Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Debt Investor Presentation (2024)
39 slides from Nordea Bank Abp's debt investor presentation, 2024
Slide 1: Debt investor presentation Q2 2024
cA mA Let r presentation’ Q2 2024
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management's current views with respect to certain future events and potential financial performance. Although Nordea believes that the expectations reflected in such forward-looking statements are reasonable, no assurance
Slide 3: Table of contents
Table of contents 1. Quarterly update 4 2. Credit quality 14 3. Capital, liquidity and funding 21 4. Macroeconomy 34 ° Nordea
Slide 4: 1. Quarterly update
1. Quarterly update Nordea
Slide 5: Second-quarter highlights 2024
Second-quarter highlights 2024 Executive summary Continued high-quality income growth - Netinterest income up 4%, net fee and commission income up 6% and net fair value result down 15%. Total income up 3% - Operating profit remained strong, 2% lower compared to Q2 2023 Return on equity* 17.9% and ea
Slide 6: Net interest income
Net interest income Stable volumes, improved margins Year-over-year bridge, EURm 1,904 ee 2-0 26 31 ° 68 0 7 1831 cal — Q223. Volumes Margins Deposit Treasury- Other FX Q224 hedge related items Quarter-over-quarter bridge, EURm . ! @ 1,954 100007 600 a 12 Zz Qo 2 26 al Q124 Volumes Margins Deposit T
Slide 7: Net interest income sensitivity
Net interest income sensitivity Net interest income sensitivity to policy rate changes Sensitivity to +50bp parallel rate shift in policy rates*, EURm Le Denmark Finland Norway Sweden Total year 1 NII Nil impact impact incl. hedge increase MB Total net impact YF Hedge impact beyond year 1 Structural
Slide 8: Net fee and commission income
Net fee and commission income Return to growth driven by higher savings and capital markets activity Year-over-year bridge, EURm Q223 Asset Brok.& Pay.& Lending Significant Other mgmt. advisory cards Quarter-over-quarter bridge, EURm v 795 Q224 795 Q124 Asset Brok.& Pay.& Lending Significant Other m
Slide 9: Net fair value result
Net fair value result Higher business activity in customer areas Net fair value result, EURm r t-15%q * Higher business activity in 290 291 | customer areas mainly in FX and 62 3 247 rates products 225 35 een 0 ven 154 * Market-making slightly down from Q223 that saw high activity in rates products
Slide 10: Costs
Costs Costs in line with plan Year-over-year bridge, EURm v 1,278 — Won Bae _. 31 1205 32 Q223 Underlying Technology M&A Regulatory FX Q224 costs &risk integration fees management costs investments Quarter-over-quarter bridge, EURm 1289 5g 1000-7 ae —— 28 45 10 —— Q124 Underlying Technology M&A Regu
Slide 11: Group Leadership Team (GLT), GLT-1 and GLT-2
CO2 € x2 11 3) Group Leadership Team (GLT), GLT-1 and GLT-2
Slide 12: Sustainability at the core
Sustainability at the core Further strengthened climate targets in our lending portfolio Progress -29% (2023) Sector Sub-sector Emissions scope Metric Base year Baseline Targetyear Target Current status Residential real Households and tenant- -a0—509 16.6 kgCO2e/m2 estate owner associations Tand2 kg
Slide 13: Sustainability at the core
Sustainability at the core Actively engaging to drive transition and capture growth opportunities Channelling capital towards sustainable solutions Green and sustainability-linked loans Total volumes, EURbn Nordea Asset Management sustainability inked Assets under management, EURbn 123% 12.4% loans
Slide 14: 2. Credit quality
2. Credit quality Nordea
Slide 15: Credit portfolio by sector
*Other corporates includes several categories of which the largest is Financial institutions consisting mostly of various investment funds.
Slide 16: Individual provisions and write-offs, collective provisions
• 68 - -21 61 7 - 82 - Individual provisions Collective Net loan losses Fair value adj. Total and write-offs provisions (net) incl. Nordea Kredit • - • - -
Slide 17: Credit portfolio development
• 19,469 19,092 14,027 13,988 16,207 • 2,238 2,234 2,457 2,343 2,585 • • Q321 Q421 Q122 Q222 Q322 Q422 Q123 Q223 Q323 Q423 Q124 Q224
Slide 18: Credit portfolio — real estate management industry (REMI)
Credit portfolio — real estate management industry (REMI)* Well-diversified portfolio, high-quality lending ‘ens volumes Sable Diversified across countries Norway Sweden 20% Q223. Q323.«Q423,)-Q124.—S 224 17% Denmark MMicre MB RRE Finland 90% of portfolio with low probability Diversified across type
Slide 19: Real estate loan-to-value and interest coverage
• 72 65 64 65 65 37% - 57 53 31% 28% 52 51 52 24% 27% 18% 10% 10% 12% 1% 1% 2% • DK FI NO SE Total Current 20% value decline Current 0–40% LTV 51–60% LTV 71–80% LTV - 20% value decline 41–50% LTV 61–70% LTV >80% LTV - 3.8 3.7 • 3.4 3.3 46% 40% 36% 2.3 1.9 1.9 1.7 25% - 1.5 1.5 15% 14% 15% 5% 2% 0% 0
Slide 20: Credit quality stages and coverage ratio
50% RW floor • 8% 50% 6% 30% 6% 95% 96% 94% 94% 93% • 1% 1% 5% 1% 6% 1% 6% 1% • 3% 3% Q223 Q323 Q423 Q124 Q224 Q224 1-notch 2-notch 3-notch Impact Stage 1 Stage 2 Stage 3 • 60 59 63 57 57 51 51 51 52 47 • Impairment rate Coverage ratio Q223 Q323 Q423 Q124 Q224
Slide 21: 3. Capital, liquidity and funding
3. Capital, liquidity and funding Nordea
Slide 22: Capital
Capital Significant buffer to capital requirements Capital position and requirements (%) 23.0% CET1 ratio CET1 Total Own funds Q2 2024 requirement capital ratio requirement Q2 2024 WM Actual | SyRB MM CCoB ™ ccyB O-SII|_ Ml Pillar 2 requirement HB Minimum CET1 requirement ¢ CET1 capital ratio 17.5%
Slide 23: Capital
Capital Continued strong capital generation CET1 capital ratio development, % * CET1 capital ratio increased to 17.5% - CET1 capital increased EUR 0.5bn due to profit accumulation net of dividend 172 oo or 0.1 0.1 75 accrual and FX effects - Risk exposure amount increased by EUR ~15 0.8bn mainly due
Slide 24: Capital outlook
• 2024 2025 2026-2027-> 17.5 - • - - 0.5 15.5 -2.0 - -0.3 -0.4 -0.2 • - -
Slide 25: Capital excellence
Capital excellence Strong capital generation supporting returns Reiterating shareholder returns supported by strong capital generation Year Average quarterly capital generation, bp ~80-90* Hl Capital generation net of dividend accrual EUR ~17-18bn Share buy-backs 8 N 2017-2019 7 N Dividends Ss a 202
Slide 26: Balance sheet
Balance sheet Strong balance sheet structure Q22024 * Total assets EUR 607bn at Other assets Other liabilities end of Q2 2024 Derivatives pentane - Strong balance sheet with 7 Short-term funding deposits as primary source of funding Liquid assets ~ - Long-term funding 79% of total Liquidity buffer w
Slide 27: Liquidity
Liquidity Strong liquidity position Liquidity buffer composition, EUR 108bn Currency split Asset split 2% MMSEK EUR 32% USD DKK N% NOK 22% Deposits and borrowings from the public*, EURbn 217 216 224 183 206 89 109 118 112 120 124 2020 2021 2022 2023 Q124 —-Q2.2024 Hl Households |) Corporates 27+ Inc
Slide 28: Deposits
• • • 5% 18 % 22% 17% 41% 30 % 7% 25 % 50 % 12 % 37% 20 % 3% 4% 68 % • 24% 41% • 39 % 8% 29 % 28
Slide 29: Wholesale funding
Wholesale funding Solid funding operations Total wholesale funding, EUR 194bn CD & CP above 1Y MM CD &CP below 1Y I Green covered bonds International covered bonds Scandinavian covered bonds I Senior non-preferred bonds IB Senior preferred bonds I Subordinated debt Sustainable bonds** Short term fun
Slide 30: Sustainability at the core
Sustainability at the core Enhanced focus on sustainable funding Nordea’s green bond asset portfolio* Green buildings wAssets eligible for green covered bonds Renewable energy ™Pollution prevention and control m™Clean transportation mEnergy efficiency natural resources 30 mSustainable management of
Slide 31: Covered bonds
Covered bonds Nordea covered bond operations Four aligned covered bond issuers with complementary roles Data as per Q1 Legislation Cover pool assets Cover pool size Covered bonds outstanding oc Issuance currencies Rating (Moody's / S&P) Outstanding green covered bonds Nordea Eiendomskreditt riLN Up
Slide 32: Funding transactions
Funding transactions Nordea recent benchmark transactions Issuer Type Currency Amount (m) FRN / Fixed date Callable Nordea Bank Senior preferred [) EUR 1,000 Fixed Jun-24 Nordea Bank Tier 2, Green @ EUR 750 Fixed to Fixed May-24 May-30 Nordea Mortgage Bank Covered @ EUR 1,000 Fixed Apr-24 Nordea Ban
Slide 33: Minimum requirements for own funds and eligible liabilities
Minimum requirements for own funds and eligible liabilities MREL positions and requirements Subordinated MREL Nordea ratio, Reg. % REA, Nordea ratio, Reg, % LRE 02.24, % REA capped 02.24, % LRE Total MREL 7% sp Ml own funds | ml sNP lceR Nordea ratio, Rea. % REA Reg. % LRE 02.24, % REA 33 * Combi yB
Slide 34: 4. Macroeconomy
4. Macroeconomy Nordea
Slide 35: Nordic economic development
Nordic economic development Activity picks up GDP Unemployment rate 140 Tindex '2007Q1=100 GDP, level Index 2007Q1=100 140 " % Unemployment % " 135 135 10 130 | —Sweden + 130 ) Norway Ir —| 125 7 = Denmark -) 125 8 120 | =Fintand J, 120 7 us us 6 0 aT nos : 105, WV 105, a 4 100 (IFES Vv 100 3 3 9s J
Slide 36: Nordic economies
Nordic economies Precision play Policy rates 5.04, 151% Policy rates 40 35 3.0 25 20 15 1.0 os 0.0 -05 “1.0 5.0 Fiscal Balance, % of GDP 150 25 100 75 ° Norway Wretand 4 Netherlands Public balance/debt, % of GDP, 2024E (IMF) 2024E putin ° sweden “ ? Germany t United Kingdom “~ China——e Belgium Spain
Slide 37: Households
Households Purchasing power is increasing, but from low levels Household debt % of disposable] 30° incomel|. 275 300 49% of disposable 275 fincome Household debt 250 250 225 225 200 200 175 175 150 150 125 125 100 100 75 75 —Sweden — Norway — Denmark — Finland 50 50 2002 2004 2006 2008 2010 2012 201
Slide 38: Housing markets
Housing markets Brighter outlook Home prices Households’ credit growth 250 Index, 2007=100 Home prices 250 158.0 \%e v/y Households’ credit growth % y/y| 18.0 2m moving average 125 125 225 10.0 10.0 200 75 75 175 5.0 5.0 25 25 150 0.0 4 0.0 125 25 25 -5.0 5.0 100 75 75 75 -10.0 10.0 07/08 09°10 1112
Slide 39: Contacts
Contacts Investor Relations Ilkka Ottoila Head of Investor Relations Tel: +358 9 53 00 70 58 Ilkka.ottoila@nordea.com Group Treasury Anders Frank-Leessoe Group Treasurer, Head of Group Treasury Tel: +45 5547 76 72 anders.frank@nordea.com 39 Maria Caneman Head of Debt IR and Ratings Tel: +46 10 156 5