NRDBY - Despite Significant Near-Term Growth Challenges Danske Bank Looks Undervalued Today

• Danske will likely report modest, if any, sequential revenue growth in Q3, but better expense control and stable credit costs could be sources of upside relative to expectations.
• Credit quality has remained quite high and Danske is exceptionally well-capitalized. With a diverse loan book, including modest exposure to commercial real estate, Danske should see low cumulative credit losses.
• Weak spreads remain a challenge, but Danske has long operated with thin net interest margins and economic recovery prospects in the Nordic region look good.
• Low single-digit growth from 2019-2024 and long-term core earnings growth around 4%, as well as a mid-single-digit ROTCE in 2021, can support an attractive mid-teens annualized total return.

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