Slide 1: Investor Presentation 25 October 2007
Investor Presentation 25 October 2007
Slide 2: CEO Presentation
CEO Presentation
Slide 3: Strong results
Strong results Income EUR 5,744m, up 9% (EUR 5,268m in the first nine months 2006*) Strong volume growth in all key areas Expenses EUR 2,993m, up 7% (EUR 2,806m) Gap between income and cost growth of 2.4%-points* Very limited impact from market turmoil Profit before loan losses EUR 2,751
Slide 4: Operating income up 9%
Operating income up 9% YoY EURm Strong growth in Net interest income – up 10% 6 000 5 744 Double digit lending growth compensating for margin 5 500 5 268 pressure 5 000 Increased deposit volumes and improved margins 4 500 Increased contribution from New European Markets 4 000 Net commissio
Slide 5: Limited impact on Nordea from international market turmoil
Limited impact on Nordea from international market turmoil Insignificant consequences on Nordea’s funding operations Well diversified funding base Prudent liquidity management Good reception of the Nordea name in the market Limited group P/L effects from market turbulence Limited exposur
Slide 6: Cost increase in line with expectations
Cost increase in line with expectations Cost increase YoY (Jan-Sep) 7% 6,7% Moderate cost growth reflecting 6% 5,8% 5% 4,9% implemented growth strategy and related 4% investments 3% 2% Number of employees in New European 1% 0% Markets up 1,450 to 3,180 Reported Excl. banking Excl. banking operat
Slide 7: Profit before loan losses up 12% Jan – Sep 2007
Profit before loan losses up 12% Jan – Sep 2007 EURm 3 000 2 751 Strong top line growth drives the profit 2 462 increase 2 500 Strong contribution from all Customer 2 000 Areas - consistent delivery of Nordea’s 1 500 organic growth strategy 1 000 500 0 Jan - Sep 06 * Jan - Sep 07 * Excl. capital
Slide 8: Gap between income and cost growth on track
Gap between income and cost growth on track %-points 4 Gap of 2.4%-points for the first 9 months 3,4 Income 9.0% 3,2 Costs 6.6% 3 Gap of 3.1%-points excl. Russia 2,4 Continued quarterly improvement – in 2 line with full year expectations Unchanged outlook for full year, gap in 1 the area
Slide 9: Strong and well diversified credit portfolio
Strong and well diversified credit portfolio Net loan losses, EURm Continued flow of recoveries and limited new 0 -10 provisions in the first nine months -13 -13 -20 -30 Credit quality remains stable cross sectors – improved -28 -40 corporate ratings -50 -60 -55 14 quarters with net recoveries
Slide 10: On the route to Great Nordea
On the route to Great Nordea Profit orientation Ambitious vision & targets Clear growth strategy Strong customer oriented values & culture 10
Slide 11: Ambitious financial targets
Ambitious financial targets Long-term financial targets Target In the top quartile of Total Shareholder Return (%) European peer group Risk-adjusted profit (EURm) Double in 7 years Return on Equity (%) In line with top Nordic peers Capital structure policy Policy Dividend payout-ratio > 40% of net p
Slide 12: Total shareholder return (TSR) Ytd 2007
12 B an k % A o lli -25 -15 -5 5 15 25 35 45 55 e d f Ir Iri lan sh d B an k H bo B ar s cl ay s R B O D S an Sw s k ed e Er ba st nk e So U Ban ci nic k et e re (2/1 2007 – 28/9 2007) G dito en er al e B D N nB P Sa NO nt R an de r SE B Ll oy ds C om SH m Total shareholder return (TSR) Ytd 2007 er
Slide 13: Risk-adjusted profit well above long term target
Risk-adjusted profit well above long term target EURm 2000 Up 17% Jan - Sep 07 1 798 Strong revenue generation and 1 539 1500 positive gap Doubling of risk adjusted profit in 7 years implies 10% annual growth rate 1000 500 0 Jan - Sep 06 Jan - Sep 07 Risk adjusted profit 13
Slide 14: Return on Equity (RoE) – in line with target
Return on Equity (RoE) – in line with target % 25 Nordea’s RoE above Nordic average 22,6 19,6 19,5 19,5 Combined focus on 20 18,8 Organic growth Operational efficiency 15 Capital management 19.5% Jan - Sep 2007 10 5 0 FY 2006 Jan - Jun 07 Jan - Sep 07 Nordea Average Nordic Peers (Danske,
Slide 15: Profitable organic growth
Profitable organic growth Exploit growth potential in Supplement Nordic growth Increase business with global and European strategy with investments in existing customers monoline businesses based New European Markets on strong competencies Increase business with Creating value through Successf
Slide 16: Growth strategy continues to pay off
Growth strategy continues to pay off Each area has clearly identified initiatives Private Banking Segments in focus Gold customers Small & Medium Corporates Long term savings Consumer credits and Cards Product areas in focus Life insurance Capital markets products Geographical markets
Slide 17: Increased number of customers in premium segments drives income growth
Increased number of customers in premium segments drives income growth Gold segment YoY (Jan - Sep) 12.8% Continued growth in business 7.6% 4.9% 175 with Gold customers 72 155 13% increase in business volume 2.4 69 2.2 Increased number of Gold customers 15.2% Up 8% in Q3, annualised No. of c
Slide 18: Nordic Private Banking – strong position and potential
Nordic Private Banking – strong position and potential Private Banking segment YoY (Jan-Sep) 18.0% Increased number of Private 1,4% 16,3% 46 Banking customers 542 39 Up 16% Q3/Q3 85 535 73 Strong volume growth driven by strong customer inflow 15.2% Up 18% YoY Business volumes No. of customer
Slide 19: Continued revenue growth in all Nordic Banking corporate segments
Continued revenue growth in all Nordic Banking corporate segments Income growth (YoY) Double digit income growth 10% Strong growth in corporate lending volumes 9% – clearly compensating for margin pressure experienced in the period 6% Increased contribution from transactions within corporate a
Slide 20: Improved market position within consumer lending and cards
Improved market position within consumer lending and cards YoY Retail consumer lending Lending Margin Consumer lending up 15% EURbn % Non-collateralised up 17% 18 4,6 17 17,5 1.9 million credit cards outstanding 16,9 16 16,4 4,0 Of which 1.1 with revolving credit 15,6 350,000 issued during
Slide 21: Growth plan in Sweden well on track
Growth plan in Sweden well on track Gold customers Regional banks in Sweden (‘000) Number of Gold customers up 6% in Q3, 800 annualised – accelerating growth rate since 746 757 706 714 719 725 735 launch of Growth plan Growth Plan Sweden focuses on advisory 600 services and product segments with
Slide 22: Strong growth in New European Markets
Strong growth in New European Markets YoY Total income New European Markets* EURm Total lending up 76%, excl. Orgresbank 80 Mortgage lending up 86% 70 Number of gold customers doubled 68 60 63 Selective growth ambitions in Poland and 50 Baltics Approx. 40 new branches to be opened in Polan
Slide 23: Focused resource management a prerequisite for growth
Focused resource management a prerequisite for growth 70 C/I ratio (%) Cost culture firmly established 60 64 63 60 50 56 53 52 Future branch project and Nordea 40 Transformation Program to free up time 30 for sales 20 10 Strategic investments to support growth 0 2002 2003 2004 2005 2006 Jan-Se
Slide 24: Unchanged outlook for 2007
Unchanged outlook for 2007 Capital markets have gradually normalised, even though further market disturbances cannot be ruled out Despite remaining market uncertainty Nordea confirms its financial outlook for the full year 2007 The cost increase for the full year is expected to be approx. 6%
Slide 25: CFO Presentation
CFO Presentation
Slide 26: Income statement summary
Income statement summary EURm Jan-Sept 07 Jan-Sept 06* Chg % Net interest income 3,139 2,863 10 Net fee and commission income 1,614 1,525 6 Net gains/losses on items at fair value 873 726 20 Equity method 29 61 -52 Other income* 89 93 -4 Total operating income 5,744 5,268 9 Staff costs -1,773 -1,645
Slide 27: Income statement summary
Income statement summary EURm Q3/07 Q2/07 Chg % Q3/06* Net interest income 1,092 1,043 5 979 Net fee and commission income 531 548 -3 497 Net gains/losses on items at fair value 264 318 -17 224 Equity method 10 9 11 16 Other income* 17 39 -56 18 Total operating income 1,914 1,957 -2 1,734 Staff cost
Slide 28: Net interest income
Net interest income YoY EURm 1 100 1 092 Up 10% 1 043 1 006 1 004 1 000 979 Double digit lending growth compensated for margin pressure 900 Lending to the public up 19% 800 Underlying margins stabilising 700 Deposit volumes up 13% 600 Continued improvement of margins 500 Contribution f
Slide 29: Robust volume growth continues in Customer Areas
Robust volume growth continues in Customer Areas % YoY Q3oQ2 Lending, total* 19 4 – Mortgage lending 12 3 – Nordic consumer lending 15 3 – of which non-collateralised lending 17 3 – Nordic Corporate lending 16 3 Deposits, total** 13 2 – Household deposits 10 3 – Nordic Corporate deposits 15 4 * Lend
Slide 30: Change in net interest income
Change in net interest income EURm YoY Q3oQ2 Volume driven 264 20 -Lending volumes 195 12 -Deposit volumes 69 8 Margin driven -69 -5 -Lending margins -161 -21 -Deposit margins 92 16 Day effect 0 12 Orgresbank 30 3 Other, net 51 19 Total 276 49 30
Slide 31: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on NII* Q3/07 Q2/07 Q1/07 Increasing market rates, 100bp 246 249 220 Decreasing market rates, 100bp -277 -279 -249 SIIR kept stable despite higher business volumes - changed balance sheet structure *Approx. end of period SIIR is define
Slide 32: Net commission income
Net commission income YoY Up 6% EURm 600 Lending-related commissions up 19% reflecting high business activity 549 548 500 535 531 Savings-related commissions up 10% 497 AM commissions up 5% following growth in AuM 400 Life commissions up 25% Brokerage up 16% 300 Card commissions up 17%
Slide 33: Net commission income – business trends
Net commission income – business trends EURm YoY 1200 Total commissions up 6% 1000 1054 The strong growth in savings 961 accounts drives a substitution effect 800 from savings commissions to net interest income 600 541 576 Strongest growth in lending 400 commissions – up 19% 311 Payment comm
Slide 34: Net gains/losses – focus on customer business
Net gains/losses – focus on customer business EURm YoY 300 288 273 274 Up 20% 250 Up 13% in Customer Areas 211 Increased penetration of Nordea’s corporate 200 186 customer base 150 Revaluation of OMX shares approx. EUR 90m (EUR 25m) 100 78 Q3oQ2 50 37 30 13 17 Down 17% 0 Seasonal slowdow
Slide 35: Increased revenues from net gains/losses in Customers Areas
Increased revenues from net gains/losses in Customers Areas Q3/Q3 Net gains/losses, Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Strong sales to customers EURm Nordic Banking 102 120 103 109 86 within Nordic Banking and Institutional & Inst. & Int. Banking 38 59 42 37 33 Revenues up 18% International Banking Q
Slide 36: Operating income
Operating income YoY EURm 1 957 Up 9% 2 000 1 898 1 914 1 873 10% growth Q3/07 over Q3/06 1 800 1 734 Net interest income up 10% 1 600 Strong volume growth and increased deposit 1 400 margins 1 200 Net commissions up 6% 1 000 Net gains/losses up 20% 800 Continued successful penetration
Slide 37: Revenue growth in Nordea
Revenue growth in Nordea EURm 5,744 +51 +132 +81 +75 476 +103 5,268 +34 Income Lending, Savings: Markets New Transaction Other Income Jan-Sep volumes AM, Life European accounts Jan-Sep 2006 and and Markets 2007 margins savings 37 accounts
Slide 38: Expenses
Expenses YoY EURm 1,016 Up 7% 992 1,008 993 1 000 928 Staff costs up 8% 19 24 25 25 900 23 Wage inflation and increased number of employees 800 391 383 391 372 Variable salaries 700 355 Investments in growth areas, eg Poland & Baltics 600 Orgresbank consolidated from Q2 2007 606 585 592
Slide 39: Expense growth in Nordea
Expense growth in Nordea 0.8% 6.7% EURm 2.0% +23 +xx 0.9% +55 1.0% +25 +187 2.0% +27 +57 2,993 2,806 Total Wage Higher variable Orgresbank Growth Other Total expenses increases salaries and areas expenses Jan-Sep profit sharing Jan-Sep 2006 2007 39
Slide 40: Growth in Staff Costs
Growth in Staff Costs 0.4% 7.8% EURm 0.9% +6 1.4% +15 1.6% +23 +128 3.5% +27 +57 No. of recruited FTEs: approx. 2,400* 1,773 1,645 No. of FTEs that has left: approx. 1.900* Staff costs Wage Higher variable Increased Orgresbank Training Staff costs Jan-Sep increases salaries and number of and other J
Slide 41: Number of FTEs
Number of FTEs 32 500 YoY Increased number of sales related 3 115 employees and falling number of 2 887 30 000 2 125 employees in processing and staff units 1 710 1 664 27 500 New European Markets up 1,450 FTE’s Excl. New European Markets, number of employees up approx. 1 % 25 000 27 973 27 80
Slide 42: Loan losses, net
Loan losses, net EURm 20 Jan-Sep 07 Positive at EUR 54m reflecting 0 continued recoveries and limited new -13 -13 provisions -20 -28 Strong credit quality in all markets -40 -55 -60 -82 -80 -100 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 42
Slide 43: Net profit
Net profit EURm YoY 900 876 Up 10% 816 Continued strong gap between revenues and 800 761 cost growth 701 Further loan loss recoveries – however lower 700 673 than last year Tax rate 19% 600 500 Q3oQ2 400 Down 7% 300 Revenues effected by seasonal slowdown and market turmoil 200 Slightly
Slide 44: Gap in line with target
Gap in line with target Income growth, incl. Orgresbank Gap 2.4%-points Ytd – in line with full % 12 9,9 10,4 year outlook 10 9,0 Gap 3.1%-points excluding Orgresbank 8 6,8 Jan-Sep 07: Orgresbank revenues EUR 37m, 6 expenses EUR 22m 4 Jan-Sep 06: IMB revenues under equity method 2 EUR 22m 0
Slide 45: Profitability maintained at high level
Profitability maintained at high level % 25 23,8 Jan-Sep 07 22,7 20,6 21,5 Risk-adjusted profitability maintained 20 18,0 19,5 at high level Lower return on equity mainly 15 explained by lower loan loss recoveries and higher equity in 2007 10 5 0 2005 2006 * Jan-Sep 07 RoE RaRoCar ** * Excl. gai
Slide 46: Strong increase in risk-adjusted EPS
Strong increase in risk-adjusted EPS 1 0,87 0,9 0,80 0,8 0,69 0,7 0,59 0,6 0,5 0,4 0,3 0,2 0,1 0 EPS, EUR* EPS, risk adjusted, EUR Jan-Sep 06 Jan-Sep 07 * 2006 excl. capital gain from sale of IMB shares 46
Slide 47: Limited increase in RWA – Basel II rules impacting
Limited increase in RWA – Basel II rules impacting EURbn 220 206 Basel II RWA excl. transition rules up 200 200 185 185 193 189 194 1% to EUR 177bn compared to Q2, 176 177 180 despite volume growth 160 Lower risk weights following improved collateral 140 sourcing 120 Basel II reduces RWA with
Slide 48: Improved capital position
Improved capital position % 7,9 8 7,7 7.2% Tier I-ratio according to Basel II 7,1 7,1 7,2 6,9 7 6,8 6,8 6,8 incl. transition rules Step one in Basel II implementation 6 Capital base EUR 18.5bn 5 Tier I excl. transition rules 7.9% 4 3 Tier I according to Basel I 6.8% 2 1 0 Q3/06 Q4/06 Q1/07
Slide 49: Business trends
Business trends
Slide 50: Total lending
Total lending EURbn 239 240 230 222 214 220 199 201 200 191 182 189 175 180 161 170 156 155 160 148 140 120 100 80 60 40 20 0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Corporate Housing loans Other loans Public sector 50
Slide 51: Household mortgages, volumes and margins
Household mortgages, volumes and margins EURbn % 90 1,6 85 1,5 80 81,1 1,4 75 79,0 74,9 76,3 1,3 70 71,8 69,4 1,2 65 66,9 60 63,0 65,2 1,1 60,1 1,0 55 56,6 57,8 54,7 0,9 50 52,9 49,6 45 0,8 40 0,7 35 0,6 30 0,5 25 0,4 20 0,3 15 10 0,2 5 0,1 0 0,0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06
Slide 52: Nordic consumer lending, volumes and margins
Nordic consumer lending, volumes and margins EURbn % 18 17,5 4,5 16 16,9 16,4 15,4 15,6 4,0 14 14,9 13,9 14,2 13,5 13,8 3,5 12,9 13,2 12 12,5 12,7 12,2 3,0 10 2,5 8 2,0 6 1,5 4 1,0 2 0,5 0 0,0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 52
Slide 53: Nordic Banking corporate lending, volumes and margins
Nordic Banking corporate lending, volumes and margins EURbn % 100 1,4 97,5 1,3 90 94,7 92,1 88,0 1,2 80 83,5 84,1 79,7 80,4 1,1 76,5 77,4 70 74,0 1,0 68,5 70,0 65,7 68,1 0,9 60 0,8 50 0,7 0,6 40 0,5 30 0,4 20 0,3 0,2 10 0,1 0 0,0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/0
Slide 54: Shipping and Oil Services lending, volumes and margins
Shipping and Oil Services lending, volumes and margins EURbn % 8 1,5 7,7 1,4 7,4 7,0 7,1 7,2 1,3 6,9 1,2 6 6,1 6,2 6,2 1,1 5,8 1,0 5,0 0,9 4,6 4,6 4,6 0,8 4,4 4 0,7 0,6 0,5 2 0,4 0,3 0,2 0,1 0 0,0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 54
Slide 55: New European Markets lending, volumes and margins
New European Markets lending, volumes and margins* EURbn % 8 1,6 7 1,4 7,1 6 6,2 1,2 5 5,2 1,0 4,6 4 0,8 4,0 3,7 3,4 3 3,3 0,6 2,8 2,4 2,5 2 0,4 1 0,2 0 0,0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 55 * Excl. Russia
Slide 56: Total deposits
Total deposits EURbn 140 133 135 130 126 126 119 119 120 116 113 105 106 108 110 105 98 97 100 92 90 80 70 60 50 40 30 20 10 0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Of which household deposits 56
Slide 57: Nordic Banking household deposits, volumes and margins
Nordic Banking household deposits, volumes and margins EURbn % 60 59,8 2,4 55 54,1 2,2 50 50,7 51,4 49,6 50,1 2,0 45 45,7 46,9 47,0 47,1 43,8 44,1 1,8 42,3 42,9 40 41,7 41,3 40,2 40,7 40,4 1,6 35 1,4 30 1,2 25 1,0 20 0,8 15 0,6 10 0,4 5 0,2 0 0,0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05
Slide 58: Nordic Banking corporate deposits, volumes and margins
Nordic Banking corporate deposits, volumes and margins EURbn % 50 1,6 45 46,8 44,7 45,0 1,4 44,1 40 41,4 40,6 40,0 39,8 39,1 38,5 38,1 1,2 37,9 37,2 37,2 37,9 35 30 1,0 25 0,8 20 0,6 15 0,4 10 0,2 5 0 0,0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 58
Slide 59: New European Markets deposits, volumes and margins
New European Markets deposits, volumes and margins* EURbn % 3,0 1,5 2,8 1,4 2,7 1,3 2,5 1,2 2,4 2,3 1,1 2,0 2,1 1,0 1,9 0,9 1,8 1,8 0,8 1,5 1,5 0,7 1,3 1,4 0,6 1,0 0,5 0,4 0,3 0,5 0,2 0,1 0,0 0,0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 59 * Excl. Russia
Slide 60: New segment reporting structure
New segment reporting structure As a consequence of the new operating model and Nordea’s changed organisation the financial reporting has been adjusted accordingly Financial result in two dimensions: 1. Customer dimension; two main Customer Areas; Nordic Banking and Institutional & International
Slide 61: Nordic Banking, profit before loan losses
Nordic Banking, profit before loan losses Q3/Q3 EURm 800 Up 17%, driven by top-line growth 750 700 760 761 Revenue growth 11% 650 686 688 All geographical markets contributing, in particular 600 651 Finland 550 500 Net interest income up 11% 450 Strong increase in business volumes 400 350
Slide 62: Nordic Banking
11% growth excl. Nordic Banking effect from Retail deposit hedge Denmark Finland Norway Sweden EURm Q3/07 Chg Q3/07 Chg Q3/07 Chg Q3/07 Chg Total income 428 9% 422 17% 202 13% 425 7% Total expenses -199 6% -180 7% -111 8% -222 2% Profit before loan losses 229 12% 242 26% 91 20% 203 13% Operating pro
Slide 63: Institutional & International Banking, profit before loan losses
Institutional & International Banking, profit before loan losses EURm Q3/Q3 140 Up 21% - excl. Russia 132 High customer activity in Financial Institution 120 Division 115 Increased profit contribution from New European 100 105 Markets 100 Negative FX effect (USD) in Shipping 91 80 Revenues
Slide 64: Institutional & International Banking
Institutional & International Banking Financial Institutions Shipping, Oil services New European & International Markets EURm Q3/07 Chg Q3/07 Chg Q3/07 Chg Total income 85 16% 59 7% 68 119% Total expenses -43 0% -12 20% -39 95% Profit before loan losses 42 40% 47 4% 29 163% Operating profit 42 40% 4
Slide 65: Asset Management product result
Asset Management product result Q3/Q3 EURm Up 6% 120 Commission income up 12% 110 113 Unchanged income- and result 100 103 margin 100 90 80 83 Q3oQ2 70 78 Lower trading activity due to market 60 turmoil 50 40 Substitution effect between fixed income funds and savings accounts 30 20 10 Key
Slide 66: Assets under management
Assets under management YoY EURbn 180 163 165 163 Up 9% 158 160 149 Nordic Private Banking assets 140 up 18% 120 Q3oQ2 100 Moderate decline following net 80 outflow and market turmoil 60 40 20 0 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Nordic Retail funds European Fund Distribution Nordic Private Banking
Slide 67: Net flows savings
Net flows savings Net flow AuM (EURbn) 2.6 4 1.8 2.0 Net outflow in Q3 of EUR 2.0bn 3 -1.3 Customers reducing their market exposure and moving 2 -2.0 assets from funds into savings accounts 1 -1 Net outflow of EUR 0.2bn in Nordic Private Banking -2 mainly due to one customer – will have effect
Slide 68: Life insurance, product result
Life insurance, product result YoY Up 8% EURm Improved investment return, 3.1% 90 Q3/Q2 80 70 74 Gross written premiums up 11% 67 Strong sales in Denmark and Poland 60 61 58 58 Sweden still effected by the regulatory 50 changes 40 Product result stable despite market 30 turmoil 20 Key ra
Slide 69: CRO Presentation
CRO Presentation
Slide 70: Focus in risk management
Focus in risk management Capital management – implementation of the Basel II program and efficient use of capital Tier 1 capital EUR 13.9bn Tier 1 ratio 7.2% Well diversified funding base Liquidity management – net balance of stable funding Prudent credit policies Well diversified cred
Slide 71: Stable funding base in Nordea
Stable funding base in Nordea Balance sheet EURbn Jan - Sep 2007 Strong and well diversified Treasury bills 7.4 Loans and receivables to institutions 33.6 funding base Loans and receivables to the public 238.7 Loans to deposits (excl. Interest bearing securities 23.4 - of which banks and credit
Slide 72: Liquidity management a key focus area
Liquidity management a key focus area Structural liquidity risk of Nordea is measured by the net balance of stable funding – difference between stable liabilities and stable assets Target to have a positive net balance of stable funding, ie stable assets must be funded by stable liabilities Stab
Slide 73: Well diversified lending portfolio
Well diversified lending portfolio Share of total lending, end of Q3 2007 Household 44% Well-diversified lending mix measured by customer segments Corporate 56% and industry Stable over time Lending to companies by industry, end of Q3 2007 Other Renting, 9% EUR 128.7bn Consulting and other servi
Slide 74: Well diversified revenues streams
Well diversified revenues streams Well diversified revenue streams*, Q3 2007 Four equally sized home markets New European Increased revenue proportion from Markets 4% New European Markets 3.8% in Q3 Different business cycles in the four Norway 13% Nordic countries Denmark 29% Finland 27% Swede
Slide 75: Strong growth in the Baltic countries….
Strong growth in the Baltic countries…. Growth total lending Growth mortgage lending % % 70 65 82 83 81 80 77 60 50 49 50 60 41 40 48 30 36 30 40 25 20 16 20 9 10 0 0 2005 2006 Jan Sep 07 Q307 2005 2006 Jan - Sep 07 Total market Nordea Total market Nordea Growth total deposits YoY % 43 Selected gr
Slide 76: …with limited risk exposure
…with limited risk exposure Growth total lending Growth mortgage lending EURbn EURbn 12 11,6 10,7 6 10 5,2 8,6 8 4,3 4 6 3 4,0 4 2 2 1,5 0,9 0,6 0,6 0,5 0,6 0,3 0 0 2005 2006 Jan - Sep 07 Q3 2005 2006 Jan - Sep 07 Total market Nordea Total market Nordea Growth total deposits YoY EURbn 8 Nordea’s m
Slide 77: Impaired loans and total allowances
Impaired loans and total allowances EURm Q3 2007 Q4 2006 Q3 2006 Impaired loans, gross, individually assessed 1,344 1,616 1,499 Allowances for individually assessed loans 632 764 832 Impaired loans, net, individually assessed 712 852 667 Impaired loans, net / lending (%) 0.30 0.40 0.33 Allowances, i
Slide 78: Impaired loans
Impaired loans EURm. End of Q3/07 Gross Provisions Net Household customers 360 130 230 Manufacturing 350 175 175 Trade and services 187 87 100 Other companies 48 52 -4 Real estate 98 42 56 Renting, Consulting and other services 121 72 49 Agriculture & Fishing 29 13 16 Construction 40 16 24 Transport
Slide 79: Loan losses
Loan losses YoY EURm Recoveries maintained at high level 330 299 and limited new provisions Nordea is confident in the overall 180 126,4 101 98,1 quality of its credit portfolio 86 30 -13 -27,8 -13 -54 -120 -82,4 -129 -111 -140 -139,9 -270 -420 -381 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Gross Reversals
Slide 80: Possible effects on lending margins from market turmoil
Possible effects on lending margins from market turmoil Risk awareness – increasing default rates Increased interest rates and volatility – increased cost of capital Improved risk adjusted prices expected Pricing power in lending is contra cyclical 30.000 25.000 Exposure (EUR mill.) 20.000 1
Slide 81: Summary – Jan - Sep 2007
Summary – Jan - Sep 2007 Organic growth strategy continues to pay off Strong result Revenues up 9% Risk-adjusted profit up 17% Strong growth in number of Gold and Private Banking customers Limited impact from market turmoil Outlook for 2007 unchanged 81
Slide 82: Facts & figures
Facts & figures
Slide 83: Facts & Figures, content
Facts & Figures, content Credit quality Page 85 Economic Capital Page 90 Customer areas Page 93 Balance sheet Page 121 Market position Page 124 Appendix Page 126 83
Slide 84: Credit quality
Credit quality
Slide 85: Loan portfolio by customer category
Loan portfolio by customer category* EURbn 129 130 123 119 120 113 110 105 105 100 101 100 97 91 93 90 83 84 79 80 80 80 82 70 74 76 68 71 60 63 65 66 58 60 50 53 55 56 50 40 30 20 23 23 24 19 19 20 20 21 21 22 10 16 17 17 17 18 0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/
Slide 86: Lending to household customers
Lending to household customers End of Q3/07 EUR 106.0bn Other loans comprise Other loans 22,3% Consumer credits Investment credits Car financing Overdraft facilities Credit cards Home equity credits Housing loans 77,7% 86
Slide 87: Loan portfolio in figures
Loan portfolio in figures EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Household customers 106.0 102.6 98.7 96.4 91.9 Real estate 34.5 32.5 31.6 30.7 28.6 Construction 4.1 3.9 3.6 3.4 3.3 Transport, communication 6.0 6.3 6.7 5.9 5.9 Trade and services 12.5 11.8 12.6 11.1 10.8 Manufacturing 18.6 19.4 17.5 15.
Slide 88: Lending by geographical area
Lending by geographical area End of Q3/07 EUR 238.7bn Latin America USA 0,6% Asien 1,0% 0,7% Nordic countries and Poland, Baltics and Other OECD Russia 0,4% 93,3% Övriga 6,7% Other non OECD 0,4% EU countries 3,6% Nordic countries and Poland, Baltics and Russia, EUR 222,7bn Denmark 61.3 Sweden 65
Slide 89: Economic capital
Economic capital
Slide 90: Economic capital (EC)
Economic capital (EC) EURbn EC per business area 11 (EURm) Q3/07 10 10,3 10,5 9,6 9,9 Nordic Banking 7,317 9 9,3 8 IIB 875 7 Savings & Life Products 1121 6 Banking & Capital 471 5 Market Products 4 Treasury 450 3 Private Banking 112 2 GST 117 1 0 Other 0 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Total 10,464 90
Slide 91: Economic capital – distribution
Economic capital – distribution End of Q3/07 Private Group Group Savings & Life Banking Services & Life risk Treasury Products 1% Technology Operational risk 1% 4% 11% 1% 9% Business risk Institutional & 10% International Banking 8% Market risk 15% Credit risk Banking & Nordic 65% Capital Market Ban
Slide 92: Nordic Banking
Nordic Banking
Slide 93: Nordic Banking lending and deposit volumes
Nordic Banking lending and deposit volumes Lending, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Denmark 59.4 57.6 56.5 54.5 51.1 50.8 47.2 Finland 45.7 45.0 43.5 42.4 41.4 40.4 39.5 Norway 36.3 34.8 32.0 31.3 30.2 28.7 26.7 Sweden 58.1 55.6 56.2 52.8 52.3 51.4 51.3 Deposits, EURbn Q3/07 Q2/07 Q1
Slide 94: Nordic Banking breakdown of lending
Nordic Banking breakdown of lending Denmark, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Corporate 26.1 25.8 25.1 23.9 21.4 21.6 19.8 Household mortgages 24.3 23.7 23.1 22.5 21.8 20.8 20.3 Consumer lending 7.2 6.9 6.7 6.5 6.3 6.0 5.8 Finland, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Corpo
Slide 95: Nordic Banking breakdown of lending
Nordic Banking breakdown of lending Norway, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Corporate 18.6 17.6 15.9 15.3 14.8 13.9 13.0 Household mortgages 16.8 16.1 15.2 15.2 14.6 13.9 12.9 Consumer lending 1.1 1.1 1.1 1.0 1.0 1.0 0.9 Sweden, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Corpora
Slide 96: Nordic Banking breakdown of deposits
Nordic Banking breakdown of deposits Denmark, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Corporate 12.3 11.1 11.3 10.5 10.1 10.8 9.2 Households, current 3.4 3.5 3.2 3.4 3.3 3.4 3.1 accounts Households, savings 15.4 15.3 14.8 14.2 14.0 13.9 13.5 accounts Finland, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3
Slide 97: Nordic Banking breakdown of deposits
Nordic Banking breakdown of deposits Norway, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Corporate 12.6 12.1 11.6 11.0 10.4 10.2 9.4 Households, current 2.2 2.2 1.9 2.1 2.1 2.3 2.0 accounts Households, savings 4.6 4.1 4.0 4.0 4.0 3.7 3.6 accounts Sweden, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06
Slide 98: Payments & transactions
Payments & transactions
Slide 99: E-banking customers and payments
99 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 Mill. Feb-00 June- Oct-00 Feb-01 June- Oct-01 Feb-02 June- Oct-02 feb-03 jun-03 okt-03 feb-04 jun-04 okt-04 feb-05 jun-05 E-banking customers okt-06 feb-06 jun-06 okt-06 feb-07 jun-07 0 5 10 15 20 25 30 35 40 45 50 55 60 Mill. Q1/00 Q3/00 Q1/01 Q3/01 E-
Slide 100: Issued debit and credit cards
100 0,0 1,0 2,0 3,0 4,0 5,0 Mill. Jan-01 May-01 Sept-01 Jan-02 May-02 Sept-02 jan-03 maj-03 sep-03 Debit cards jan-04 maj-04 sep-04 jan-05 maj-05 sep-05 jan-06 Cards, all customers Issued debit and credit cards Credit cards maj-06 sep-06 jan-07 maj-07 sep-07 0 20 40 60 80 100 120 140 160 180 200 220
Slide 101: Payment transactions, households
Payment transactions, households 250 200 150 100 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 Manual transactions Payment ATMs Card payments Cash withdrawal ATMs Direct debit Netbank payments 101
Slide 102: Payment transactions, households
Payment transactions, households Mill. Jan-Sep 07 2006 2005 2004 2003 2002 Manual transactions 75.7 108.7 124.6 129.1 137.7 150.6 Pay terminals 27.8 16.3 19.7 23.6 27.1 31.7 Card payments 607.1 735.1 621.0 527.8 459.9 395.5 Cash withdrawal ATM 121.7 164.8 181.7 190.4 197.4 204.4 Direct debit 86.6 10
Slide 103: Institutional & International Banking
Institutional & International Banking
Slide 104: Institutional & International lending and deposit volumes and margins
Institutional & International lending and deposit volumes and margins Lending, EURbn Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Q4/05 Financial Institutions Division 2.9 2.8 1.7 1.5 1.3 1.5 2.1 1.7 SOSI 10.1 10.3 9.9 9.4 9.1 9.1 8.6 8.5 New Markets 8.0 6,8 5.2 4.6 4.0 3.7 3.4 3.3 Total* 22.6 21.3 18.
Slide 105: Nordea operations in New European Markets
Nordea operations in New European Markets End of Q3/07 Estonia Latvia Lithuania Poland Russia Total Customers 62,050 60,050 68,050 397,300 32,200 1,349,6501 Branches/salespoints 18 19 12 58 30 137 Number of FTEs 303 405 240 1,000 1,217 3,165 Total assets, EURm 1,738 2,296 1,344 2,672 1,424 9,474 Com
Slide 106: Asset Management & Life Insurance
Asset Management & Life Insurance
Slide 107: Breakdown of AuM by market and channels
Breakdown of AuM by market and channels Retail funds* Fund sales Q3/07 (sold through through Private Institutional Life & Total by EURbn own distribution) third-parties Banking customers Pensions** market Denmark 8.6 - 18.9 11.6 19.0 58.0 Finland 7.5 - 17.0 5.7 9.2 39.4 Norway 1.9 - 2.9 3.9 5.7 14.4
Slide 108: Asset Management margins
Asset Management margins Bps 79 80 71 72 70 65 65 60 Income affected by lower trading 50 43 activity due to financial market 40 36 37 turmoil - transaction related income 31 30 30 18% lower than in Q3 2006 20 AuM related margin higher than Q3 10 last year due to the change in 0 product mix towar
Slide 109: Asset structure
Asset structure* Q3/07 Q3/06 Int'l. fixed Int'l. fixed income income 18% 14% Nordic fixed Nordic Nordic income equities fixed 43% 14% income Nordic 46% equities 14% Int'l. Int'l. equities equities 25% 26% *Average AuM for Asset Management activities excl. Nordic Private Banking activities. 109
Slide 110: European fund distribution
European fund distribution EURm 8 000 7 000 6 000 4499 5 000 4 000 3 000 2 000 1 000 0 -1 000 646 Q1/02 Q3/02 Q1/03 Q3/03 Q1/04 Q3/04 Q1/05 Q3/05 Q1/06 Q3/06 Q1/07 Q3/07 Inflow AuM 110
Slide 111: Life - breaking out profit drivers
Life - breaking out profit drivers Fee based on size of life provisions in “with profit” companies – DK, FI Fee contribution Profit-sharing from the Norwegian business (existing model, change pending) Contribution from cost 25% of surplus/deficit from cost result in DK, 100% from FI and SE res
Slide 112: Life - profit drivers
Life - profit drivers EURm Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Traditional insurance Fee contribution/profit sharing 39 38 37 47 34 Contribution from cost result 0 -1 -1 -4 0 Contribution from risk result 7 7 5 9 6 Return on Shareholders’ equity/other profits -1 12 6 15 11 Total Profit Traditional 45 56 4
Slide 113: Life – gross written premiums by market
Life – gross written premiums by market EURm Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Denmark 307 299 329 328 244 Norway 257 154 257 205 134 Finland 123 178 213 238 151 Sweden 68 87 97 191 95 Other 150 98 125 150 97 Total 905 816 1.021 1.112 720 113
Slide 114: Life, investments
Life, investments EURbn 35 33.6 34.1 Equities 32.5 33.0 31.1 Predominantly listed equities 30 1/3 Nordic, 2/3 international 25 Bonds 20 3/4 Nordic issuers 15 Primarily government and mortgage institutions 10 5 0 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Equities Real Estate Alternative investments B
Slide 115: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q3/07 Q2/07 Q3/07 Q2/07 Denmark 14.8 14.7 26 27 Finland 8.9 8.8 19 19 Norway 5.3 5.0 21 22 Sweden 3.7 3.7 12 13 Total 34.1 33.3 22 23 115
Slide 116: Life - solvency situation
Life - solvency situation End of Q3/07 Required Actual Solvency Solvency in % of EURm solvency solvency buffer requirement Denmark 525 689 164 131 Finland 231 801 570 347 Norway* 187 428 241 229 Sweden** 67 123 56 183 * Excluding unit linked company ** Nordea Life Sweden I 116
Slide 117: Life – solvency sensitivity
Life – solvency sensitivity End of Q3/07 Denmark Finland Norway Sweden Solvency in % of requirement 131 347 229 183 Equities drop 12% 132 274 229 157 Interest rates down 50bp 129 381 229 214 Interest rates up 50bp 132 313 229 152 117
Slide 118: Life – financial buffers
Life – financial buffers EURm % of total provisions Q3/07 Q2/07 Q3/07 Q2/07 Denmark 1,546 1,574 13.5 14.0 Finland 395 394 7.6 7.5 Norway 237 268 5.6 6.7 Sweden 273 267 17.1 16.9 Total 2,451 2,503 11.9 11.4 118
Slide 119: Life – buffers in different scenarios
Life – buffers in different scenarios End of Q3/07 EURm Denmark Finland Norway Sweden Financial buffers, actual 1,546 395 237 273 Equities drop 12% 1,283 228 147 255 Interest rates down 50bp 1,478 474 239 239 Interest rates up 50bp 1,541 316 236 307 119
Slide 120: Balance sheet
Balance sheet
Slide 121: Balance sheet
Balance sheet End Sep End Dec End Sep EURm 2007 2006 2006 Treasury bills and other eligible bills 7,434 6,678 7,304 Loans and receivables to credit institutions 33,637 26,792 27,244 Loans and receivables to the public 238,719 213,985 201,126 Derivatives 23,359 24,207 24,419 Other assets 83,589 75,22
Slide 122: Capital base
Capital base EURm Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Core equity 16,261 15,459 15,858 15,271 14,288 Hybrid capital loans 1,431 1,441 1,440 1,458 1,457 Deferred tax assets -314 -344 -340 -369 -275 Goodwill -1,999 -1,968 -1,951 1,770 -1,765 Other items net -1,458 1,126 -1,905 -1,443 -1,001 Tier 1 capital 1
Slide 123: Market position
Market position
Slide 124: Market position in Nordic markets
Market position in Nordic markets Market shares Denmark Finland Norway Sweden Personal customers - mortgage lending 15.4% 30.1% 11.9% 15.4% - consumer lending 14.4% 30.6% 11.5% 9.9% - deposits 21.2% 32.5% 8.5% 17.7% Corporate customers - lending 18.6% 36.3% 17.4% 13.5% - deposits 24.3% 37.3% 18.1% 1
Slide 125: Appendix
Appendix
Slide 126: Ratings
Ratings Moody’s S&P Fitch DBRS Short Long Short Long Short Long Short Long Nordea Bank AB P-1 Aa1 A-1+ AA- F1+ AA- R-1 (high) AA Nordea Bank D P-1 Aa1 A-1+ AA- F1+ AA- R-1 (high) AA Nordea Bank F P-1 Aa1 A-1+ AA- F1+ AA- R-1 (high) AA Nordea Bank N P-1 Aa1 A-1+ AA- F1+ AA- R-1 (high) AA Nordea Hypot
Slide 127: Largest registered shareholders, 28 September 2007
Largest registered shareholders, 28 September 2007 Shareholder Number of Percent of Change 30 days, shares, mill Nordea mill shares Swedish state 515.6 19.9 % 0.0 Sampo Oyj 184.0 7.1 % 42.2 Nordea Denmark Fund 102.5 3.9 % 0.0 Robur Funds 64.6 2.5 % -0.4 SHB/SPP Funds 52.0 2.0 % -1,6 Alecta 42.5 1.6
Slide 128: Market development – interest rates
Market development – interest rates Change % 30-06-07 30-09-07 Q3/07 Short, EUR (one week) 4.01 4.17 0.16 Long, EUR (5 years) 4.77 4.48 -0.29 Short, DK 4.26 4.11 -0.15 Long, DK 4.95 4.65 -0.30 Short, NO 4.43 4.89 0.46 Long, NO 5.74 5.55 -0.19 Short, SE 3.47 3.88 0.41 Long, SE 4.81 4.68 -0.13 128
Slide 129: Macro data – Nordic market
Macro data – Nordic market % 2007e 2008e 2009e Gross domestic product DK 1.5 1.9 1.6 FI 3.8 3.1 2.9 NO 5.1 2.3 2.9 SE 3.3 2.6 2.4 Inflation DK 1.6 2.0 2.3 FI 2.5 2.7 2.0 NO 0.7 2.6 2.3 SE 1.9 1.7 2.2 Private consumption DK 1.8 1.7 1.7 FI 4.0 3.0 2.7 NO 5.9 2.6 2.5 SE 2.9 2.8 2.2 Unemployment DK 3.4
Slide 130: Financial calendar 2008
Financial calendar 2008 13 February - full year 2007 29 April - interim report for the first quarter 22 July - interim report for the second quarter 23 October – interim report for the third quarter www.nordea.com/ir 130
Slide 131: Disclaimer
Disclaimer Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or