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Evidence Based Management in HR at Danske Bank
2006 Lars Mørch, Head of HR, Member of the Executive Committee, Danske Bank
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”One platform – exceptional brands” - a common, exportable strategy
Common infrastructure: HR IT Communication Finance Credit Call Centre Shared Services Centre Same retail strategy: Products and concepts Product development Retail structure and processes
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Geographical operations - cautious, value-adding expansion
Oslo Branch estab . in 1997 Helsinki Stockholm . in 1995 Östgöta Enskilda bought in 1997 Danske Bank Polska in 2000 London . in 1983 Fokus Bank in 1999 Hamburg . in 1985 Intl . Lux . in 1976 . in 1871 Northern Bank bought in 2004 National Irish Bank Predominantly represented in Northern Europe within retail banking Directly or indirectly represented in many financial centres
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Breakdown of profit growth
Performance highlights - keeping up the momentum Net profit 5% to DKr 3.1bn Strong activity in most business units and support from higher short-term interest rates Income up 13% on volume growth and heavy customer-driven trading activity Costs up 23% due to integration expenses and bonuses Migration of NB and NIB completed DKr m Q1 2005 Q1 2006 Index Income 8,039 9,123 113 Expenses 3,958 4,871 123 Profit bef. credit loss exp. 4,081 4,252 104 Credit loss expenses -126 -129 - Profit before tax 4,207 4,381 104 Tax 1,223 1,250 102 Net profit for the year 2,984 3,131 105 DKr m Breakdown of profit growth DKr bn (end-period) Q1 2005 Q1 2006 Index 4,500 - Corporate loans 338 393 116 - Retail loans 204 251 123 Bank loans ex repos 542 643 119 Repo loans 197 217 110 3,250 Mortgage loans 531 567 107 Trading portfolio 468 357 76 Deposits 569 618 109 2,984 3,131 Shareholders' equity 65 70 109 Total assets 2,271 2,392 105 2,000 Q1 2005 Income, ex Income, Expenses, Expenses, Credit Tax Q1 2006 Risk-weighted assets 884 972 110 NB&NIB NB&NIB ex NB&NIB losses NB&NIB
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Danske Bank – HR History - increased focus on development
’Old school’ Personnel Department until 2002 Strategic refocusing of HR Corporate Centre of Excellence Part of strategic Group platform
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Shared ambitions – sufficient flexibility - as local as possible
HR vision The Danske Bank Group will attract and retain people with the best competencies and the highest performance. HR mission The management of the Danske Bank Group employs best-in-class HR solutions
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HR is a mutual responsibility … - among equal stakeholders
Business units Execute HR and assure committed employees - a high level of competencies - a high level of performance through HR tools HR Development Owns the HR strategy - responsibility for concepts, follow-up and support HR Services Delivers efficient, flawless administration
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…that leaders execute - and report on
Group vision, mission and focus areas, Models/solutions Top management Reporting/analysis ExCo HR Dev. HR Policies HR Data and Surveys Local adaptations and requirements Local management reporting Business Unit HR and Management Execution Local Management and HR Enters Own data Employees
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Robust HR Leadership Practices - tools, assessment, support
Centres of excellence A wide range of HR tools Competency profiles Learning methodology e-Learning Management foundation Leadership programme Succession Management Talent management Incentive programme Performance agreements HR Key Figures HR System Recruitment/employer branding Coaching, sparring and support Employee Engagement surveys Projects Assessment Support Projects Coaching Sparring Yearly circle Training/ competencies Strategic Focus Areas Leadership training Succession/ talent Performance management Recruitment and attraction HR Consultants
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All HR activities are monitored
Process owned by HR Conclusions owned by business units Prioritising targets and activities ACTIVITIES RESULTS Evaluation of results and new target setting
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1. Management
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2. Succession management and talent development
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3. Commitment
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4. Recruitment and attraction I
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4. Recruitment and attraction II
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5. Performance management I
8 7 6 5 4 3 2 1
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5. Performance management II
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6. Competency development
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Development in employee engagement outperforms peers and industry
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Employee profitability index
The “case for HR” at the branch network Employee profit correlated with employee satisfaction and motivation in Danske Bank Employee profitability index
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