Slide 1: Interim Report First Quarter 2005 Press conference
Interim Report First Quarter 2005 Press conference 27 April 2005 Lars G Nordström President and Group CEO
Slide 2: Strong results in the first quarter
Strong results in the first quarter z Net profit up 8% to EUR 495m (EUR 459m in Q1 2004) z Operating profit up 10% to EUR 688m (EUR 624m) z Total income up 1% to EUR 1,582m (EUR 1,569m) despite lower investment result and including additional other income of EUR 40m z Total expenses flat z Earnings
Slide 3: Stable development compared to Q4
Stable development compared to Q4 z Net profit up 4% to EUR 495m (EUR 476m in Q4 2004) z Operating profit up 2% to EUR 688m (EUR 677m) z Total income down 4% from seasonally high Q4 to EUR 1,582m (EUR 1,646m) z Total costs down 8% z Positive net loan losses 3
Slide 4: Total operating income
Total operating income YoY: EURm 1800 z Total income up 1% – NII up 5% 1600 1646 1569 1582 – Commissions up 4% 1400 1462 1450 – Net gains/losses down 47% 1200 – Income from sale of general insurance business in 2002, 1000 EUR 40m 800 QoQ: 600 z Total income down 4% from 400 seasonally high Q4 200 –
Slide 5: Expenses
Expenses EURm z Nordea’s flat cost target for 1000 the banking business remains 979 900 903 908 932 902 unchanged 867 873 865 865 800 830 z Flat cost target excludes: 700 – costs in Life 600 – depreciation of operational leasing 500 z As a result of IFRS and 400 changed presentation format 300 200 1
Slide 6: Expenses
Expenses EURm YoY: 1000 979 908 43 z Total expenses kept flat 903 902 41 865 413 34 45 39 z Wage increases, inflation and 339 380 353 growth in business volumes 800 334 offset by efficiency gains and reduced no. of FTEs 600 519 523 QoQ: 492 515 487 400 z Down from seasonally high Q4 z Other expenses
Slide 7: Loan losses
Loan losses EURm YoY: 50 z Overall stable credit quality 40 42 z Reversals exceeded new provisions – 4th quarter in a row 30 QoQ: 20 z Stable credit quality 10 z No industry sector stands out 0 -3 -2 -10 -6 -10 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 7
Slide 8: Volume growth in focus areas
Volume growth in focus areas z Mortgage lending to personal customers up 15% year-on-year z Lending to small and medium-sized corporates increased by 14% z Assets under Management up 11% to EUR 136bn z Written premiums in Life up 23% 8
Slide 9: Volume growth in focus areas
Volume growth in focus areas YoY QoQ z Lending, total 15% 6% – Mortgage lending +15% +2% – Consumer lending* +9% +3% – SME lending +14% +5% – CIB lending (excl. Markets) +18% +19% z Deposits, total 14% 1% – Household deposits +7% +-0% – SME deposits +6% -2% – CIB deposits (excl. Markets) +56% +10% 9
Slide 10: Assets under Management
Assets under Management EURbn 160 z AuM climbs to new all-time- 135.8 140 125.7 130.6 high at EUR 135.8bn 121.9 123.3 120 – net inflow of EUR 2.7bn in Q1 100 – asset appreciation EUR 80 2.5bn in Q1 60 40 20 0 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Nordic retail funds Nordic private banking International weal
Slide 11: Active capital management
Active capital management z Successful issues of Tier 1 instruments z Repurchase of 139 million shares completed z New mandate to repurchase own shares 11
Slide 12: Group financial targets
Group financial targets Key performance indicator Q1/05 2004 Target Total shareholder return (TSR), % #7 #3 In the top quartile of European peer group RoE, % 15.7 14.5* > 15% in 2005 and > 17% or in line with level of top Nordic peers from 2007 Costs**, EURm 865 3,502 Same cost level through 2007 as
Slide 13: Shipping Finance - the Nordea experience
“Shipping Finance - the Nordea experience” 27 April 2005 Carl E. Steen Head of Shipping,Offshore and Oil Services Division
Slide 14: Shipping, Offshore and Oil Services Division (SOOSD)
Shipping, Offshore and Oil Services Division (SOOSD) A division within the Corporate and Institutional Banking business area Centre of competence in Oslo, local presence in Bergen, Stavanger, Ålesund, Copenhagen, Gothenburg, Helsinki, London, New York and Singapore Consists of 80 shipping profession
Slide 15: Shipping Markets
Shipping Markets Most shipping segments have, over the past few years, enjoyed attractive freight rates which has made the industry very profitable for nearly all companies and its shareholders due to: Strong world economic growth Industrialisation on new countries ( e.g. China) Liberalisation
Slide 16: Shipping Markets (Cont.)
Shipping Markets (Cont.) Outlook for the shipping segments is positive driven by: World economic growth expected to remain at relatively high levels in the short to medium term Risk of tonnage oversupply is limited in the short to medium term due to limited shipbuilding capacity However, there a
Slide 17: Shareholders' approximate return over 5 years for selected shipping companies
Shareholders’ approximate return over 5 years for selected shipping companies D/S Norden 5700% Torm 4150% Frontline 3250% CMB 1750% Cosco Singapore 900% Hanjin 900% OMI Corp 850% Odfjell 800% Teekay 550% HMM 200% AP Møller 80% S&P 500 negative 20% Source: Bloomberg 17
Slide 18: Nordea Shipping Portfolio
Nordea Shipping Portfolio Total exposure approx USD 11.2 bn (committed), end December 2004 Misc. shipping Misc. non-shipping Other Combined vessels 9% 8% Bulkers transportation 1% 13 % 1% Crude tankers Containers 10 % 1% Offshore/Oil Chemical tankers Services 6% 14 % Ferries Product tankers 4 % Crui
Slide 19: Lending (mEUR)
Business Development, mEUR 7.000 160 6.000 140 120 5.000 100 Lending 4.000 Profit 80 3.000 60 2.000 40 1.000 20 2002* 2003 2004 2004-Q1 2005-Q1 * Adjusted for changed allocation principle from Markets as of 2003 Total Lending Net Profit After Losses 19
Slide 20: Lending (mUSD)
Business Development, mUSD 9.000 200 8.000 180 7.000 160 140 6.000 Lending 120 Profit 5.000 100 4.000 80 3.000 60 2.000 40 1.000 20 2002* 2003 2004 2004-Q1 2005-Q1 * Adjusted for changed allocation principle from Markets as of 2003 Total Lending Net Profit After Losses 20
Slide 21: Income types, 2004
Income types, 2004 Interest income excl deposit Deposits Commission income Trading income Other income 21
Slide 22: Geographic distribution of income, 2004
Geographic distribution of income, 2004 Norway London, New York, Singapore Denmark Sweden Finland 22
Slide 23: 2004 League Tables
2004 League Tables Nordea reached the position as the leading global arranger for syndicated loans to the shipping and offshore industries. % 35 30 25 20 15 10 5 0 Calyon Nordea Citigroup DnB NOR HSBC BNP Paribas 23 Source: Delogic
Slide 24: The Leading Arranger of Syndicated Loans to the Shipping and Offshore Industries
The Leading Arranger of Syndicated Loans to the Shipping and Offshore Industries June 2004 June 2004 July 2004 CONCORDIA MARITINI \w\ ITY Vp E Concordia Maritime AB USD 250,000,000 Revolving Credit Joint Lead Arranger and Joint Bockrunner Leif Héegh & Co Limited USD 600,000,000 Revolving Credit Join
Slide 25: Success Factors
Success Factors Market knowledge, structuring capabilities and placing power add value to our clients, enabling us to win mandates in a lead position Nordea’s large balance sheet and strong brand name, enabling us to underwrite substantial amounts Strong client relationships and high quality p
Slide 26: Interim Report First Quarter 2005 Press conference
Interim Report First Quarter 2005 Press conference 27 April 2005 Lars G Nordström President and Group CEO
Slide 27: In summary
In summary z Strong and stable results z Volume growth in focus areas despite – Intensifying competition – Increasing pressure on margins z Fourth consecutive quarter with positive net loan losses z Going forward – Maintaining strict risk and cost management – Continue to capture revenue growth oppo
Slide 28: Interim Report First Quarter 2005 Press conference
Interim Report First Quarter 2005 Press conference 27 April 2005
Slide 29: Income statement summary
Income statement summary EURm Q1/05 Q1/04 Chg % Net interest income 897 854 5 Net fee and commission income 453 434 4 Net gains/losses on items at fair value 115 216 -47 Equity method 13 9 44 Other income 104 56 86 Total operating income 1,582 1,569 1 Staff costs -515 -519 -1 Other expenses -353 -33
Slide 30: Income statement summary
Income statement summary EURm Q1/05 Q4/04 Chg % Net interest income 897 920 -3 Net fee and commission income 453 467 -3 Net gains/losses on items at fair value 115 179 -36 Equity method 13 15 -13 Other income 104 65 60 Total operating income 1,582 1,646 -4 Staff costs -515 -523 -2 Other expenses -35