Danske Bank A/S

Good morning, everyone. Welcome to the conference call for Danske Bank's financial results for the first quarter of 2026. My name is Klaus-Inge Jensen, and I'm head of Danske Bank's investor relations. With me today, I have CEO, Carsten Nyhrys, and our CFO, Cecile Hillary. The presentation today will be extended, as it will include an update on our Forward 28 strategy. We aim to keep this presentation at around 35 minutes. After the presentation, we will open up for a Q&A session as usual. And afterwards, feel free to contact the IR department if you have any more questions. I will now hand over to Carsten. Slide two, please.

Yeah, thank you, Klaus. And I would also like to welcome you to our conference call where I'm pleased to share the highlights of Danske Bank's financial results for Q1 and present an update on our 420 strategy. Let me start with the key messages for the quarter. So we've had a solid start to 2026, driven by clear commercial momentum across our focus areas and supported by a constructive Nordic operating environment, despite the market volatility that we've seen. On the numbers, net profit was $5.7 billion, and this corresponds to a 13.1% return on equity. And our cost income ratio was 45.8%, broadly in line with our around 45% 2026 target. Activity levels were strong. Total lending grew around 4% year on year, supporting market share gains across the Nordics. And we delivered around $6 billion of debt inflows in asset management in the first quarter of 2026. And then for the remaining two years of our 4-28 strategy period, we're raising our financial ambitions. So for 2028, we target a return on equity above 14.5%, total income around $63 billion, and cost-income ratio no greater than 43%, with a new CET1 capital ratio target of around 16%. And then finally, reflecting our strong capital position and updated capital framework, we're announcing an extraordinary dividend payment of $5 billion, equivalent to 6.14 Danish kroner per share, and this alongside a revised ordinary dividend policy of 60% to 70% of net profit. Cecilia and I will go through the Q1 results briefly, and then we will comment much more on the strategy update, and then, of course, take questions. Slide three, please. So turning to our business units, we saw good customer activity across segments in the first quarter, driving higher loan and deposit volumes overall. At personal customers, performance was stable, supported by core income from higher volumes and an increase in daily banking activity. ROAC remained above target, reflecting disciplined costs and continued efficiency, despite fairly modest volume growth. At business customers, we saw a stronger quarter, with solid lending and deposit growth translating into higher income. ROAC also remained above target, helped by lower costs and loan impairment reversals that underscored the quality of the portfolio. And then at large corporates and institutions, activity levels were good and volumes continued to grow, but total income was impacted by seasonality and performance fees. As a result, ROAC declined slightly, also reflecting somewhat higher allocated capital. So overall, the picture across business units is consistent. We see healthy customer demand. We see good volume momentum and returns that remain at or above target at PC and BC. And then with LC&I performance reflecting a strong underlying franchise impacting by timing effects only. And then slide four, please, and I'll hand it over to Cecile.

Turning to the income statements. Total income was broadly stable year-on-year, supported by solid core income. Net interest income increased versus Q1 last year and reflected higher volumes, while fee income also grew year-on-year on the back of strong underlying customer activity. Quarter-on-quarter, total income declined, mainly reflecting seasonality after a very strong Q4, particularly in performance-related fees. In addition, trading income and income from insurance activities were impacted by volatile financial markets, driving negative valuation effects in the quarter. On costs, operating expenses increased slightly year on year, reflecting inflation and investments, but declined quarter on quarter, mainly due to seasonal effects in performance compensation and lower severance costs. Overall, the cost development remains in line with our full year guidance. Credit quality remained very strong with small net reversals of impairments. As a result, net profit for the quarter was 5.7 billion. Slide five, please. Turning to core banking income, the underlying trajectory remained solid, driven by higher business volumes and continued customer activity. Net interest income remains resilient, adjusted for the 200 million non-recurring tax benefit in Q4, And despite fewer interest days in the quarter, NII increased by around 1%, supported by continued growth in lending and deposit volumes and contributions from the structural hedge. Lending margins were impacted primarily by timing effects, with competitive pricing pressure also continuing to weigh on margins. During the quarter, we increased the notional amount of the structural hedge by around $10 billion to approximately $190 billion, while NII sensitivity remains unchanged, providing a stable earnings profile going forward. Fee income declined quarter on quarter as expected, following a record level of performance fees in Q4. Underlying trends remain healthy, with strong daily banking activity, sustained demand for corporate cash management and solid lending and guarantee fees, while capital market activity was subdued due to financial market volatility. Slide 6, please. Turning to trading income and costs. Trading income quarter-on-quarter reflects higher underlying customer activity in LC&I, though it was impacted due to the volatility in financial markets. This volatility and the interest rate movements had a negative impact at Group Treasury from unrealized market value adjustments, primarily related to cross-currency swaps and bond portfolio investments held for liquidity management purposes. On expenses, costs were lower quarter and quarter, mainly due to seasonality, including lower performance-based compensation and lower severance costs. This improvement is consistent with what we typically see in the first quarter. More broadly, cost discipline remains strong and we continue to deliver structural cost takeouts in line with plan. As a result, we reaffirm our full year 26 cost outlook with a range of 26 to 26.5 billion corresponding to a cost to income ratio of around 45%. Slide 7, please. Turning to credit quality and capital. Asset quality remained very strong in the quarter. we recorded net reversals of impairment charges of 26 million, reflecting a well-diversified and well-provisioned portfolio that is supported by stable customer fundamentals. Full-year impairment guidance, however, remains unchanged at around 1 billion, corresponding to around 5 basis points cost of risk. Our macro scenarios remain prudent, reflecting ongoing geopolitical uncertainty, including tariffs and trade tensions. Post-model adjustments were maintained at 5.4 billion, equivalent to around 30 basis points, and provide significant downside protection. On capital, we continue to generate strong capital during the quarter. The reported CET1 capital ratio was 17.7% before the impact of our announced 5 billion extraordinary dividend payments, which pro forma will take our CET1 capital ratio to 17.1%. Risk-weighted assets increased by 11 billion, net of the previously announced impact of the conglomerate directive, primarily driven by higher lending volumes and market risk related to financial market volatility. Capital requirements were broadly stable, leading CETO and capital ratio headroom of around 290 basis points, underscoring our continued capital strength and flexibility. Slide nine, please, and back to Carsten.