Slide 1: Second quarterly report 2009 Press and analyst conference
Second quarterly report 2009 Press and analyst conference 21 July 2009 Christian Clausen President and Group CEO
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Nordea believes that the expectations reflected in such forward looking statements are reasonable, no assurance
Slide 3: Strong performance continues
Strong performance continues Income up 4% Expenses up 2% Solid gap income and cost growth 13 14 2 Q2 2008 Q1 2009 Q2 2009 Q2 2008 Q1 2009 Q2 2009 Q2/Q1 H1/H1 Q2/Q2 Strong capital base Loan losses 57 bps (*) Risk adjusted profit up 4% Tier 1 Capital well above target Target 9% Q2 2008 Q1 2008 Q2 2009
Slide 4: Result highlights
Result highlights EURm Q2/09 Q1/09 Chg % Q2/08 Chg % H1/09 H1/08 Chg % Net interest income 1,305 1,356 -4 1,230 6 2,661 2,411 10 Net fee and commission 412 381 8 518 -20 793 1,013 -22 Net gains/losses 594 515 15 198 200 1,109 482 130 Other income 48 27 78 46 0 75 47 60 Total income 2,359 2,279 4 1,9
Slide 5: Total operating income up 4% Q2/Q1 and 18% Q2/Q2
Total operating income up 4% Q2/Q1 and 18% Q2/Q2 A new record income level Total income, EURm 2 359 Performance in accordance with strategic 2 279 plans 1 992 Continued strong momentum in customer areas Income from corporate customers up 1% - strong trend in customer-driven capital markets o
Slide 6: Sustainable income growth
Sustainable income growth Total income, EURm 2 359 2 279 2 251 Strong execution of the 2 142 1 992 organic growth strategy 1 957 1 996 Robust business model 1 898 1 914 1 961 1 873 Capturing the potential in 1 780 1 754 1 734 Nordea’s customer base Growth initiatives have delivered CAGR of
Slide 7: Continued focus on cost management – expenses in line with outlook
Continued focus on cost management – expenses in line with outlook Total operating expenses, EURm Total expenses up 2% compared to previous quarter 1 073 1 090 1 116 Underlying cost growth 6% in local currencies Cost/income ratio 47% - 54% one year ago 50% in Nordic Banking Continued execu
Slide 8: Profit before loan losses up 5% Q2/Q1 and 35% Q2/Q2
Profit before loan losses up 5% Q2/Q1 and 35% Q2/Q2 Profit before loan losses, EURm New record level 1 243 Strong income generation 1 189 provides ability to absorb loan losses even in a stressed 919 scenario In the middle of the worst recession in modern times Nordea over delivers compared to
Slide 9: Net loan losses – in line with outlook statement
Net loan losses – in line with outlook statement Net loan losses EUR 425m and EUR 378m excluding the one-off provision in relation to Net loan losses, EURm a legal claim, contested by Nordea 57bps in Q2 (excl the legal claim) - broadly 57bps in line with the level in Q1 54bps 50 bps excl Danis
Slide 10: Net interest income – holding up well despite pressure on deposit margins
Net interest income – holding up well despite pressure on deposit margins Minus 4% in Q2/Q1 and up 6% Q2/Q2 Net interest income, EURm Pressure on deposit margins from lower 1 356 1 230 1 305 interest rates – the negative impact is levelling off – minus EUR 60m in Q2 vs minus EUR 180m in Q1 Con
Slide 11: Strong servicing of corporate customers
Strong servicing of corporate customers Continued high business activity with Corporate lending growth - Nordic markets corporate customers - overall financing 4.7% 4.7% volumes have -0.4% 6,0 increased in H1 0.4% 0% 0,4 0,4 114,2 An increasing part of 108,2 108,2 new financing is taking place t
Slide 12: Net fee and commission income up 8% - breaking the negative trend
Net fee and commission income up 8% - breaking the negative trend from last year Net fee and commission, EURm A clear rebound of savings-related 518 commissions - up 7% AuM up 9% - gradual recovery of equity market and changed savings pattern of household customers 412 381 Net inflow of EUR 2.
Slide 13: Net gains/losses up 15% from record level
Net gains/losses up 15% from record level Explained by execution on corporate Net gains/losses, EURm strategy – further penetration of the 528 524 customer base and strengthened relations have led to more customer business High demand within risk management services – both fixed income, FX and 2
Slide 14: Contracting economies affecting the loan portfolio
Contracting economies affecting the loan portfolio Impaired loans and recivables, EURm Impaired loans gross – up 19% to EUR 3,534m or 118bps of total lending 1 585 55% of the impaired loans are still performing 1 116 576 Largest increases in consumer durables, 1 849 1 949 902 shipping and offs
Slide 15: Expected losses – 25bps over the cycle
Expected losses – 25bps over the cycle Annualised net loan losses Bps 20 15 10 5 0 -5 -10 -15 -20 Expected losses 2009 – -25 25bps -30 -35 -40 -45 -50 -55 -60 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2002 2003 2004 2005 2
Slide 16: Approximately half of the credit portfolio is low risk
Approximately half of the credit portfolio is low risk – no new areas of concern Companies owned by Private Equity Total lending to public Q2 2009, EUR 278bn funds – 3% of total lending Commercial real estate Mortgage lending Well diversified between industries Construction Residential real esta
Slide 17: Well diversified Baltic portfolio - 3% of total lending
Well diversified Baltic portfolio - 3% of total lending Corporate segment exposure Baltic countries EURm 1.9 Annualised Q2 loan losses 214bps of which 44% collective 7% State Gross impaired loans in the Baltic countries increased 63% to EUR 418m - corresponding 1.5 to 550 bps of total lending 1.
Slide 18: Strong capital position gives room to maneuver
Strong capital position gives room to maneuver Core Tier 1 capital ratio excluding transition rules Nordea compared with its European peer group, % One of the strongest core capital positions in Europe 10.3 Strong capital position defined as one of the cornerstones in the Middle of the road stra
Slide 19: Competitive funding position
Competitive funding position S & P L on g S & P S ho rt Stable rating – low CDS-spread B BVA AA A -1+ S an ta n d er AA A -1+ B N P P a r ib a s N ord e a AA AA - A -1+ A -1+ Liquidity buffer of EUR 48bn as of end Q2 SHB I n t e s a S a n p a o lo AA - AA - A -1+ A -1+ (EUR 42bn Q1) D nB N O R A
Slide 20: Over delivery on long-term targets
Over delivery on long-term targets Accumulated risk-adjusted profit 38.3% Risk-adjusted profit up 40% in Q2 – Nordea’s key financial target 27.0% Middle of the road strategy has delivered in 2009 15.0% 15.3% 16.5% 12.6% 14.3% Diversified income streams 8.4% 14.1% 2.7% Q107 Q207 Q307 Q407 Q108
Slide 21: Total shareholder return 1/1 2007 – 30/6 2009
21 -100 -80 -60 -40 -20 0 % RBS Allied Irish Banks Bank of Ireland KBC Commerzbank Lloyds Swedbank SEB 1/1 2007 – 30/6 2009 Societe Generale Erste Group Unicredit Danske Total shareholder return (TSR) Barclays Intesa Sanpaolo BBVA DnBNOR BNP Paribas Santander Top quartile SHB Nordea -15.5 Source: Th
Slide 22: Total shareholder return 1/1 2009 – 30/6 2009
22 -50 -30 -10 10 30 50 70 90 % KBC Commerzbank Lloyds RBS Intesa Sanpaolo BBVA Allied Irish Banks Swedbank 1/1 2009 – 30/6 2009 Societe Generale SEB Erste Group SHB Total shareholder return (TSR) Unicredit Santander Nordea 49.7 BNP Paribas Danske Bank DnBNOR Top quartile Barclays Bank of Ireland So
Slide 23: Despite turbulent times - the journey towards Great Nordea continues
Despite turbulent times - the journey towards Great Nordea continues Currently, Great Nordea: Challenging market Middle of the Road: Long-term strategy conditions Short-term strategy Weak economic activity and Keep the positive Profit orientation – low interest rate levels momentum cost risk and cap
Slide 24: Long term strategy unchanged – Middle of the Road
Long term strategy unchanged – Middle of the Road Increase business with existing Exploit global and Supplement Nordic Nordic customers and attract new European growth through customers business lines business in New European Markets Manage risk Existing core and healthy new and exposure household c
Slide 25: Strong performance on back of the robustness of the Nordea business model
Strong performance on back of the robustness of the Nordea business model Customer centric business model - proven resilient to market turbulence Geographical split of total income in customer areas H1 2009, EUR 4,638m Strategy is based on the large Customer base Focus on corporate and retail
Slide 26: Focus on building business relations with customers
Focus on building business relations with customers Nordea’s credibility and stability have positive impact on customer loyalty and customer acquisition Nordic 9115,000 new Gold customers during 12 months, up 5% Banking Record high level of 360-degree customer meetings 9100% more customer meetings p
Slide 27: Increase in inflow of new Nordic customers
Increase in inflow of new Nordic customers Total number of gold customers, Focus on qualified customer meetings, thousands attractive products and strong capital situation has led to continued growth in number of customers 2 533 2 418 Total increase in number of gold customers is on average almo
Slide 28: With this foundation we can hold a steady course
Growth strategy With this foundation we can hold a steady course Continue to support existing customers Grow share of wallet through strengthening the customer relations - Gold, Private Banking and high quality corporate customers Selectively capture new business opportunities Secure corporate credi
Slide 29: Outlook
Outlook Risk-adjusted profit expected to be higher than in 2008 – previous outlook risk-adjusted profit was expected to be unchanged Cost growth is expected to be slightly lower than in 2008 – unchanged from previous outlook Since global and Nordic economies have contracted clearly beyond gene
Slide 30: Concluding remarks
Concluding remarks Record performance in second quarter 2009 Total income Profit before loan losses and risk-adjusted profit Key financial targets even above long-term targets Strengthening of customer relations – both on household and corporate High operational efficiency – wide gap bet
Slide 31: The leading Nordic bank, acknowledged for its people
The leading Nordic bank, acknowledged for its people, creating superior value for customers and shareholders. 31