Capital Market Day, Copenhagen, 29 June 2000 Den Danske Bank in Sweden Ulf Lundahl Senior Executive Vice President of Östgöta Enskilda Bank
Östgöta Enskilda Bank Founded 1837 in Linköping Regional bank in Östergötland with private banking unit in Stockholm 1837-90 Supported by main shareholder L-E Lundberg during Swedish banking crisis Growth strategy launched 1994 - geographical expansion
Östgöta Enskilda Bank Acquired by Den Danske Bank March 1997 From 400 to 1,000 employees 1994-2000 20,000 business customers 145,000 private customers Balance sheet total year-end 1999 SEK 59,320 M year-end 1996 SEK 14,500 M
Swedish market Highly concentrated 4 banking groups have 87% of all banking assets (1999) Niche players have not challenged the major players significantly ÖEB/DDB the only viable full-service challenger to the big four
Market positions 1999 (1995) Market Market Total lending share share (SEK BN) (%) 99 (%) 95 SHB 272 29 22 SEB 189 20 27 FsB 191 21 28 NB 157 17 18 ÖEB/DDB 38 4 1 Skandiabanken 6 0.6 0.4 LF WASA 2 0.2 < 0.1 IKANO 2 0.2 -- GE Capital 8 0.8 -- Citi Bank 2 0.2 0.1
ÖEB Strategy Focused full-service provider High net worth families Medium-sized and selected small businesses Local branding creates perception - a network of local banks Combination of a radical implementation of all business is local with world class products and delivery (DDB) Flexible and entrepreneurial organisation
Year 1992 Östgöta Enskilda Bank Stockholm Norrköping Linköping Boxholm Finspång Kisa Mjölby Skänninge Motala Söderköping Tranås Vadstena Åtvidaberg Göteborg Malmö Nyköping Södertälje
Year 1997 Östgöta Enskilda Bank Stockholm (3 branches) Norrköping (3 branches) Linköping (3 branches) Boxholm, Finspång Kisa, Mjölby, Skänninge, Motala Söderköping, Tranås, Vadstena, Åtvidaberg Den Danske Bank Stockholm Provinsbankerna Göteborg - Bohusbanken Halmstad - Provinsbanken Halland Örebro - Provinsbanken Närke Helsingborg - Provinsbanken Skåne Malmö (1 branch) - Provinsbanken Skåne Nyköping - Provinsbanken Sörmland Södertälje - Provinsbanken Sörmland Karlstad - Provinsbanken Värmland Jönköping - Smålandsbanken Växjö - Smålandsbanken
Year 2000 Östgöta Enskilda Bank Stockholm (6 branches) Norrköping (3 branches) Linköping (3 branches) Boxholm, Finspång Kisa, Mjölby, Skänninge, Motala Söderköping, Tranås, Vadstena, Åtvidaberg Den Danske Bank Stockholm Provinsbankerna Göteborg - Bohusbanken Kungsbacka -Bohusbanken Halmstad - Provinsbanken Halland Örebro - Provinsbanken Närke Helsingborg - Provinsbanken Skåne Kristianstad - Provinsbanken Skåne Malmö (3 branches) - Provinsbanken Skåne Nyköping - Provinsbanken Sörmland Södertälje - Provinsbanken Sörmland Karlstad - Provinsbanken Värmland Borås - Provinsbanken Älvsborg Jönköping - Smålandsbanken Värnamo - Smålandsbanken Växjö - Smålandsbanken Sundsvall - Sundsvallsbanken Uppsala - Upplandsbanken
1200 1000 800 600 400 200 Number of employees Number of persons Full-time equivalent Currently employed 975 persons Forecasts 1020 persons 0 'Jul 1997 'Jan 1998 'Jul 1998 'Jan 1999 'Jul 1999 'Jan 2000 'Jul 2000 'Jan 2001
Deposits, business customers % Market share 1996-1999 6% 5% 4% 3% 2% 1% 0% 1996 1997 1998 1999
Lending, business customers % Market share 1996-1999 5% 4% 3% 2% 1% 0% 1996 1997 1998 1999
Deposits, personal customers % Market share 1996-1999 2,0% 1,6% 1,2% 0,8% 0,4% 0,0% 1996 1997 1998 1999
Lending, personal customers % Market share 1996-1999 5% 4% 3% 2% 1% 0% 1996 1997 1998 1999
Lending broken down on units and growth 50% 40% 30% 20% 10% 0% Östgöta + 27.3 % Stockholm + 51.8 % Provins + 64.4 % mar-99 mar-00
Deposits broken down on units and growth 40% 35% 30% 25% 20% 15% 10% 5% 0% Östgöta +5.4 % Stockholm + 72.2 % Provins + 38.6 % mar-99 mar-00
Funds broken down on units and growth 60% 50% 40% 30% 20% 10% 0% Östgöta + 52 % Stockholm + 97 % Provins + 76% mar-99 mar-00
Income broken down on units and growth 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Östgöta + 23.7% Stockholm +55.8 % Provins + 81.5 % mar-99 mar-00
Income growth ÖEB 1995-1999 M SEK 1995 1996 1997 1998 1999 Fee income exc. brokerage fees: 55 64 94 107 121 Brokerage and asset management fees: 39 46 84 106 149 Total fee income: 94 110 178 213 270
Volume growth ÖEB 1995-1999 M SEK 1995 1996 1997 1998 1999 Leasing and factoring: 196 397 572 1,241 2,170
Private banking/asset management area critical to Swedish strategy Individual portfolios under management march 2000: 33 BN SEK (1995: 8,5) Funds under management May 2000 7,3 BN SEK (1995: 1,5) Danica unit link: Established November 1999 Customers May 2000 Premiums 7 months Market share 2000 3,000 561 M SEK 2 %
Internet Banking ÖEB first Internet Bank in Scandinavia November 1996 31,000 customers use Internet Banking 28% of all personal customers with transaction accounts use Internet Banking (+4% 2000) 180,000 payment transactions per month May 2000 - growth rate 10,000 per month 7,000 business customers on business version of Internet Banking. 38% of all business customers, that use ÖEB for payment, is Internet Banking users
Opportunities Regional banking strategy has more growth potential. ÖEB has no geographical presence in 10 targeted geographical centres Stockholm presents more opportunities (6 branches at the end of 2000) Product capability strengthened after systems migration to DDB platform October 2000 Asset management/savings area including unit link (in early stages of development). Next phase - distribution outside ÖEB network.
Capital Market Day, Copenhagen, 29 June 2000