Slide 1: Presentation for Investors 18 February 2004
Presentation for Investors 18 February 2004
Slide 2: Contents
Contents z Press slides Page 3 z Financial highlights Q4/03 Page 18 z Credit quality Page 52 z Economic capital Page 67 z Nordea Page 72 z Business areas Page 80 z Balance sheet Page 123 z Market shares Page 130 z Appendix Page 146 2
Slide 3: Year-end Report 2003 Press conference
Year-end Report 2003 Press conference 18 February 2004 Lars G Nordström President and Group CEO
Slide 4: Solid improvements in 2003
Solid improvements in 2003 • Net profit up 68% to EUR 1,490m (EUR 887m in 2002) • Operating profit up 17% to EUR 1,812m (EUR 1,547m) • Total income largely unchanged at EUR 5,639m (EUR 5,670m) • Total costs down 2% • Earnings per share EUR 0.51 (EUR 0.30) • Return on equity (excluding goodwill) 16.7
Slide 5: Underlying positive trend confirmed in Q4
Underlying positive trend confirmed in Q4 • Operating profit EUR 383m (EUR 470m in Q3) • Total income at EUR 1,399m (EUR 1,403m); net interest and commission income up • Costs largely unchanged on a comparable basis taking reservation for profit sharing and start-up costs related to the joint ventur
Slide 6: Short-term top priorities have been addressed - delivering on promises
Short-term top priorities have been addressed - delivering on promises z Reduce volatility and ensure growth of income z Improve cost control z Ensure capital efficiency z Maintain credit portfolio quality 6
Slide 7: Volatility has been reduced
Volatility has been reduced Investment earnings and insurance z Investment earnings up EUR operating profit Q1/02-Q4/03 48m EURm – position taking benefited from 100 81 reduced interest rates 75 particularly in Q2 50 50 31 39 41 44 29 27 40 33 40 z Operating profit in Life & 25 11 19 Pensions up EUR
Slide 8: Income maintained at a stable level
Income maintained at a stable level z Marginal increase when including Income Q1/02-Q4/031 currency effect EURm z Net interest income down 2% 2000 – pressure on deposit margins following lower interest rates 1600 1457 1463 1425 1406 1403 1399 1382 1374 – compensated by increase in mortgage lending 1
Slide 9: Costs are kept well within the flat cost target
Costs are kept well within the flat cost target Costs and C/I ratio Q1/02-Q4/03 z Reported expenses including EURm profit sharing down EUR 72m % 1200 100 or 2% to EUR 3,673m 1000 905 922 925 993 917 902 973 80 z Underlying expenses down 881 64 66 approx. 5.5% 800 64 65 67 60 – profit sharing 61 58 6
Slide 10: Number of employees down
Number of employees down Full time equivalents (FTEs) Q1/02-Q4/03 (end of period) z Number of full-time Number employees (FTE) down by of FTEs 45000 3,510 to 30,761 40000 – 900 FTEs to joint venture 35300 34600 35000 33888 34271 33879 32949 32227 with IBM 30761 30000 – 500 FTEs related to the sale o
Slide 11: Capital efficiency strengthened
Capital efficiency strengthened z Economic capital reduced by Economic capital EUR 1.3bn since end of 2002 01/02-Q4/03 z Divestment of real estate and EURbn 12 other non-core assets 10.4 z Growth of off-balance-sheet 10.2 10.2 10 9.9 9.5 business 9.1 9,0 8.9 z Implementation of economic 8 capital an
Slide 12: Credit portfolio in general in healthy shape
Credit portfolio in general in healthy shape Loan losses Q1/02-Q4/03 z Concentration on Nordic EURm customers has helped 125 % 0.9 maintain good credit quality 0.8 z Loan losses were EUR 102m 100 98 0.7 higher than in 2002, but 92 89 0.6 slightly decreasing throughout 84 75 76 0.5 2003 63 66 0.4 z M
Slide 13: Increased dividend per share proposed
Increased dividend per share proposed Per share, EUR 0.25 Total, EURm 712 Pay-out ratio (of the net profit, target >40%) 48% Dividend yield (calculated on share price 30 Dec, 2003) 4.2% 13
Slide 14: Total shareholder return (TSR) 2003
14 CO M M ER % 0 10 20 30 40 50 60 70 80 90 100 110 120 ZB AN K SE NO B HY RD PO EA Dn VE B R NO EI R NS BA SW N ED K B BA AN R K CL SO AY S Nordea peer group CI ET E B G EN NP ER AL E AB SH N B AM RO DA NS KB K C E BA NK SA M PO HB BA O N S K R Total shareholder return (TSR) 2003 O F BO IR S EL LL
Slide 15: Strategic themes 2004
Strategic themes 2004 Sustainable growth of economic profit Ensure stable and Ensure operational Ensure capital profitable growth of excellence, strict cost efficiency and high income management and credit portfolio quality reduced complexity Attract, develop and retain highly motivated, competent a
Slide 16: In summary
In summary z Increased focus and speed led to improved performance in 2003 z Mission accomplished - delivering on our promises – Volatility has been reduced and income maintained at a stable level – Costs are kept well within the flat cost target – strict cost management leads to raised cost ambitio
Slide 17: Financial highlights Q4/03
Financial highlights Q4/03 17
Slide 18: Market development – stock market indexes
Market development – stock market indexes % 30 25 20 15 10 5 0 -5 -10 -15 Q1/03 Q2/03 Q3/03 Q4/03 Copenhagen Helsinki Oslo Stockholm Nasdaq Dow Jones 18
Slide 19: Market development – interest rates
Market development – interest rates Change Change 30-09-03 31-12-03 % Q4/03 2003 Short, EUR (one week) 2.07 2.07 0 -0.93 Long, EUR (5 years) 3.10 3.50 +0.40 +0.09 Short, DK 2.10 2.12 +0.02 -0.94 Long, DK 3.34 3.64 +0.30 -0.04 Short, NO 2.76 2.22 -0.54 -4.47 Long, NO 4.04 3.84 -0.20 -1.59 Short, SE 2
Slide 20: Short interest rates - average (one week)
Short interest rates - average (one week) % 7 6 5 4 3 2 1 0 EUR DKK SEK NOK Q1/03 Q2/03 Q3/03 Q4/03 20
Slide 21: Net interest income
Net interest income EURm YoY: 1000 z Nii down 2% z Pressure on deposit margins 885 z Strong demand for mortgages 800 835 843 838 850 z Corporate lending margins improved 600 QoQ: 400 z Nii up 1% z Interest rates at historical low level 200 z Deposit margins stable overall – supported by ”hedges” z I
Slide 22: Nii – active management of interest rate exposure
Nii – active management of interest rate exposure z Falling interest rates have had a negative impact on deposit margins in 2003 z “Hedges” reduced negative effect on Nii in H2 2003 by approx. EUR 10-15m per quarter z Effect expected to be reduced from and including Q2 2004 22
Slide 23: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on Nii* Q4/03 Q3/03 Increasing market rates, 100bp 275 220 Decreasing market rates, 100bp -251 -240 *Approx. end of period z Increased SIIR – maturity of current ”hedges” shortened compared to Q3 SIIR is defined as the effect on net inte
Slide 24: Net commission income
Net commission income EURm 388 YoY: 388 500 379 61 353 366 47 z Down 3% 47 40 – reflecting mainly lower 44 88 400 brokerage income 95 88 87 88 35 35 28 – partly compensated by Asset 20 200 300 24 194 Mgmt and payments 195 191 179 QoQ: 200 z Up 2% 100 114 120 129 z AuM up 6% to EUR 113bn 108 104 – hi
Slide 25: Trading
Trading EURm YoY: 180 z Increased by 7% 160 140 157 155 z Leading Nordic provider of derivatives and debt capital 120 130 130 125 market services 100 80 z High quality earnings – customer driven revenue 60 stream 40 QoQ: 20 0 z Largely unchanged reflecting Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 maintained ac
Slide 26: Total income
Total income YoY: z Maintained income level despite EURm difficult markets 6000 – negative currency effect of 1% 5,670 5,639 z Net interest income down 2% 5000 – pressure on deposit margins following lower interest rates 4000 – compensated by increase in mortgage lending 3000 z Commission income dow
Slide 27: Expenses – underlying development
Expenses – underlying development EURm YoY: 4000 3,745 3,673 z Reported expenses down 2% 3500 3,666 – personnel expenses increased 3,464 3000 by 1% 2500 – other expenses decreased 8% 2000 z Underlying expenses down 6% 1500 – profit sharing – new business, Poland 1000 – higher restructuring costs 500
Slide 28: Expenses
Expenses EURm QoQ: 993 973 1000 448 917 46 z Expenses increased by EUR 902 881 397 363 416 92m in Q4 of which: 350 800 – profit sharing EUR 46m – Start-up IBM JV EUR 30m 600 z Variable salaries and 545 520 539 531 511 restructuring costs increased 400 EUR 12m z Shift of EUR 12m between 200 personnel
Slide 29: Development of FTEs
Development of FTEs FTEs 2003 2002 40000 Retail 18,407 20,300 35000 34,271 33,879 CIB 2,102 2,444 32,949 30000 32,227 30,761 AM & Life 1,796 1,866 25000 GPT 6,772 7,710 20000 Other 1,684 1,951 15000 Total 30,761 34,271 10000 Change -10% 5000 Outsourced/ +1,321 0 insourced Q4/02 Q1/03 Q2/03 Q3/03 Q4/
Slide 30: Loan losses
Loan losses EURm YoY: 300 236 246 z Loan loss ratio 0.25% in 2003 219 221 229 200 z Loan losses concentrated to Norwegian retail portfolio 98 92 89 100 76 84 z Large part relates to fish farming 0 z Pan Fish shares valued at zero -100 -143 -138 -132 QoQ: -154 -145 -200 z Loan loss ratio 0.23% in Q4
Slide 31: Investment earnings, banking
Investment earnings, banking EURm YoY: 100 z Increased EUR 48m 90 80 z Gains on fixed income 81 portfolio in H1 70 60 z Gains on equity portfolio in H2 50 40 QoQ: 41 30 33 z Equity portfolios performed 29 27 well 20 10 z Positive contribution also from 0 fixed income portfolios Q4/02 Q1/03 Q2/03 Q3/
Slide 32: Operating profit, Life insurance
Operating profit, Life insurance EURm YoY: 200 z Substantially Increased profit 175 in 2003 150 z Gradual implementation of 149 125 changed business model 100 z Higher investment return 75 – 5.8% in 2003 (0.2% in 2002) 50 – financial buffers increased 25 QoQ: 2 0 z Maintained profit level 2002 2003
Slide 33: Income statement summary
Income statement summary EURm 2003 2002 Change % Total income 5,639 5,670 -1 Total expenses -3,673 -3,745 -2 Loan losses, net -363 -261 Equity method 57 52 Profit before inv. earnings and insurance 1,660 1,716 -3 Investment earnings, banking 170 122 Operating profit, life insurance 149 2 Operating p
Slide 34: Real estate holdings reduced
Real estate holdings reduced 2003 z Write-down of EUR 115m in Q4 z Divestment of residential z Expected gain of approx. EUR 300m in property and owner-occupied 2004 properties in Denmark – net financial effect of real estate disposals z Sale of shares in Nordisk expected to be a gain of approx. EUR
Slide 35: Net profit
Net profit EURm 1500 z Increased by 68% 1,490 z Operating profit up 17% 1200 z Deferred tax income of EUR 900 300m included in Q3/03 887 z Write-down of real estate 600 included at year-end, EUR 115m 300 z Allocation to pension fund in 2002 (EUR 255m) 0 2002 2003 35
Slide 36: Key figures
Key figures EUR Earnings per share % Return on equity (excl. goodwill) 0.25 30 25 0.20 20 0.15 15 0.10 10 0.05 5 0.00 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 EPS 2003 EUR 0.51 RoE 2003 16.7% EPS 2003 adjusted to standard tax EUR 0.43 RoE adjusted to standard tax and 14.5% and f
Slide 37: Earnings per share – 12 months rolling
37 Q 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 1/ 20 EUR 00 Q 2/ 20 00 Q 3/ 20 00 Q 4/ 20 00 Q 1/ 20 01 Q 2/ 20 01 Q 3/ 20 01 Q 4/ 20 01 Q 1/ 20 02 Q 2/ 20 02 Q 3/ 20 02 Q 4/ 20 02 Q 1/ 20 03 Earnings per share – 12 months rolling Q 2/ 20 03 Q 3/ 20 03 Q 4/ 20 03
Slide 38: Increased dividend proposed
Increased dividend proposed z Per share, EUR 0.25 z Total, EURm 712 z Pay-out ratio (of the net profit, target >40%) 48% z Dividend yield (calculated on share price Dec 30, 2003) 4.2% z Ex dividend date 1 April z Record date 5 April z Payment date 14 April 38
Slide 39: Balance sheet - key items
Balance sheet - key items Change, 12 EURbn 2003 2002 months % Lending 145.6 145.7 0 Deposits 95.6 94.2 1 Shareholders’ equity 12.2 11.9 2 Total assets 262.2 249.6 5 Risk-weighted assets 134.4 134.7 0 End of period 39
Slide 40: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 149 94 95 93 96 146 147 147 146 91 80 120 100 60 80 60 40 40 20 20 0 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 End of period 40
Slide 41: Capital position
Capital position Tier 1 ratio % z Approx 2.8% of outstanding shares 10 9 repurchased by end 2003 8 z Implementation of IAS19/RR29 7 (pensions) from 2004 7.1 7.3 6 – reduction of equity of EUR 183m 5 – reduction of Tier 1 by approx. 15bp 4 3 z New authorisation to purchase up 2 to 10% of the total no
Slide 42: Result by business area
Result by business area EURm 500 400 428 395 300 200 100 92 100 48 60 43 44 35 62 0 -111 -100 -200 -268 -300 Retail CIB Asset Mgmt* Life* Group Group Treasury Functions *Product result for Asset Management and Life and Eliminations Q3/03 Q4/03 Figures are disclosed and consolidated using end of peri
Slide 43: Retail Banking operating profit
Retail Banking operating profit EURm 500 z Strong sales 450 z Increase in payment transactions 400 428 395 z Loan losses in Retail Banking 350 376 354 345 Norway 300 z Improved RoE 250 200 150 100 50 Key ratios Q4/03 Q3/03 0 C/I ratio, % 55 56 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 RoE, % 26 24 43
Slide 44: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Quarterly averages 2.5 z Stable lending margins 2.3 2.1 z Stable deposit margins 1.9 – supported by ”hedges” 1.7 1.5 1.3 1.1 0.9 0.7 0.5 02 02 02 02 03 03 03 03 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Lending to corporates Lending to personal customers D
Slide 45: CIB operating profit
CIB operating profit EURm 150 z Income picked up in Q4 141 120 131 z Maintained high activity in Markets 107 90 100 z Continued low loan losses 92 60 30 Key ratios Q4/03 Q3/03 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 C/I ratio, % 54 56 RoE, % 15 13 45
Slide 46: Asset Management product result
Asset Management product result EURm 60 60 z Strong sales and result 50 z Net inflow of EUR 5.8bn Q4 48 – net inflow in 2003 EUR 12.5bn 40 41 z AuM up 6% to EUR 113bn Q4 38 30 – up 18% from end 2002 31 20 10 Key ratios Q4/03 Q3/03 C/I ratio, % 56 60 0 AuM, EURbn 113 107 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03
Slide 47: Life Insurance, product result
Life Insurance, product result EURm 60 z Stable result development 50 z Changed business model key 52 48 to reduced volatility 40 43 44 z Improved investment return – financial buffers stable on Q3 30 20 22 10 Key ratios Q4/03 Q3/03 Inv return, % 0.7 0.4 0 Financial 4.7 4.6 Q4/02 Q1/03 Q2/03 Q3/03 Q
Slide 48: Group Treasury operating profit
Group Treasury operating profit EURm 100 90 z High funding activity 91 80 z Gain on equities 70 60 62 50 58 40 30 35 20 27 10 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 48
Slide 49: Group Functions and Eliminations
Group Functions and Eliminations QoQ: Q4/03 Q3/03 z OM/HEX shares EUR 27m Q3 Income -69 17 z SWAP reservation to CIB Q3 Expenses -173 -102 z IBM JV start-up costs EUR 30m Q4 z Profit sharing EUR 46m Q4 Loan losses -14 -7 Equity method 6 5 z General: z Results from real estate holdings Operating prof
Slide 50: Outlook 2004
Outlook 2004 z Economic growth expected to increase in the Nordic region in 2004 z Increased short-term interest rates not expected until late 2004, at the earliest z Outlook for increased revenues is positive, although at a moderate level z Sharp attention on cost control will be maintained also go
Slide 51: Credit quality
Credit quality 51
Slide 52: Loan portfolio by customer group
Loan portfolio by customer group End of 2003 EUR 145.6bn Public sector 2% Personal customers 44% Companies 54% 52
Slide 53: Lending to personal customers
Lending to personal customers End of 2003 EUR 64.7bn Other loans z Continued strong growth in 24% mortgage lending z Other loans comprise – consumer credits – investment credits – car financing – overdraft facilities – credit cards Housing loans 76% 53
Slide 54: Lending to companies by industry
Lending to companies by industry End of 2003 EUR 77.9 bn Shipping & Offshore Construction Agriculture & 5% 3% Fishing 6% Real estate 27% Transport, communication 6% Renting, consulting and other services 7% Other companies 8% Manufacturing Commerce and 16% services Finance 54 11% 11%
Slide 55: Loan portfolio
Loan portfolio EURbn Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Personal customers 64.7 63.5 60.2 58.6 57.9 Real estate 21.2 22.0 22.0 22.6 22.4 Construction 2.6 2.5 2.8 2.9 3.1 Transport, communication 4.4 4.6 3.8 3.5 3.5 Trade and services 8.7 9.1 9.1 8.9 8.3 Manufacturing 12.5 13.2 12.5 13.5 13.9 Finance 8.3
Slide 56: Lending by geographical area
Lending by geographical area End of 2003 EUR 145.6bn Non-OECD Latin America 0.8% 0.9% Other OECD 0.6% Asia Nordic countries 0.5% 91.7% The Baltic states Other USA and Poland 8.3% 1.1% 1.1% Other EU countries 3.3% Nordic countries, EUR 133.6bn z Denmark 38.2 z Finland 31.0 z Norway 22.0 z Sweden 42.4
Slide 57: Transfer risk exposure
Transfer risk exposure EURm. End of 2003 Asia 682 Latin America 262 -of which China 352 -of which Brazil 140 South Korea 114 Mexico 47 Indonesia 22 Chile 21 Panama 31 Argentina 2 Middle East 309 -of which Iran 104 Turkey 64 57
Slide 58: Nordea fisheries financing
Nordea fisheries financing End of 2003 Total exposure approx. EUR 2.1 bn Fish processing/ export z Total outstanding EUR 1.8bn 23% Fish z Mainly Norwegian exposure farming 41% z Fish farming the troubled area – represents approx. 0.6% of total loan book z Increased salmon prices but still not on sat
Slide 59: Nordea shipping portfolio
Nordea shipping portfolio Distribution by type of vessel End of 2003 Total exposure approx. EUR 5.6bn Reefers Combined Other dry cargo 3% vessels z Outstanding, EUR 4.9bn 1% 5% Crude tankers – reduced following weak 14% Pure car carries USD 5% Feries Misc. loans z Well diversified portfolio by 6% 12
Slide 60: Nordea real estate financing portfolio
Nordea real estate financing portfolio End of 2003 Total exposure approx. EUR 21.2bn z Largest industry exposure Denmark 9.0% z Relatively large and financially Norway Sweden strong companies 48.5% 19.7% z High level of collateral coverage z Lending to residential real estate companies approx 50% Fi
Slide 61: Impaired loans
Impaired loans EURm. End of period Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Impaired loans, gross 2,649 2,916 2,851 2,892 3,260 Provisions -1,936 -2,072 -2,015 -2,087 -2,153 Of which: Specific provisions -1,468 -1,624 -1,571 -1,630 -1,698 Appraised by category -62 -64 -65 -64 -64 General provisions -406 -384 -
Slide 62: Impaired loans
Impaired loans EURm. End of 2003 Gross Provisons Net Personal customers 557 351 206 Real estate 211 143 68 Construction 73 63 10 Transport, communication 255 181 74 Trade and services 222 168 54 Manufacturing 242 206 36 Finance 37 21 16 Renting, Consulting and other services 261 229 32 Other compani
Slide 63: Loan losses
Loan losses EURm YoY: 300 236 246 z Loan loss ratio 0.25% in 2003 219 221 229 200 z Loan losses concentrated to Norwegian retail portfolio 98 92 89 100 76 84 z Large part relates to fish farming 0 z Pan Fish shares valued at zero -100 -143 -138 -132 QoQ: -154 -145 -200 z Loan loss ratio 0.23% in Q4
Slide 64: Comments on certain industries
Comments on certain industries Real estate z Vacancy rates increasing from very low levels in commercial real estate z Rent levels down from peak but still higher than original levels 3-5 years ago z Low interest rates help secure cash flow and secondary market values z New construction volumes adju
Slide 65: Comments on certain industries
Comments on certain industries Shipping and Offshore industry z Pick up in economy leading to increased rates z Bulk market particularly strong z Tanker market strong but volatile z Crusing market recovering from global uncertainties z Offshore industry suffering from uncertainty of oil prices z Nor
Slide 66: Economic capital
Economic capital 66
Slide 67: Economic capital (EC)
Economic capital (EC) z EC is the capital required by Nordea to cover unexpected losses z 6 different risk categories are incorporated z The measurement period is one year z The confidence level is 99.97% z The economic capital may change over time due to: – composition of risk exposures – changes i
Slide 68: Economic capital
Economic capital EURbn 12.0 z EC reduced by EUR 1.3bn 11.0 in 2003 10.0 10.2 9.0 9.5 9.1 z No major changes in Q4 9.0 8.9 8.0 7.0 z Ongoing sale of real estate 6.0 holdings 5.0 4.0 3.0 2.0 1.0 0.0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 68
Slide 69: Economic capital per business area
Economic capital per business area End of 2003 Other Treasury 9% EC per business area, Q4/03 5% EURbn Asset Mgmt & Life Retail Banking 4.7 12% CIB 1.8 Retail 54% Asset Mgmt 0.1 CIB Life 1.0 20% Treasury 0.5 Other 0.8 Total 8.9 69
Slide 70: Distribution of economic capital - by risk category
Distribution of economic capital - by risk category End of 2003 Real estate risk 4% Life risk Operational risk 1% 8% Business risk 10% Market risk Credit risk 17% 60% 70
Slide 71: Nordea
Nordea 71
Slide 72: Mission: 'Making it possible' Vision
Mission: ‘Making it possible’ By providing a broad set of easily accessible and competitive financial services and solutions, Nordea helps customers to reach their objectives. Vision We will be valued as the leading financial services group in the Nordic and Baltic markets with a substantial growth
Slide 73: Strategic themes
Strategic themes Sustainable growth of economic profit Ensure stable and Ensure operational Ensure capital profitable growth of excellence, strict cost efficiency and high income management and credit portfolio quality reduced complexity Attract, develop and retain highly motivated, competent and pe
Slide 74: Strategic themes firmly anchored throughout the Group
Strategic themes firmly anchored throughout the Group Retail Banking Corp. and Inst. Banking Asset Management & Life Group / Group functions • Increase sales to all existing • Increase share of wallet • Capture share of growth in customers • Further enhance position the long-term savings and Ensure
Slide 75: Financial targets
Financial targets Key performance indicator 2003 2002 Target Total shareholder return, peer group 3rd 15th In the top five of the peer group ranking Return on equity excluding goodwill, % 16.7 11.3 Sustainable RoE>15% from 2004 Costs, EURm 3,673 3,745 Same cost level as in 2003 Cost/income ratio, %
Slide 76: Peer group by market cap, EURbn
Peer group* by market cap, EURbn 6 February 2004 RBoS BARCLAYS BNP HBoS LLOYDS TSB SOCIETE GENERALE ABN AMRO NORDEA DANSKE BANK KBC ABBEY NATIONAL ALLIED IRISH BANKS BANK OF IRELAND HYPOVEREINSBANK SHB COMMERZBANK SEB SWEDBANK DnB NOR SAMPO 0 10 20 30 40 50 60 70 *As defined by Nordea 76
Slide 77: Strong distribution network throughout the Nordic and Baltic Sea region
Strong distribution network throughout the Nordic and Baltic Sea region Finland Branch offices 416 Personnel 9,118 Sweden Branch offices 260 Helsinki Personnel 7,659 Stockholm St Petersburg Norway Oslo Tallinn Branch offices 130 Copenhagen Riga Personnel 3,836 Vilnius Moscow Denmark Warzaw Branch of
Slide 78: Large customer base with high penetration in e-banking
Large customer base with high penetration in e-banking Baltic Sea Total DK FI NO SE Region Banking customers (1,000) Personal customers 1,620 2,960 630 4,100 280 9,590 Corporate customers 80 320 65 440 30 935 Life insurance customers (1,000) 615 312 220 463 55 1,665 E-banking customers (1,000) 523 1
Slide 79: Business areas
Business areas 79
Slide 80: Result by business area
Result by business area EURm 500 400 428 395 300 200 100 92 100 48 60 43 44 35 62 0 -111 -100 -200 -268 -300 Retail CIB Asset Mgmt* Life* Group Group Treasury Functions *Product result for Asset Management and Life and Eliminations Q3/03 Q4/03 Figures are disclosed and consolidated using end of peri
Slide 81: Retail Banking
Retail Banking 81
Slide 82: Retail Banking operating profit
Retail Banking operating profit EURm 500 z Strong sales 450 z Increase in payment transactions 400 428 395 z Loan losses in Retail Banking 350 376 354 345 Norway 300 z Improved RoE 250 200 150 100 50 Key ratios Q4/03 Q3/03 0 C/I ratio, % 55 56 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 RoE, % 26 24 82
Slide 83: Retail Banking operating profit by markets
Retail Banking operating profit by markets Retail DK FI NO SE P&B EURm Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Net interest income 758 751 208 203 198 191 117 124 225 222 11 11 Non-interest income 356 340 87 91 99 78 35 46 124 116 8 6 Total income 1,114 1,091 295 294 297 269 152 170 349 338 19 17 Total
Slide 84: Retail Banking lending
Retail Banking lending EURbn 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Q3/03 Q4/03 End of period 84
Slide 85: Retail Banking deposits
Retail Banking deposits EURbn 25 20 15 10 5 0 Denmark Finland Norway Sweden Q3/03 Q4/03 End of period 85
Slide 86: Retail Banking deposits
Retail Banking deposits EURbn. End of 2003 25 9.3 20 4.2 6.8 15 2.6 6.6 6.4 10 1.2 10.2 3.4 6.9 5 6.1 5.4 0 Denmark Finland Norway Sweden Corporate Personal customer - saving accounts 86 Personal customer - current accounts
Slide 87: Retail Banking, volumes and margins
Retail Banking, volumes and margins Volumes Margins EURbn Q4/03 Q3/03 Q4/03 Q3/03 Lending to corporates 56.0 57.3 1.2% 1.2% Lending to personal customers 63.0 61.5 1.6% 1.7% Total lending 119.0 118.8 1.4% 1.5% Deposits from corporates 29.0 28.2 1.0% 1.0% Deposits from personal customers 41.0 41.1 1.
Slide 88: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Quarterly averages 2.5 z Stable lending margins 2.3 2.1 z Stable deposit margins 1.9 – supported by ”hedges” 1.7 1.5 1.3 1.1 0.9 0.7 0.5 02 02 02 02 03 03 03 03 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Lending to corporates Lending to personal customers D
Slide 89: E-banking & transactions
E-banking & transactions 89
Slide 90: E-banking customers
90 Ja n 1 1.5 2 2.5 3 3.5 4 -0 Ju 0 Mill. ne -0 No 0 v- 0 Ap 0 r il - Se 01 pt -0 Fe 1 b- 0 Ju 2 ly - 0 De 2 E-banking customers c- 0 M 2 ay -0 O 3 E-banking customers ct -0 3 Ja n- 0 50 100 150 200 250 300 350 400 Ju 00 (1,000) ne -0 No 0 v- Ap 00 ril - Se 01 pt -0 Fe 1 b- 0 Ju 2 ly- 0 De 2 c- 0 Eq
Slide 91: Payments and log-ons
Payments and log-ons E-banking payments E-banking log-ons Mill. Mill. 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 00 00 01 01 02 02 03 03 00 00 01 01 02 02 03 03 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Denmark Finland Norway Sweden Denmark Finland Norway
Slide 92: Penetration on the net
92 Ja n 0 5 10 15 20 25 30 % -0 1 M ay -0 1 Se pt -0 1 Ja n- 02 M ay -0 2 Se p- 02 Ja n- 03 M ay -0 3 Se Mutual funds penetration rate p- 03 Penetration on the net Ja 0 10 20 30 40 50 60 70 80 n- 0 % M 0 ay - Se 00 pt -0 Ja 0 n- 0 M 1 ay - Se 01 pt -0 Ja 1 n- 0 M 2 ay -0 Executed trades 02 2 -S e Ja
Slide 93: Cards
93 Ja 0 5 10 15 20 25 30 35 40 45 50 n- 01 Mill. M ay -0 Se 1 pt Cards -0 1 Ja n- 02 M ay -0 2 Se pt -0 2 Ja Card payments n- 03 M ay -0 3 Se p- 03 Ja n 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 -0 Mill. 1 M ay -0 1 Se pt -0 1 Ja n- 02 M ay -0 2 Se pt -0 2 M ar -0 3 Ju Issued debit and credit card
Slide 94: Payment transactions, households
Payment transactions, households Payments transactions, households Breakdown of transactions Mill. Mill. 300 500 275 400 250 300 225 200 200 175 100 150 0 99 00 01 02 03 Q 1 Q 1 Q 1 Q 1 Q 2 Q 2 Q 2 Q 2 Q 3 Q 3 Q 3 03 0 0 0 0 0 0 0 0 0 0 0 19 20 20 20 20 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Card pay
Slide 95: Corporate and Institutional Banking (CIB)
Corporate and Institutional Banking (CIB) 95
Slide 96: CIB operating profit
CIB operating profit EURm 150 z Income picked up in Q4 141 120 131 z Maintained high activity in Markets 107 90 100 z Continued low loan losses 92 60 30 Key ratios Q4/03 Q3/03 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 C/I ratio, % 54 56 RoE, % 15 13 96
Slide 97: Stock market development
Stock market development Market Volume Market index Q4 2003, Chg Q4 vs Q3, % Q4 2003, % EURbn Denmark 17.1 -2.8 2.6 Finland 37.6 -3.1 8.3 Norway 19.6 0.5 19.9 Sweden 77.0 2.4 12.7 Source: Nordea Securities 97
Slide 98: CIB operating profit by main area
CIB operating profit by main area International Corporate Financial and Investment Banking Instititutions Other Markets CIB Shipping Banking Division Division Division EURm Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Total income 238 212 95 119 58 46 45 44 14 14 26 -11 125 105 Total expenses -129 -119
Slide 99: CIB lending volume
CIB lending volume EURbn 25 20 15 10 5 0 Corporate Banking Financial International and Total Division Institutions Division Shipping Division Q3/03 Q4/03 End of period 99
Slide 100: Asset Management & Life
Asset Management & Life oe te 4 a slit 100
Slide 101: Asset Management product result
Asset Management product result EURm 60 60 z Strong sales and result 50 z Net inflow of EUR 5.8bn Q4 48 – net inflow in 2003 EUR 12.5bn 40 41 z AuM up 6% to EUR 113bn Q4 38 30 – up 18% from end 2002 31 20 10 Key ratios Q4/03 Q3/03 C/I ratio, % 56 60 0 AuM, EURbn 113 107 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03
Slide 102: Assets under management
Assets under management EURbn 113.3 120 100 Life & pensions 80 Institutional clients 60 European private banking & fund distribution 40 Nordic private banking 20 Nordic retail funds 0 Q1/03 Q2/03 Q3/03 Q4/03 102
Slide 103: Asset structure – Investment Management
Asset structure – Investment Management* Q4/03 Q3/03 EUR 73.7bn EUR 70.4bn Int'l. fixed Int'l. fixed income income 13% 11% Nordic Nordic equities equities 14% 13% Nordic Nordic fixed fixed income income 54% 53% Int'l. Int'l. equities equities 20% 22% 103 *Including mgmt of own investment funds
Slide 104: Asset structure – Investment Funds
Asset structure – Investment Funds Q4/03 Q3/03 EUR 41.2bn EUR 38.4bn Balanced Balanced funds funds 10% 11% Fixed Fixed income income funds funds 46% 48% Equity Equity funds funds 44% 41% 104
Slide 105: Investment Funds, volumes and margins
Investment Funds, volumes and margins EURbn % Margins 18 1.4 16 1.2 14 1.0 12 10 0.8 8 0.6 6 0.4 4 2 0.2 0 0.0 DK FI NO SE DK* FI NO SE Q3/03 Q4/03 Q3/03 Q4/03 End of period * Net margin 105
Slide 106: European Fund distribution
European Fund distribution EURm 5000 z Net sales amounted to EUR 1bn in Q4 4500 z More than 1000 active distribution 4000 agreements 3500 3000 z Assets by country of source: 2500 – 24% from Switzerland 2000 – 24% from Germany 1500 – 20% from Spain 1000 – 9% from Austria 500 – 8% from Luxembourg 0 –
Slide 107: Life Insurance, product result
Life Insurance, product result EURm 60 z Stable result development 50 z Changed business model key 52 48 to reduced volatility 40 43 44 z Improved investment return – financial buffers stable on Q3 30 20 22 10 Key ratios Q4/03 Q3/03 Inv return, % 0.7 0.4 0 Financial 4.7 4.6 Q4/02 Q1/03 Q2/03 Q3/03 Q
Slide 108: Life - breakdown of product result
Life - breakdown of product result EURm Q4/03 Q3/03 Normalised operating margin 62 50 Fluctuations compared to normalised investment return -114 -151 Change in discount rate for life provisions 111 126 Allocation to policy-holders -6 -13 Allocation to/from financial buffers -10 28 Net profit from ot
Slide 109: Life
Life EURm Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 TRADITIONAL LIFE Premiums written net 533 370 461 499 595 Normalised investment. return 244 236 247 250 284 Benefits paid and change in provision -687 -532 -626 -636 -770 Insurance operating expenses -28 -24 -28 -27 -30 Normalised operating margin 62 50 54 86
Slide 110: Life
Life EURm Denmark Finland Norway Sweden Other Total TRADITIONAL LIFE Premiums written net 230 156 113 32 2 533 Normalised investment return 108 62 51 16 6 244 Benefits paid and change in provision -322 -192 -135 -36 -2 -687 Insurance operating expenses -11 0 -11 -2 -4 -28 Normalised operating margin
Slide 111: Life - investments
Life - investments EURbn 23.9 25 z Equities 20 – predominantly listed equities – 50/50 Nordic/international 15 z Bonds 10 – ¾ Nordic issuers – primarily govmn’t & mortgage inst. 5 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Equities Bonds Real estate Unit linked 111 End of period
Slide 112: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q4/03 Q3/03 Q4/03 Q3/03 Denmark 11.2 11.0 16* 17* Finland 6.3 6.1 17 17 Norway 3.2 3.1 10 10 Sweden 2.7 2.7 3 4 Total 23.4 22.9 14 15 Total equity exposure including hedge, % 10 *Hedged 112
Slide 113: Life - solvency situation
Life - solvency situation End of 2003 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 435 493 58 113 Finland 219 522 303 238 Norway 121 195 74 161 Sweden 66 112 45 168 113
Slide 114: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q4/03 Q3/03 Q4/03 Q3/03 Denmark 623 595 6.5 6.2 Finland 145 153 3.1 3.4 Norway 62 39 2.3 1.5 Sweden 48 54 3.0 3.4 Total 878 842 4.7 4.6 * Financial buffers are defined in accordance with local regulations and practices. 114
Slide 115: Life – solvency sensitivity, end of 2003
Life – solvency sensitivity, end of 2003 Denmark Finland Norway Sweden % Solvency in % of requirement 114 238 161 168 Equities drop 12% 113 208 156 156 Interest rates down 50bp 110 254 180 209 Interest rates up 50bp 117 211 165 137 115
Slide 116: Life – buffer sensitivity, end of 2003
Life – buffer sensitivity, end of 2003 Denmark Finland Norway Sweden EURm Financial buffers* 623 145 62 48 Equities drop 12% -116 -54 -19 -10 Interest rates down 50bp -43 48 8 26 Interest rates up 50bp -23 -48 -8 -22 * Financial buffers are defined in accordance with local regulations and practices.
Slide 117: Group Treasury
Group Treasury A £ 4 q a 4 117
Slide 118: Group Treasury operating profit
Group Treasury operating profit EURm 100 z High funding activity 90 91 80 z Gain on equities 70 60 62 50 58 40 30 35 20 27 10 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 118
Slide 119: Group Treasury operating profit by main areas
Group Treasury operating profit by main areas Investment & Risk Trading Group Funding Total Fixed income Equity portfolios portfolios EURm Q4/03 Q3/03 Q4/03 Q3/03 Q4/03 Q3/03 Q4/03 Q3/03 Income 5 -3 32 33 37 17 Expenses -3 -3 -1 0 -8 -9 Profit excl. Investment earnings 29 8 29 8 Investment earnings
Slide 120: Group Treasury - investments
Group Treasury - investments EURbn 20 z Equities 14.8 – listed, unlisted & private equity 15 funds z Bonds 10 – ¾ Nordic issuers – primarily government and mortgage inst. 5 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Fixed income Equities End of period 120
Slide 121: Treasury – risk management
Treasury – risk management End of 2003 z Price risk – price risk in interest-rate positions, calculated as a parallel shift assuming a change in market interest rates of 100bp z Equity risk (VaR) – risk related to equities, calculated as VaR, comprise all equities including listed, unlisted and priv
Slide 122: Balance sheet
Balance sheet 122
Slide 123: Balance sheet - key items
Balance sheet - key items Change, EURm 2003 2002 12 months % Lending 145,644 145,740 0 Deposits 95,556 94,177 1 Shareholders’ equity 12,177 11,897 2 Total assets 262,190 249,619 5 Risk-weighted assets 134,396 134,660 0 End of period 123
Slide 124: Balance sheet structure - assets
Balance sheet structure - assets EURbn 150 146 146 120 90 60 30 28 32 29 29 23 22 23 25 5 3 0 Lending Bonds and Loans and Assets, Other assets, Other other interest advances to insurance banking bearing credit inst. securities End of period 2002 2003 124
Slide 125: Real estate holdings
Real estate holdings Book value. EURbn 2003 2002 2001 2000 1999 Owner occupied properties 0.4 1.2 1.5 1.4 1.4 Non owner occupied properties 0.1 0.2 0.3 0.6 2.1 Shares in real estate holding 0.2 0.4 0.3 0.4 0.4 companies Investments of the insurance 2.1 1.9 2.0 1.6 1.6 companies Total 2.8 3.7 4.1 4.0
Slide 126: Balance sheet structure – liabilities and equity
Balance sheet structure – liabilities and equity EURbn 120 100 94 96 80 60 62 64 40 34 20 26 29 29 20 22 12 12 6 5 0 Deposits and Debt Deposits by Provisions and Liabilities, Shareholder´s Other other securities in credit other liabilities, insurance equity borrowings issue institutions banking from
Slide 127: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 149 94 95 93 96 146 147 147 146 91 80 120 100 60 80 60 40 40 20 20 0 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 End of period 127
Slide 128: Capital base
Capital base EURm End of 2003 Shareholders’ equity 12,177 Deductions insurance companies and other -886 Shareholders’ equity in the capital base 11,291 Hybrid capital 280 Minority interests 8 Group goodwill -1,762 Other deductions -63 TIER 1 Capital 9,754 TIER 2 Capital (subordinated debt) 4,473 Ded
Slide 129: Market shares
Market shares * Statistics as of December 2003 129
Slide 130: Market shares, personal customer deposits
Market shares, personal customer deposits % 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Dec 02 Dec 03 130
Slide 131: Personal customer deposits - market volume & share
131 N 00 ov -A 0 100 200 300 400 0 100 200 300 400 500 F e - 00 00 ug b -N DKKbn NOKbn M -01 01 ov ay - Au - 01 01 Feb g -m N - 01 01 ay ov -A F e - 01 01 ug b -N M -02 02 ov ay -F Au -02 02 eb g -m N - 02 02 ay Norway Denmark ov -A F e - 02 02 ug b -N M -03 03 ov ay -F Au - 03 03 eb g -M N - 03 03
Slide 132: Market shares, corporate deposits
Market shares, corporate deposits % 45 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Dec 02 Dec 03 132
Slide 133: Corporate deposits - market volume & share
133 N N ov ov 0 100 200 300 0 50 100 150 200 250 300 F e - 00 F e - 00 b b DKKbn NOKbn M -01 M -01 ay ay A -01 A -01 ug ug N - 01 N - 01 ov ov F e - 01 F e - 01 b b M -02 M - 02 ay ay A -02 A -02 ug ug N - 02 N - 02 Norway Denmark ov ov F e - 02 F e - 02 b b M -03 M -03 ay ay Au -03 A -03 g ug N - 0
Slide 134: Market shares, personal customer lending
Market shares, personal customer lending % 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Dec 02 Dec 03 134
Slide 135: Personal customer lending - market volume & share
135 N A ov ug 0 200 400 600 800 0 50 100 150 200 250 300 F e - 00 N - 00 b DKKbn ov NOKbn M -01 Fe - 0 ay b 0 A -01 M -0 ug ay 1 N - 01 A -01 ov ug F e - 01 N - 01 ov b Fe - 0 M -02 b- 1 ay M 02 A -02 ay ug A -02 N - 02 ug Norway Denmark ov N - 02 F e - 02 ov b Fe - 0 M -03 b 2 ay M -03 ay A -03 A -
Slide 136: Personal customer lending - market volume & share
136 N A ov ug 0 200 400 600 800 0 50 100 150 200 250 300 F e - 00 N - 00 b ov NOKbn DKKbn M -01 Fe - 0 ay b 0 A -01 M -0 ug ay 1 N - 01 A -01 ov ug F e - 01 N - 01 ov b Fe - 0 M -02 b- 1 ay M 02 A -02 ay ug A -02 N - 02 ug Norway Denmark ov N - 02 F e - 02 ov b Fe - 0 M -03 b 2 ay M -03 ay A -03 A -
Slide 137: Market shares, corporate lending
Market shares, corporate lending % 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Dec 02 Dec 03 137
Slide 138: Corporate lending - market volume & share
138 N N ov ov 0 50 100 150 200 250 300 350 400 0 100 200 300 400 500 F e - 00 F e - 00 b b DKKbn NOKbn M -01 M -01 ay ay A -01 A -01 ug ug N - 02 N - 01 ov ov F e - 02 F e - 01 b b M -02 M -02 ay ay A -02 A -02 ug ug N - 02 N - 02 Norway Denmark ov ov F e - 02 F e - 02 b b M -03 M -03 ay ay A -03 A
Slide 139: Investment funds - market volume & share
Investment funds - market volume & share DKKbn Denmark EURbn Finland 350 32% 25 34% 300 30% 32% 250 20 28% 30% 200 15 28% 26% 150 26% 24% 10 100 24% 50 22% 5 22% 0 20% 0 20% S 2 S 3 D 0 Ju 3 S 0 Ju 1 D 2 M 2 D 3 3 0 Se 3 1 3 1 D 2 2 D 3 3 0 0 -0 -0 -0 -0 -0 -0 -0 -0 -0 0 -0 -0 n- n- -0 -0 -0 0 -0 n-
Slide 140: Investment funds, net inflow, Norway
Investment funds, net inflow, Norway Market volume, Nordea volume, and accumulated market share ytd NOKm % 3,000 60 50 2,000 40 30 1,000 20 10 0 0 -10 -1,000 -20 -30 -2,000 -40 -50 -3,000 -60 2 3 2 3 2 3 02 03 2 3 1 2 3 -0 -0 -0 -0 0 0 r-0 r-0 -0 -0 -0 b- g- b- g- n n ct ct ec ec ec Ap Ap Ju Ju Au A
Slide 141: Investment funds, net inflow, Finland
Investment funds, net inflow, Finland Market volume, Nordea volume, and accumulated market share ytd EURm % 1200 40 1000 32 800 24 600 16 400 8 200 0 0 -200 -8 -400 -16 Ju 2 D - 02 Ju 3 D - 03 A p 02 A u 02 A p 03 A u - 03 N 02 N 03 S e 02 S e 03 Fe 02 Ju ay Fe 03 Ju 03 M 02 02 -02 M 03 M 03 Ja 1 O
Slide 142: Investment funds, net inflow, Sweden
Investment funds, net inflow, Sweden Market volume, Nordea volume, and accumulated market share ytd SEKm 19bn % 18bn 14,000 28 12,000 24 10,000 20 8,000 16 6,000 12 4,000 8 2,000 4 0 0 -2,000 -4 1 2 2 2 2 2 3 3 3 3 3 -0 -0 -0 -0 -0 -0 - 02 -0 -0 -0 -0 -0 - 03 c b p r u n ug ct ec b p r n ug ct ec D
Slide 143: Market share, equity dealing - Nordea Securities
Market share, equity dealing - Nordea Securities % Equity market turnover EURbn 14 Q4/03 Q3/03 12 Denmark 17.1 17.6 10 Finland 37.6 38.8 8 Norway 19.6 19.5 Sweden 77.0 75.2 6 4 2 0 ki o m en sl sin ol ag O kh el h oc H en St op C Q3/03 Q4/03 143
Slide 144: Appendix
Appendix z Financials Page 146 z Nordea share Page 157 z Other Page 164 z Macro statistics Page 169 144
Slide 145: Appendix - Financials
Appendix z Financials 145
Slide 146: Pension obligations
Pension obligations z Defined benefit plans in Sweden, Norway, Finland and partly Denmark, mainly covered by pension funds under local regulation z Aggregated deficit of EUR 56m end 2003 not recognised in balance sheet – reflecting surpluses in Finland (EUR 58m), Sweden (EUR 5m) and Denmark (EUR 8m)
Slide 147: Pension obligations (national GAAP)
Pension obligations (national GAAP) Major pension plans End of period Sweden Norway Finland Denmark Total EURm Q4/03 Q3/03 Q4/03 Q3/03 Q4/03 Q3/03 Q4/03 Q3/03 Q4/03 Q3/03 Pension obligations 901 894 533 471 552 548 84 85 2,070 1,998 Assets 784 772 295 287 610 589 82 81 1,770 1,729 Funded status (117
Slide 148: Operational income statement
Operational income statement EURm Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Net interest income 850 838 843 835 885 Net commission income 388 379 366 353 388 Trading income 125 130 155 157 130 Other income 36 56 99 29 54 Total income 1,399 1,403 1,463 1,374 1,457 Personnel expenses -511 -531 -539 -520 -545 Prof
Slide 149: Statutory income statement
Statutory income statement EURm Q4/03 Q4/02 Interest income 1,906 2,601 Interest expenses -1,023 -1,643 Net interest income 883 958 Dividends received 1 3 Net commission income 405 403 Net result from financial operations 86 76 Other income 60 63 Total income 1,435 1,503 General administrative expen
Slide 150: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory accounts Operational Trading Investment Other Statutory EURm 2003 income activities Insurance adjustment 2003 Net interest income 3,366 177 1) 115 6) 3,658 Dividends received 13 4) 30 9) 43 Commission income 1,486 47 2) 1,533 Trading 567 -567 5) Net result
Slide 151: Reconciliation of operational and statutory acounts
Reconciliation of operational and statutory acounts 1. Net interest income from trading transactions in Nordea 11. Operating profit for insurance, in separate lines for general Markets (for example interest related to swaps etc.), and life in the operational accounts. reclassified as trading income
Slide 152: Expenses - breakdown
Expenses - breakdown EURm Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Personnel 1) 512 532 541 521 547 Profit sharing 46 - Information technology 2) 136 88 85 99 136 Marketing 27 14 23 18 34 Postage, telephone and office expenses 56 53 49 58 62 Rents, premises and real estate expenses 87 74 81 82 89 Other 112 123
Slide 153: Total IT-related expenses
Total IT-related expenses* EURm 250 200 216 208 184 174 150 166 100 50 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 *Refers to IT operations, service expenses and consultant fees including personnel etc, but excluding IT expenses in insurance operations 153
Slide 154: C/I ratio
C/I ratio C/I ratio, banking C/I ratio, banking % % 70 70 66 65 67 60 60 64 63 61 58 58 50 50 40 40 30 30 20 20 10 10 0 0 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 2001 2002 2003 154
Slide 155: Gains and losses on various disposals etc
Gains and losses on various disposals etc EURm Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 P&L BA Write-down real -115 Own line Other estate Retail Finland 10 OM/HEX shares 27 Other Other Inkassosentralen 8 Other Retail Huoneistokeskus 43 Other Retail Nordisk Renting 32 Other Other Europay 24 Inv e Re
Slide 156: Appendix - Nordea share
Appendix z Nordea share 156
Slide 157: Total shareholder return (TSR) 2003
C O 157 M M ER % 0 10 20 30 40 50 60 70 80 90 100 110 120 ZB AN K SE N H O B YP RD O D E VE nB A RE N I N OR *As defined by Nordea SW SBA ED N K B Source: Bloomberg 31/12-2003 BA AN R K SO C C LA IE YS TE G B EN NP ER AL E AB S H N B AM RO D AN SK KB E C BA N SA K M Nordea peer group* PO BA H BO N S
Slide 158: Shareholder structure, end of 2003
Shareholder structure, end of 2003 4.0% 2.0% 6.3% 30.2% 7.0% Swedish institutions International institutions 7.1% Swedish state Danish institutions Finnish institutions Finnish public Danish public 19.0% Swedish public 24.4% Number of shareholders approx. 503,000 158
Slide 159: Largest registered shareholders, end 2003
Largest registered shareholders, end 2003 Shareholder Number of shares % Swedish state 542.0 19.0 Nordea Danmark fonden 102.5 3.6 Alecta 92.4 3.2 Robur fonder 75.5 2.7 Nordea fonder 69.6 2.4 AMF Pension 61.0 2.1 Tryg i Danmark smba 52.2 1.8 Fjärde AP-fonden 50.1 1.8 SEB fonder 49.7 1.7 Skandia 39.5
Slide 160: Number of shares
Number of shares Type of Number of Outstanding Date transaction Subject shares issued shares Jan, 2000 New issue Merita 815,800,287 2,091,067,728 April, 2000 New issue Unidanmark 869,776,488 2,960,844,216 June, 2000 New issue Unidanmark 18,348,501 2,979,192,717 2000-2001 New issue Conversions* 3,473
Slide 161: Distribution of shares, end of 2003
Distribution of shares, end of 2003 No of shares Shareholders Shareholders,% No of shares Shares,% 1-1,000 418,780 83.21 133,440,956 4.69 1,001-10,000 79,446 15.79 192,815,613 6.77 10,001-100,000 4,203 0.84 105,303,233 3.70 100,001-1,000,000 627 0.12 208,109,580 7.31 1,000,001- 234 0.05 2,206,830,34
Slide 162: Data per share
Data per share 2003 2002 2001 2000 19991) 1998 EUR EUR EUR SEK SEK SEK Dividend 0.252) 0.23 0.23 2.00 1.75 1.64 Shareholders’ equity per share, EUR 4.28 4.06 4.00 3.74 3.43 2.68 Earnings per share, EUR 0.51 0.30 0.53 0.58 0.55 0.53 Share price, end of period, 54.0 38.4 55.5 71.5 50.0 52.0 SEK P/E ra
Slide 163: Appendix - Other
Appendix z Other 163
Slide 164: Ratings
Ratings Moody’s S&P Fitch BFSR Short Long Short Long Short Long Individ. Nordea Bank D B P-1 Aa3 A-1 A+ F1+ AA- B Nordea Bank F B P-1 Aa3 A-1 A+ F1+ AA- B Nordea Bank N B- P-1 Aa3 A-1 A+ F1+ AA- B Nordea Bank S B P-1 Aa3 A-1 A+ F1+ AA- B Nordea Hypotek P-1 Aa3 A-1 Nordea Kredit Aaa Norgeskreditt P-1
Slide 165: Business structure
Business structure Board of Directors Internal Audit Activity CEO Lars G Nordström Group Management Secretariat Corporate and Asset Management Group Processing Group Corporate Retail Banking Group Staffs Institutional Banking & Life and Technology Centre Kari Jordan Peter Schütze Tom Ruud Christian
Slide 166: Legal structure, 30 January 2004
Legal structure, 30 January 2004 Nordea Bank AB (Publ) Sweden Nordea Bank Nordea Bank Nordea Bank Nordea Bank Nordea Asset Nordea Nordea Life Danmark A/S Sweden AB Finland Plc Norge ASA Management Securities AB Holding A/S Denmark (publ) Sweden Finland Norway AB Sweden Sweden Denmark Various Nordea
Slide 167: Group Executive Management
Group Executive Management Lars G Nordström President and Group CEO Christian Clausen Head of Asset Management & Life Carl-Johan Granvik Head of Group Credit and Risk Control, Group CRO Kari Jordan Head of Retail Banking Arne Liljedahl Head of Group Corporate Centre, Group CFO Markku Pohjola Head of
Slide 168: Appendix - Macro statistics and estimates
Appendix z Macro statistics and estimates Source: Nordea Markets Economic Research Estimates from January 2004 168
Slide 169: Macro data
Macro data % 2003e 2004e 2005e Gross domestic product DK 0.2 2.3 2.4 FI 1.7 3.2 3.5 NO 0.7 3.4 2.9 SE 1.5 2.5 2.9 Inflation DK 2.1 1.5 2.0 FI 1.3 0.6 1.8 NO 2.5 1.0 2.1 SE 2.1 0.9 2.0 Private consumption DK 1.3 2.8 2.0 FI 3.8 3.3 2.6 NO 3.0 4.7 3.5 SE 2.0 2.3 2.5 Unemployment DK 6.1 6.2 5.6 FI 9.0 9
Slide 170: Market development - GDP
Market development - GDP % 2002 2003e 2004e 2005e Denmark 2.1 0.2 2.3 2.4 Finland 2.2 1.7 3.2 3.5 Norway 1.3 0.7 3.4 2.9 Sweden 1.9 1.5 2.5 2.9 Source: Nordea Economic Research, January 2004 In Norway, forecasts are for mainland GDP 170
Slide 171: Gross domestic product
Gross domestic product Change in % YoY 10 8 6 4 2 0 -2 -4 -6 -8 -10 Q1/90 Q1/95 Q1/00 Denmark Finland Norway Sweden 171
Slide 172: Inflation
Inflation % 14 12 10 8 6 4 2 0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Denmark Finland Norway Sweden 172
Slide 173: Private consumption
Private consumption Change in % YoY 10 8 6 4 2 0 -2 -4 -6 -8 Q1/90 Q1/95 Q1/00 Denmark Finland Norway Sweden 173
Slide 174: Household saving rates
Household saving rates % 12 10 8 6 4 2 0 -2 -4 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Denmark Finland Norway Sweden 174
Slide 175: Unemployment
Unemployment % of labour force 20 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Denmark Finland Norway Sweden 175
Slide 176: Credit growth total lending to non-bank sector
176 96 M -10 -5 0 5 10 15 ar ch 96 Se 97 pt M ar ch 97 Se Change in % YoY 98 pt M ar ch 98 Se 99 pt Denmark M ar ch 99 Se 00 pt M ar Finland ch 00 Se 01 pt M ar ch Norway 01 -S ep 02 -M a 02 r -S ep Sweden M ar -0 03 3 -S ep Credit growth total lending to non-bank sector
Slide 177: Bankruptcies
Bankruptcies Number of bankruptcies per month 1800 1600 1400 1200 1000 800 600 400 200 0 94 95 96 97 98 99 00 01 02 03 n- n- n- n- n- n- n- n- n- n- Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Denmark Finland Norway Sweden 177
Slide 178: Exchange rate, EUR/USD
178 2/ 1 /9 0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2 USD 2/ 8 5 /9 2/ 8 9 /9 2/ 8 1 /9 2/ 9 5 /9 2/ 9 9 /9 2/ 9 1 /0 2/ 0 5 /0 2/ 0 9 /0 2/ 0 1 /0 2/ 1 5 Exchange rate, EUR/USD /0 2/ 1 9 /0 2/ 1 1 /0 2/ 2 5 /0 2/ 2 9 /0 2/ 2 1 /0 2/ 3 5 /0 2/ 3 9 /0 2/ 3 1 /0 4
Slide 179: Exchange rate, EUR/SEK
179 1/ 1 /9 8 8.4 8.8 9.2 9.6 10 SEK 1/ 8 5 /9 1/ 8 9 /9 1/ 8 1 /9 1/ 9 5 /9 1/ 9 9 /9 1/ 9 1 /0 1/ 0 5 /0 1/ 0 9 /0 1/ 0 1 /0 1/ 1 5 /0 Exchange rate, EUR/SEK 1/ 1 9 /0 1/ 1 1 /0 1/ 2 5 /0 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 1/ 3 1 /0 4
Slide 180: Exchange rate, EUR/NOK
180 1/ 1 /9 7 7.5 8 8.5 9 9.5 10 NOK 1/ 8 5 /9 1/ 8 9 /9 1/ 8 1 /9 1/ 9 5 /9 1/ 9 9 /9 1/ 9 1 /0 1/ 0 5 /0 1/ 0 9 /0 1/ 0 1 /0 1/ 1 5 /0 Exchange rate, EUR/NOK 1/ 1 9 /0 1/ 1 1 /0 1/ 2 5 /0 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 1/ 3 1 /0 4
Slide 181: Oilprice development, Brent, USD/Barrel
181 1/ 1 /9 0 5 10 15 20 25 30 35 40 45 50 0 Dollar 1/ 1 /9 1 1/ 1 /9 2 1/ 1 /9 3 1/ 1 /9 4 1/ 1 /9 5 1/ 1 /9 6 1/ 1 /9 7 1/ 1 /9 8 1/ 1 /9 9 1/ 1 /0 0 1/ 1 /0 1 1/ 1 /0 2 1/ Oilprice development, Brent, USD/Barrel 1 /0 3 1/ 1 /0 4
Slide 182: Stock exchange indices
Stock exchange indices Index 100 = 1997 800 700 600 500 400 300 200 100 0 7 7 8 8 9 9 0 0 1 1 2 2 3 3 4 /9 /9 /9 /9 /9 /9 /0 /0 /0 /0 /0 /0 /0 /0 /0 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ HEX Index Affärsvärldens General Index 182 Oslo Total Index KFX Index
Slide 183: Money market, 3 month rates
183 1/ 1 /9 2 3 4 5 6 7 8 9 8 % 1/ 4 /9 1/ 8 7 /9 1/ 8 10 /9 1/ 8 1 /9 1/ 9 4 /9 1/ 9 7 Denmark /9 1/ 9 10 /9 1/ 9 1 /0 1/ 0 4 /0 0 Finland 1/ 7 /0 1/ 0 10 /0 1/ 0 1 /0 1/ 1 4 Norway /0 1/ 1 7 /0 1/ 1 10 /0 1/ 1 1 Money market, 3 month rates /0 2 Sweden 1/ 4 /0 1/ 2 7 /0 1/ 2 10 /0 1/ 2 1 /0 1/ 3 4
Slide 184: Government bond, 10 year
184 1/ 1 /9 % 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 1/ 8 5 /9 1/ 8 9 /9 1/ 8 1 /9 1/ 9 5 /9 Denmark 1/ 9 9 /9 1/ 9 1 /0 1/ 0 5 /0 Finland 1/ 0 9 /0 1/ 0 1 /0 1/ 1 5 /0 Norway 1/ 1 9 Government bond, 10 year /0 1/ 1 1 /0 1/ 2 5 /0 Sweden 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 1/ 3 1 /0 4
Slide 185: Financial calendar 2004
Financial calendar 2004 z AGM will be held on 31 March 2004 z Q1 report 2004 will be published on 28 April 2004 z Q2 report 2004 will be published on 18 August 2004 z Q3 report 2004 will be published on 27 October 2004 z The Nordea Annual Report will be available on www.nordea.com around March 1 www