
conducted to help further assess the sensitivity and future
resilience of the Group’s portfolios. It is important to note that
scenario analyses rely on forward-looking parameters and long-
term horizons, and this involves a higher level of uncertainty
than standard forms of stress testing. The scenario analyses
have therefore not yet been used to model forward-looking
credit losses, but instead they help to identify exposure at risk,
support the identification of potential risk-mitigating efforts and
inform portfolio strategies.
For our transition scenario analyses, scenarios are applied
following the Network for Greening the Financial Sector (NGFS)
3 Applies to conventional, unconventional and frontier oil and gas expansion.
suggestions and recommendations from the International
Energy Agency (IEA). For our physical risk scenario analysis,
historical worst flooding risk scenarios with varying return
periods across our Nordic markets are used. For results of
the scenarios analysis conducted in 2022, see chapter 4
on Sustainability risk management in our Risk Management
2022 report. To prioritise the Group’s efforts, focus has been
set on high-risk sectors identified in the climate risk heat
map (see chapter 4 on Sustainability risk management in our
Risk Management 2022 report). If necessary, due diligence,
risk appetite and risk policies are further tightened to ensure
resilience.
Analysing the climate-related impact of our entire lending
portfolio is also critically important for understanding significant
climate action areas and identifying potential climate transition
risk areas. In 2020, we committed to aligning our lending
portfolio with the principles of the Paris Agreement, and since
then we have been mapping, refining and updating the financed
CO2e emissions resulting from our lending activities. The
results of this work formed the basis for setting science-based
targets and defining our climate-related actions.
We constantly evaluate our exposures in sectors considered
highly exposed to climate change and take action when
deemed relevant. We worked on the update of our Group
position statement on fossil fuels to accelerate the phase-out
of coal-fired energy production from our lending portfolios
by 2030 and excluded long-term financing or refinancing to
exploration and production companies engaging in activities
related to oil and gas expansion3 beyond that which was
approved for development by 31 December 2021.
Our development of sustainable finance products and advisory
services has resulted in Danske Bank remaining the leading
Nordic arranger of sustainable bonds in Bloomberg’s league
table, and in Bloomberg’s global ranking for green bonds, we
secured a 16th place. Advisory services and engagement
are also significant ways through which we can take action
to capitalise on climate-related opportunities. In 2022,
climate and greenhouse gas emissions were the most
frequently discussed ESG engagement topic within our asset
management business.
Risk Management
Climate-related risks are considered as external factors that
can affect existing financial risks, including credit, market
and liquidity risk, and non-financial risks, such as operational
and compliance-related risks. Climate-related risk is therefore
considered a cross-cutting driver of existing risks. The Group
takes a risk-based approach and annually assesses which
risk types are considered to be materially affected by climate-
related risk drivers.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
26
The table below provides an overview of the focus areas with respect to climate risk management in 2022.
Disclosure area
Process for identifying and assessing climate-related risk
Lending
Climate risk pertains to transition risks, which are risks
associated with the shift to a low-carbon economy, and to
physical risks arising from projected climate changes such as
weather-related hazards. Credit risk will be affected by both of
these climate-related risks in the medium and long term.
The Group takes a risk-based approach in prioritising risk
management efforts for sectors that are likely to be most
exposed to transition and physical risks. For that purpose,
applying a climate risk heat map, the Group prioritises its risk
management efforts for sectors that are the most sensitive
to transition risks and physical risks. The Group’s climate risk
heat map is based on a mix of qualitative and quantitative
input to define credit exposures most exposed to transition
and physical risks.
Identification of climate-related risks occur through:
• sustainability due diligence when granting or renewing a
loan
• sustainability risk assessments for high-risk portfolios
• climate scenario analysis for key sectors to determine
the future resilience of the Group’s portfolios and to help
identify potential risk-mitigating efforts and inform portfolio
strategies
• measuring the carbon footprint of our lending portfolio to
further account for transition-related risks
Physical risks are identified mainly for collateral-related
exposure (flooding risk, in particular) by using data on
historically worst flood events and most extreme climate
projections.
Asset
management
The process for identifying and assessing climate-
related risks follows the overall process for incorporating
sustainability risks, which is outlined in our Responsible
Investment Policy. Central to this is our investment teams’
focus on sustainability issues that are likely to affect a
company’s business and ability to deliver attractive returns
to our investors. To enable a systematic approach, we have
developed our proprietary analytical tool, called mDASH
(short for materiality dashboard).
The tool allows us to:
• identify relative level of exposure to climate-related risks
across sectors and industries
• assess companies’ performance in managing climate-
related exposures
• guide engagement with companies on material climate-
related risks
• examine alignment with different global warming pathways
via scenario analysis
For more details, please see our Risk Management 2022 report.
Process from managing climate-related risk and integrating
this into our overall risk management processes
Expectations towards customers related to how the Group
manages climate-related risks are outlined in the Group’s
position statements. Any restrictions outlined in the position
statements are further embedded as policy requirements
in our Credit Policy, which outlines our procedure for how
sustainability risks (including climate risk) are managed.
The Group manages climate-related transition risk at several
levels.
• Customer level, where the Group has developed a
methodology to assess business customers’ transition
plans to gain a more granular overview of the transition
risks. The customer assessments are based on criteria that
aim to capture both the customers’ current performance as
well as their short-, medium- and long-term ambitions and
plans to meet their decarbonisation strategy and targets.
In addition, the assessments include an evaluation of the
customers’ risk of not executing on their strategies because
of external factors that affect their ability to transition, e.g.
technology and government support factors. Furthermore,
ESG due diligence is performed in the credit-granting
process, which includes climate-related risk considerations.
• Portfolio level, where the Group sets long-term targets for
sectors with high financed emissions. Climate risks are
also considered part of the Group’s risk appetite-setting
process, with limits either tightened or introduced for high-
risk segments to further manage the portfolios. This allows
for actively steering the sustainability risks at portfolio
level. We also use scenario analysis and carbon emission
estimates to further assess needed actions to ensure our
loan portfolio supports the needed transition.
• In addition, the Group has intensified its focus on customers
that are considered to be lagging in the transition process
but have started from weak financial positions. For these
customers, the Group identifies relevant mitigating actions.
For physical risks, the risks associated with flooding risk are
managed primarily at the portfolio level, but the concentration
risk does not currently give rise to further actions. This will
continue to be monitored, and it will be relevant to assess
other physical risk hazards in the future, for example extreme
heat, pending good coverage of climate data in the Nordic
countries.
Based on the materiality perspective, we use several tools to
manage climate-related risk. We have several options at our
disposal to determine the right approach for a given investee
company, from active ownership (engagement) to inclusion
(portfolio adjustment) and exclusion (divestment). In terms
of active ownership, we engage with companies on climate-
related issues and have incorporated relevant aspects into
our voting guidelines. As a signatory of the Net Zero Asset
Managers Initiative, we are committed to engaging with the
100 largest emitters in our portfolios by 2025. If necessary,
we exclude companies that are involved in activities that have
significant negative climate impact, and for some of our funds
we also use a carbon risk score as an inclusion criterion,
the aim of which is to achieve a score as per the disclosure
in the fund prospectus. Also, we address relevant carbon
risk-related aspects through our membership of various
initiatives, including The Institutional Investors Group on
Climate Change and Climate Action 100+.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
27
Metrics and targets
Danske Bank’s climate-related risks and opportunities are
evaluated and monitored through different metrics covering our
business units and own operations. Targets are set to reflect our
ambitions in our roadmap to net zero, and progress against these
targets is reported on an annual basis. In 2022, we continued our
efforts to improve our climate-related metrics so that more data
can become available, and we worked on our financed emission
reduction targets across our lending and investment portfolios
to align with the SBTi guidance and Danske Bank’s net-zero
commitments. As a result, we have adapted our targets previously
set for the shipping4, utilities5, and oil and gas6 sectors, and we
have developed additional emission intensity reduction targets
for commercial real estate, personal mortgages and the steel and
cement sectors. As these new climate-related targets were first
published in January 2023 as part of Danske Bank’s Climate
Action Plan, data for the reporting year 2022 is not yet available.
The newly developed metrics will be included in next year’s TCFD
reporting.
The table below provides an overview of the key climate-related
metrics and targets that are currently monitored.
Disclosure area
Current metrics
Target
More details
Climate-related risks
Transition risks Proportion of lending activities materially
No targets
exposed to transition risks: 14%7
(2021: around 15% )
Risk Management 2022 report,
Chapter 4 Sustainability risk
management, section 4.2.1
Physical risks
Proportion of lending activities materially
exposed to physical risks: around 4%7
(2021: around 6%)
No targets
Risk Management 2022 report,
Chapter 4 Sustainability risk
management, section 4.2.1
Financed
emissions
Weighted average carbon intensity of
investment products: 68.40 tonnes
CO2e/million USD revenue
(2020: 85.40 tonnes CO2e/million
USD revenue)
Number of engagements: 208
50% reduction from
2020 to 2030
Climate Action Plan, Asset
Management chapter, Asset
Management Targets section
Engagement with the
100 largest emitters
Climate Action Plan, Asset
Management chapter, Asset
Management Targets section
Own
operations
Total scope 1 + scope 2 + scope 3 CO2e
emissions: 6,979 tonnes CO2e9
(2021: 4,733 tonnes CO2e)
60% reduction by
2030
Climate Action Plan, performance
overview & assurance chapter,
ESG performance data section
Climate-related
opportunities
Sustainable
product
offering
Facilitated sustainable financing since
2019: DKK 273 billion
(2021: DKK 192 billion)
DKK 300 billion by
2023
Annual Report 2022,
Sustainability chapter, sustainable
finance section
Assets under management in Article 9
funds: DKK 52 billion10
(2021: DKK 65 billion)
DKK 150 billion in
2030
Annual Report 2022,
Sustainability chapter, sustainable
finance section
Investments in the green transition by
Danica Pension: DKK 37.7 billion (2021:
DKK 33.5 billion)
DKK 50 billion in
2023
Annual Report 2022,
Sustainability chapter, sustainable
finance section
4 Previous target for lending portfolio: 20-30% reduction in emissions per unit transported (measured in gCO2e/DKK million lent) by 2030 against a 2020 baseline.
5 Previous target for lending portfolio: 30% reduction in carbon emissions per kWh of power generation (measured in gCO2e/kWh) by 2030 against a 2020 baseline.
6 Previous target: 50% reduction in lending exposure (measured in absolute target/risk appetite) by 2030 against a 2020 baseline.
7 Year-on-year decrease in exposure at risk for both transition and physical risk is due to updates to the methodology related to EPC labels and flood risk maps in Denmark,
lowering the exposure at risk for the property-related portfolios. The overall risk profile is considered to be stable compared to 2021. The Group will continue to refine the
climate risk heat map and will be subject to change.
8 Target was set in 2022, therefore not comparative information available.
9 Scope 3 carbon emissions related to employees of the Group working from home was added in 2022.
10 Decrease reflects negative developments in the financial markets.
For further climate-related metrics and targets specific to Danica
Pension, please see Danica Pension’s separate TCFD disclosure.
Read more
For further information, please see the following publications:
Danica Pension’s TCFD disclosure, which outlines how climate-
related topics are addressed in the Group’s pension subsidiary;
Danske Bank’s Climate Action Plan, which introduces our
new climate-related targets and addresses how Danske Bank
approaches the climate transformation; our Sustainability Report
2022, which covers climate-related aspects as an integral part of
Danske Bank’s sustainability strategy; and our Risk Management
2022 report for more information on identified sustainability risks,
including the Group’s climate risk heat map.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
28
Estonia and remediation matters
In 2022, Danske Bank continued its remediation efforts,
including the handling of the Estonia matter and the debt
collection case in Denmark.
Estonia matter
Investigation
On 13 December 2022, Danske Bank announced that it had
reached final coordinated resolutions with the US Department
of Justice (DoJ), the US Securities and Exchange Commission
(SEC) and the Danish Special Crime Unit (SCU) following the
investigations into failings and misconduct related to the non-
resident portfolio at Danske Bank’s former Estonia branch. In
relation to the resolutions with the U.S. authorities, Danske
Bank has pleaded guilty to a criminal charge from the DoJ of
conspiracy to commit bank fraud. Furthermore, Danske Bank
agreed to settle a civil securities fraud action with the SEC.
Under the SCU resolution, Danske Bank has agreed to accept
fines and confiscation for violations of the Danish AML Act and
the Danish Financial Business Act.
The coordinated resolutions mark the end of the criminal and
regulatory investigations into Danske Bank by the authorities in
Denmark and the United States.
The Bank remains subject to a criminal investigation by
authorities in France and has posted bail in the amount of
DKK 80 million. The Bank continues to cooperate with the
authorities.
The aggregate amounts payable to the US and Danish
authorities total USD 2.06 billion (approximately DKK 15.3
billion – hedged following the provision). This is covered by
the provisions booked in connection with our financial results
for the third quarter of 2022 and the third quarter of 2018.
Reflecting cross-crediting arrangements between the three
authorities as well as currency conversions, the amounts
payable to the authorities are as follows: DoJ: USD 1,209
million, SEC: USD 179 million and SCU: DKK 4,749 million.
All amounts have been paid in January 2023.
Danske Bank has accepted and agreed to the terms of the
resolutions. As part of the Bank’s agreement with DoJ, the
Bank was placed on corporate probation for three years from
13 December 2022 until 13 December 2025. As a result
of the resolutions, the investigations by U.S. and Danish
authorities are now closed as to Danske Bank. However,
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Capital and
liquidity
management
Sustainability
Financial review
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
29
the Bank remains in contact with DoJ as a matter of post-
resolution obligations set forth in the agreement with DoJ.
in the historical debt collection systems on the basis of a data-
driven model.
Civil claims
Danske Bank is subject to ongoing litigation in relation to the
Estonia matter. This includes, inter alia, an action against
Danske Bank (and other defendants) in the United States and
a number of court cases initiated against Danske Bank in
Denmark. These civil claims are not included in the coordinated
resolutions with DoJ, SEC, and SCU. Danske Bank will continue
to defend itself vigorously against these claims. The timing of
completion of any such civil claims (pending or threatening) and
their outcome are uncertain and could be material.
Update on the debt collection case
As announced on 31 August 2022, Danske Bank has chosen
an accelerated solution for its debt collection customers,
whereby approximately 90,000 debt collection customers
in Denmark will have their debt to the bank set to zero, and
Danske Bank will not collect this debt. In the fourth quarter, we
began communicating to customers whose debt is set to zero.
In the coming period, we expect to begin communicating
the effect of the solution to customers and expect the
compensation payout to the vast majority of customers to be
completed by the end of 2023.
In the third quarter of 2022, operating expenses were
impacted by a one-off amount of DKK 600 million, whereas
write-downs of debt increased loan impairment charges by a
one-off amount of DKK 650 million, which includes part of the
compensation to customers. It was furthermore communicated
that further sample checks related to the customer
compensation model were needed, and this work has now
resulted in our taking a more conservative approach, which is
to the benefit of our debt collection customers. This approach
impacted our operating expenses by a further DKK 310 million
in the fourth quarter of 2022 to cover compensation to debt
collection customers for potential overcollection of debt.
Furthermore, Danske Bank has decided to compensate
customers for any potential overcollection related to the issues
Danske Bank continues to have a dialogue with and report
progress with the debt collection case to the impartial
reviewers appointed by the Danish FSA.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
30
Financial review
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.
Provision for Estonia matter
Impairment charges on goodwill
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.
2022
2021
Index
22/21
25,188
12,590
1,426
63
1,936
41,203
26,478
962
13,800
1,627
-703
1,568
-2,271
-13
-2,284
2,784
-5,068
86
22,049
13,525
4,126
2,088
797
42,584
25,663
687
-
-
16,921
348
16,573
-2
16,571
3,651
12,920
451
114
93
35
3
243
97
103
140
-
-
-
-
-
-
-
76
-
19
Q4
2022
7,442
3,054
747
386
733
12,362
6,909
235
-200
-
5,654
774
4,880
-2
4,877
704
4,174
-
Q3
2022
6,307
2,999
503
-286
244
9,767
6,777
237
14,000
1,627
-12,637
368
-13,005
-28
-13,033
760
-13,792
-
Index
Q4/Q3
118
102
149
-
-
127
102
99
-
-
-
210
-
7
-
93
-
-
2022 vs 2021
Net profit decreased to a net loss of DKK 5,068 million
(2021: a net profit of DKK 12,920 million). The result for
2022 was affected by the provision for the Estonia matter of
DKK 13,800 million and the goodwill impairment charge
of DKK 1,627 million. Excluding these one-offs, net profit
amounted to DKK 10,359 million. Further, the accelerated
solution to the debt collection case led to a total effect on profit
before tax of DKK 1,560 million, consisting of a negative effect
on operating expenses of DKK 910 million and an increase
in loan impairment charges of DKK 650 million. Higher net
interest income and other income could not fully compensate
for the effect that the market turmoil had on net trading income
and on net income from insurance business.
Income
Net interest income increased to DKK 25,188 million (2021:
DKK 22,049 million), benefiting from changes to base rates,
but also from income on deposits following repricing and market
developments in rates as well as larger volumes. In Northern
Ireland, the increase in net interest income was driven by
actions taken in response to higher UK interest rates.
Net fee income decreased to DKK 12,590 million (2021:
DKK 13,525 million). We saw good remortgaging activity as
a result of the rise in interest rate levels as well as an increase
in service fees due to repricing. Net fee income from everyday
banking products maintained a positive trend throughout
2022. Investment fees decreased as customer activity
within capital markets was significantly lower, and income in
Asset Management fell following a decline in assets under
management and lower performance fees.
Net trading income decreased to DKK 1,426 million (2021:
DKK 4,126 million). Net trading income recovered in the
second half of the year, as market conditions became more
supportive. During 2022, we continued to support our
customers through the volatile repricing on the financial
markets. However, the extraordinarily high volatility and lower
liquidity in the Nordic fixed income markets made market-
making services and the management of the risk held to
support our fixed income franchise challenging. Net trading
income benefited from a one-off gain of DKK 170 million on
the sale of shares in Sanistål, whereas a negative effect of
eliminations of returns on own shares had an adverse effect.
Net income from insurance business amounted to DKK 63
million (2021: DKK 2,088 million). The underlying business
is strong, and the underlying loss on the health and accident
business was reduced. Following the negative market
developments, the result of the life insurance business
decreased. Costs of DKK 150 million to cover compensation
to customers, as announced on 9 September 2022, also had
a negative effect on the result. However, some of the negative
effect was offset by the gain of DKK 415 million on the sale of
Danica Norway.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Sustainability
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
31
Other income amounted to DKK 1,936 million (2021:
DKK 797 million). The increase was due partly to the sale of
our activities in Luxembourg, which generated a one-off gain of
DKK 421 million, and to the sale of our shares in MobilePay,
which generated a gain of DKK 415 million, and to increased
sales prices of assets in our leasing operations.
Operating expenses
Operating expenses amounted to DKK 26,478 million (2021:
DKK 25,663 million). Underlying expenses continued to
progress according to plan, which helped mitigate elevated
remediation costs and costs related to the Estonia matter.
Furthermore, as announced on 31 August 2022, we have
chosen an accelerated solution for the vast majority of our
debt collection customers. Operating expenses were impacted
by a one-off amount of DKK 910 million due to an increase in
provisions for compensation to customers.
Finally, the Resolution fund, bank tax etc. item increased to
DKK 962 million (2021: DKK 687 million) as a result of the
Swedish bank tax that came into force on 1 January 2022.
Provision for the Estonia matter
On 13 December 2022, Danske Bank announced that it had
reached final coordinated resolutions with the US Department
of Justice (DoJ), the US Securities and Exchange Commission
(SEC) and the Danish Special Crime Unit (SCU) following the
investigations into failings and misconduct related to the non-
resident portfolio at Danske Bank’s former Estonia branch.
Under the terms of the coordinated resolution and as part of
a cross-crediting agreement between the agencies, the total
settlement amount was fixed at DKK 15,300 million. In addition
to the provision booked in 2022 of DKK 13,800 million, a
provision of DKK 1,500 million was booked in 2018.
million was assessed to be impaired due to increasing discount
rates and the current turbulence in the financial markets and
was thus written off.
Loan impairment charges
On the back of strong credit quality, loan impairment charges
in core business segments normalised in 2022, amounting to
DKK 1,568 million (2021: DKK 348 million).
Loan impairment charges
(DKK millions)
Charges
2022
% of net
credit
exposure*
2021
% of net
credit
exposure*
Charges
Personal Customers
Business Customers
Large Corporates &
Institutions
Northern Ireland
Group Functions
Total core
927
578
-774
168
669
1,568
0.10
0.09
-0.25
0.30
17.37
0.08
60
426
-13
-127
2
348
0.01
0.06
-0.00
-0.24
0.04
0.02
*Defined as net credit exposure from lending activities in core segments, excluding
exposures related to credit institutions and central banks and loan commitments.
Impairments reflect the macroeconomic uncertainty and
slowing economic growth due to increased inflationary
pressure as well as interest rate hikes, while COVID-19-
related uncertainty decreased. Although the macroeconomic
landscape remains uncertain and develops at a fast pace, the
credit quality of individual customers was strong across the
core loan portfolios as a result of the post-pandemic economic
recovery.
Impairment charges on goodwill
Goodwill in Danica Pension arising from the purchase of SEB
Pension Danmark in 2018 and amounting to DKK 1,627
The accelerated solution to the debt collection case led to a one-
off increase in loan impairment charges of DKK 650 million in
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
32
the third quarter, impacting the result of Group Functions. This
covers part of the remediation costs related to compensating
customers for potential overcollection. In addition, debt of
approximately DKK 1.0 billion was written off. However, the
write-offs were covered by matching impairment charges and
had no impact on loan impairment charges in 2022 at Group
level.
A continued review of post-model adjustments throughout the
year resulted in new post-model adjustments of DKK 1.6 billion
to address idiosyncratic risks in the portfolios stemming from
the surge in inflation and energy costs as well as the worsening
macroeconomic outlook. Developments in 2022 also led to
an increase in post-model adjustments related to the property
segment and to personal customers due to increasing inflation
and interest rates and the risk of a decline in property prices
and disposable incomes. On the other hand, COVID-19-related
uncertainty has declined since the end of 2021, and the related
post-model adjustments were fully released by September
2022, as the new virus variants did not cause prolonged
lockdowns. The total allowance account amounted to DKK
19.7 billion (end-2021: DKK 22.7 billion), including post-model
adjustments of DKK 6.6 billion (end-2021: DKK 6.3 billion).
Personal Customers saw increasing impairment charges in
2022, while Business Customers had impairment charges
comparable to the charges in 2021. The charges were driven
by changes in the macroeconomic scenarios to account for
expectations of higher inflation and interest rate hikes as well
as increased post-model adjustments. For Business Customers
in particular, this was partly offset by strong credit quality and
reversals as customers benefited from the post-pandemic
economic recovery.
Large Corporates & Institutions continued to have net loan
impairment reversals in 2022 owing to improved credit quality
driven by the post-pandemic economic recovery and the
resulting decline in charges made against facilities to individual
customers. The effect of this was partly offset by increasing
post-model adjustments.
The changes to the macroeconomic scenarios were driven
primarily by a lower GDP, rising interest rates and reinforced
inflationary pressure as a result of rapid price increases on
commodities such as energy, metals and agricultural products.
Base-case, upside and downside scenarios were all updated
following the macroeconomic uncertainty. The scenario weights
from the fourth quarter of 2021 were maintained in 2022 and
were 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%).
Tax
The tax expense of DKK 2,784 million (2021: DKK 3,651
million) was affected mainly by non-deductible items, including
the additional provision for the Estonia matter and the goodwill
impairment charge. The effective tax rate excluding the
additional provision for the Estonia matter and the goodwill
impairment charge was 21.2% (2021: 22.0 %).
Q4 2022 vs Q3 2022
Net profit for the fourth quarter amounted to DKK 4,174 million
(Q3 2022: DKK 1,835 million, excluding the provision for the
Estonia matter and the goodwill impairment charge).
•
•
•
•
•
•
•
•
•
Net interest income increased to DKK 7,442 million (Q3 2022:
DKK 6,307 million) due to higher lending volumes and repricing
of deposits as a consequence of the rise in interest rates. In
Northern Ireland, we saw an increase in net interest income,
reflecting higher UK interest rates and related repricing initiatives.
Net fee income amounted to DKK 3,054 million (Q3 2022:
DKK 2,999 million), driven by higher remortgaging activity and
good activity within M&A advisory services.
Net trading income increased to DKK 747 million (Q3 2022:
DKK 503 million), driven mainly by positive value adjustments of
the derivatives portfolio and a one-off gain on the sale of shares
in Sanistål. The negative effect of eliminations of returns on own
shares partly offset these positive effects.
Net income from insurance business amounted to DKK 386
million (Q3 2022: a negative DKK 286 million). The result of the
life insurance business increased from the third-quarter result,
as Danica Pension was able to collect the full risk allowance for
2022. The result of the health and accident business decreased.
Other income increased to DKK 733 million (Q3 2022:
DKK 244 million), due mainly to a one-off gain on the sale of
shares in MobilePay.
Operating expenses amounted to DKK 6,909 million (Q3
2022: DKK 6,777 million), driven mainly by seasonality and
higher IT cost. Further sample checks related to the customer
compensation model were needed, and this work has resulted in
our taking a more conservative approach, which is to the benefit
of our debt collection customers. This approach impacted our
provisions by a further DKK 310 million, as the accelerated
solution affected operating expenses for the fourth quarter
of 2022. In the third quarter of 2022, operating expenses
were impacted by a one-off amount of DKK 600 million to
cover compensation to debt collection customers for potential
overcollection of debt.
The provision for the Estonia matter amounted to a reversal
of DKK 200 million (Q3 2022: DKK 14,000 million) due to a
reduction of the provision made to cover the settlement of the
matter.
The goodwill impairment charge amounted to DKK 0 million (Q3
2022: DKK 1,627 million). In the third quarter, an impairment
charge related to Danica Pension’s acquisition of SEB Pension
Danmark was recognised.
Loan impairment charges for core business segments
amounted to DKK 774 million in the fourth quarter (Q3
2022: DKK 368 million). Impairment charges were driven by
updated macroeconomic scenarios and increased post-model
adjustments. On the other hand, credit quality continued to be
strong throughout the fourth quarter, resulting in impairment
reversals relating to individual customer exposures.
•
Tax amounted to DKK 704 million (Q3 2022: DKK 760 million).
The tax amount was affected, among other things, by the non-
taxable profit on the sale of shares in MobilePay.
DKK 4,174 million
Profit before tax
for the fourth quarter of 2022
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Sustainability
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
Balance sheet
Lending (end of period)
(DKK millions)
Personal Customers
Business Customers
Large Corporates & Institutions
Northern Ireland
Group Functions incl. eliminations
Allowance account, lending
Total lending
Deposits (end of period)
(DKK millions)
Personal Customers
Business Customers
Large Corporates & Institutions
Northern Ireland
Group Functions incl. eliminations
Total deposits
Covered bonds
(DKK millions)
Bonds issued by Realkredit Danmark
Own holdings of bonds*
Total Realkredit Danmark bonds*
Other covered bonds issued
Own holdings of bonds
Total other covered bonds
2022
2021
805.1
639.6
322.5
53.8
-0.1
16.9
883.2
653.0
264.8
55.8
-2.9
19.6
1,804.0
1,834.4
410.8
285.2
389.5
94.6
-10.2
407.9
292.5
383.5
99.0
-15.3
1,169.9
1,167.6
685.2
42.1
727.3
156.7
99.0
255.8
770.7
42.4
813.1
165.1
86.9
252.0
Total deposits and issued mortgage bonds etc.
2,152.9
2,232.7
33
Index
22/21
91
98
122
96
-
86
98
101
98
102
96
-
100
89
99
89
95
114
102
96
Q4
2022
805.1
639.6
322.5
53.8
-0.1
16.9
Q3
2022
803.5
625.9
354.2
54.5
1.8
15.6
1,804.0
1,824.3
Index
Q4/Q3
100
102
91
99
-
108
99
410.8
285.2
389.5
94.6
-10.2
415.4
287.5
399.3
96.2
-11.1
1,169.9
1,187.3
685.2
42.1
727.3
156.7
99.0
255.8
667.0
42.5
709.5
162.8
89.2
252.0
2,152.9
2,148.9
99
99
98
98
-
99
103
99
103
96
111
102
100
Lending as % of deposits and issued mortgage
bonds etc.
83.8
82.2
83.8
84.9
*Includes only bonds issued to fund lending. For further information, see the Definition of alternative performance measures section.
Lending
Lending stood at DKK 1,804 billion (end-2021: DKK 1,834
billion). Excluding the changes in the fair value of mortgage
loans in Denmark following the increases in interest rate levels,
lending increased 3% from the level at the end of 2021 to
DKK 1,882 billion. Mortgage lending at nominal value at
Realkredit Danmark amounted to DKK 802 billion (end-2021:
DKK 808 billion).
The increase in lending at Large Corporates & Institutions
was driven partly by higher volumes in Sweden, reflecting
our strategic ambition to grow the number of core customer
relationships in Sweden. At Business Customers, we saw
an increase in bank lending due to higher customer activity.
Mortgage lending at nominal value increased 1%. Green
loan volumes also increased. At Personal Customers, bank
lending increased, driven primarily by the Danske Bolig Fri
product – an alternative to a mortgage loan. Total lending at
Personal Customers decreased 9% due to negative market
value adjustments of mortgage loans caused by the higher
interest rate level, the slowdown in the housing market and the
discontinuation of the customer portfolio in Luxembourg.
In Denmark, new gross lending, excluding repo loans, amounted
to DKK 129 billion. Lending to personal customers accounted
for DKK 30 billion of this amount.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
34
In Denmark, our market shares of bank lending, excluding repo
loans, to personal and business customers increased to 19.8%
at the end of 2022 (end-2021: 18.6%) and to 23.2% (end-
2021: 22.0%), respectively. The market share in Denmark,
including mortgage lending, decreased, however, to 24.6% at
the end of 2022 (end-2021: 24.8%). In Sweden, our market
share of lending increased from 5.1% to 5.4%, and in Finland,
our market share of lending increased from 9.5% to 10.0%. In
Norway, we maintained our market share of lending at the end-
2021 level.
The effect of higher activity among corporate and institutional
customers was more than offset by lower exposure to personal
and business customers in Denmark, primarily as a result of
the net negative effect of fair value adjustments. In addition, the
effect of the increase in activity was offset by lower deposits
with central banks and weaker exchange rates (SEK, NOK and
GBP), thus reducing credit exposure. However, in local currency,
credit exposure to business customers in Sweden, Finland
and Norway increased. Credit exposure directly related to
customers in or from Russia, Ukraine and the Baltic countries
is limited and amounted to less than DKK 0.1 billion at 31
December 2022.
Market shares of lending
(%)
Denmark incl. RD (excl. repo)
Finland*
Sweden (excl. repo)
Norway*
31 December
2022
31 December
2021
Risk Management 2022, section 3, which is available at
danskebank.com/ir, provides details on Danske Bank’s credit
risks.
24.6
10.0
5.4
6.3
24.8
9.5
5.1
6.3
Credit quality
Credit quality remained strong in 2022 at all business units.
However, we remain vigilant for any possible deterioration
related to the risks and uncertainty mentioned in the loan
impairment charges section above.
Source: Market shares are based on data from central banks at the time of reporting.
* The market shares for Finland and Norway are based on data as at 30 November 2022.
Lending equalled 83.8% of the total amount of deposits,
mortgage bonds and other covered bonds (2021: 82.2%).
Stage 3 loans in core segments
Deposits
Deposits amounted to DKK 1,170 billion (end-2021:
DKK 1,168 billion). The increase in deposit volumes was
due to cautious investment strategies among our customers
and the outlook for positive deposit rates.
In Denmark, our market share of deposits decreased to 28.4%
at the end of 2022 (end-2021: 29.1%). In Finland, Sweden and
Norway, our market share of deposits was also lower than at
the end of 2021.
Market shares of deposits
(%)
Denmark (excl. repo)
Finland*
Sweden (excl. repo)
Norway*
31 December
2022
31 December
2021
28.4
9.7
4.6
7.3
29.1
10.0
5.1
8.1
Source: Market shares are based on data from central banks at the time of reporting.
* The market shares for Finland and Norway are based on data as at 30 November 2022.
Credit exposure
Credit exposure from lending activities in core business
segments decreased to DKK 2,513 billion (end-2021:
DKK 2,716 billion).
(DKK millions)
Gross exposure
Allowance account
Net exposure
Collateral (after haircut)
Stage 3 coverage ratio (%)
31 December
2022
31 December
2021
32,132
46,012
8,251
12,397
23,881
33,615
20,775
30,143
73
78
The stage 3 coverage ratio is calculated as allowance account stage 3 exposures relative to
gross stage 3 exposures net of collateral (after haircuts).
Total gross credit exposure in stage 3 was DKK 32.1 billion
(end-2021: DKK 46.0 billion), corresponding to 1.3% of
total gross exposure. Stage 3 exposure was concentrated
on personal customers, shipping, oil and gas, commercial
property and agriculture, which combined accounted for 69%
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.
Total gross exposure in stage 2 has increased DKK 45
billion since the end of 2021, primarily in the commerical
property and personal customers segments due to changes in
macroeconomic scenarios.
The allowance account amounted to 1.02% (end-2021:
1.15%) of lending and guarantees.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Sustainability
Financial high-
lights - Danske
Bank Group
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
35
Allowance account by business units
Bond portfolio
31 December
2022
31 December
2021
(%)
31 December
2022
31 December
2021
(DKK millions)
Accum.
impairm.
charges
% of
credit
expo-
sure1
Accum.
impairm.
charges
Personal Customers
5,427
0.66
5,654
Business Customers
10,235
1.58
10,186
Large Corporates &
Institutions
Northern Ireland
Group Functions
Total
3,050
0.76
5,227
863
1.56
850
31
0.78
17
19,605
1.02 21,935
1 Relating to lending activities in core segments.
% of
credit
expo-
sure1
0.64
1.54
1.84
1.44
0.36
1.15
Trading and investment activities
Credit exposure from trading and investment activities
amounted to DKK 1,189 billion at the end of 2022 (end-2021:
DKK 1,068 billion). The increase was due primarily to an
increase in derivatives with positive fair value.
The Group has made netting agreements with many of its
counterparties concerning positive and negative market values
of derivatives. The net exposure was DKK 89.1 billion (end-
2021: DKK 76.8 billion).
The value of the bond portfolio was DKK 502 billion (end-
2021: DKK 540 billion). Of the total bond portfolio, 70% was
recognised at fair value and 30% at amortised cost.
Government bonds and bonds guaranteed
by central or local governments
Bonds issued by quasi-
government institutions
Danish mortgage bonds
Swedish covered bonds
Other covered bonds
Corporate bonds
Total holdings
Bonds at amortised cost included in total
holdings
44
4
37
7
6
2
100
30
45
3
35
10
5
2
100
27
The financial highlights on page 8 provide information about the
balance sheet.
Trading portfolio assets and trading portfolio liabilities
decreased to net assets of DKK 84.5 billion (end-2021: net
assets of DKK 134.6 billion). The decrease in net assets was
due mainly to decreased bond holdings and changes in the fair
value of the derivatives portfolio.
Other balance sheet items
Due from credit institutions and central banks decreased
to DKK 191.9 billion (end-2021: DKK 320.0 billion). The
decrease was due to general liquidity management. More
information on this is provided under the Funding and liquidity
heading in the Capital and liquidity management section.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
36
Capital and liquidity management
The main purposes of our capital management practices are to
support our business strategy and to ensure a sufficient level of
capital to withstand even severe downturns without breaching
regulatory requirements.
Capital ratios
At the end of 2022, the Group’s total capital ratio was 22.1%,
and its CET1 capital ratio was 17.8%, against 22.4% and
17.7%, respectively, at the end of 2021. The movement in
the capital ratios in 2022 was driven by a decline in the total
REA, the cancellation of the remaining dividends for 2021 and
a decrease in the capital deduction for Danica Pension. These
effects were partly countered by the realised net loss due to
the effect of the coordinated resolution with the US and Danish
authorities in relation to the Estonia matter. The total capital
ratio was moreover affected by the redemption of additional tier
1 capital instruments of EUR 750 million in April 2022.
During 2022, the total REA decreased approximately
DKK 22 billion due to a decline in the REA for credit risk, which
was partly countered by an increased REA for market risk.
Capital requirements
Danske Bank’s 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 2022, the Group’s solvency need ratio was
10.6%, a decrease of 0.8 percentage points from the level
at the end of 2021. The decrease was primarily due to the
removal of DKK 7.5 billion of the DKK 10 billion Pillar II add-on
as required under the orders issued by the Danish Financial
Supervisory Authority (the Danish FSA) in 2018. The reduction
in the Pillar II add-on was driven by the additional provision
related to the Estonia matter made on 27 October 2022. The
amount was 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
2022, the Group’s CBR was 7.0%.
Announced increases in the national countercyclical buffer
rates in Denmark, Norway and Sweden will increase the
Group’s CBR by 0.5 percentage points in 2023. Consequently,
the fully phased-in countercyclical buffer requirement will be
2.0%, thereby bringing the fully phased-in CET1 requirement to
13.6%.
Capital ratios and requirements
(% of total REA)
Capital ratios
CET1 capital ratio
Total capital ratio
Capital requirements (incl. buffers)
CET1 requirement
- portion from countercyclical buffer
- portion from capital conservation buffer
- portion from SIFI buffer (O-SII)
Solvency need ratio
Total capital requirement**
Buffer to requirement
CET1 capital
Total capital
2022
Fully phased-in*
17.8
22.1
13.1
1.5
2.5
3.0
10.6
17.6
4.7
4.5
17.4
21.8
13.6
2.0
2.5
3.0
10.6
18.2
3.8
3.6
* 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 2022.
The calculation of the solvency need ratio and the combined
capital buffer requirement is described in more detail in section
6 of Risk Management 2022, which is available at
www.danskebank.com/ir.
Minimum requirement for own funds and eligible liabilities
The Danish FSA sets the MREL at two times the solvency
need plus one time the SIFI buffer and one time the capital
conservation buffer. Furthermore, the CBR must be met in
addition to the MREL. In the annual MREL decision from the
Danish FSA, the (backward-looking) MREL was set at 26.7% of
the total REA adjusted for Realkredit Danmark.
At the end of 2022, the point-in-time requirement including the
CBR was equivalent to DKK 245 billion, or 33.7% of the total
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 263 billion. In addition, an MREL of 6% of the leverage
ratio exposure (LRE) is in place. The LRE-based requirement
equalled 21.3% of the total REA adjusted for Realkredit
Danmark, making the REA-based requirement the binding
constraint.
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.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
37
At the end of 2022, the subordination requirement was
equivalent to DKK 205 billion. The backward-looking
subordination requirement, as set by the Danish FSA, was
28.2% of the total REA adjusted for Realkredit Danmark.
MREL-eligible subordinated liabilities stood at DKK 234 billion.
MREL requirement and eligible funds; end-2022
(DKK billions) (% of total REA)
Credit ratings
Credit ratings remained unchanged in 2022.
On 16 December 2022, S&P revised the outlook on Danske
Bank to Stable from Negative as a consequence of the
resolution of the Estonia matter.
Subsequent to the announcement of the resolution, Fitch and
Moody’s also affirmed their ratings and outlooks on the Group.
245
(33.7%)
263
(36.2%)
29
(4.1%)
77
(10.6%)
157
(21.6%)
MREL indluding CBR
MREL funds
Preferred senior debt > 1year
Non-preferred senior debt > 1year
CET, AT1, T2
Note: The requirement and eligible funds are adjusted for Realkredit Danmark’s
capital and debt buffer requirements.
Leverage ratio
At the end of 2022, the Group’s leverage ratio was 5.0% under
the transitional rules and 4.9% under the fully phased-in rules.
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 the capital targets
to regulatory developments in order to ensure a strong capital
position.
Capital distribution policy
In 2022, Danske Bank made an additional provision of
DKK 13,800 million in relation to the Estonia matter. Conse-
quently, the Board of Directors will propose to the annual
general meeting in 2023 not to pay out dividend for 2022.
Danske Bank’s dividend policy remains unchanged, targeting a
dividend of 40-60% of net profit.
Danske Bank has strong capital and liquidity positions, and the
Board of Directors remains committed to our capital distribution
policy.
Danske Bank’s ratings, 31 December 2022
Fitch
Moody’s
S&P
Counterparty rating
A+
A1/P-1
AA-/A-1+
Deposits
Senior debt
Issuer rating
Outlook
Non-preferred
senior debt
Tier 2
AT1
A+/F1
A2/Stable/P-1
A+/F1
A/F1
Stable
A
BBB+
BBB-
A3/P-2
A+/A-1
A3/P-2
A+/A-1
Stable
Stable
Baa2
BBB+
-
-
BBB
BB+
Covered bonds issued by Realkredit Danmark are rated ‘AAA’
(Stable outlook) by Fitch, S&P and Scope Ratings. Covered
bonds issued by Danske Bank A/S are rated ‘AAA’ (Stable
outlook) by both Fitch and S&P. Covered bonds issued by
Danske Hypotek AB are rated ‘AAA’ (Stable outlook) by S&P
and ‘AAA’ by Nordic Credit Rating. Covered bonds issued by
Danske Mortgage Bank Plc are rated ‘Aaa’ by Moody’s.
Environmental, Social and Governance (ESG) ratings
Danske Bank currently focuses on the following ESG rating
agencies (a reflection of investor priorities).
Danske Bank’s ESG ratings
CDP Worldwide, UK
ISS ESG, USA
Score at
31 December
2022
Score at
31 December
2021
B
B
C+ Prime
C Prime
MSCI ESG Ratings, USA
BBB
BBB
Sustainalytics, USA
Medium Risk
Medium Risk
Moody’s ESG Solutions, USA
61
61
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
38
On 13 January 2022, ISS ESG raised its rating to ‘C+ Prime’,
thereby reflecting a reassesment of its Corporate Governance
and Business Ethics factor.
On 12 February 2022, ISS ESG downgraded Danske Bank to
‘C Prime’ from ‘C+ Prime’ after introducing a new rating factor:
Financial Audit and Accounting Risk.
On 16 June 2022, ISS ESG raised its rating to ‘C+ Prime’
from ‘C Prime’ after reassessing its Staff and Suppliers,
Environmental Management, Products and Services and Eco-
efficiency rating factors.
ESG ratings and outlooks remained unchanged in the fourth
quarter of 2022.
Funding and liquidity
The financial year 2022 was affected by equity and interest rate
volatility following high inflation prints, numerous central bank
interest rate hikes and a very tense geopolitical situation. The
credit markets remained active with decent supply and stable
investor appetite for Danske Bank issues.
In early January 2023, we issued EUR 1 billion in senior debt
(4nc3), EUR 1 billion in senior debt in green format (8nc7) and
USD 1.25 billion in non-preferred senior debt (3nc2) for a total
of DKK 23.5 billion.
At the end of December 2022, the Group had issued covered
bonds of DKK 39.6 billion, senior debt of DKK 1.4 billion and
non-preferred senior debt of DKK 20.1 billion, thus bringing total
long-term wholesale funding to DKK 61.1 billion.
Our strategy is to be a regular issuer in the EUR benchmark
format and 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 NOK and SEK, remains in place. The benchmark
issues are expected to be supplemented by private 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 redemptions
on the one hand and our capital targets on the other. Any
issuance of subordinated debt may cover part of our funding
need. Note G22 provides more information about bond issues
in 2022.
Danske Bank’s liquidity position remained robust. At the end
of December 2022, our liquidity coverage ratio stood at 151%
(31 December 2021: 164%), with an LCR reserve of
DKK 570 billion (31 December 2021: DKK 687 billion), and
our net stable funding ratio stood at 123%.
At 31 December 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 357
billion (31 December 2021: DKK 381 billion).
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 2022, Danske Bank was in compliance with
all threshold values. A separate report is available at
www.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
implement Basel IV, the European Commission adopted
proposals in October 2021 to amend, inter alia, Regulation (EU)
No 575/2013 (CRR) and Directive 2013/36/EU (CRD). The
proposals include adjustments to the Basel IV standard, and
the output floor is subject to a transitional arrangement, which
means that the output floor must be fully implemented by 1
January 2030.
In order to estimate any effects that the finally adopted
regulation and directive may have on the Group, the Group
continuously monitors the legislative negotiations and conducts
impact assessments. On the basis of the Group’s current and
updated analysis of the EU Banking Package 2021, the Group’s
current capital planning takes into account the expected 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 arrangements with regard 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 proposals
is uncertain and may result in further adjustments as the EU
negotiations progress towards the final rules.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
39
Investor Relations
In 2022, the financial markets took a more positive view of
Danske Bank as an investment case owing to our progress
with the remediation of legacy issues, growth in core banking
income lines and steady execution on our strategic initiatives
to become a simpler and better bank. During the year, we saw
a positive development in our share price, and equity analysts
upgraded their recommendations 10 times from sell or hold to
buy. In addition, the average target price was lifted DKK 13 to
DKK 144.
such as the OMX Copenhagen 25 CAP Index (OMXC25CAP).
At the end of 2022, Danske Bank shares had an index
weighting of 4.8%.
Danske Bank’s share price increased from DKK 113 at 31
December 2021 to DKK 137 at 31 December 2022, an
increase of 22%. In comparison, the OMXC25CAP Index
decreased 13%, while the Europe 600 Banks Index decreased
15%.
This positive development in how the market perceives Danske
Bank also provided a positive backdrop to our engagement
with analysts and investors, enabling an even more proactive
and frequent dialogue, and underpinned our continuous efforts
to keep investors and analysts updated on Danske Bank’s
strategic development, financial performance and outlook.
These efforts include participation in many types of proactive
investor communication, such as roadshows, conferences and
consultations.
Investor engagement
The year marked the return of real physical events with
shareholders after the pandemic. During the year, Investor
Relations hosted and participated in both hybrid events and
physical events with attendance from investors and analysts.
More specifically, Investor Relations facilitated a significant
number of investor events with participation from debt and
equity investors, primarily from the Nordic countries, other
European countries and the US.
Retail investors
In the light of increasing interest from retail investors, we
strengthened our dedicated efforts to actively engage with this
investor segment. As a result, the year saw active engagement
with our retail investor base as we hosted successful events
in collaboration with the Danish Shareholders Association and
HC Andersen Capital. Alongside these dedicated efforts, we
saw the total share of retail investors in our shareholder base
increase approximately 5% in 2022 according to Nasdaq data.
ESG
Equity and debt investors show growing interest in the
environmental, social and governance (ESG) performance of
the companies in which they invest. In collaboration with Group
Sustainability, Investor Relations shaped Danske Bank’s ESG
messaging to meet investors’ expectations, and we actively
engaged with ESG investors during the year. Further to that,
ESG investors increasingly invested in our share, and ESG-
focused institutional investors now represent approximately
35.1%, which exceeds the average for companies in Nasdaq’s
Financials sector.
Danske Bank shares
Danske Bank shares are listed on Nasdaq Copenhagen and are
included in a number of Danish and international equity indices,
Danske Bank shares
(DKK millions)
Share capital (millions)
Share price (end of year)
Total market capitalisation (end of year) (billions)
Earnings per share
Dividend per share
Book value per share
Share price/book value per share
2022
8,622
137.3
116.8
-6.1
-
188.4
0.7
2021
8,622
113.0
96.4
14.6
2.0
200.6
0.6
Danske Bank is covered by 29 sell-side analysts, who regularly
publish research reports and sector reports. A list of the
analysts and other relevant information, including financial
reports, investor presentations, share and bond information,
are available at danskebank.com/investorrelations/reports.
Investor Relations collects and distributes consensus estimates
from sell-side analysts for external and internal stakeholders.
The average daily trading volume of Danske Bank shares was
around 2 million. The Danske Bank share was the 7th most
actively traded share on Nasdaq Copenhagen during 2022.
Danske Bank shares
Index 2016 = 100
Danske Bank Europe 600 Banks
150
125
100
75
50
25
0
2016
2017
2018
2020
2019
2021
2022
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
40
Shareholders
At the end of 2022, Danske Bank had about 281,000
shareholders. The 10 largest shareholders together owned
about 40% of the share capital. During 2022, the number
of shareholders in Denmark increased slightly, whereas the
number of foreign-based shareholders decreased somewhat.
We estimate that shareholders outside Denmark, mainly in the
US, the EU and the UK, hold around 42% of the share capital.
Danske Bank shareholders 2022
Other
5%
Rest of Europe
14%
UK
4%
USA
19%
A. P. Møller
Holding
21%
k
r
a
m
n
e
D
Rest of Denmark
37%
According to the Danish Companies Act, shareholders must
notify the company if the voting rights of their shares represent
5% or more of the voting rights of the company’s share capital
or if the nominal value of their shares represents 5% or more of
the share capital. Shareholders must also disclose changes in
shareholdings if they exceed or fall below specified percentage
thresholds.
One shareholder has notified Danske Bank of holding 5% or
more of the share capital:
•
The A.P. Møller Holding Group holds about 21% of the
share capital.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
41
Organisation and management
General meeting
The general meeting is Danske Bank’s highest decision-making
authority.
In 2022, the annual general meeting was held on 17 March.
Danske Bank’s Articles of Association are available at
www.danskebank.com/about-us/corporate-governance and
contain information about the notice convening the general
meeting, the shareholders’ admission and voting rights as
well as the shareholders’ right to submit proposals and have
specified business transacted at the meeting.
All shareholders have voting rights according to the number
of shares held at the date of registration and each share of
DKK 10 carries one vote at the general meeting. No share
has any special rights attached to it.
Only the general meeting can amend Danske Bank’s Articles
of Association. Any amendment requires not less than a two-
thirds majority of the votes cast and not less than two-thirds
of the share capital represented at the general meeting and
entitled to vote.
A resolution to wind up Danske Bank by merger or voluntary
liquidation can be passed only if adopted by not less than three-
quarters of the votes cast and not less than three-quarters
of the share capital represented at the general meeting and
entitled to vote.
Board of Directors
The Board consists of thirteen members, nine elected by the
general meeting and four elected by and among the employees.
Board members elected by the general meeting stand for
election each year. As prescribed by Danish law, members
elected by and among the employees serve on the Board of
Directors for a four-year term, with the next election to be held
prior to the annual general meeting in 2026.
The Nomination Committee operates as a preparatory
committee for the Board of Directors with respect to the
nomination and appointment of candidates to the Board of
Directors and to the Executive Leadership Team of Danske
Bank. Board candidates are nominated by the Board of
Directors or the shareholders and are elected by the general
meeting.
The members of the Board of Directors were re-elected at
the annual general meeting on 17 March, except for Karsten
Dybvad, who did not seek re-election. Jacob Dahl, Allan Polack
and Helle Valentin were elected as new members of the Board
of Directors.
Pages 236-243 of Annual Report 2022 provide information
about the individual members of the Board of Directors,
including their directorships. Note G37 on page 164 provides
information on the number of Danske Bank shares held by the
members of the Board of Directors, and note G36 on page
160 provides information on the remuneration of the Board of
Directors.
Work of the Board of Directors in 2022
In 2022, the Board of Directors held 33 meetings, of which
13 were extraordinary meetings. As to committee meetings
(ordinary and extraordinary), the Audit Committee held 7
meetings, the Risk Committee held 8 meetings, the Conduct
& Compliance Committee held 7 meetings, the Nomination
Committee held 6 meetings and the Remuneration Committee
held 5 meetings.
The members’ participation in Board and Committee meetings
in 2022 is illustrated below.
Board
Committees
Audit
CCC
Nomina-
tion
Remune-
ration
Risk
Martin Blessing
31/32
Jan Thorsgaard Nielsen
32/32 7/7
Bente Bang
Lars-Erik Brenøe
Kirsten Ebbe Brich
30/32
32/32
31/32
Aleksandras Cicasovas*
23/23
Jacob Dahl*
22/23
Thorbjørn Lundholm Dahl**
10/10
4/4
4/4
2/2
6/6
1/1
6/6
7/7
3/3
2/2
3/3
5/5
6/6
Karsten Dybvad**
10/10
1/1
2/2
2/2
1/1
Louise Aggerstrøm Hansen* 22/23
Raija-Leena Hankonen-Nybom 32/32 7/7
Charlotte Hoffmann**
10/10
Bente Avnung Landsnes
32/32 7/7
2/2
Allan Polack*
Carol Sergeant
Helle Valentin*
23/23
30/32
22/23
7/7
4/4
2/2
2/2
3/3
6/6
8/8
*Aleksandras Cicasovas, Jacob Dahl, Louise Aggerstrøm Hansen, Allan Polack and
Helle Valentin joined the Board of Directors in March 2022
**Thorbjørn Lundholm Dahl, Karsten Dybvad and Charlotte Hoffmann stepped down
from the Board of Directors in March 2022
In the fourth quarter, the Board of Directors carried out its
annual evaluation of i.a. its composition, the work of the
Board committees, the Board committee structure and the
leadership of the Board chairman. To ensure anonymity, an
external consulting firm facilitated the evaluation. All members
of the Board of Directors and the Executive Leadership Team
answered comprehensive questionnaires. The findings and
conclusions were subsequently presented to and discussed by
the Board of Directors.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
42
The aim of the evaluation was to ensure, among other things,
that the composition of the Board of Directors as well as the
special competencies of each Board member enable the Board
of Directors to perform its tasks. As the Board of Directors
operates as a collegial body, its overall competencies and
experience are the sum of the individual board members’
competencies and experience. The composition of the Board
of Directors aims to ensure the stable and satisfactory
development of Danske Bank for the benefit of its customers,
employees, shareholders and other stakeholders. The
competencies of the Board of Directors collectively are
described in the Competency profile, which is available at
danskebank.com. Pages 236-241 of Annual Report 2022
provide information on the competencies of the individual Board
members.
The results of the 2022 evaluation were overall good and
showed good alignment both within the Board of Directors and
between the Board of Directors and the Executive Leadership
Team. The Board of Directors will work on the agreed focus
areas in 2023.
Danske Bank on 1 August 2023 and become a member of the
Executive Leadership Team.
Commercial Leadership Team
Team members
Title
Lars Alstrup
Head of Advisory Bank, Business Customers
Erlend Angelfoss
Country Manager Norway
Jakob Bøss
Michel van Drie
Head of Group Sustainability, Stakeholder Relations,
Communications & Marketing
Head of Technology & Services,
Large Corporates & Institutions
Stojko Gjurovski
Country Manager Finland & Head of Banking Finland
Paul Martin Gregory
Head of Corporate and Institutional Banking
Claus Harder
Head of Markets & Transaction Banking
Christoffer Møllenbach
Head of Group Finance
Atilla Olesen
Linda Olsen
Head of Investment Banking & Securities
COO for Personal & Business Customers
Mark Wraa-Hansen
Head of Personal Customers, Denmark
Executive Leadership Team
Team members
Title
Carsten Rasch Egeriis
Chief Executive Officer
Magnus Agustsson
Chief Risk Officer
Berit Behring
Head of Large Corporates & Institutions
Christian Bornfeld
Karsten Breum
Stephan Engels
Johanna Norberg
Head of Personal Customers and Financial Crime
Risk & Prevention
Chief People Officer
Chief Financial Officer
Head of Business Customers & Country Manager,
Danske Bank Sweden
Frans Woelders
Chief Operating Officer
On 7 January 2022, Danske Bank announced changes to the
Executive Leadership Team, and the commercial activities
are now organised in three business units headed by Berit
Behring, Christian Bornfeld and Johanna Norberg, respectively.
New Head of Personal Customers and Financial Crime Risk
& Prevention Christian Bornfeld and new Head of Business
Customers & Country Manager, Danske Bank Sweden Johanna
Norberg joined the Executive Leadership Team on 1 May 2022,
replacing Glenn Söderholm, who left the Executive Leadership
Team and assumed a role as senior adviser. Glenn Söderholm
left his position as senior adviser to the Executive Leadership
Team on 31 December 2022.
On 16 January 2023, Danske Bank announced that Berit
Behring had decided to start the transition to retirement and
would stay in her role until 1 August 2023. At the same time,
it was announced that Joachim Alpen, currently co-head of
Large Corporates & Financial Institutions at SEB, will join
Since 1 January 2021, a Commercial Leadership Team has
been in place. In addition to the members of the Executive
Leadership Team, the Commercial Leadership Team consists of
11 experienced leaders who undertake important commercial
roles in the Danske Bank Group. The Commercial Leadership
Team is responsible for ensuring strong cooperation across
the Group and focuses on developing Danske Bank’s customer
offerings. The team is the key driver behind the Group’s 2023
plan to become a better and more competitive bank.
Corporate governance recommendations
Corporate governance recommendations issued by the
Danish Committee on Corporate Governance are available
at corporategovernance.dk. The recommendations are best
practice guidelines for the management of companies with
shares admitted for trading on a regulated market in Denmark,
including Nasdaq Copenhagen A/S. If a company fails to
comply with a recommendation, it must explain why it has
chosen a different approach. Danske Bank complies with all
recommendations.
The statutory corporate governance report issued in
accordance with section 134 of the Danish FSA’s Executive
Order on Financial Reports for Credit Institutions and
Investment Firms etc., section 107b of the Danish Financial
Statements Act and the Nasdaq Nordic Main Market Rulebook
for Issuers of Shares (“Nordic Main Market Rulebook”) is
available at danskebank.com/about-us/corporate-governance.
The report includes an explanation of Danske Bank’s status on
all recommendations.
The Danish Bankers Association, which is now part of Finance
Denmark, has issued a Corporate Governance Code, which
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
43
Danske Bank must comply with or explain why it does not
comply. Danske Bank complies with all recommendations set
out in the Code. Danske Bank’s explanation of the status on
all recommendations is included in section C of its Corporate
Governance Report 2022.
Data ethics
Danske Bank’s data ethics principles define how Danske Bank
strives to act with regard to data use across the Group and in its
business relations.
Danske Bank strives to be transparent about the purposes for
which data is used and to communicate this clearly. We aim to
ensure that processes are clearly understood in terms of risk
as well as the social, ethical and societal consequences of our
use of data. We assess and evaluate the impact of the use of
advanced technologies, analytics and computational methods
on the parties involved.
During 2022, Danske Bank focused on integrating the
data ethics principles into its core data-related steering and
governance documents, such as the Data Risk Policy and the
Personal Data Protection Policy. In addition, Danske Bank
revisited its Advanced Analytics Framework to make sure that
its data ethics principles are fully considered.
In 2023, Danske Bank will continue to integrate the principles
into its processes and steering and control mechanisms.
The principles are available at
www.danskebank.com/corporate-governance.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
44
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
45
Business units
Our five commercial business units support our strategy for each customer segment.
Personal Customers
Our Personal Customers unit provides advisory services to personal customers and Private Banking
customers in Denmark, Sweden, Norway and Finland. Our advisers and experts are there to help
customers when and how it best suits the individual customer – at online meetings, via our websites
or if so required over the phone or at a branch.
When our customers need to make important financial decisions about, for example, their home,
investments or pension, we offer customised advice that is based on their current situation
and needs. And with our intuitive digital solutions, we aim to make it as easy as possible for our
customers to do most of their banking business whenever and wherever they want.
Business Customers
We offer our customers advice that adds value to their business, no matter whether the customer
is a sole proprietor or an entity in a multinational group. Our strategic advisory services are always
based on the needs of the business, for example in connection with growth, an acquisition, a change
of ownership, strategic development or international expansion.
Our business customers have access to the market’s most innovative digital solutions that make
day-to-day banking easy and pave the way for new insights and opportunities.
Large Corporates & Institutions
Large Corporates & Institutions caters to the most complex financing and transaction needs of large
corporate and institutional customers, and we help them to prosper and grow.
We offer expertise in financing, risk management, investments and financial advisory services, and
our customers have access to our award-winning transaction banking solutions.
Thanks to our extensive network and our many years of experience, we serve as intermediary
between issuers and investors with a view to creating financing and investment opportunities. Our
goal is to be an inspirational partner that understands the customers’ strategic agendas and offers
tailored solutions to meet their needs.
Danica Pension
Danica Pension’s strategy is based on our ambition to be our customers’ financial security provider
and thereby enhance customer satisfaction. We focus on proactively helping our customers – both
personal and business customers – to ensure that they have the right pension, insurance and
healthcare solutions, while we also generate attractive returns after costs and contribute to creating
a more sustainable society.
Northern Ireland
Danske Bank is the leading bank in Northern Ireland, serving personal, business and corporate
customers. The business is also a growing bank in targeted sectors across the rest of the United
Kingdom. We support our customers through face-to-face, online and mobile solutions. Our focus
in Northern Ireland is on remaining a stable, strong and risk-astute bank, consolidating our market-
leading position alongside pursuing prudent low-cost growth opportunities in the rest of the UK.
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
46
Personal Customers
Personal Customers saw high customer activity in 2022, with rising interest rates driving high remortgaging activity. Repricing
initiatives taken in response to rising market rates had a positive effect on income on deposits. The financial markets continued
to be under pressure due to the higher inflation rate, elevated energy prices and uncertainty related to the war in Ukraine. This
adversely affected the value of assets under management and investment income.
Profit before tax in 2022 amounted to DKK 3,909 million, an increase of 24% from the level in 2021. Net interest income
increased 11% due to higher market rates and repricing initiatives. The reopening of societies in 2022 resulted in increased
customer activity and had a positive effect on net trading income and service fees in particular. Other income increased due to the
sale of the customer portfolio in Luxembourg and the sale of shares in MobilePay. Operating expenses decreased as a result of
the continued efficiency gains and the implementation of the Better Bank plan. Credit quality remained solid, but as a result of the
macroeconomic outlook, loan impairment charges increased DKK 867 million.
Loans, excluding reverse transactions before impairments
805,120
883,166
Personal 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
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
2022
2021
Index
22/21
8,778
4,682
444
987
14,891
10,056
161
4,836
927
3,909
7,876
4,903
322
211
13,311
10,109
117
3,202
60
3,142
4,727
410,806
612,997
30,898
5,087
407,904
663,096
32,980
0.71
0.62
15.7
9.7
12.7
9.5
67.5
75.9
Q4
2022
2,739
1,020
101
440
4,300
2,722
40
1,578
592
986
Q3
2022
2,168
1,108
123
39
3,438
2,237
40
1,201
9
1,191
805,120
803,452
4,727
410,806
612,997
30,325
4,140
415,364
603,569
30,934
0.90
0.70
20.8
15.5
13.0
15.4
63.3
65.1
Index
Q4/Q3
126
92
82
-
125
122
100
131
-
83
100
114
99
102
98
-
-
-
-
111
95
138
-
112
99
138
151
-
124
91
93
101
92
94
-
-
-
-
4,262
4,866
88
4,262
4,749
90
Fact Book Q4 2022 provides financial highlights at customer type level for Personal Customers, Fact Book Q4 2022 is available at danskebank.com/ir.
Business initiatives
The cost of living increased significantly in 2022 due to record-
high energy prices adding to the inflationary pressure and the
increase in market rates. These factors impacted individuals
and households and we supported our customers by providing
expert advice on a daily basis, especially in relation to home
finance and investments. We contacted vulnerable customers
in all our markets to help them with their personal finances and
launched a dedicated website. Since the launch, on average,
there has been more than 400 visitors per day, and they spend
more than 10 minutes on the site on average. As an added
bonus, the site generates calculations on mortgages and
meeting bookings.
Customers increasingly demanded digital banking services,
and we also saw a need to adapt our business to the turbulent
market characterised by financial turmoil, stagnating house
prices and rising inflation. As a result of these developments
and as part of the implementation of the Better Bank plan, we
adjusted our organisation in the fourth quarter of the year. As a
result, the number of FTEs at Personal Customers was reduced.
In the second half of 2022, as a result of the rise in market
rates, we removed negative interest rates for customers in
Denmark and Finland, and we now offer positive interest rates
on savings accounts in all our Nordic markets. Furthermore,
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
47
we adjusted the pricing of loan and credit products across our
markets to adapt to the new interest rate environment.
The rise in mortgage rates in Denmark fuelled remortgaging
activity in 2022, and this had a positive effect on fee income.
Our share of new mortgage lending increased from the level in
2021 despite lower customer activity in the housing market as
well as declining house prices. Throughout 2022, but especially
in the third and fourth quarters, we saw remortgaging of loans
to a higher coupon. This remortgaging activity brought about a
reduction in the total nominal outstanding debt of about
DKK 10 billion in 2022. Combined with the slowdown in the
housing market, this reduction of the outstanding debt led to a
decrease in mortgage volumes in 2022. The nominal value of
mortgage volumes decreased 3% from the level in 2021, and
measured at fair value, there was a decrease of 9% due to the
rise in market rates.
The turmoil on the financial markets adversely affected our
customers’ investment appetite, and we saw a reduction of
the net flow from the level in 2021. Combined with market
developments, we saw a drop in the value of assets under
management and in turn also a decline in investment fee
income. Because of the turmoil in the financial markets, we
emphasise to our customers the importance of having a long-
term perspective on their investments, and we help guide them
through these times of uncertainty and volatility.
During the autumn of 2022, we launched five new balanced
funds in the Nordic market to offer our customers an
investment solution that focuses on sustainability and good
diversification across equities and bonds. Through these funds,
investment customers now have an even better opportunity to
combine return and sustainability.
In the first quarter of 2022, the sale of the customer portfolio in
Luxembourg had a positive income effect of around DKK 400
million. In the fourth quarter of 2022, the sale of MobilePay and
the merger with Vipps was approved by the EU Commission,
and the new company began operations on 1 November 2022.
This had a positive effect on income of DKK 415 million, due to
a gain from the sale of shares in MobilePay.
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
48
Customer satisfaction
Customer satisfaction among our
personal customers across the Nordic
countries was challenged during 2022,
albeit with a positive trend noted in all
markets in the second half of 2022. We
initiated marketing campaigns to highlight
our wider value proposition, increased
proactivity in relation to customers
through a multi-channel approach and
increased our engagement with less
satisfied customers, which led to a better
retention rate. In addition, we continued
to focus on combining expert advice with
easy-to-use digital solutions.
2022 vs 2021
Profit before tax amounted to DKK 3,909
million (2021: DKK 3,142 million),
driven by higher income and lower
operating expenses, partly offset by loan
impairment charges. Total income rose
due to an increase in net interest income
from deposits driven by the rise in market
rates, higher remortgaging fees as a result
of high remortgaging activity and one-off
gains on the sale of the customer portfolio
in Luxembourg and the sale of shares
in MobilePay. The financial results were
adversely affected by the depreciation of
currencies.
Net interest income increased to
DKK 8,778 million (2021: DKK 7,876
million) due primarily to income on
deposits driven by the rising market
rates and higher volumes. Deposit
volumes increased 1% as a result of our
customers’ cautious investment strategy
and the outlook for positive deposit
rates. Our market share of bank lending
increased, driven primarily by Danske
Bolig Fri. Total bank lending increased 1%.
Net fee income decreased to DKK 4,682
million (2021: DKK 4,903 million).
Service and trading fees increased on the
back of the reopening of societies as well
as high remortgaging activity. Investment
fees decreased as a consequence of the
challenging financial markets and the sale
of our customer portfolio in Luxembourg.
Net trading income increased to
DKK 444 million (2021: DKK 322
million) due to foreign exchange activity
driven by the reopening of societies.
Other income amounted to DKK 987
million (2021: DKK 211 million). The
increase was driven by a one-off gain
on the sale of our customer portfolio in
Luxembourg and the sale of shares in
MobilePay.
Operating expenses decreased to
DKK 10,056 million (2021: DKK 10,109
million). We continued to see efficiency
gains and a decrease in transformation
costs related to the implementation of
the Better Bank plan. However, the new
bank tax in Sweden, increased resolution
fund payments as well as increased
compliance costs partly offset the
decrease.
The number of full-time-equivalent
staff decreased 12% during the year
as a result of the Better Bank plan
transformation and divestments.
Credit quality remained solid in the fourth
quarter of 2022. We continue to be
vigilant for any possible deterioration
as uncertainty in the macroeconomic
landscape remains high.
In 2022, loan impairment charges
amounted to DKK 927 million (2021:
DKK 60 million). The increase in
charges was driven by changes in the
macroeconomic outlook with rising
interest rates and inflation, as well as
changes in post-model adjustments.
Credit exposure
Credit exposure decreased to DKK 883
billion at the end of 2022 (end-2021:
DKK 991 billion), driven mainly by
lower exposure in Personal Customers
Denmark due to the net negative effect of
fair value adjustments of mortgage loans
and a decrease in exposure in Personal
Customers Norway and Sweden also due
to weaker NOK and SEK foreign exchange
rates.
Q4 2022 vs Q3 2022
Profit before tax in the fourth quarter
decreased to DKK 986 million (Q3
2022: DKK 1,191 million). Total income
increased, driven by higher net interest
income and a one-off gain on the sale
of shares in MobilePay, but the overall
result saw a negative effect from loan
impairment charges.
• Net interest income increased 26%,
driven by an increase in the value of
deposits as a consequence of the rise
in market rates.
• Net fee income decreased 8% due to
lower investment fees driven by the
uncertainty in the financial markets.
• Other income increased to DKK 440
million, driven by a one-off gain on the
sale of shares in MobilePay.
• Operating expenses increased 22%
and stood at DKK 2,722 million
(Q3 2022: DKK 2,237 million). We
continued to see an underlying effect
of the Better Bank implementation,
but this was offset by severance pay
resulting from the FTE reduction in the
fourth quarter. Furthermore, IT and
development costs increased due to
seasonality.
• The fourth quarter of 2022 saw
loan impairment charges of
DKK 592 million (Q3 2022: DKK 9
million), The increase in charges was
attributable mainly to changes in the
macroeconomic scenario.
• Total lending volumes increased
2% in Denmark, driven by increased
bank lending volumes generated by
the Danske Bolig Fri product and
a reduction in the negative value
adjustments of mortgage loans. Total
lending across markets was on par
with the preceding quarter.
• Deposit volumes decreased 1% due to
the depreciation of currencies as well
as the higher cost of living.
DKK 986 million
Profit before tax
for the fourth quarter of 2022
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
49
Business Customers
During 2022, Business Customers experienced good customer activity with strong financial momentum despite considerable
geopolitical uncertainty and a challenging macroeconomic environment caused by the war in Ukraine, higher energy prices,
inflation and rapidly rising interest rates.
Due to multiple interest rate hikes by the central banks across the markets in which we operate, we continued our active pricing
strategy to adapt and at the same time maintain an attractive value proposition for our customers. In addition, the war in Ukraine
and the effects of the COVID-19 lockdowns continued to affect the global supply of new assets, which benefited income from the
sale of existing assets in our leasing operations.
In 2022, profit before tax amounted to DKK 6,430 million, an improvement of 35% from the level in 2021. This was driven
primarily by repricing initiatives, combined with increased customer activity across most business areas. Despite underlying
efficiency measures, operating expenses increased due to the new bank tax in Sweden and investments in digitalisation and in the
risk management and compliance areas. The financial performance was adversely affected by the depreciation of currencies.
Loans, excluding reverse transactions before impairments
639,557
652,955
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
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
2022
2021
Index
22/21
9,175
1,825
517
847
7,788
1,613
351
580
12,364
10,333
5,356
224
7,008
578
6,430
5,144
173
5,189
426
4,763
8,938
285,177
344,445
39,623
9,059
292,530
377,388
40,881
0.99
0.83
17.7
12.7
16.2
11.7
43.3
49.8
Q4
2022
2,699
472
145
215
3,531
1,437
56
2,094
669
1,425
Q3
2022
2,392
448
129
201
3,170
1,254
56
1,917
-289
2,205
639,557
625,945
8,938
285,177
344,445
39,325
8,274
287,523
336,593
39,439
1.17
1.03
21.3
19.4
14.5
22.4
40.7
39.6
Index
Q4/Q3
113
105
112
107
111
115
100
109
-
65
102
108
99
102
100
-
-
-
-
118
113
147
146
120
104
129
135
136
135
98
99
97
91
97
-
-
-
-
1,635
1,699
96
1,635
1,689
97
Fact Book Q4 2022 provides financial highlights at customer type level for Business Customers. Fact Book Q4 2022 is available at danskebank.com/ir.
Business initiatives
Many of our business customers find it difficult to navigate this
challenging environment with the rise in inflation and elevated
uncertainty. While we saw a rise in the number of business
defaults in the market, the overall risk profile of our loan portfolio
remained satisfactory. As one of the largest banks in the Nordic
region, Danske Bank plays an important role in supporting
our customers with advice and services to help handle the
challenges posed by the energy crisis. Our new service model,
which allows us to customise our support and advice to match
customers’ needs, plays a vital part in this respect. We help our
customers navigate through the crisis, both when it comes to
providing financial advisory services across customer segments
and when it comes to assisting our customers in managing their
working capital needs.
Despite the large pressure on our customers, we continued to
see good customer activity relative to 2021. Cash management
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
50
DANSKE BANK / ANNUAL REPORT 2022
and foreign exchange activity were the primary drivers behind
the increase in ancillary income. In addition, the sale of used
assets in our leasing operations continued to be high due to
both the global lack of supplies and the effects of the COVID-19
lockdowns. Furthermore, we succeeded in switching a large
part of customers with basic business banking needs to a
subscription fee model.
The repricing of deposits and increased fee and trading in-
come were the primary factors behind the positive income
development in 2022. The rise in market rates in the latter
part of 2022 increased the focus on repricing initiatives. As a
result of the rise in market rates, we raised customer rates on
deposits and specific loan and credit products, most recently
with an increase across various products on the Danish market.
We saw a good inflow of deposit volumes in Denmark due to
our customers building up liquidity and solidifying their business
while at the same time lowering their investment appetite due to
the uncertainty on the financial markets. Bank lending volumes
increased 5% due to higher customer activity, and our green
lending volume increased 51%. Mortgage lending at nominal
value increased 1%, however, measured at fair value, there
was a decrease of 8% due to the higher market rates. Despite
the increase in bank lending and the nominal value of mortgage
lending, the negative market value adjustment of mortgage
loans caused a decrease in total lending of 2%.
Sustainability remains a high priority across the Group, and
through our advisers’ strategic financial sparring, we continue
to guide our customers in a more sustainable direction. We held
events across the Nordic countries to increase the focus on and
knowledge of green loans. Several new products were released
in 2022 to support the sustainability agenda. GreenFleet70,
a car leasing solution in Denmark, Norway and Sweden,
was successful. Green leasing, especially of vehicles and
transportation – including electric busses for public transport
throughout the Nordic countries – saw strong demand.
Customer satisfaction
In 2022, customer satisfaction for business customers was
largely in line with our ambitions – both for small and medium-
sized business customers. Among business customers across
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
51
Q4 2022 vs Q3 2022
Profit before tax in the fourth quarter
decreased to DKK 1,425 million (Q3
2022: DKK 2,205 million). Higher net
interest income driven by higher deposit
income was offset by higher operating
expenses and higher loan impairment
charges.
• Net interest income increased 13%
and stood at DKK 2,699 million (Q3
2022: DKK 2,392 million), driven by
deposit income.
• Net fee income increased 5%, driven
by higher remortgaging activity.
• Operating expenses increased 15%.
We continue to see a decrease in
costs related to the Better Bank
plan implementation. However, the
decrease was offset by an increase in
IT costs.
• The fourth quarter of 2022 saw loan
impairment charges of DKK 669
million (Q3 2022: reversals of
DKK 289 million). The charges
were driven by changes in post-
model adjustments and updated
macroeconomic scenarios.
DKK 1,425 million
Profit before tax
for the fourth quarter of 2022
Net trading income increased to
DKK 517 million (2021: DKK 351
million), driven by increased foreign
exchange activity due to good economic
momentum in the broader economy
following COVID-19 policy stimulus as
well as FX volatility resulting in increased
demand for hedging.
Other income amounted to DKK 847
million (2021: DKK 580 million). The
increase was the result of higher sales
prices for assets in our leasing company.
Operating expenses increased 4% to
DKK 5,356 million (2021: DKK 5,144
million). We continued to see a decrease
in costs related to the implementation of
the Better Bank plan, however, the new
bank tax in Sweden as well as increased
compliance and IT costs more than offset
the decrease.
Credit quality remained solid in the
fourth quarter of 2022. However, the
macroeconomic landscape remained
uncertain and develops at a fast pace.
In 2022, loan impairment charges
amounted to DKK 578 million (2021:
DKK 426 million). The increase in
impairment charges in 2022 due to
updated macroeconomic scenarios and
changes in post-model adjustments was
partly offset by strong credit quality as
customers benefited from the post-
pandemic economic recovery.
Credit exposure
Credit exposure decreased to DKK 745
billion at the end of 2022 (end-2021:
DKK 777 billion), mainly driven by
lower exposure to the Private Housing
Co-ops. & Non-Profit As-sociations
and Commercial Property segments
due to net negative effect of fair value
adjustments. Despite flat exposure
development in Norway and Sweden
in DKK, local currency credit exposure
increased among business customers in
both Sweden and Norway.
all the markets in which we operate, we
were ranked at least in the top three
among our peers, and in most markets in
the top two.
Throughout 2022, we worked with a wide
range of initiatives to strengthen and
maintain high customer satisfaction. We
increased our proactive communication
and supported customers with advisory
services, financing and knowledge in
the challenging financial environment
by focusing on topics such as the war
in Ukraine, inflation, supply chains and
rising energy prices. We leveraged
our digital channels and digital credit
algorithms and offered attractive
refinancing of government-backed
COVID-19 support loans.
Other concrete initiatives included
reduced waiting time to become a new
customer and implementation of our new
customer service model. The service
model is tailored to customers’ unique
needs in terms of value proposition and
coverage. During the design phase, we
engaged our business customers in
the development of new digital solu-
tions to achieve an improved customer
experience.
2022 vs 2021
Profit before tax amounted to DKK 6,430
million (2021: DKK 4,763 million). The
increase was driven primarily by repricing
initiatives as well as higher customer
activity driving ancillary income. An
increase in operating expenses partly
offset some of the increase.
Net interest income increased 18%,
driven by higher income on deposits
following market developments in pricing
and rates. Excess liquidity among our
customers resulted in an increase in
deposit volumes in Denmark, which also
had a positive effect on deposit income.
Net fee income stood at DKK 1,825
million, an increase of 13% (2021:
DKK 1,613 million). This increase was
driven by higher service fees due to
repricing as well as high refinancing and
remortgaging activity, the latter as a
result of the higher interest rate levels.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
52
DANSKE BANK / ANNUAL REPORT 2022
Large Corporates & Institutions
During 2022, the operating environment became increasingly challenging as the highest inflation rate in decades caused central
banks to tighten monetary policy more and sooner than expected. Combined with an uncertain economic outlook, this led to an
increase in the demand for advisory services, risk hedging and credit, and we supported our customers with more than DKK 40 billion
in additional lending. This demonstrates the value of our diversified business model, as higher net interest income partly mitigated
the effect of lower net fee income from capital markets and investment activities. Net trading income recovered in the second half
of the year following a loss in the second quarter, amid continued market volatility. Notwithstanding the negative macroeconomic
environment, we continued to see underlying momentum, as illustrated by high growth in everyday banking fees, our leading position
in sustainable finance and the inflow of new customers in Sweden.
Profit before tax in 2022 was DKK 6,635 million, a fall from 2021 as higher net interest income, lower operating expenses and loan
impairment reversals did not fully offset the decline in net trading income and net fee income.
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
2022
2021
5,605
5,732
1,489
2
4,732
6,777
3,137
5
12,828
14,650
6,966
504
5,861
-774
6,635
322,539
281,266
2,048
389,486
336,580
27,495
42,138
0.81
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
Index
22/21
118
85
47
40
88
99
140
77
-
87
122
121
47
102
99
106
97
-
-
-
-
77
112
61
-
87
45
63
88
Q4
2022
1,590
1,436
866
-
3,892
1,876
125
2,016
-618
2,634
322,539
281,266
2,048
389,486
336,580
27,495
41,816
0.87
19.3
25.2
48.2
2,054
Q3
2022
1,404
1,364
596
-
3,364
1,599
125
1,765
-11
1,775
354,247
293,947
2,134
399,252
333,514
24,035
41,958
0.79
16.8
16.9
47.5
2,109
1,947
1,082
124
550
32
313
1,719
728
-73
611
57
306
3,892
3,364
Index
Q4/Q3
113
105
145
-
116
117
100
114
-
148
91
96
96
98
101
114
100
-
-
-
-
97
113
149
-
90
56
102
116
Profit before loan impairment charges as % p.a. of allocated capital
13.9
Profit before tax as % p.a. of allocated capital (avg.)
Cost/income ratio (%)
Full-time-equivalent staff
15.7
54.3
2,054
Total income
(DKK millions)
General Banking
Markets
of which xVA*
Asset Management
of which performance fees
Investment Banking & Securities (IBS)
Total income
6,936
2,387
-48
2,313
174
1,193
6,203
3,909
104
2,653
385
1,886
12,828
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.
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
53
Assets under management
(DKK millions)
Institutional clients
Retail clients
Total assets under management1
1 Includes assets under management from Group entities.
2022
2021
404,211
262,642
487,560
325,025
666,853
812,585
Index
22/21
83
81
82
Q4
2022
404,211
262,642
Q3
2022
399,196
261,181
666,853
660,378
Index
Q4/Q3
101
101
101
Business initiatives
In 2022, our ambition to be our customers’ preferred strategic
financial partner was more relevant than ever. The Russian
invasion of Ukraine and the rapid rise in inflation fuelled
economic uncertainty and operational complexity for our
customers, who faced not only higher input prices, continued
supply chain disruptions and declining asset prices in the
financial markets but also large uncertainty as to whether the
economic slowdown would turn into a recession. Throughout
the year, we continued to work closely alongside our customers,
helping them adapt to the new operating environment and
supporting them with advisory services, risk hedging and credit.
Demand for credit was particularly strong during 2022, as
capital markets became more expensive and less accessible.
Furthermore, 2022 was characterised by an increase in the
need for event-driven financing and working capital, as factors
such as higher energy prices led to stronger demand for
short-term liquidity. Danske Bank’s strong liquidity and capital
positions enabled us to support our customers through this
volatile period.
While financing needs increased, customer activity within
capital markets advisory services decreased, especially in the
equity capital markets, with Nordic deal volumes falling 70%
from the record level in 2021 amid a significant reduction in the
number of IPOs. With the M&A business being less sensitive
to current market conditions, we allocated more of our advisory
resources to this, which led to leading M&A positions in
Denmark, Norway and Finland. We also maintained our leading
position among Nordic banks in terms of volumes supported in
the European debt capital markets.
The decline in customer activity was less significant within
sustainable finance in the Nordic countries, and we expanded
our sustainability-focused offerings further in order to support
the growing demand for sustainable finance and transition
advisory services. During 2022, we added resources to
strengthen our position in the area of renewable energy finance
and advisory services, with the aim of supporting the transition
towards low-carbon technologies.
In 2022, we maintained our number one ranking among
arrangers of sustainability-linked loans in terms of volumes
supported according to the Nordic Bloomberg League table,
as we continued to develop and provide incentives for our
customers to reach their own climate targets. For example, we
structured the sustainability link for a EUR 500 million credit
facility provided to global bioscience company Chr. Hansen
by an international group of banks. Chr. Hansen’s financing
costs are now to be linked to the company’s ability to reach
its Paris-aligned climate targets. Moreover, on the basis of
the methodologies of the Science Based Targets initiative,
we further developed our own climate targets for our asset
management business and our lending to key sectors such as
shipping, oil and gas, steel and cement.
We also continued our work to make day-to-day banking
simple and effortless. As part of this, we launched a number
of new strategic partnerships, such as Altapay, Axeptia and
Zenegy in selected markets. During 2022, we welcomed
the first customers live on the AltaPay payment processing
platform, which offers full payment data and cost transparency
regardless of whether payments are executed as e-commerce
or in-store payments or via mobile channels.
Customer satisfaction
We continue to see overall strong ratings in terms of customer
satisfaction as measured in the independent Nordic Prospera
research by Kantar that ranks us Nordic number one in the
‘Prospera Grand Total’ report for the seventh consecutive
year. In particular, we maintained high customer satisfaction
with our product offering, with Nordic number one Prospera
rankings within areas such as FX, Cash Management, Interest
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
54
Rate Swaps and DCM Investment Grade
Issuance.
We also maintained Nordic top three
positions within Institutional and Large
Corporate Banking, which should enable
us to support customers and benefit
from the rebalancing of risk positions and
balance sheet that has been triggered
by the changed market conditions. We
are also proud that our commitment
to making day-to-day banking easier
resulted in the highest customer
satisfaction ratings for digital solutions
in both the Nordic Large Corporate and
Institutional Banking Prospera report.
2022 vs 2021
Profit before tax declined to DKK 6,635
million (2021: DKK 7,638 million) as a
result of lower net trading income and net
fee income.
Net interest income increased to
DKK 5,605 million (2021: DKK 4,732
million) as a result of higher lending
volumes and deposit margins.
Lending volumes in General Banking
increased 21% from the level at the
end of 2021, driven both by new credit
facilities and customers drawing more
on existing facilities. The high growth in
lending volumes reflects the challenging
operating environment, but also our
strategic ambition to grow our business
in Sweden especially.
Net fee income declined to DKK 5,732
million (2021: DKK 6,777 million),
reflecting both that 2021 was a
record year, but also that customer
activity within capital markets was
significantly lower and that income
in Asset Management fell following a
decline in assets under management
and lower performance fees. Higher net
fee income from M&A advisory services
and a continually strong momentum
in everyday banking services, such as
cash management, partly mitigated the
decline.
Net trading income declined to
DKK 1,489 million (2021: DKK 3,137
million) as a result of losses in our Rates
& Credit business in the second quarter
of the year. During 2022, we continued
to support our customers through the
volatile repricing on financial markets.
However, the extraordinarily high volatility
and lower liquidity in the Nordic fixed
income markets made market-making
services and the management of the
risk held to support our fixed income
franchise challenging. Net trading income
recovered in the second half of the year,
as market conditions became more
supportive.
Operating expenses decreased to
DKK 6,966 million (2021: DKK 7,025
million), mainly as a result of lower
provisions for performance-based
compensation. The Resolution Fund,
bank tax etc. item increased to DKK 504
million as a result of the Swedish bank
tax that came into force on 1 January
2022.
The number of full-time equivalent staff
fell to 2,054 (2021: 2,684), as the 1st
line Financial Crime Risk and Business
Controls functions were moved to Group
Functions and Personal Customers,
respectively.
The overall credit quality of our portfolio
remained strong in the fourth quarter
of 2022, with the general rating trend
being stable. Loan impairments in 2022
amounted to a net reversal of DKK 774
million, which is an increase in reversals
from the year earlier (2021:
DKK 13 million). The reversals reflect
strong credit quality and were driven by
the post-pandemic economic recovery,
with the effect being partly offset by an
increase in post-model adjustments.
Credit exposure
Net credit exposure from lending
activities increased to DKK 648
billion at the end of 2022 (end-2021:
DKK 591 billion), mainly as a result of
increased exposure in the utilities and
infrastructure, capital goods, pulp and
paper and chemicals sectors.
Q4 2022 vs Q3 2022
Profit before tax increased to
DKK 2,634 million (Q3 2022:
DKK 1,775 million), driven by a
reversal of loan impairment charges
and higher net trading income.
• Net interest income increased to
DKK 1,590 million (Q3 2022:
DKK 1,404 million), driven mainly
by higher deposit margins. Lending
volumes declined in the fourth quarter,
following very high growth in the
first half of 2022, as credit demand
declined in the energy sector in
particular.
• Net fee income increased to
DKK 1,436 million (Q3 2022:
DKK 1,364 million), driven mainly by
good activity within M&A advisory
services.
• Net trading income increased to
DKK 866 million (Q3 2022:
DKK 596 million), driven mainly
by positive value adjustments of
our derivatives portfolio.
• Operating expenses increased to
DKK 1,876 million (Q3 2022:
DKK 1,599 million), driven by
seasonality and higher IT costs.
• Loan impairment charges amounted
to a net reversal of DKK 618 million
(Q3 2022: net reversal of DKK 11
million). The increase in reversals
in the fourth quarter was due to the
continued post-pandemic economic
recovery.
DKK 2,634 million
Profit before tax
for the fourth quarter of 2022
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
55
Danica Pension
The rise in interest rates and inflation, which led to global market turbulence, had a negative impact on the returns of many of our
customers’ pension savings in 2022, and assets under management decreased 16% as a result of the financial headwinds. The
underlying business is still strong, and we continue to see improvements in our health and accident business.
One of the main focus areas has been to reassure our customers that despite the financial market turmoil, we have firm confidence in
our investment strategy, and they should maintain a long-term perspective on their pension savings.
Net income from insurance business before goodwill impairments amounted to DKK 63 million in 2022, a decline from the level in
2021.
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
Goodwill impairment
Net income from insurance business incl. goodwill
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
Assets under management
(DKK millions)
Life insurance
Health and accident insurance
Total1
2022
2021
771
-1,044
152
-121
184
63
1,627
-1,565
35,094
2,146
2,724
-520
-20
2,184
-96
2,088
-
2,088
37,617
5,563
393,359
449,344
20,469
20,055
0.3
187
881
20,847
12,918
16.2
210
960
Index
22/21
28
201
-
-
-
3
-
-
93
39
88
98
155
-
-
-
Q4
2022
563
-162
53
454
-68
386
-
386
8,528
249
Q3
2022
-150
-118
-108
-375
90
-286
1,627
-1,913
7,766
185
393,359
385,782
20,469
18,800
8.2
187
18,362
20,805
-5.5
196
881
872
388,712
15,078
403,789
462,930
17,449
480,379
84
86
84
388,712
377,883
15,078
14,749
403,789
392,631
Index
Q4/Q3
-
137
-
-
-
-
-
-
110
135
102
111
90
-
-
-
103
102
103
1 Figures are for the Danica Group.
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
and shareholder costs. Special allotments are also included (note G38 in Annual Report 2022 provides further information).
Business initiatives
The decline in the global financial markets had a significant
impact on listed shares and bonds and resulted in negative
returns on our customers’ pension savings. This made it a
priority for Danica Pension throughout the year to continuously
reassure our customers that our investment strategy is based
on a long-term outlook and that we continue to have confidence
in our ability to achieve positive returns on our investments
when the situation stabilises. In our communications, we
highlighted the fact that the markets have generally yielded
strong returns over the past three years.
To make customers more aware of the importance of making
pension savings and to increase awareness of Danica Pension
among personal customers, we created a new communications
platform under a concept called “Get to know your future”.
The platform was introduced through a campaign spanning
television, printed material, outdoor advertising, digital media
and social media. In the campaign, our customers meet their
future, represented by a person who tries to get the customers’
attention and to make them take an interest in their pension
savings. By making the campaign this way, it is our goal to make
the topic of pension more tangible and something you would
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
56
DANSKE BANK / ANNUAL REPORT 2022
like to talk about, thus breaking down some of the barriers for
understanding a complex and intangible topic.
One of our key strategic areas is the continued development
of our healthcare solutions, and in 2022, Danica Pension
announced a DKK 100 million investment plan for further
strengthening our preventive healthcare efforts. The investment
is earmarked for staff specialised in ensuring that our
customers receive correct and sufficient treatment as well as
for the development of the digital solutions that support our
customers in the healthcare area.
In 2022, we continued to develop and refine the new health
package, which gives customers quick and easy access to
online consultations with doctors, psychologists and dieticians.
We were pleased to see that the health package was used
for 24,000 consultations in 2022, of which 9,000 were
with psychologists. A total of 27% of the customers who had
consultations with our psychologists would not have sought
this help had the digital solution not been available.
As a natural extension of the success of the new health
package, a new solution was introduced in 2022 for personal
customers. The solution enables personal customers who do
not otherwise have access to the health package through their
employer to buy access. By offering the health package to a
new group of customers, we are able to provide healthcare to
a wider group of our customers, particularly those who have
retired and therefore no longer have access to healthcare via
their workplace.
We were pleased to note that the large investments made
in our healthcare solutions and in the health and accident
business meant that we successfully contributed to preventing
long-term illness and to ensuring a faster return to work for
more of our customers.
One of our key strategic aims is to further enhance the options
our 800,000 customers have for investing their pension
savings with a strong focus on sustainability.
For the Danica Balance Responsible Choice investment
solution, we select investments that actively contribute to
making a difference within areas such as climate, environment,
health, food production and other social aspects, thereby
supporting the UN Sustainable Development Goals. Our
customers are free to choose the proportion of their savings
that they want to invest with this heightened sustainability
focus.
It is Danica Pension’s ambition that, by 2050, all of its
investments will be carbon neutral. Danica Pension has set
2025 intermediate carbon intensity-based reduction targets in
key sectors, including the energy, utilities, transport, steel and
cement sectors. Danica Pension aims to help reduce carbon
emissions in these sectors by between 15% and 35% relative
to 2019 levels.
We will continue to focus on creating financial security for our
customers through relevant and proactive advisory services
with the aim of creating attractive returns after costs.
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
57
driven mainly by negative valuation
adjustments of life insurance products
where Danica Pension has the
investment risk, with the effect being
partly offset by changes in life insurance
provisions. Costs of DKK 150 million
to cover compensation to customers,
as announced on 9 September 2022,
also had a negative effect on the result.
Moreover, the result was affected by a
change in accounting policies, which
means that the change in the profit
margin relating to life insurance that is
used to cover expected future losses
on health and accident insurance is
now presented under the result of life
insurance. This had a negative effect on
the result of the life insurance business
of DKK 629 million and a positive effect
on the result of the health and accident
business of the same amount.
The result of the health and accident
business declined to a loss of
DKK 1,044 million (2021: loss of
DKK 520 million). The result benefited
from the above-mentioned change
in the presentation. The risk result
improved due to a reduction of technical
provisions, and claims continued to
be at a stable level in 2022. However,
negative valuation adjustments caused
a decrease in the investment result of
DKK 1,348 million to a loss of DKK 987
million in 2022 (2021: a profit of
DKK 361 million). 2021 included a
provision for tax on pension returns of
DKK 267 million.
The return on investments allocated to
shareholders’ equity etc. increased
DKK 172 million from the level in 2021.
Assets under management decreased
DKK 77 billion because of the
developments in the financial markets.
A review of capital allocation framework
has increased capital allocated to Danica
Pension.
Customer satisfaction
We maintain a focus on improving
customer satisfaction by providing
pension savings products that meet
customer needs and demands.
According to the December 2022
Aalund Research survey, Danica Pension
improved from fourth to second place in
Aalund’s business-to-business rating.
2022 vs 2021
Danica Pension was affected by the
negative developments in the financial
markets in 2022 and the goodwill
impairment charge of DKK 1,627 million
from the purchase of SEB Pension in
2018. The impairment charge was
made due to rising discount rates and
the turbulence in the financial markets.
The underlying business is still strong,
and the underlying loss on the health and
accident business was reduced, with
customers being offered more and better
treatment today than three years ago.
After a period of high growth, Danica
Pension saw a decrease in premiums in
2022 of 14% from the level in 2021.
This development was due to the sale
of Danica Norway in June 2022 and
a deliberate focus on maintaining a
profitable business model, which led
to a decrease in the number of new
customers and thereby single premiums.
Regular premiums increased due to an
inflow of new business customers in
earlier periods.
Net income from insurance business
(before goodwill impairments) decreased
to DKK 63 million (2021: DKK 2,088
million), due primarily to the negative
developments in the financial markets.
The profit of DKK 415 million from the
sale of Danica Norway is included in the
result for 2022. With the sale, Danica
Pension is focusing its business further
and is in an even stronger position to
develop the best pension solutions for its
customers in Denmark. As a result of the
sale of Danica Norway, the number of
FTEs was reduced.
The result of the life insurance business
decreased to DKK 771 million (2021:
DKK 2,724 million). The decrease was
Q4 2022 vs Q3 2022
Net income from insurance business
(before goodwill impairments) increased
to DKK 386 million (Q3 2022: loss of
DKK 286 million). The result of the life
insurance business increased from the
third-quarter result, while the result
of the health and accident business
decreased. The return on investments
allocated to shareholders’ equity
increased in the fourth quarter.
• The result of the life insurance
business increased 713 million, as
Danica was able to collect the full risk
allowance for 2022 and as the above-
mentioned change in presentation
had a negative effect on the third-
quarter result. The third quarter of
2022 was also adversely affected
by a provision of DKK 150 million to
cover compensation to customers, as
announced on 9 September 2022.
• The result of the health and accident
business decreased in the fourth
quarter due to the third quarter seeing
a positive effect from the above-
mentioned change in accounting
policies, which means that the
change in the profit margin relating
to life insurance that is used to cover
expected future losses on health and
accident insurance is now presented
under the result of life insurance.
• The return on investments allocated
to shareholders’ equity etc. increased
DKK 161 million, due mainly to
higher returns on assets allocated to
shareholders’ equity.
• Total premiums increased 10% due to
an increase in both single and regular
premiums.
• Assets under management increased
DKK 11 billion, due mainly to the
positive developments in the financial
markets.
DKK 386 million
Net income from
insurance business
for the fourth quarter of 2022
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
58
Northern Ireland
Our focus in Northern Ireland is on remaining a stable, strong and risk-astute bank, consolidating our market-leading position
alongside pursuing prudent low-cost growth opportunities in the rest of the UK. This is supported by a strong performance in 2022,
with income and profitability both improved and costs maintained below the 2021 level.
Profit before tax increased 18% to DKK 456 million, despite the impact of market volatility on trading income and where 2021
benefited from net loan impairment reversals.
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 entity’s capital.
2022
2021
Index
22/21
1,900
335
-342
21
1,914
1,290
623
168
456
1,341
288
-66
12
1,576
1,317
259
-127
386
53,761
55,848
824
94,562
6,080
1.19
7.5
67.4
1,288
802
98,980
6,713
0.87
5.8
83.6
1,268
142
116
-
175
121
98
241
-
118
96
103
96
91
102
Q4
2022
568
87
269
4
928
347
580
132
449
Q3
2022
508
84
-402
3
194
320
-126
-2
-124
53,761
54,478
824
94,562
6,113
1.45
29.4
37.4
1,288
694
96,232
6,081
1.28
-8.2
164.9
1,271
Index
Q4/Q3
112
104
-
133
-
108
-
-
-
99
119
98
101
101
Business initiatives
Our ambition is to deliver sustainable and responsible growth as
a more efficient, geographically diverse and digitally-orientated
business.
Our residential mortgage book grew in 2022, supported by a
strong product and service proposition that includes the UK’s
first ever carbon-neutral mortgage. More than half of the new
mortgage lending we approved across the UK in 2022 was in
the form of our carbon-neutral mortgage product. Furthermore,
affordability assessments for new mortgages incorporate the
impact of inflationary pressures and higher interest rates.
As part of our commitment to supporting customers who are
worried about the increased cost of living, we created a Money
Worries online hub for personal customers and a Rising Cost
of Doing Business online hub for small business customers.
These hubs offer advice and assistance and include a customer
call back service for those who want to talk to one of our
specialist advisers.
Through 2022, we continued to enhance our digital proposition
for both personal and business customers. As a result of
accelerating digital adoption by our customers, with more than
6.5 million digital channel logons each month, we have reduced
our branch network with the closure of four branches and
sold our offsite ATM network to an established local provider.
Through these and other actions, the bank’s costs in 2022
were maintained below the level of costs in 2021 despite the
inflationary pressure.
Customer satisfaction
We were very pleased to finish the year in first place across
both Personal Banking and Corporate & Business Banking.
2022 vs 2021
Profit before tax increased to DKK 456 million (2021:
DKK 386 million), with actions taken in response to higher UK
interest rates and increased transactional activity supporting
a strong income performance, partially offset by negative net
trading income.
Net interest income increased 42% to DKK 1,900 million
(2021: DKK 1,341 million), driven by actions taken in response
to higher UK interest rates. Increasing momentum within
mortgage lending was partially offset by low loan demand
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
59
Q4 2022 vs Q3 2022
The fourth quarter saw a profit before
tax of DKK 449 million (Q3 2022:
loss of DKK 124 million), with the
improvement driven by a combination
of continued growth and higher trading
income.
• Net interest income increased to
DKK 568 million (Q3 2022:
DKK 508 million), reflecting pricing
actions taken in response to higher UK
interest rates.
• Net fee income increased to DKK 87
million (Q3 2022: DKK 84 million)
in the quarter, as underlying activity
levels remained strong.
• Net trading income was positive in
the fourth quarter, reflecting market
expectations for a decrease in UK
interest rates and a corresponding,
favourable mark-to-market movement
on the hedging portfolio from the third
quarter. The negative trading income
reported in the third quarter and
earlier periods will continue to reverse
over the remaining life of the hedging
portfolio.
• Operating expenses increased to
DKK 347 million (Q3 2022: DKK 320
million) due to seasonality.
• Loan impairment charges increased
in the fourth quarter, reflecting an
uncertain macroeconomic outlook, but
remained low overall.
from large business customers. Many
business customers have delayed
investment decisions and continue to
hold additional liquidity. Deposits were
broadly unchanged year-on-year (in
local currency), with high post-pandemic
balances maintained.
Net fee income grew 16% to DKK 335
million (2021: DKK 288 million),
reflecting improved activity levels and
pricing actions.
Net trading income was negative due
to adverse mark-to-market movements
on the hedging portfolio given increased
market expectations for rising UK
interest rates during 2022. This will
reverse over the remaining life of the
hedging portfolio.
Operating expenses were reduced year-
on-year and stood at DKK 1,290 million
(2021: DKK 1,317 million), reflecting a
continually strong cost focus.
Loan impairment charges remained
low against a net reversal in 2021.
Impairment levels were higher in the
fourth quarter, reflecting an uncertain
macroeconomic outlook; however the
loan portfolio remained strong, driven by
a conservative risk appetite and astute
handling of existing and new lending
opportunities.
DKK 449 million
Profit before tax
for the fourth quarter of 2022
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Group Functions
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
60
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 2022 decreased from the level in 2021 to a loss of
DKK 13 million. Lending decreased DKK 0.9 billion from the level at the end of 2021, driven by the divestment of legacy
exposures at Non-core.
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
Loan impairment charges
(DKK millions)
Non-core banking*
Non-core conduits etc.
Total
2022
2021
Index
22/21
Q4
2022
Q3
2022
Index
Q4/Q3
23
101
-78
-66
-13
1,207
39
2,112
668
-0.11
-1.9
-
25
234
-210
-207
-2
2,123
811
2,191
872
0.38
-0.2
-
92
43
37
32
-
57
5
96
77
2
6
-5
-2
-2
1,207
39
2,112
593
0.11
-1.3
-
1
30
-29
-2
-28
1,235
40
2,105
662
-
-16.9
-
200
20
17
100
7
98
98
100
90
25
25
100
25
36
69
-1
-64
-66
-254
47
-207
-
-
32
-1
-1
-2
-
-2
-2
-
50
100
* Non-core banking encompasses the Group’s activities in Lithuania, Non-core Ireland, Luxembourg and Germany.
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.
The winding up of the remaining Non-core activities is
proceeding according to plan. Amortisation of the small portfolio
remaining at the Lithuania branch was completed at the end of
2022, and we have thus terminated our banking activities in
Lithuania.
2022 vs 2021
Profit before tax decreased to a loss of DKK 13 million (2021:
DKK 2 million) due to a decrease in loan impairment reversals
that was driven by settlement of part of the exposure. In 2021,
loan impairment reversals were largely driven by the divestment
of legacy exposures in Ireland and Lithuania. The effect of the
decrease in loan impairment reversals in 2022 was partly
offset by a decrease in operating expenses as a result of the
general progress made with the winding-up activities across
Non-core.
The closing of the subsidiary bank in Luxembourg is well
underway, and the return of the banking licence was formally
approved by regulators in the fourth quarter of 2022.
At the end of 2022, total lending was down to DKK 1.2 billion.
The decrease from the level at the end of 2021 was owing to
the sale of a legacy exposure at Non-core.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
61
Q4 2022 vs Q3 2022
The Non-core unit posted a loss before
tax of DKK 2 million in the fourth quarter
of 2022 (Q3 2022: loss of DKK 28
million) due to a decrease in operating
expenses.
•
•
Total income amounted to DKK 2
million (Q3 2022: DKK 1 million).
Operating expenses decreased to
DKK 6 million (Q3 2022: DKK 30
million). The decrease mainly reflects
the progress made with the winding-up
activities in Luxembourg and Lithuania.
•
Loan impairment charges amounted
to a net reversal of DKK 2 million (Q3
2022: DKK 2 million).
•
Total lending amounted to DKK 1.2
billion (Q3 2022: DKK 1.2 billion).
DKK -2 million
Profit before tax
for the fourth quarter of 2022
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Financial
statements
Statements
Management
and directorships
Definition of
alternative
performance
measures
62
Group Functions
Group Functions includes Group Treasury, Technology & Services and other Group functions. In addition, Group Functions
includes eliminations.
In 2022, the loss before tax increased to DKK 18,136 million from a loss of DKK 1,444 million in 2021. The increase
in the loss was caused by the additional provision of DKK 13,800 million for the Estonia matter and the provision of
DKK 1,560 million related to the compensation of debt collection customers for potential overcollection of debt. In
addition, net interest income and net trading income were down, due, among other things, to market developments.
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
Provision for Estonia matter
Profit before loan impairment charges
Loan impairment charges
Profit before tax
Full-time-equivalent staff
Profit before tax
(DKK millions)
Group Treasury
Own shares and issues
Additional tier 1 capital
Group support functions
Total Group Functions
2022
2021
Index
22/21
-270
16
-681
78
-857
312
-56
381
-10
627
2,810
2,068
74
24
13,800
-17,467
669
-18,136
10,878
-1,118
-114
89
-16,993
-18,136
37
36
-
-1,442
2
-1,444
10,252
599
-67
451
-2,427
-1,444
-
-
-
-
-
136
200
67
-
-
-
-
106
-
170
20
-
-
Q4
2022
-155
40
-634
74
-674
526
15
-
Q3
2022
-166
-4
57
-
-113
1,368
15
-
-200
-1,000
-
-1,000
10,878
14,000
-15,481
659
-16,140
10,802
-525
-552
1
76
-1,000
-304
252
2
-16,089
-16,140
Index
Q4/Q3
93
-
-
-
-
38
100
-
-
6
-
6
101
173
-
50
-
6
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
handle, for example, the pricing of funding. Group Treasury also
manages the Group’s liquidity bond portfolio and the investment
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.
2022 vs 2021
Excluding the additional provision of DKK 13,800 million for
the Estonia matter, Group Functions posted a loss before tax
of DKK 4,336 million (2021: loss of DKK 1,444 million).
Including the additional provision, the loss before tax was
DKK 18,136 million. The loss was due to the additional
provision of DKK 13,800 million for the Estonia matter and
increases in operating expenses of DKK 910 million and loan
impairment charges of DKK 650 million as a result of the
decision to compensate debt collection customers for potential
overcollection of debt. In addition, net interest income and net
trading income were down, due, among other things, to market
developments.
Net interest income decreased to a loss of DKK 270 million
(2021: income of DKK 312 million) due primarily to lower
bond portfolio income as a result of higher interest rates in the
market, which in turn increased the funding costs for fixed-rate
bonds. These bond investments form an integral part of Danske
Bank’s interest rate risk hedging. Furthermore, the redemption
of the Group’s final equity-accounted additional tier 1 capital
instrument reduced the income of Group Functions from the
allocation of costs to the business units.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
63
Q4 2022 vs Q3 2022
Group Functions posted a loss before
tax of DKK 1,000 million (Q3 2022:
loss of DKK 16,140 million). The
improved result before tax related
mainly to additional provisions for the
Estonia matter made in the third quarter
of DKK 14,000 million.
•
•
•
•
•
Net interest income amounted to a
loss of DKK 155 million (Q3 2022:
loss of DKK 166 million) relating,
among other things, to lower bond
portfolio income as higher interest
rates increased funding costs.
Net trading income decreased to a
loss of DKK 634 million (Q3 2022:
income of DKK 57 million) due
primarily to negative income from
interest rate risk management at
Group Treasury and a negative effect
of eliminations of returns on own
shares that more than offset the gain
of DKK 170 million on the sale of
Sanistål shares.
Operating expenses decreased
to DKK 526 million (Q3 2022:
DKK 1,368 million). Further sample
checks related to the customer
compensation model were needed,
and this work has resulted in our
taking a more conservative approach,
which is to the benefit of our debt
collection customers. This approach
impacted our provisions by a further
DKK 310 million, as the accelerated
solution affected operating expenses
for the fourth quarter of 2022. In
the third quarter of 2022, operating
expenses were impacted by a one-off
amount of DKK 600 million to cover
compensation to debt collection
customers for potential overcollection
of debt.
Provisions for the Estonia matter
amounted to DKK 14,000 million in
the third quarter of 2022, of which
DKK 200 million was reversed in the
fourth quarter.
Loan impairment charges amounted
to DKK 0 million (Q3 2022: DKK 659
million). The third quarter was affected
by a charge of DKK 650 million
related to the decision to compensate
debt collection customers for potential
overcollection of debt.
DKK -1,000 million
Profit before tax
for the fourth quarter of 2022
Net trading income decreased to a loss
of DKK 681 million (2021: income
of DKK 381 million), due primarily to
lower income from interest rate risk
management at Group Treasury. In
addition, Group Treasury’s fair value
bond portfolios were negatively affected
by market value adjustments of Danish
mortgage bond investments in 2022.
Furthermore, net trading income was
adversely affected by a negative effect of
eliminations of returns on own shares.
A gain of DKK 170 million on the sale of
Sanistål shares was included in 2022,
whereas 2021 benefited from a gain
of DKK 227 million on the sale of VISA
shares in the Group’s private equity
portfolio.
Operating expenses, after allocation
to the business units, increased from the
level in 2021 and amounted to
DKK 2,810 million (2021: DKK 2,068
million). This was due primarily to
the decision to pay compensation
to debt collection customers for
potential overcollection of debt, leading
to a provision of DKK 910 million.
Furthermore, an additional provision
of DKK 13,800 million for the Estonia
matter was made in 2022.
Loan impairment charges increased to
DKK 669 million (2021: DKK 2 million)
as compensation to debt collection
customers for potential overcollection of
debt led to a charge of DKK 650 million.
The number of full-time-equivalent
staff increased to 10,878 as the 1st
line Financial Crime Risk and Business
Controls functions were moved from
Large Corporates & Institutions to Group
Functions.
DANSKE BANK / ANNUAL REPORT 2022 Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Financial
statements
Statements
Management
and directorships
64
Definition of alternative
performance measures
Danske Bank’s management believes that the alternative performance measures (APMs) used in the Management’s 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 Bank’s management defines operating targets and monitors performance.
Throughout the Management’s 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. Notes G1 and G3 to the financial statements describe 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 state-
ments prepared under IFRS.
Definitions of additional ratios presented on page 8 and in other sections of the Management’s 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. Accordingly, for 2022, it is the
dividend to be paid in 2023.
Return on average sharehold-
ers’ equity (% p.a.)
Net profit as disclosed in the financial highlights divided by the average of the quarterly average shareholders’ 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 86 million (full-year 2021: DKK 451
million). The denominator represents equity, excluding additional tier 1 capital and other non-controlling interests equal to a reduction
in the average of the quarterly average equity of DKK 2,266 million (2021: 7,733 million) compared to a simple average of total
equity (beginning and end of the period).
Adjusted return on average
shareholders’ equity (% p.a.)
Net profit, excluding the provision for the Estonia matter and the impairment charges on goodwill, divided by the average of the
quarterly average shareholders’ equity (beginning and end of each quarter) within the year. The numerator and denominator are
adjusted as per Return on average shareholders’ equity above.
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 at the end of the period, the ratio for 2022 would be 0.85% (2021: 0.73%) due to the daily
average of the sum of loans and deposits being DKK 39.9 billion higher (2021: DKK 5.4 billion higher) than if calculating the ratio by
applying the end-of-period sum of loans and deposits. The purpose of the ratio is to show whether 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 provision for Estonia matter and impairment charges on goodwill divided by total income. All amounts are
from the financial highlights.
Adjusted cost/income ratio (%)
Operating expenses 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 shares outstanding at the
end of the period.
Loan impairment charges as %
of net credit exposure
This ratio is calculated on the basis of loan impairment charges and loans and guarantees in core segments. The numerator is the
loan impairment charges of DKK 1,568 million (2021: DKK 348 million) from the financial highlights 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.
Allowance account as % of net
credit exposure
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 19.6 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 1,081.7 billion (2021: DKK 1,026.1 billion), Loans at fair value of DKK 724.1 billion (2021: DKK 809.9
billion) and guarantees of DKK 81.4 billion (2021: DKK 81.0 billion) at the end of the period, 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.
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 was subsequently updated to December 2021 data in
Interim report – first quarter 2022.
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
DANSKE BANK / ANNUAL REPORT 2022
65
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Financial high-
lights - Danske
Bank Group
Executive
summary
Strategy
execution
Sustainability
Estonia and
remediation
matters
Financial review
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Statements
Management
and directorships
Definition of
alternative
performance
measures
66
DANSKE BANK / ANNUAL REPORT 2022
Contents
Letter to our
stakeholders
Danske Bank
2022 at a glance
Executive
summary
Strategy
execution
Financial high-
lights - Danske
Bank Group
Sustainability
Financial review
Estonia and
remediation
matters
Capital and
liquidity
management
Investor
Relations
Organisation and
management
Business units
Personal
Customers
Business
Customers
Large Corporates
& Institutions
Danica Pension
Northern Ireland
Non-core
Group Functions
Definition of
alternative
performance
measures
Financial
statements
Statements
Management
and directorships
67
Financial statements
68 Income statement – Danske Bank Group
144 G27. Guarantees, commitments and contingent
69
Statement of comprehensive income
– Danske Bank Group
70 Balance sheet – Danske Bank Group
71 Statement of capital – Danske Bank Group
74 Cash flow statement – Danske Bank Group
75 Notes – Danske Bank Group
75 G1. Basis of preparation
83 G2.
Changes and forthcoming changes to
accounting policies and presentation
liabilities
147 G28. Balance sheet broken down by expected due
date
148 G29. Contractual due dates of financial liabilities
149 G30. Transferred financial assets that are not
deregcognised
150 G31. Assets provided or received as collateral
151 G32. Offsetting of financial assets and liabilities
152 G33. Fair value information for financial instruments
158 G34. Non-financial assets recognised at fair value
85 G3. Business model and business segmentation
159 G35. Related parties
91 G4. Activities by country
93 G5. Net interest and net trading income or loss
96 G6. Fee income and expenses
98 G7.
Gain or loss on sale of disposal groups and
Other income
99 G8.
Insurance contracts
100 G9. Operating expenses
101 G10. Audit fees
102 G11. Loan impairment charges
103 G12. Trading portfolio assets and liabilities
109 G13. Investment securities
111 G14. Due from credit institutions and central banks
112 G15. Loans at amortised cost
118 G16. Loans and issued bonds at fair value
121 G17. Asset and deposits under pooled schemes and
unit-linked investment contracts
122 G18. Assets and liabilities under insurance contracts
125 G19. Intangible assets
128 G20. Due to credit institutions and central banks and
Deposits
129 G21. Tax
133 G22. Issued bonds
137 G23. Assets held for sale and Liabilities in disposal
groups
138 G24. Other assets and Other liabilities
141 G25. Equity
143 G26. Note to the cash flow statement
160 G36. Remuneration of management and material
risk takers
164 G37. Danske Bank shares held by the Board of
Directors and Executive Leadership Team
165 G38. Group holdings and undertakings
167 G39. Interests in associates and joint arrangements
168 G40. Interests in unconsolidated structured entities
169 G41. Risk management – Danske Bank Group
169 Risk exposure
170 Total capital
171 Credit risk
171 Sustainability risk
172 Credit exposure
190 Bond portfolio
193 Market risk
196 Liquidity risk
199 Life insurance risk
204 Non-financial risk
206 Highlights and ratios
207 Definitions of ratios
208 Financial statements – Danske Bank A/S
DANSKE BANK / ANNUAL REPORT 2022
68
60 Danske Bank / Annual Report 2022
Income statement – Danske Bank Group
Note
(DKK millions)
2022
2021
G5
G5
G5
Interest income calculated using the effective interest method
Other interest income
Interest expense
G7
G5
G6
G6
Net interest income
Fee income
Fee expenses
Net trading income or loss
Gain or loss on sale of disposal groups*
Other income*
Net premiums
Net insurance benefits
Operating expenses
G9
G24, G27 Provision for Estonia matter
G19
Impairment charges on goodwill
G8
G8
G7
G11
G21
Profit before loan impairment charges
Loan impairment charges
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)
* Comparative information has been reclassified due to change in presentation as described in note G2(a)
31,697
47,570
51,241
28,026
17,305
5,993
-32,983
1,420
5,476
35,394
2,750
31,250
13,800
1,627
-782
1,502
-2,284
2,784
22,077
35,601
30,904
26,774
18,495
6,378
36,600
180
5,553
37,518
71,208
30,822
-
-
16,712
141
16,571
3,651
-5,068
12,920
-5,154
86
12,469
451
-5,068
12,920
-6.1
-6.0
-
14.6
14.6
2.0
DANSKE BANK / ANNUAL REPORT 2022ContentsLetter to our stakeholdersDanske Bank 2022 at a glanceFinancial high-lights - Danske Bank GroupExecutive summaryStrategy executionSustainabilityEstonia and remediation mattersFinancial reviewCapital and liquidity managementInvestor RelationsOrganisation and managementBusiness unitsPersonal CustomersBusiness CustomersLarge Corporates & InstitutionsDanica PensionNorthern IrelandNon-coreGroup FunctionsDefinition of alternative performance measuresStatementsManagement and directorships
Financial
statements
Danske Bank / Annual Report 2022 61
69
Statement of comprehensive income – Danske Bank Group
Note
(DKK millions)
G21
G12
G21
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
2022
2021
-5,068
12,920
-968
-179
-789
-4,481
2,463
-1,546
-14
-674
-2,904
-3,693
-8,761
-90
-146
56
1,708
-1,270
-326
6
-152
270
326
13,246
-8,847
86
12,795
451
-8,761
13,246
DANSKE BANK / ANNUAL REPORT 2022ContentsLetter to our stakeholdersDanske Bank 2022 at a glanceFinancial high-lights - Danske Bank GroupExecutive summaryStrategy executionSustainabilityEstonia and remediation mattersFinancial reviewCapital and liquidity managementInvestor RelationsOrganisation and managementBusiness unitsPersonal CustomersBusiness CustomersLarge Corporates & InstitutionsDanica PensionNorthern IrelandNon-coreGroup FunctionsDefinition of alternative performance measuresStatementsManagement and directorships
70
62 Danske Bank / Annual Report 2022
Balance sheet – Danske Bank Group
Note
(DKK millions)
G14
G14
G12
G13
G15
G16
G17
G18
G23
G19
G21
G24
G20
G12
G20
G22
G22
G17
G18
G23
G21
G24
G22
G22
G25
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
Total assets
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
G25
Shareholders of Danske Bank A/S (the Parent Company)
Additional tier 1 capital holders
Total equity
Total liabilities and equity
2022
2021
175,052
60,811
638,799
302,958
1,082,818
932,677
66,499
455,416
350
6,802
5,199
35,618
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
3,762,999
3,935,834
138,777
554,321
1,262,293
697,388
192,682
66,725
487,422
-
2,464
69,024
93,235
38,350
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
3,602,681
3,759,130
8,622
-2,630
-1,526
155,852
-
160,318
-
8,622
-612
34
161,439
1,724
171,207
5,497
160,318
176,704
3,762,999
3,935,834
DANSKE BANK / ANNUAL REPORT 2022ContentsLetter to our stakeholdersDanske Bank 2022 at a glanceFinancial high-lights - Danske Bank GroupExecutive summaryStrategy executionSustainabilityEstonia and remediation mattersFinancial reviewCapital and liquidity managementInvestor RelationsOrganisation and managementBusiness unitsPersonal CustomersBusiness CustomersLarge Corporates & InstitutionsDanica PensionNorthern IrelandNon-coreGroup FunctionsDefinition of alternative performance measuresStatementsManagement and directorships
71
Danske Bank / Annual Report 2022 63
Statement of capital – Danske Bank Group
Changes in equity
(DKK millions)
Shareholders of Danske Bank A/S (the Parent Company)
Foreign
currency
translation
reserve
Reserve for
bonds at fair
value (OCI)
Share
capital
Retained
earnings
Proposed
dividends
Additional
tier 1 capital
Total
Total
Total equity as at 1 January 2021
8,622
-1,050
354 150,521
1,724 160,171
8,508 168,679
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
Proposed dividends
Redemption of additional tier 1 capital
Acquisition of own shares and additional tier 1 capital
Sale of own shares and additional tier 1 capital
Share based payments
Tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,708
-1,270
-
-
-
438
438
-
-
-
-
-
-
-
-
-
-
12,469
-
-
-
-326
6
-
-320
-90
-
-
-
-
298
208
-320
12,677
-
-
-
-
-
-
-
-
-
12,469
451
12,920
-90
1,708
-1,270
-326
6
298
326
-
-
-
-
-
-
-
-90
1,708
-1,270
-326
6
298
326
12,795
451
13,246
-
-
-
-
-
-
-
-
-
16
-1,724
-
-19,801
19,715
146
-111
-
-1,724
1,724
-
-
-
-
-
-
-1,708
-
-
-19,801
19,715
146
-111
-466
-
-
-3,000
-
4
-
-
-466
-1,708
-
-3,000
-19,801
19,719
146
-111
Total equity as at 31 December 2021
8,622
-612
34 161,439
1,724 171,207
5,497 176,704
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
Redemption of additional tier 1 capital
Acquisition of own shares and additional tier 1 capital
Sale of own shares and additional tier 1 capital
Share based payments
Tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-5,154
-
-4,481
2,463
-
-
-
-
-
-
-1,546
-14
-
-968
-
-
-
-
853
-2,018
-1,560
-115
-2,018
-1,560
-5,269
-
-
-
-
-
-
-
-
-
-5,154
86
-5,068
-968
-4,481
2,463
-1,546
-14
853
-3,693
-8,847
-
-
-
-
-
-
-
-968
-4,481
2,463
-1,546
-14
853
-3,693
86
-8,761
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
-
-18,728
18,301
57
33
-
-1,724
-
-
-
-
-
-
-1,705
-
-18,728
18,301
57
33
-164
-
-5,419
-
-
-
-
-164
-1,705
-5,419
-18,728
18,301
57
33
Total equity as at 31 December 2022
8,622
-2,630
-1,526 155,852
- 160,318
- 160,318
DANSKE BANK / ANNUAL REPORT 2022ContentsLetter to our stakeholdersDanske Bank 2022 at a glanceFinancial high-lights - Danske Bank GroupExecutive summaryStrategy executionSustainabilityEstonia and remediation mattersFinancial reviewCapital and liquidity managementInvestor RelationsOrganisation and managementBusiness unitsPersonal CustomersBusiness CustomersLarge Corporates & InstitutionsDanica PensionNorthern IrelandNon-coreGroup FunctionsDefinition of alternative performance measuresStatementsManagement and directorshipsFinancial statements
72
64 Danske Bank / Annual Report 2022
Statement of capital – Danske Bank Group
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 2022. 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. On 28 April 2022, the Board of Directors decided
that Danske Bank would not pay out dividends in connection with the interim report for the first quarter of 2022 as Danske Bank had entered into initial
discussions with U.S. and Danish authorities on the resolution of the Estonia matter. No dividends were paid out in connection with the interim report for the
second quarter of 2022 as the discussions with authorities were still ongoing. In light of the additional provision for the Estonia matter made in the third
quarter of 2022, the Board of Directors has decided to cancel the remaining dividend for 2021.
In 2022 Danske Bank made an additional provision of DKK 13,800 related to the Estonia matter. Consequently, the Board of Directors will propose to the
annual general meeting in 2023 that no dividend be paid out for 2022. Danske Bank’s dividend policy remains unchanged, targeting a dividend of 40-60% of
net profit.
Earnings per share (DKK millions)
Net profit attributable to the shareholders of the parent company
Number of shares issued at 1 January
Average number of own shares held by the Group (including share buy-back programme)
Average number of shares outstanding
Number of dilutive shares issued for share-based payments
2022
2021
-5,154
12,469
862,184,621 862,184,621
8,804,138
10,422,647
851,606,850 853,352,805
621,939
4,590,464
Adjusted average number of shares outstanding after share capital reduction, including dilutive shares
856,197,314 853,974,744
Earnings per share (DKK)
Diluted earnings per share (DKK)
-6.1
-6.0
14.6
14.6
The share capital consists of shares of a nominal value of DKK 10 each. All shares carry the same rights; there is thus only one class of shares.
Number of shares outstanding
Issued at 1 January
Holding of own shares
Shares outstanding at 31 December
(DKK millions)
Holding of own shares
Trading portfolio
Investment on behalf of customers
Total
2022
2021
862,184,621 862,184,621
8,832,178
11,237,849
850,946,772 853,352,443
Number
2022
Number
2021
5,301,082
5,936,767
4,223,165
4,609,013
Value
2022
728
815
11,237,849
8,832,178
1543
Value
2021
477
521
998
Danske Bank Group accounts for all shares issued by Danske Bank A/S and held by Danske Bank Group as own shares that are eliminated in the statement
of changes in shareholders' equity. The disclosures above clarify the purpose of the acquisitions made by Danske Bank Group of its own shares.
(DKK millions)
Holding as at 1 January
Acquisition of own shares
Sale of own shares
Value adjustment
Holding as at 31 December
Trading
portfolio
477
18,119
17,836
-32
728
Investment
on behalf
of customers
521
609
464
150
815
Total
2022
998
18,728
18,301
118
1,543
Total
2021
859
19,754
19,715
100
998
The Board of Directors is authorised to let Danske Bank acquire own shares up to a total nominal amount of 10% of the share capital. The shares may be
held for ownership or provided as collateral. If shares are acquired for ownership, the acquisition price may not deviate by more than 10% from the price
quoted at the time of acquisition. Danske Bank A/S has obtained permission from the Danish Financial Supervisory Authority to acquire own shares for
market-making purposes etc. and this amount is deducted from the Group’s common equity tier 1 capital.
DANSKE BANK / ANNUAL REPORT 2022ContentsLetter to our stakeholdersDanske Bank 2022 at a glanceFinancial high-lights - Danske Bank GroupExecutive summaryStrategy executionSustainabilityEstonia and remediation mattersFinancial reviewCapital and liquidity managementInvestor RelationsOrganisation and managementBusiness unitsPersonal CustomersBusiness CustomersLarge Corporates & InstitutionsDanica PensionNorthern IrelandNon-coreGroup FunctionsDefinition of alternative performance measuresStatementsManagement and directorships
Statement of capital – Danske Bank Group
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 / Annual Report 2022 65
73
31 December
2022
31 December
2021
160,318
217
-28
160,506
-
-
160,506
-222
3,063
-1,338
-567
-
-5,529
-500
242
-352
-1,424
-4,683
149,197
15,300
164,497
20,765
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
185,261
192,757
838,193
860,173
17.8%
19.6%
22.1%
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.
Risk Management 2022 provides more details about the Group’s total capital, the total risk exposure amount and the Group’s solvency need. The report
is available at danskebank.com/investorrelations/repor ts and is not covered by the statutory audit.
DANSKE BANK / ANNUAL REPORT 2022ContentsLetter to our stakeholdersDanske Bank 2022 at a glanceFinancial high-lights - Danske Bank GroupExecutive summaryStrategy executionSustainabilityEstonia and remediation mattersFinancial reviewCapital and liquidity managementInvestor RelationsOrganisation and managementBusiness unitsPersonal CustomersBusiness CustomersLarge Corporates & InstitutionsDanica PensionNorthern IrelandNon-coreGroup FunctionsDefinition of alternative performance measuresStatementsManagement and directorshipsFinancial statements
74
66 Danske Bank / Annual Report 2022
Cash flow statement – Danske Bank Group
(DKK millions)
Cash flow from operations
Profit before tax
Tax paid
G26 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
Sale of businesses
Acquisition of intangible assets
Acquisition of tangible assets
Sale of tangible assets
Cash flow from investing activities
G26
G26
G26
G26
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
G14
G14
G14
Total
Note G26 provides further information on the cash flow statement.
2022
2021
-2,284
-3,025
21,459
16,571
-2,459
4,916
16,150
19,028
-35,987
50,153
-428
819
34,905
-29,737
-132,574
-10,315
-2,343
-109,357
2,032
-560
-826
4
-38,509
48,984
-82
-7,007
-4,114
-41,751
-7,596
-5,291
-1,224
-37,562
-
-885
-686
8
650
-1,563
-
-
20,052
-30,590
-1,705
-5,419
-164
-611
10,102
-3,718
4,352
-6,309
-1,708
-3,000
-466
-654
-18,437
-1,401
362,997
-3,322
-127,144
400,889
2,634
-40,526
232,531
362,997
6,630
168,422
57,479
6,765
286,621
69,611
232,531
362,997
DANSKE BANK / ANNUAL REPORT 2022ContentsLetter to our stakeholdersDanske Bank 2022 at a glanceFinancial high-lights - Danske Bank GroupExecutive summaryStrategy executionSustainabilityEstonia and remediation mattersFinancial reviewCapital and liquidity managementInvestor RelationsOrganisation and managementBusiness unitsPersonal CustomersBusiness CustomersLarge Corporates & InstitutionsDanica PensionNorthern IrelandNon-coreGroup FunctionsDefinition of alternative performance measuresStatementsManagement and directorships
Danske Bank / Annual Report 2022 67
75
Notes – Danske Bank Group
G1. Basis of preparation
(a) General
Danske Bank Group prepares its consolidated financial statements in accordance with the International Financial Reporting Standards (IFRSs) and
applicable interpretations (IFRIC) issued by the International Accounting Standards Board (IASB), as adopted by the EU. Furthermore, the consolidate d
financial statements comply with the Danish FSA’s Executive Order No. 1306 dated 16 December 2008 on the use of IFRSs by undertakings subject to
the Danish Financial Business Act.
On 1 January 2022, the Group implemented the amendments to IAS 16, IAS 37, IFRS 3 and Annual Improvements to IFRS Standards 2018 – 2020.
The Group has changed the presentation in the income statement of gain or loss on sale of disposal groups. Further information on the changes to
accounting policies in 2022 can be found in note G2. Except for these changes, the Group has not changed its significant accounting policies from those
applied in the Annual Report 2021. The implementation of the amendments to IFRSs had no impact on the financial statements.
For changes in the financial highlights and segment reporting, see note G3.
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.
Monetary assets and liabilities in foreign currency are translated at the exchange rates at the balance sheet date. Exchange rate adjustments of monetary
assets and liabilities arising as a result of differences in the exchange rates at the transaction date and at the balance sheet date are recognised in the
income statement. Non-monetary assets and liabilities in foreign currency that are subsequently revalued at fair value are translated at the exchange
rates at the date of revaluation. Exchange rate adjustments are included in the fair value adjustment of an asset or liability. Other non-monetary items in
foreign currency are translated at the exchange rates at the transaction date. The accounting treatment of foreign currency translation of units outside
Denmark is described in note G25.
For the purpose of clarity, the primary financial statements and the notes to the financial statements are prepared using the concepts of materiality and
relevance. This means that line items not considered material in terms of quantitative and qualitative measures or relevant to financial statement users
are aggregated and presented together with other items in the primary financial statements. Similarly, information not considered material is not
presented in the notes.
The significant accounting policies are incorporated into the notes to which they relate.
The Group may be exposed to sustainability drivers. Credit risk is deemed to be the risk type most materially affected by sustainability drivers. Climate
risk is currently the most urgent of all ESG-related drivers capable of affecting the Group’s credit risk. From a financial materiality perspective, climate-
related risks have been deemed most relevant for the Group’s lending activities. Further information on how sustainability drivers may affect these
financial statements has been provided in various sections of these financial statements; see note G1(b) Significant accounting estimates, note G15
Loans at amortised cost, and note G41 Risk management notes.
(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 solely payments of principal and interest (SPPI) test
further explained in note G15) 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 G1