Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Q4 2024 Earnings Presentation
24 slides from Nordea Bank Abp's earnings presentation, January 2025
Slide 1: Fourth-quarter and full-year results 2024
Fourth-quarter and full-year results 2024
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: Executive summary
Fourth-quarter highlights 2024 Executive summary Continued income growth - Total income up 1%. Net interest income down 5%, net fee and commission income up 8% and net fair value result up 31% - Operating profit up 4%, to EUR 1.5bn RoE* 14.3% (14.1% Q423) and EPS EUR 0.32 (0.31 Q423). FY24 RoE 16.7%
Slide 4: Fourth-quarter results 2024
Key financials Fourth-quarter results 2024 Income statement and key ratios Q424 Q423 Q4/Q4 Q324 Q4/Q3 EURm Net interest income 1,854 1,946 -5% 1,882 -1% Net fee and commission income 825 763 8% 774 7% Net insurance result 69 40 73% 60 15% Net fair value result 201 154 31% 284 -29% Other income 6 12
Slide 5: Full-year results 2024
Key financials Full-year results 2024 Income statement and key ratios FY24 FY23 FY/FY EURm Net interest income 7,594 7,451 2% Net fee and commission income 3,157 3,021 5% Net insurance result 253 217 17% Net fair value result 1,023 1014 1% Other income 57 40 43% Total operating income 12,084 11,743
Slide 6: Higher volumes and lower deposit margins, as expected
Net interest income Higher volumes and lower deposit margins, as expected Year-over-year bridge, EURm • Net interest income down 5% -5% 1,946 42 • Lending and deposits up 199 19 30 1,854 89 13 - Mortgages up 6% (1% excluding Norwegian acquisition) - Corporate lending up 1% Q423 Volumes Margins Depos
Slide 7: Continued growth; higher savings and payment & card income
Net fee and commission income Continued growth; higher savings and payment & card income Year-over-year bridge, EURm +8% • Net fee and commission income 825 up 8% 0 5 0 0 14 43 • Savings fee income up with higher 763 assets under management - AuM up 11%, to EUR 422bn Q423 Asset Brok. & Pay. & Lendin
Slide 8: Higher customer activity and valuations
Net fair value result Higher customer activity and valuations Net fair value result, EURm +31% • Strong customer risk 291 284 management activity, mainly in 31 247 22 FX and rates products 0 17 35 6 201 154 7 • Market-making down, driven by wider spreads and higher bond market volatility 241 245 225
Slide 9: Costs in line with plan
Costs Costs in line with plan Year-over-year bridge, EURm +1% • Total costs up 1%, driven by 3 5 112 investments and inflation 8 177 1,417 76 1,434 - Underlying costs up 5%, driven by salary reviews, technology running costs, and marketing activities - Investments in technology Q423 Underlying Norwe
Slide 10: Continued strong credit quality
Net loan losses and similar net result Continued strong credit quality • Total net loan losses and similar net result EUR 54m (6bp) Net loan losses and similar net result, EURm - Continued moderate level of loan losses - Individual provisions and write-offs driven -29 by small number of corporates,
Slide 11: Strong capital position; share buy-backs in progress
Capital • CET1 capital ratio 15.8% Strong capital position; share buy-backs in progress - 2.2 percentage points above regulatory requirement - EUR 0.3bn increase in CET1 capital, CET1 capital ratio development, % mainly driven by profit net of dividend, partly offset by share buy-back 15.8 0.7 -0.3
Slide 12: Personal Banking
Personal Banking Income supported by increased mortgage and deposit volumes, and savings growth Total income, EURm • Total income down 1% -1% • Net interest income down 6%; mortgage volumes up 5% 1 183 1 189 1 176 1 187 1 170 and deposit volumes up 5% 845 817 • Net fee and commission income up 14%,
Slide 13: Business Banking
Business Banking Solid volume and ancillary income growth, offset by lower deposit margins Total income*, EURm • Total income down 3% -3% • Net interest income down 7%; lending volumes up 1% and 870 873 879 853 843 deposit volumes up 4% • Net fee and commission income up 3%, driven by higher 613 613
Slide 14: Large Corporates & Institutions
Large Corporates & Institutions Solid customer activity, with lending and deposit growth Total income, EURm • Total income down 7% -7% • Net interest income down 7%; lending volumes up 1% and deposit volumes up 12% 590 623 587 583 547 • Net fee and commission income down 6%, mainly driven by 372 368
Slide 15: Asset & Wealth Management
Asset & Wealth Management Strong inflow of new customers in Private Banking and strong net flows in all channels Total income, EURm • Total income up 14% • Net interest income stable; lending volumes up 5% and +14% deposit volumes up 3% 358 368 356 365 • Net fee and commission income up 7% – assets
Slide 16: 2025: The preferred financial partner in the Nordics
2025: The preferred financial 2025 financial target partner in the Nordics Return on equity >15% Assumes CET1 requirement of 15%, including management buffer Rates assumed to normalise at ~2% Unique Nordic diversification and scale Supported in 2025 by Cost-to-income ratio Profitable growth and high
Slide 17: Taking Nordea to the next level
Taking Nordea to the next level Leveraging the unique power of Delivering superior Outgrowing the market our Nordic scale financial performance Best-in-class customer experiences Targeting focused organic growth Continued market-leading return opportunities on equity Market-leading growth, cost effi
Slide 18: Nordea
Nordea
Slide 19: Strong capital generation supporting returns
Supplementary information Capital excellence Strong capital generation supporting returns Shareholder returns supported by continued strong capital generation EUR ~17-18bn Year Average quarterly capital generation, bp • Capital return commitment reaffirmed Share buy-backs - Strong capital generation
Slide 20: Net interest income sensitivity to policy rate changes
Supplementary information Net interest income sensitivity Net interest income sensitivity to policy rate changes Sensitivity to +50bp parallel shift in policy Deposit hedge – nominal volume, • NII impact largely driven by policy rates*, EURm EURbn rates and pass-through ~75–125 36 34 33 - Actual pas
Slide 21: Well-diversified portfolio, high-quality lending
Supplementary information Credit portfolio – real estate management industry (REMI)* Well-diversified portfolio, high-quality lending Lending volumes stable Diversified across countries • Well-diversified portfolio across 31 32 31 32 32 Finland Nordic markets 6 6 6 6 6 18% Sweden • 90% of exposure t
Slide 22: Solid LTVs, resilient interest coverage, high occupancy
Supplementary information Credit portfolio – real estate management industry (REMI)* Solid LTVs, resilient interest coverage, high occupancy Solid LTV levels for all countries Majority of portfolio with low LTV • 86% of exposures with LTV below 60% 67 54 64 63 63 64 45% - In event of 20% decline in
Slide 23: Low levels of risk exposure
Supplementary information Credit portfolio – real estate management industry (REMI)* Low levels of risk exposure Strong credit quality, with 93% of IFRS 9 No REA impact even from 3-notch portfolio in stage 1 downgrade due to risk weight floors 50% RW floor • Continued strong credit quality, 8% 50% w
Slide 24: Positive evolution in strong credit portfolio
Supplementary information Impairments and provisioning coverage Positive evolution in strong credit portfolio • Stage 2 loans down EUR 2.2bn, Stage 2 and 3 loans at amortised cost, EURm to 6% Stage 2 - Driven by favourable macro Stage 3 development 19,469 19,092 18,541 16,207 16,366 • Stage 3 loans