Danske Bank Pre-Close Call for Q4: Derfor opjusterer analytikerne deres forventning til 2024

Danske Bank pre-Close call for q4, her bearbejdet til dansk, læs også originaludgaven nederst, – gengivelse omfatter også Q&A, som efterfølgende har udløst en del opjusteringer fra analytikerne af det forventede 2024-resultat. Læs også bearbejdet udgave i næste ØU Finans.  

Claus Jensen – Head of Investor Relations
God eftermiddag, og velkommen til Danske Banks Q4 2024 Pre-close Call. Mit navn er Claus Ingar Jensen, og jeg er Head of Investor Relations. Med mig har jeg Nikolai Tvernø og Lewis West fra vores IR-team. Bemærk venligst, at dette opkald optages af compliance-grunde, og manuskriptet fra dette opkald vil blive offentliggjort på Investor Relations-websitet efter opkaldet. Da vi gennemfører dette opkald via Teams, skal du være opmærksom på, at hvis du ønsker at stille spørgsmål, skal du logge ind via Teams-appen eller din browser. Hvis du deltager via en telefonlinje, vil IR-teamet være tilgængeligt for spørgsmål efter opkaldet.

På dagens opkald vil jeg fremhæve relevante offentlige data og makroøkonomiske tendenser på vores markeder forud for starten af den stille periode den 17. januar, inden offentliggørelsen af vores Q4 2024-rapport den 7. februar. Jeg vil gennemgå resultatopgørelsen linje for linje og kommentere kapital til sidst. Derefter åbner vi for en Q&A-session. For god ordens skyld vil jeg også gerne fremhæve følgende: Jeg vil kun besvare spørgsmål relateret til allerede offentliggjorte oplysninger samt offentligt tilgængelige oplysninger, medmindre andet er angivet.

I den forbindelse vil jeg fremhæve, at udviklinger i specifikke indekser ikke altid har den samme effekt på vores præstation. Inden jeg gennemgår indtægtslinjerne, vil jeg gerne starte med en kort kommentar om de seneste makroøkonomiske udviklinger baseret på vores Nordic Outlook fra december.

I 2024 har vi set inflationen gradvist nærme sig normaliserede niveauer på tværs af Norden samt en overgang mod økonomisk vækst på vores markeder. Vi har set stærkere end forventet vækst i Norge og Danmark med stabile arbejdsløshedsrater og lønudvikling.

Specifikt i Danmark ser de makroøkonomiske indikatorer særligt sunde ud, selvom væksten fortsat understøttes af stærk præstation i medicinalindustrien. Forbruget er vokset langsomt, drevet af vareforbrug, og vi forventer, at dette vil stige yderligere understøttet af stigende reallønninger og faldende renter. Genopretningen af forbrugernes købekraft hjælper også boligmarkedet med at komme sig noget, omend stadig fra et lavt niveau. Dette ses i de første Q4-tendenser for boligmarkedet rapporteret af Danske Research baseret på data fra vores datterselskab, Home.

Generelt er udsigterne relativt positive, selvom risikoen for en økonomisk nedtur fortsat er til stede, og usikkerheden forbliver høj, primært drevet af det geopolitiske miljø.

Netto renteindtægter
Lad mig starte med at fremhæve ændringerne i centralbankernes politikrenter, som vi har set i de nordiske lande i fjerde kvartal. Den danske nationalbank sænkede sin politikrente med 25 basispoint med virkning fra den 18. oktober og igen med yderligere 25 basispoint med virkning fra den 13. december, hvilket spejler lignende beslutninger fra ECB. Den svenske centralbank, Riksbanken, sænkede sin politikrente med 50 basispoint med virkning fra den 13. november og igen den 19. december med 25 basispoint, effektueret den 8. januar i år.

Som følge af rentenedsættelserne fra ECB og den danske nationalbank har Danske Bank sænket vores rentesatser for privatkunder. Umiddelbart efter oktobers rentenedsættelse sænkede vi vores rentesats på nyudlån med 50 basispoint, mens vi sænkede vores opsparingskontorente med 50 basispoint med virkning fra den 1. december. Bemærkelsesværdigt har vi fastholdt renten på almindelige transaktionskonti på 0,25 % i Danmark for op til 50.000 DKK i indskud.

I Sverige var renten på transaktionskonti allerede sænket til 0 % i begyndelsen af september, mens opsparingsrenter generelt er sænket med 75 basispoint. Renter på erhvervskundeprodukter er generelt sænket i takt med centralbankens nedsættelser med varierende ikrafttrædelsesdatoer.

Vedrørende de seneste volumendata henviser vi til offentligt tilgængelige oplysninger. I forhold til udlån bemærker vi, at den samlede kreditefterspørgsel forblev generelt afdæmpet for både privat- og erhvervslån i Danmark ifølge de seneste statistikker. Bemærk, at Q4 har samme antal rentedage som tredje kvartal, med en anslået dageffekt på omkring 17 millioner DKK.

Som altid skal man være opmærksom på valutaudsving på de markeder, hvor vi opererer. Britiske pund værdsatte ca. 1 % i fjerde kvartal, mens SEK var ca. 1 % lavere og NOK stort set uændret mod DKK.

Afsluttende bemærkninger
Dette afslutter vores indledende kommentarer i dette pre-close call. Inden vi går videre til Q&A-sessionen, vil jeg gerne fremhæve, at vi går ind i vores stille periode den 17. januar, og vi vil snart begynde at indsamle konsensusestimater med bidragsfrist tirsdag den 14. januar.

Bemærk venligst, at vi offentliggør vores Q4-resultater den 7. februar kl. 7:30 CET, og at konferencen for investorer og analytikere finder sted kl. 8:30 CET, som sædvanligt.

Vi er nu klar til Q&A-sessionen. [Operatørinstruktioner].

Spørgsmål og svar

Jan Erik – ABG Sundal Collier Holding ASA
Jeg har to spørgsmål, hvis jeg må. Det første handler om salget af Asset Management. Investeringsgebyr-niveauet i Q4 vil blive påvirket af salget, men hvornår fandt salget faktisk sted? Var det i forbindelse med resten af bankens aktiviteter, så effekten for Q4 bliver begrænset, når det kommer til aktiver under administration?

Claus Jensen – Head of Investor Relations
Ja, det var det. Det var en samlet pakke, kan man sige.

Jan Erik – ABG Sundal Collier Holding ASA
Okay, så vi skal bruge den dato til det. Når det gælder betalingen og gebyrlinjen for forbrug, osv., opfangede jeg ikke helt betalingen, du nævnte fra sidste år eller noget fra et partnerskab. Hvor meget var det beløb, hvis du kan give os det?

Claus Jensen – Head of Investor Relations
Det var et tocifret beløb. Jeg tror, det var omkring 50 millioner SEK.

Namita Samtani – Barclays Bank
Claus, med hensyn til netto renteindtægter for 2024, du nævnte 36,5 milliarder DKK. Inkluderer det frasalg af den norske forretning, der blev solgt til Nordea?

Claus Jensen – Head of Investor Relations
Ja, det gør det. Jeg tror, indkomsten eller NII-påvirkningen fra den norske forretning var omkring 0,6 milliarder DKK årligt. Så kan du selv lave regnestykket. Dette var i praksis en halv kvartals påvirkning i Q4, og det er inkluderet i det tal, jeg tidligere har nævnt.

Namita Samtani – Barclays Bank
Okay, cool. Og har du nævnt, hvor meget af omkostningerne, der er fjernet fra omkostningsbasen på grund af salget?

Claus Jensen – Head of Investor Relations
Det er omkring 0,5 milliarder DKK, som var de årlige omkostninger for PC Norway.

Namita Samtani – Barclays Bank
Okay, cool. Og mit sidste spørgsmål: Kan du forklare igen, hvorfor der er en negativ påvirkning i Danica Pension-afdelingen?

Claus Jensen – Head of Investor Relations
Ja, det skyldes, at vi laver en modelopdatering, der i bund og grund fastsætter størrelsen på de hensættelser, vi skal tage i forhold til sundheds- og ulykkesforretningen. Beregningen viser sig at have en negativ effekt i Q4. Derfor har jeg udtalt, at vi forventer et årsresultat i den lave ende af vores guidede interval på mellem 1,4 milliarder DKK og 1,6 milliarder DKK.

Sofie Peterzens – JPMorgan Chase & Co
Med hensyn til Nordea, du nævnte 600 millioner DKK i netto renteindtægter. Hvor meget sagde du, at gebyrlinjen var, og var omkostningerne omkring 0,5 milliarder DKK årligt?

Claus Jensen – Head of Investor Relations
Ja, og jeg nævnte ikke noget specifikt om gebyrindtægter, men jeg tror, gebyrindtægterne sandsynligvis ligger under 100 millioner DKK. Jeg tror, det er omkring 70 millioner DKK, vi havde i gebyrindtægter.

Sofie Peterzens – JPMorgan Chase & Co
Og hørte jeg forkert, eller sagde du, at kapitalpåvirkningen ville være 30 basispoint lavere i fjerde kvartal på grund af udbyttet?

Claus Jensen – Head of Investor Relations
Ja, det er korrekt, alt andet lige selvfølgelig.

Sofie Peterzens – JPMorgan Chase & Co
Med hensyn til din rentesensitivitet på 0,5 milliarder DKK pr. 25 basispoint, inkluderer det afdækningen, du har på plads, eller skal vi tænke på afdækningen separat?

Claus Jensen – Head of Investor Relations
Nej, afdækningen er altid inkluderet i vores NII-sensitivitet.

Sofie Peterzens – JPMorgan Chase & Co
Okay, så selvom der har været mange rentenedsættelser, ser din guidance ud til at antyde en meget begrænset nedgang i netto renteindtægter i fjerde kvartal. Hvis vi justerer for Nordea, ser det ud til at være endnu mindre. Hvordan kan rentesensitiviteten være så lille i fjerde kvartal, når der har været betydelige rentenedsættelser, og indlånsrenterne ikke er blevet reduceret meget?

Claus Jensen – Head of Investor Relations
Rentesensitiviteten, herunder den norske påvirkning, er ret begrænset. For vores indlånsforretning ligger størstedelen af rentesensitiviteten hos indskud, hvorimod udlånsforretningen i høj grad er en gennemløbsforretning. Derfor afspejles lavere renter hurtigt i kundesatserne.

Johannes Thormann – HSBC
To spørgsmål fra min side, tak. Først og fremmest et opfølgende spørgsmål om forsikringsresultatet. Kan det betyde et negativt forsikringsresultat i fjerde kvartal, hvis vi lander i den lave ende af intervallet? Og hvor bæredygtig eller engangsbaseret er denne modeleffekt? Det er mit første spørgsmål.

Det andet spørgsmål er, hvor meget af de svenske bankskatter og danske og andre afgifter til resolution-fonde vil være inkluderet i Q4-resultaterne? Hvilket samlet beløb forventer I?

Claus Jensen – Head of Investor Relations
For at tage dit sidste spørgsmål først, Johannes, så forventer jeg ikke nogen sæsonmæssige variationer i vores betalinger af forskellige bankskatter og bidrag til resolution-fonde. Disse betalinger fordeles mere eller mindre ligeligt hen over året.

Med hensyn til dit første spørgsmål om forsikringsresultatet, tror jeg, du er bekendt med, hvor meget år-til-dato-resultatet var ved udgangen af tredje kvartal. Baseret på det, jeg har indikeret her, er jeg sikker på, at vi begge kan bruge samme regnemaskine til at finde ud af, hvor Q4 potentielt kan lande på forsikringsindkomsten.

Jan Erik – ABG Sundal Collier Holding ASA
Ja, jeg havde to mere, undskyld. Niveauet af afdækninger, som Sofie nævnte, hvad er det nuværende tal? Og hvor mange år har du det i varighed? Køber du stadig aktivt afdækninger, selvom renterne falder?

Claus Jensen – Head of Investor Relations
Nej. Indlånsafdækningen er uændret omkring 150 milliarder DKK. Da det er en obligationsportefølje, der fungerer som en indlånsafdækning, kan der være mindre udsving omkring kvartalsslut i forhold til indfrielser osv. Men vores politik er at holde den omkring 150 milliarder DKK.

Tidligere var hele porteføljen placeret i “hold-to-maturity”-bogen, men vi er begyndt at geninvestere dele af indlånsafdækningen i “hold-to-available-for-sale”-porteføljen. Derfor så du i Q3, at tallet for “hold-to-maturity”-bogen var 144 milliarder DKK. Dette vil sandsynligvis fortsætte med at falde, men du kan lægge forskellen fra “available-for-sale”-porteføljen til og nå de 150 milliarder DKK.

Jan Erik – ABG Sundal Collier Holding ASA
Okay, så det vil vise sig i OCI (Other Comprehensive Income), ikke i de daglige resultater?

Claus Jensen – Head of Investor Relations
Det vil gradvist vise sig i OCI, når vi foretager geninvesteringer.

Jan Erik – ABG Sundal Collier Holding ASA
Okay. Og med hensyn til aktivkvalitet nævnte du, at I guider mod nul for nedskrivninger. I havde en netto tilbageførsel efter ni måneder. Bør vi læse noget ind i tallene, eller betyder “nul” blot, at det kan være mellem 0,5 højere eller 0,5 lavere?

Claus Jensen – Head of Investor Relations
Nej, jeg tror, vi lavede en justering af vores nettoresultatforventninger i Q3. Vi har ingen yderligere kommentarer, og hvis der var ændringer, ville jeg ikke meddele det på en pre-close call. Men som jeg ser det, er der ingen ændringer i forhold til tredje kvartal.

Martin Birk – SEB
Claus, blot to små spørgsmål fra min side. Først: Novo Nordisk er faldet med 25 % i Q4. Hvad betyder det for jeres investeringsgebyrer? Og for det andet: For et par år siden fastslog Finanstilsynet, at guidance for det kommende år var intern viden og skulle offentliggøres til markedet hurtigst muligt. Vil Danske Bank udsende en 2025-guidance i de kommende uger?

Claus Jensen – Head of Investor Relations
Nej, det er ikke vores plan. Enhver guidance skal godkendes af bestyrelsen, og processen, der fører til dette, tillader ikke nogen forudgående offentliggørelse af forventningerne til næste år.

Med hensyn til Novo-aktien og dens påvirkning på investeringsgebyrer: Jeg er enig i, at det ser dramatisk ud med faldet i aktiekursen, men det har kun en lille effekt på vores investeringsgebyrer.

Riccardo Rovere – Mediobanca
Claus, et hurtigt spørgsmål: De postmodellerede justeringer, som blev skabt under COVID, har været ret stabile siden da. Kunne det være muligt, at disse på et tidspunkt bliver afviklet, eller vil de forblive, givet at usikkerheden fortsætter?

Claus Jensen – Head of Investor Relations
Ja, vi taler om postmodellerede justeringer som en del af vores hensættelsesbog. Disse justeringer er ikke statiske, og vi har tidligere frigivet nogle af dem, fx i Q3. Men jeg vil ikke skabe nogen forventninger om store ændringer i den nærmeste fremtid.

Afslutning
Tak til alle for at deltage i opkaldet. Vi ser frem til at tale med jer igen i forbindelse med Q4. Den stille periode starter den 17. januar. Hvis I har spørgsmål i mellemtiden, er I velkomne til at kontakte mig eller mit team. Ha’ en god dag. Farvel.

Original version på engelsk:

anuary 07, 2025 at 07:00 am EST

Share

Claus Jensen   Head of Investor Relations

Good afternoon, and welcome to the Danske Bank Q4 2024 Pre-close Call. My name is Claus Ingar Jensen, and I’m Head of Investor Relations. With me, I have Nikolai Tvernø and Lewis West from our IR team. And please note that this call is being recorded for compliance reasons, and the script used for this call will be published on the Investor Relations website after the call. Given that we conduct this call via Teams, please be aware that if you want to ask questions, you must log on via the Teams app or your browser. If you participate via a telephone line, the IR team will be available for questions after the call.

In today’s call, I will highlight relevant public data and macroeconomic trends in our markets before the start of the silent period of the 17th of January ahead of the publication of our Q4 ’24 report on the 7th of February. I will go through the P&L statement line by line, and comment on capital at the end. Afterwards, we will open up for a Q&A session. And for the sake of good order, I would also like to highlight the following. I will only answer questions related to already disclosed information as well as publicly available information unless otherwise noted.

Connected to this, I wish to highlight that developments in specific indices may not always have the same effect on our performance. But before going through the income lines, I would like to start with a brief comment on the most recent macroeconomic developments based on our Nordic outlook from December. During ’24, we have seen inflation gradually approaching normalized levels across the Nordics and the shift towards economic growth across our markets. We have seen stronger-than-expected growth in Norway and Denmark with stable unemployment rates and wage development.

Specifically in Denmark, the macroeconomic indicators look particularly healthy, though growth continues to be supported by the strong performance of the pharmaceutical industry. Consumption has grown slowly, driven by goods consumption, and we expect that this will pick up, supported by rising real wages and declining interest rates. The restoration of consumer purchasing power is also helping the housing market recover somewhat, albeit from a low level. This is observed in the initial Q4 trends for the housing market by Danske Research based on data from our subsidiary, Home.

In general, the outlook is relatively positive, though, of course, a risk of downturn continues and uncertainty persists, driven by the geopolitical environment. Now let’s have a look at net interest income. Let me start off by highlighting the changes to the Central Bank policy rates that we have seen in the Nordic countries in the fourth quarter. The Central Bank in Denmark cuts its policy rate by 25 basis points with effect from the 18th of October and then again with another 25 basis points with effect from the 13th of December, mirroring similar rate decisions by the ECB.

The Swedish Central Bank, Riksbanken has lowered it policy rates with 50 basis points with effect from the 13th of November and then on the 19th of December with 25 basis points effective on the 8th of January this year. Following the rate cuts by the ECB and the Danish Central Bank, Danske Bank has lowered our retail customer rates. Immediately after the October rate cut, we lowered our front book lending rates by 50 basis points, while we lowered our rates on saving accounts by 50 basis points with effect from the 1st of December.

Notably, we have kept the rate on regular transaction accounts on 25 basis points in Denmark for up to DKK 50,000 in deposits.

In Sweden, the transaction account has already been lowered to 0% in the beginning of September, while saving rates have broadly been lowered by 75 basis points. Rates on business customer products have in general been lowered in tandem with Central Bank cuts with varying effective dates. Regarding recent volume development, we refer to publicly available data. In terms of lending, we know that overall credit demand remained generally muted for private borrowing as well as corporate lending in Denmark across — according to the latest statistics. Please note that Q4 has the same number of interest days as the third quarter. The day effect is estimated to be around DKK 17 million.

As always, please be mindful of currency fluctuations in the markets where we operate. Pound sterling appreciated around 1% in the fourth quarter, while SEK was approximately 1% lower and the NOK roughly flat against the DKK. Looking at funding costs, we note that CIBOR, STIBOR and NIBOR have decreased during the quarter with CIBOR lower by 54 basis points, STIBOR lower by 70 basis points and NIBOR lower by around 5 basis points, all based on quarterly averages. In terms of wholesale funding, we issued around DKK 15 billion in the fourth quarter, reaching a total of around DKK 75 billion for the full year, completing our full year funding plan of DKK 70 billion to DKK 85 billion of debt issuance across instruments.

In November, we issued EUR 500 million benchmark being a 12 non-call 7 green Tier 2 priced at 3-month Euribor plus 158 basis points, which was well received by the market. Additionally, we remind you of the EUR 500 million 3 non-call 2 preferred senior priced at 3-month Euribor plus 45 basis points, and a $1 billion 6 non-call 5 non-preferred senior priced at 114 basis points in euro equivalent, which were done in late September, but didn’t settle until early October. Please visit Danskebank.com, debt section for further details on terms and pricing for each issuance.

Finally, as stated in the Q3 conference call, we still believe that a full year 2024 NII of around DKK 36.5 billion is a fair estimate. With respect to our NII sensitivity, we note that balance sheet effects continue to have impact. Additionally, we reiterate our guidance of approximately plus/minus DKK 500 million per 25 basis points change across all currencies on average over the next 100 basis points within a 12-month period. Please note that by far most of our sensitivity relates to DKK and euro in that order. In respect to fee income, we will start by noting that development is, as always, subject to conditions in the financial markets, housing market activity and general activity level among our customers.

Let’s then look at investment fees, which naturally are impacted by the development in assets under management as well as the investment activity among our customers. Global equity markets, we have seen positive trends for the year, however, with some mixed development in Q4 between markets. In the rates market, our fixed income funds, in particular, have had a strong performance at the end of Q3 compared to a 3-year average. Please also recall the seasonality around our performance fee booking in Q4. For reference, we booked DKK 0.3 billion in Q4 of ’23.

Turning to activity-driven fees. According to the latest consumer spending monitor from Danske Bank Research, we have seen an increase in spending in real terms of 3.1% in November, confirming the positive trends from October, albeit after a subdued period. Consumer sentiment in Denmark, as measured by Statistics Denmark, however, remains in negative territory. Please also remember that in the third quarter, activity-driven fee income was affected by a catch-up partnership payment.

Turning to fees from our lending activities. We note that we have seen some positive signs in the Danish housing market, even though overall activity remains subdued. In November, we had refinancing auctions of adjustable rate mortgages. As a reference, income related to Q4 2023 refinancing auctions amounted to approximately DKK 80 million. In addition, we can add that remortgaging activity has remained low in the fourth quarter. And finally, with respect to capital markets activity, in debt capital markets, we have seen a continuation of a strong performance throughout the year, including several landmark deals, though at a somewhat slower pace.

Primary equity capital markets and M&A activity has likewise been positive relatively to low levels we witnessed in the first 9 months of the year. Now turning our focus to trading income. Market conditions and customer activity has been somewhat subdued in the fourth quarter. Overall, with regard to the fixed income markets, we have seen spreads widened significantly on callable mortgages and longer-end noncallable bonds due to weakness in euro sovereigns and SSAs. The 3.5% coupon bond open for issuance after the 4% coupon exceeded par value at the end of November.

Also, Danish government bonds have continued the performance versus Germany in Q4 as they have tightened 20 basis points further in the 10-year segment.

Currently, the 10-year spread is around minus 25 basis points, and it is the first time since the sovereign debt crisis that occurred more than 10 years ago, we have seen negative spreads in that magnitude. And then let me turn to Danica, please be aware — our income from Insurance business. Please be aware that Danica’s results are always subject to developments in the financial markets and in the Health and Accident business. For Q4, we expect an effect from model updates in the Health and Accident business with an expected negative impact for the Insurance result. Thus, we expect the full year result at the lower end of our soft guided range for normalized net income from Insurance business of between DKK 1.4 billion to DKK 1.5 billion per year, sorry, DKK 1.4 billion to DKK 1.6 billion per year.

And other income during the year, other income has been affected by low value of assets available for resale in our Leasing business. With further reduction of electrical vehicle prices, we expect asset values to decline further in the fourth quarter and thus have a negative effect on other income. As previously communicated, the sale of the Personal Customers business in Norway to Nordea also included the management of 15 Danske Invest funds, which will have a positive effect in other income booked in Q4 of between DKK 0.1 billion and DKK 0.2 billion. We have no specific comments on costs regarding the quarterly development. We reiterate our outlook for full year expenses around DKK 25.8 billion. And then turning to impairments and credit quality.

In the third quarter, we guided that we expect a full year loan impairment charges to be around 0 due to continued strong credit quality. We have no specific comments in respect to the fourth quarter other than to note that the solid macroeconomic environment continues to support credit quality and no single name exposure related to renewables or other industries have led to a revision of our impairment guidance. We have no comments in respect to tax. And in respect to one-offs, there is no one-offs for Q4 other than the income related to the sale of Danske Invest Funds to Nordea, as I highlighted under other income.

For year-over-year comparison, please observe that in the fourth quarter of 2023, we booked a one-off related tax line of DKK 85 million. On capital, we reiterate the comment made at the release of the interim report for the first 9 months of 2024 that we expect the CET1 ratio to be around 30 basis points lower at the end of the year, all else being equal, in connection with the divestment of our Personal Customers business in Norway.

To be clear, this includes the extraordinary dividend paid out on 11th of December as well as the relief from lower risk exposure amount. In terms of REA, you should be mindful around the standard procedure in Q4 of calibrating operational risk REA, which will likely lead to an impact from our higher level of profitability. And for reference, the REA increase observed in Q4 2023 was DKK 6 billion. Concerning market risk REA, we note that it remains subject to market volatility. Finally, please note that as communicated previously, we have front-loaded the expected Basel IV impact from January 2025 with DKK 20 billion increase in REA in the second quarter.

This concludes our initial comments in this pre-close call. And before we move on to the Q&A session, I would like to highlight that we enter our silent period on the 17th of January, and we will shortly start the collect consensus estimates with a contribution deadline on Tuesday, the 14th of January, i.e., next week. Please note that we will publish our Q4 results on the 7th of February at 7:30 a.m. CET, and that the conference call for investors and analysts will take place at 8:30 a.m. as usual.

We are now ready for the Q&A session. [Operator Instructions] I think there is a question from Jan Erik from ABG.

Jan Gjerland   ABG Sundal Collier Holding ASA

I have 2, if I may. The first one is on the asset management sale, which you did. The investment fee level in Q4 will be impacted by the sale, but when did the sale actually happen? Was it as in connection with the translation as you did with the rest of the bank, so it will be limited effects for Q4 when it comes to assets under management?

Claus Jensen   Head of Investor Relations

Yes. It was. It was a package, you can say.

Jan Gjerland   ABG Sundal Collier Holding ASA

Yes. So we should use that date for it. When it turns to this payment and the fee income line when it comes to spending, et cetera. I didn’t catch fully the payment you paid or you got last year or something from a partnership. How much was that number, if you can give us that?

Claus Jensen   Head of Investor Relations

That was a double digit. I think it was around SEK 50 million.

Okay. Next question, Namita.

Namita Samtani   Barclays Bank

Claus, just on the net interest income for 2024, like you’re saying DKK 36.5 billion. Does that include stripping out the Norwegian business, which was sold to Nordea?

Claus Jensen   Head of Investor Relations

Yes, it does. I think the income or the NII impact from the Norwegian business was around DKK 0.6 billion per year. So then you can do the math. So this was essentially half a quarter that will impact NII in Q4, and that is included in the number I’ve gave you before.

Namita Samtani   Barclays Bank

Okay. Cool. And how much — have you said how much of the costs come out of the cost base from the sale?

Claus Jensen   Head of Investor Relations

It’s around DKK 0.5 billion, which was the annual cost for PC Norway.

Namita Samtani   Barclays Bank

Okay. Cool. And just my final question. Can you just explain again why there’s a negative impact in the Danica Pension division?

Claus Jensen   Head of Investor Relations

Yes, because we are doing a model update, the model that essentially dictates the amount of provisions we should take in respect to the Health and Accident business. That calculation turns out to have a negative impact in Q4. And that’s the reason why I made the statement that we expect a full year result in the lower end of our guided range of between DKK 1.4 billion to DKK 1.6 billion.

And then I think we have Sofie Peterzens on the line.

Sofie Peterzens   JPMorgan Chase & Co

So just on the Nordea, so DKK 600 million in terms of net interest income, how much did you say the fee line was and were cost around DKK 0.5 billion per year?

Claus Jensen   Head of Investor Relations

Yes. And I didn’t say anything around fee, but I think the fee income is probably below DKK 100 million. I think it’s around DKK 70 million you had in fee income.

Sofie Peterzens   JPMorgan Chase & Co

And did I mishear it, but was the capital impact going to be 30 basis points lower in the fourth quarter given that you do the dividend, was it?

Claus Jensen   Head of Investor Relations

Yes, that is correct. All else equal, of course.

Sofie Peterzens   JPMorgan Chase & Co

And in terms of your rate sensitivity, the DKK 0.5 billion per 25 basis points, does that include the hedging you have in place? Or should we think about the hedging separately?

Claus Jensen   Head of Investor Relations

No, the hedge is always included in our NII sensitivity. Yes.

Sofie Peterzens   JPMorgan Chase & Co

So I mean, considering we have had quite a lot of rate cuts, I guess your kind of guidance implies a very limited decline in net interest income now in the fourth quarter. It also includes, I mean, if you adjust back the Nordea, then it implies even less. How come the rate sensitivity is so small kind of in the fourth quarter, given that we have seen quite significant cuts in rates and deposit rates haven’t really been reduced that much?

Claus Jensen   Head of Investor Relations

No, I think the rate sensitivity, you can say the Norwegian impact is fairly limited. And of course, even if the number from Norway were a smaller double-digit amount, we would not adjust our rate sensitivity just because of that. So the rate sensitivity should serve as an overall guidance for how our NII will be impacted under the assumption of certain behavioral trends among our customers and our own pricing policy assumptions.

And these are essentially unchanged from what we have seen in the third quarter, and that’s why we continue to stick to the same NII sensitivity.

Sofie Peterzens   JPMorgan Chase & Co

Yes. I was more thinking given that you say CIBOR was down 54 basis points on average quarter-on-quarter, STIBOR even more. So I was just wondering like if you take the DKK 500 million for 25, that would be DKK 1 billion per year, that would imply kind of DKK 250 million per quarter. But given your guidance, it would imply that NII is not going to decline anywhere close to DKK 250 million per quarter. I was just wondering what the offset for this is?

Claus Jensen   Head of Investor Relations

No. I mean, of course, in Q4, you will continue to see that the vintage effects from our deposit hedge will still have an impact. And please also be aware that the majority of the rate sensitivity sits with our deposits. And for the Lending business, it is to a very large extent, just a pass-through business. where lower levels on CIBOR, STIBOR, NIBOR will be mirrored into customer rates almost immediately. So I think that’s the way to think about it.

And then a question from Johannes.

Johannes Thormann   HSBC

Two questions from my side, please. First of all, a follow-up on the insurance result. Could this even imply a negative insurance result in the fourth quarter if we go to the very low end of the range? And how sustainable or one-off is this model effect? That’s my first question.

And the second question is, what — how much of the Swedish banking taxes and Danish and other resolution fund costs will be in the Q4 results? What total amount do you expect?

Claus Jensen   Head of Investor Relations

I wouldn’t expect any seasonal — to take your last question first, Johannes, I wouldn’t expect any seasonality on our payments of different bank taxes and resolution fund contributions. That is spread out over the year, more or less. And when it comes to your first question around the insurance result, I think you are aware how much year-to-date number was at the end of the third quarter.

And given what I have indicated here, I’m sure that we can both use the same calculator to get to where a potential Q4 could be on insurance income.

And I think Jan Erik is back with a question.

Jan Gjerland   ABG Sundal Collier Holding ASA

Yes, I had 2 more, sorry. The level of hedges, which Sofie pointed to, what is the number now? And for how many years do you have it on the duration? And are you still buying it constantly? So you’re still buying it on the way down, so to speak?

Claus Jensen   Head of Investor Relations

No. The deposit hedge is unchanged around DKK 150 billion, of course, due to the fact that it is a bond portfolio that serves as a deposit hedge, there can be some fluctuations around quarter ends in respect to redemptions and so on. But it is our policy to keep it around DKK 150 billion.

Previously, it has been placed entirely within the hold-to-maturity book, but we have now started to reinvest deposit hedges into the hold-to-available and sale portfolio, the one we, back in the days called the available-for-sale book. And that’s why you saw in Q3 that the number on the hold-to-maturity book was DKK 144 billion. So that would probably continue to go down, but you can just add the difference from the available-for-sale and then you will end up at DKK 150 billion.

So that is how we are going to do it going forward. So the fact that you cannot find the DKK 150 billion sitting in the hold-to-maturity book is not because we shrink the hedge, absolutely not. But you should be aware that there is a different capital treatment, the hold-to-maturity book or the hold-to-collect there, the capital reservation takes place over the Pillar 2 add-on as part of the interest rate risk for the banking book.

In the available-for-sale book or the hold-to-collect and sale book, it goes via other comprehensive income, meaning that any value adjustments on that portfolio will go directly into the capital.

Jan Gjerland   ABG Sundal Collier Holding ASA

Okay. So it will not show in the — it will show in the OCI actually, the change in the value.

Claus Jensen   Head of Investor Relations

It will gradually show in the OCI when we are doing reinvestments from this.

Jan Gjerland   ABG Sundal Collier Holding ASA

Okay. So not on a day-to-day basis, but on a reinvestment level side.

Claus Jensen   Head of Investor Relations

Yes, you can say the part of the hold-to-collect and sell book that is coming from the deposit hedge, that will gradually increase. And that’s why any value adjustments will, of course, also mean more and more on the capital, although I have to say that we are still talking about very, very small numbers so far.

Jan Gjerland   ABG Sundal Collier Holding ASA

Okay. Just on the asset quality, you mentioned that you sort of guided to 0. You had a net reversal now by 9 months. You had a peer — a very small peer though, coming out with an earnings upgrade when it comes to asset quality.

Is it anything — should we read anything into the numbers rather than that 0 is between 0.5 high and 0.5 low somewhere?

Claus Jensen   Head of Investor Relations

No, I think we made an adjustment to our net profit outlook at Q3. And we have no further comments. If we were to change it, that would not be my role to do that on a pre-close call, of course. But not as I can — I don’t see any changes to the third quarter, right?

Jan Gjerland   ABG Sundal Collier Holding ASA

Okay. Just final on insurance on this Health and Accident portfolio, is that — should we treat that separately from the other treatment? Or is the lower end of DKK 1.4 billion to DKK 1.6 billion for the whole book, including the Health and Accident book?

Claus Jensen   Head of Investor Relations

Yes. The soft guidance we give is a normalized income from insurance between DKK 1.4 billion and DKK 1.6 billion. And that was what I made a reference to. And I think there was also a question before around why we are doing these provisions and why now. I think we have a regular model update and the model update essentially dictates the provision level for our Health and Accident business. And I think it’s very clear to everyone who is participating in this call that the Health and Accident business has been and continues to be challenged due to the level of new cases and also the fact that the customers’ recovery periods also tends to be longer.

And this is not something new. It’s as it has been for a while. And now we have been doing this update in Q4, and it essentially turns out that we probably need to do more provisions on that front.

And then Martin Birk is back.

Martin Birk   SEB

Claus, just 2 questions from my side, small ones. The first one being perhaps rather strange, but Novo Nordisk is down 25% over Q4. What does that mean to your investment fees?

And then my second question is a couple of years ago, the Danish FSA, they specified that the guidance for the coming year was internal knowledge and should be disclosed to the market as soon as possible. Will Danske Bank be sending out a 2025 guidance here in the coming weeks?

Claus Jensen   Head of Investor Relations

No, that is not our plan. Any guidance, of course, needs to be approved by the Board and the process that leads up to that, the internal calculation processes and so on does not allow us for any prerelease of the outlook for next year.

And please also be aware that we have a longer-term guidance. We have our financial targets for 2026, and they are unchanged.

And then you had a question around the Novo impact on investment fees. I completely agree, Martin, it looks quite dramatic with this share price decline we have seen in Novo. It only has a small impact on investment fees, I have to say.

And then I think so far, the final questions from — comes from Riccardo from Mediobanca.

Riccardo Rovere   Mediobanca – Banca di credito finanziario S.p.A.

Claus, just a quick one. The post-model adjustments, which were created during COVID, those have been since then remained fairly stable, DKK 100 million more or less. Could it be the case that at some point, those will have to be — final decisions will have to be taken on this extra amount that you charge since ’19? Or will they stay forever given that uncertainty remains? I mean just any thoughts you may share with us on this?

Claus Jensen   Head of Investor Relations

Yes. I guess we are talking about the post-model adjustments as part of the allowance account. Is that what you are referring to?

Riccardo Rovere   Mediobanca – Banca di credito finanziario S.p.A.

Yes, exactly. Those that were kind of DKK 4 billion in ’19 and between DKK 6.5 billion or whatever it is.

Claus Jensen   Head of Investor Relations

Yes. It was around DKK 4 billion back in time. Then came the pandemic, then we increased that by approximately DKK 2 billion. Then we have made some reclassification of that when the fear of COVID slowly disappearing in the market. We reclassified it into global tensions.

And unfortunately, the level of global tensions seems to be pretty high. But it is not a static book. And we have also, at Q3, released some of the post-model adjustments but I would not create any expectation that there will be any major changes in the way we look at the world and the way that we also look at our post-model adjustments over the next coming period, no.

Okay. I think that’s it. I don’t see more questions here on my screen.

So thank you so much, everybody, for participating and looking forward to talk to you again in connection with Q4. In the meantime, silent period starts on the 17th. So if you have any questions whatsoever, please don’t hesitate to call me or my team. Have a nice day. Goodbye.