Slide 1: Presentation for Investors October 2003
Presentation for Investors 29 October 2003
Slide 2: Contents
Contents l Press slides Page 3 l Financial highlights Q3/03 Page 17 l Credit quality Page 56 l Economic capital Page 72 l Nordea Page 77 l Business areas Page 85 l Balance sheet Page 128 l Market shares Page 135 l Appendix Page 149 2
Slide 3: Interim Report Third Quarter 2003 Press conference
Interim Report Third Quarter 2003 Press conference 29 October 2003 Lars G Nordström
Slide 4: Stable underlying development in Q3
Stable underlying development in Q3 l Operating profit EUR 470m (EUR 579m in Q2) l Net profit up 55% to EUR 628m (EUR 405m in Q2 and EUR 193m in Q3/02) l Total income EUR 1,403m (EUR 1,463m in Q2 and EUR 1,406m in Q3/02) l Total expenses down 2% to EUR 881m (EUR 902m in Q2) l Earnings per share EUR
Slide 5: Significantly improved performance in the first nine months of 2003
Significantly improved performance in the first nine months of 2003 l Operating profit up 30% to EUR 1,429m (EUR 1,101m in Jan-Sep 02) l Total income EUR 4,240m (EUR 4,213m) l Total expenses down 2% to EUR 2,700m (EUR 2,752m) l Earnings per share, rolling 12 months, EUR 0.55 l Return on equity, excl
Slide 6: Continued focus
Continued focus l Partnership agreement with IBM for IT production services l Sale of Norwegian debt collection company Inkassosentralen l Change process of legal structure on track l Repurchase of own shares 6
Slide 7: Top priorities
Top priorities l Reduce volatility and ensure growth of income l Improve cost management l Ensure capital efficiency l Maintain credit portfolio quality l Reduce complexity - from “too many” to “just one” 7
Slide 8: Reduced earnings volatility from capital markets exposure
Reduced earnings volatility from capital markets exposure l Investment earnings down in Investment earnings and insurance Q3 2003 from exceptionally operating profit Q1/02-Q3/03 high Q2 level EURm – Higher medium and long-term 100 interest rates in Q3 81 75 l Operating profit in Life & 50 50 39 4144
Slide 9: Total income level maintained
Total income level maintained l Total income in Q3 2003 down Income Q1/02-Q3/031 4% - adjusted for non-recurring EURm items largely unchanged 2000 – Deposit and lending margins unchanged 1600 1,457 1,463 – Commission income increased 1,382 1,425 1,406 1,374 1,403 – Lower trading income 1200 – Increa
Slide 10: Cost development under control
Cost development under control Costs and C/I ratio Q1/02-Q2/03 l Total costs down 2% in Q3 as EURm % well as Q1-Q3 2003 1200 100 l Underlying costs in Q1-Q3 2003 993 1000 922 925 917 902 down by 5% 905 881 80 – LG Petro Bank consolidated 800 64 66 65 60 – Higher restructuring costs 64 61 600 63 58 –
Slide 11: Number of employees falling
Number of employees falling Full time equivalents (FTEs) Q1/02-Q3/03 (end of period) l Number of employees (FTE) Number down by 2,050 or 6% since of FTEs 45000 beginning of year 40000 – Huoneistokeskus employees account for 1.5 percentage 35000 32,227 point 30000 l External recruitment reduced 25000
Slide 12: Capital efficiency - strong capital position
Capital efficiency - strong capital position Economic capital l Economic capital reduced by 01/02-Q3/03 EUR 1.2bn since end of 2002 EURbn l Further real estate divestment 12 will reduce economic capital 10.2 10.4 10.2 going forward 9.9 10 9.5 9.1 9,0 l RWA stable since end of 2002 8 l Regulatory cap
Slide 13: Credit quality maintained
Credit quality maintained Loan losses Q1/02-Q3/03 l Loan loss level (annualised) EURm % stabilised at 0.25% of loans 125 0.9 and guarantees, well below 0.8 target of max. 0.40% 100 0.7 l Majority of loan losses stems 98 92 0.6 from the Norwegian lending 89 75 portfolio - especially fish 76 0.5 farmi
Slide 14: Developing Nordea
Benefiting from One bank Developing Nordea the Nordic vision Adjusting to changed market conditions 2003 Reduction of complexity Changes of business models Divestment of non-core assets Shaping the 2002 Focus, speed and performance new reality Customer organisation, customer strategy and 2001 custom
Slide 15: In summary
In summary l Our performance has been significantly improved l We have increased focus on core business and activities l As complexity in operations is being reduced our efficiency will improve l …….We are on the right track 15
Slide 16: Interim Report Third Quarter 2003 Press conference
Interim Report Third Quarter 2003 Press conference 29 October 2003 Lars G Nordström
Slide 17: Financial highlights Q3/03
Financial highlights Q3/03 17
Slide 18: Stable underlying development in Q3
Stable underlying development in Q3 l Operating profit EUR 470m (EUR 579m in Q2) l Net profit up 55% to EUR 628m (EUR 405m in Q2 and EUR 193m in Q3/02) l Total income EUR 1,403m (EUR 1,463m in Q2 and EUR 1,406m in Q3/02) l Total expenses down 2% to EUR 881m (EUR 902m in Q2) l Earnings per share EUR
Slide 19: Significantly improved performance in the first nine months of 2003
Significantly improved performance in the first nine months of 2003 l Operating profit up 30% to EUR 1,429m (EUR 1,101m in Jan-Sep 02) l Total income EUR 4,240m (EUR 4,213m) l Total expenses down 2% to EUR 2,700m (EUR 2,752m) l Earnings per share, rolling 12 months, EUR 0.55 l Return on equity, excl
Slide 20: Continued focus
Continued focus l Partnership agreement with IBM for IT production services l Sale of Norwegian debt collection company Inkassosentralen l Change process of legal structure on track l Repurchase of own shares 20
Slide 21: Market development – stock market indexes
Market development – stock market indexes % 30 25 20 15 10 5 0 Q2/03 Q3/03 Copenhagen Helsinki Oslo Stockholm Nasdaq Dow Jones 21
Slide 22: Market development – interest rates
Market development – interest rates % 30-06-03 30-09-03 Change Short, EUR (one week) 2.13 2.07 -0.06 Long, EUR (5 years) 2.97 3.10 +0.13 Short, DK 2.05 2.10 +0.05 Long, DK 3.18 3.34 +0.16 Short, NO 4.05 2.76 -1.29 Long, NO 4.06 4.04 -0.02 Short, SE 3.08 2.82 -0.26 Long, SE 3.61 3.77 +0.16 22
Slide 23: 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 23
Slide 24: Net interest income
Net interest income EURm 1000 QoQ: l Short interest rates reduced 874 885 Continued pressure on interest 800 835 843 838 l income 600 l Compensated by increased volumes and hedges against falling short-term rates 400 YoY: 200 l Volumes increased l Pressure on deposit margins 0 l Corporate lending ma
Slide 25: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on Nii* Q3/03 Increasing market rates, 100bp 220 Decreasing market rates, 100bp -240 *Approximately, end of period l Increased SIIR in Q3 – interest rates expected to have bottomed out – maturity of current hedges shorter than 12 months
Slide 26: Net commission income
Net commission income EURm 388 QoQ: 500 379 371 366 50 61 353 47 l Net commissions up 4% 40 44 400 86 95 87 88 l AuM up 5% to EUR 107bn 88 – strong sales 35 28 38 20 300 24 194 – strengthening of equity 195 191 189 179 markets 200 l Payment commissions improved slightly 100 114 120 101 108 104 l Bro
Slide 27: Trading
Trading EURm 180 l Decreased somewhat reflecting 160 157 lower market activity 155 140 – still at a high level 120 127 130 130 100 l Leading Nordic provider of 80 derivatives and debt capital market services 60 40 l High quality earnings 20 – customer driven revenue stream 0 Q3/02 Q4/02 Q1/03 Q2/03
Slide 28: Total income
Total income EURm 1500 l Maintained income level 1,463 1,403 1200 l Q3 non-recurring items: 900 – Hex shares, EUR 27m – Inkassosentralen, EUR 8m 600 l Q2 non-recurring items: 300 – Huoneistokeskus, EUR 43m – Nordisk renting, EUR 32m 0 Q2/03 Q3/03 28
Slide 29: Income statement summary
Income statement summary EURm Q3/03 Q2/03 Change % Income 1,403 1,463 -4 Expenses -881 -902 -2 Loan losses -89 -92 Equity method 10 19 Profit before inv. earnings and insurance 443 488 -9 Investment earnings, banking 27 81 Operating profit, life insurance 40 50 Operating profit, general insurance -
Slide 30: Expenses
Expenses EURm 993 1000 925 448 917 902 881 QoQ: 404 397 363 350 800 l Continued strict cost management 600 – cost reduction quarter by quarter 545 539 531 521 520 400 l Total costs down 2% l Seasonally lower activity 200 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 30 Personnel Other
Slide 31: Income statement summary
Income statement summary EURm Jan-Sep Jan-Sep Change Full year 2003 2002 % 2002 Income 4,240 4,213 1 5,670 Expenses -2,700 -2,752 -2 -3,745 Loan losses -279 -185 -261 Equity method 43 36 52 Profit before inv. earnings and insurance 1,304 1,312 -1 1,716 Investment earnings, banking 137 81 122 Operati
Slide 32: Expenses – underlying development
Expenses – underlying development YoY: EURm 3000 l Ongoing initiatives showing 2,752 2,700 effect 2500 2,715 2,586 l Reported expenses down EUR 2000 52m, or 2% l Underlying expenses approx. 1500 EUR 130m, or 4.8% lower 1000 – new business, Poland – higher restructuring costs 500 – higher variable sa
Slide 33: Development of FTEs
Development of FTEs 40000 FTEs Q3/03 Q4/02 35000 34,271 33,879 32,949 Retail 18,771 20,300* 30000 32,227 CIB 2,172 2,444 25000 20000 AM & Life 1,818 1,866 15000 GPT** 7,737 7,710 10000 Other 1,729 1,951 5000 Total 32,227 34,271 0 Change -6% Q4/02 Q1/03 Q2/03 Q3/03 *Of which approx. 500 in Huoneistok
Slide 34: Loan losses
Loan losses EURm 300 l Loan losses at manageable 246 level 236 219 221 – 0.24% of total loans and 200 181 guarantees annualised in Q3 98 l Concentrated to Norwegian 92 89 100 66 76 retail portfolio l Vast majority within fish 0 farming l Exposure to fisheries industry -100 EUR 2.2bn -115 -138 -132 -
Slide 35: Investment earnings, banking
Investment earnings, banking EURm QoQ: 100 90 l Interest rates rose globally 80 81 l Loss on fixed-income portfolio 70 60 l Gain on equities 50 YoY: 40 39 41 30 l Increased EUR 56m 29 27 20 l Position taking benefited from 10 reduced interest rates 0 particularly in Q2 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03
Slide 36: Operating profit, Life Insurance
Operating profit, Life Insurance EURm 60 l Lower volatility 50 50 l Gradual implementation of 40 44 changed business model 40 30 l Investment return decreased 20 in Q3 19 10 0 -10 -13 -20 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 36
Slide 37: Income statement summary
Income statement summary EURm Jan-Sep Jan-Sep Change Full year 2003 2002 % 2002 Income 4,240 4,213 1 5,670 Expenses -2,700 -2,752 -2 -3,745 Loan losses -279 -185 -261 Equity method 43 36 52 Profit before inv. earnings and insurance 1,304 1,312 -1 1,716 Investment earnings, banking 137 81 122 Operati
Slide 38: Net profit
Net profit EURm 1500 YoY: l Increased by 128% 1200 1,288 l Deferred tax asset of EUR 900 300m included in Q3/03 l Allocation to pension fund in 600 2002 (EUR 272m) 564 300 0 Jan-Sep 2002 Jan-Sep 2003 38
Slide 39: 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 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 EPS adjusted to standard tax, Q3 EUR 0.11 RoE adjusted to standard tax, Q3 14.0% EPS adjusted to standard tax, ytd EUR 0
Slide 40: Earnings per share – 12 months rolling
Q 40 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 1/ EUR 20 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 Earnings per share – 12 months rolling 02 Q 1/ 20 03 Q 2/ 20 03 Q 3/ 20 03
Slide 41: Balance sheet - key items
Balance sheet - key items Change, 12 EURbn Q3/03 Q4/02 Q3/02 months % Lending 149 146 147 1 Deposits 93 94 93 0 Shareholders’ equity 13 12 12 9 Total assets 261 250 252 4 Risk-weighted assets 135 135 137 -1 End of period 41
Slide 42: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 149 93 94 95 93 147 146 147 147 91 80 120 100 60 80 60 40 40 20 20 0 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 End of period 42
Slide 43: Real estate holdings reduced
Real estate holdings reduced l Sales process progressing according to plan l Book value of approx. EUR 1.0bn to be divested l Properties in Denmark with a book value of approx. EUR 0.4 sold in H1 2003 l Nordisk Renting sold in Q2 43
Slide 44: Capital position – strong
Capital position – strong Tier 1 ratio % 10 l AGM authorisation to repurchase 9 10% of outstanding shares 8 7 l Board decision to buy back shares 7.5 7.1 up to 5% of outstanding shares 6 5 l Nordea will implement IAS19 4 (pensions) from 2004 3 – non-recurring reduction of equity of 2 approx. EUR 250
Slide 45: Results by business area
Results by business area EURm 450 400 403 350 381 300 250 200 150 100 135 50 94 91 42 48 52 43 35 0 -50 -85 -100 -128 -150 Retail CIB Asset Mgmt* Life* Group Other Treasury Q2/03 Q3/03 *Product result for Asset Management and Life 45
Slide 46: Retail Banking operating profit
Retail Banking operating profit EURm 500 l Strong sales 450 l Continued growth in household 400 415 mortgages 403 350 381 347 l Sale of Inkassosentralen 341 300 l Loan losses in Retail Banking 250 Norway 200 150 100 50 Key ratios Q3/03 Q2/03 0 C/I ratio, % 56 57 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 RoE, %
Slide 47: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Quarterly averages 2.5 l Stable lending margins 2.3 2.1 l Overall deposit margins 1.9 relatively stable 1.7 l Falling short-term rates 1.5 1.3 – compensated by hedges 1.1 0.9 0.7 0.5 02 02 02 02 03 03 03 1/ 2/ 3/ 4/ 1/ 2/ 3/ Q Q Q Q Q Q Q Lending to corp
Slide 48: CIB operating profit
CIB operating profit EURm 150 l Markets income reduced but still at good level 138 135 120 – reflected in FID income 123 109 l Custody Services 90 94 – pressure on prices l Seasonal decline in customer 60 demand l Nii down following lower volumes 30 Key ratios Q3/03 Q2/03 0 Q3/02 Q4/02 Q1/03 Q2/03 Q
Slide 49: Asset Management product result
Asset Management product result EURm 50 l Product result up 14% 45 48 l Net inflow of EUR 2.4bn 40 42 – 9% inflow annualised 35 38 35 – ytd inflow EUR 6.7bn 30 31 l AuM up 5% to EUR 107bn 25 20 15 10 Key ratios Q3/03 Q2/03 5 C/I ratio, % 60 63 0 AuM, EURbn 107 102 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 49
Slide 50: Life Insurance, product result
Life Insurance, product result EURm 60 l Product result down 17%, still high level 50 52 48 l Lower volatility 40 43 l Implementation of changed 30 business model 20 l Investment return decreased in 22 10 Q3 0 Key ratios Q3/03 Q2/03 -11 -10 Inv return, % 0.4 3.3 -20 Financial 4.6 4.8 Q3/02 Q4/02 Q1/
Slide 51: Life - solvency situation
Life - solvency situation End of Q3/03 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 427 509 82 119 Finland 213 506 293 237 Norway 120 196 76 164 Sweden 67 119 52 178 51
Slide 52: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q3/03 Q2/03 Q3/03 Q2/03 Denmark 595 588 6.2 6.2 Finland 153 175 3.4 3.9 Norway 39 41 1.5 1.6 Sweden 54 65 3.4 4.3 Total 842 869 4.6 4.8 52 * Financial buffers are defined in accordance with local regulations and practices.
Slide 53: Group Treasury operating profit
Group Treasury operating profit EURm 100 QoQ: 90 91 80 l Financial markets focused on 70 economic recovery 60 l Increased medium- and long-term 50 58 interest rates 40 – loss on bond portfolio 30 35 31 20 27 l Gain on equities 10 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 53
Slide 54: Other column
Other column Q3/03 Q2/03 QoQ: Income -24 -16 l OM/HEX shares EUR 27m in Q3 l Nordisk Renting EUR 32m in Q2 Expenses -83 -71 Loan losses 0 5 General: Equity method 10 9 l Funding cost for acquisition of Nordea Bank Norway Investment earnings 0 6 l Results from real estate holdings (non-owner occupied
Slide 55: Outlook 2003
Outlook 2003 l General economic outlook slightly improved l Scope for revenue growth in 2004 – expectations of growth globally as well as in the Nordic economies l Sharp attention on cost control will be maintained l Expenses expected to be well within 2003 cost target l Target for average loan loss
Slide 56: Credit quality
Credit quality : WTS > Ww om - \. \ ' NaS 56
Slide 57: Loan portfolio by customer group
Loan portfolio by customer group End of Q3/03 EUR 148.7bn Public sector 2% Personal customers 43% Companies 55% 57
Slide 58: Lending to personal customers
Lending to personal customers End of Q3/03 EUR 63.5bn Other loans l Continued strong growth in 24% mortgage lending l Other loans comprise – consumer credits – investment credits – car financing – overdraft facilities – credit cards Housing loans 76% 58
Slide 59: Lending to companies by industry
Lending to companies by industry End of Q3/03 Shipping & EUR 82.1 bn Offshore 5% Construction Agriculture & 3% Fishing Real estate 5% 27% Transport, communication 5% Other companies 6% Renting, consulting and other services 8% Commerce and Manufacturing services 16% 11% Finance 59 14%
Slide 60: Loan portfolio
Loan portfolio EURbn Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Personal customers 63.5 60.2 58.6 57.9 56 Real estate 22.0 22.0 22.6 22.4 23 Construction 2.5 2.8 2.9 3.1 3 Transport, communication 4.6 3.8 3.5 3.5 3 Trade and services 9.1 9.1 8.9 8.3 9 Manufacturing 13.2 12.5 13.5 13.9 15 Finance 11.2 12.2 10.7 9
Slide 61: Lending by geographical area
Lending by geographical area End of Q3/03 Latin America EUR 148.7bn Asia 0.6% USA 0.5% Non-OECD 1.2% 0.7% Other OECD Nordic countries 0.5% 91.1% Other 8.9% The Baltic states and Poland 0.9% Other EU countries 4.5% Nordic countries, EUR 135.4bn l Denmark 37.5 l Finland 30.9 l Norway 22.7 61 l Sweden
Slide 62: Transfer risk exposure
Transfer risk exposure EURm. End of Q3/03 Asia 627 Latin America 270 -of which China 262 -of which Brazil 144 South Korea 110 Mexico 48 Indonesia 26 Chile 19 Panama 35 Argentina 3 Middle East 326 -of which Iran 112 Turkey 69 62
Slide 63: Nordea fisheries financing
Nordea fisheries financing End of Q3/03 Total exposure approx. EUR 2.2 bn Fish processing/ export l Total outstanding EUR 1.9bn 21% Fish l Mainly Norwegian exposure farming 44% l Fish farming the troubled area l Increased salmon prices in Q3 Fishing vessels 35% 63
Slide 64: Nordea shipping portfolio
Nordea shipping portfolio Distribution by type of vessel End of Q3/03 Total exposure approx. EUR 5.9bn Reefers Combined Other dry cargo 4% vessels l Outstanding, EUR 5.1bn 1% 4% Misc.loans 12% l Well diversified portfolio by Gas tankers 7% Crude tankers type of vessel 12% Pure car carries l Focus on
Slide 65: Nordea real estate financing portfolio
Nordea real estate financing portfolio End of Q3/03 Total exposure approx. EUR 22.0bn l Largest industry exposure Denmark 8.1% l Relatively large and financially Norway strong companies Sweden 19.4% 50.2% l High level of collateral coverage l Lending to residential real estate companies approx 50% F
Slide 66: Nordea telecom financing portfolio
Nordea telecom financing portfolio End of Q3/03 Total exposure approx. EUR 4.8 bn Manufactures l Total outstanding EUR 2.8bn 28% l Majority of exposure related to – major Nordic equipment manufacturers – major Nordic telecom operators l ECA or cash cover for 9% of exposure Operators 72% 66
Slide 67: Impaired loans
Impaired loans EURm. End of period Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Impaired loans, gross 2,916 2,851 2,892 3,260 3,136 Provisions -2,072 -2,015 -2,087 -2,153 -2,290 Of which: Specific provisions -1,624 -1,571 -1,630 -1,698 -1,834 Appraised by category -64 -65 -64 -64 -79 General provisions -384 -379 -
Slide 68: Impaired loans
Impaired loans EURm. End of Q3/03 Gross Provisons Net Personal customers 583 373 210 Real estate 213 153 60 Construction 88 76 12 Transport, communication 233 179 54 Trade and services 257 191 66 Manufacturing 295 227 68 Finance 173 142 31 Renting, Consulting and other services 214 178 36 Other comp
Slide 69: Loan losses
Loan losses EURm 300 246 l Loan losses at manageable 236 219 221 level 200 181 – 0.24% of total loans and guarantees annualised in Q3 98 92 89 100 66 76 l Loan losses concentrated to Norwegian retail portfolio 0 l Vast majority within fish farming -100 l Fish farming represents 0.6% -115 of loan boo
Slide 70: Comments on certain industries
Comments on certain industries Real estate l Vacancy rates increasing from very low levels in commercial real estate l Rent levels down from peak but still higher than original levels 3-5 years ago l Low interest rates help secure cash flow and secondary market values l New construction volumes adju
Slide 71: Comments on certain industries
Comments on certain industries Shipping and Offshore industry l Pick up in economy leading to increased rates l Bulk market particularly strong l Tanker market strong but volatile l Crusing market recovering from global uncertainties l Offshore industry suffering from uncertainty of oil prices l Nor
Slide 72: Economic capital
Economic capital 72
Slide 73: Economic capital (EC)
Economic capital (EC) l EC is the capital required by Nordea to cover unexpected losses l 6 different risk categories are incorporated l The measurement period is one year l The confidence level is 99.97% l The economic capital may change over time due to: – the composition of risk exposures – chang
Slide 74: Economic capital
Economic capital EURbn 12 11 l No major changes in EC 10 10.2 since last quarter 9.9 9 9.5 9.1 9.0 8 l Ongoing sale of real estate 7 holdings 6 l EC reduced by EUR 1.2bn 5 since Q4/02 4 3 2 1 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 74
Slide 75: Economic capital per business area
Economic capital per business area End of Q3/03 EUR 9.0bn Other 10% Treasury 6% Asset Mgmt & Life 11% Retail 51% CIB 22% 75
Slide 76: Distribution of economic capital - by risk category
Distribution of economic capital - by risk category End of Q3/03 Real estate risk Life risk 5% 1% Operational risk 8% Business risk 10% Credit risk Market risk 60% 16% 76
Slide 77: 77
77
Slide 78: 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 where we operate to reach their objectives. Vision We will be valued as the leading financial services group in the Nordic and Baltic financial markets
Slide 79: 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 80: Top priorities firmly anchored throughout the Group
Top priorities firmly anchored throughout the Group Retail Banking Corporate and Asset Management Other / Group Top priorities Institutional Banking & Life Reduce volatility and • Increase share of wallet for • Enhance position among • Capture share of expected ensure growth of personal customers in
Slide 81: Financial targets
Financial targets Key performance indicator Actual Jan-Sep Target 2002 2003 Total shareholder return, peer group # 15 # 5 YTD In the top five of the peer group ranking Return on equity excluding goodwill, % 11.3 18.9 Sustainable RoE>15% from 2004 Costs, EURm 3,745 2,700 Same cost level through 2004
Slide 82: Peer group by market cap, EURbn
Peer group* by market cap, EURbn 15 October 2003 RBoS BARCLAYS BNP HBoS LLOYDS TSB SOCIETE GENERALE ABN AMRO NORDEA ABBEY NATIONAL DANSKE BANK ALLIED IRISH SHB KBC BANK OF IRELAND COMMERZBANK HYPOVEREINSBANK SWEDBANK SEB SAMPO DnB 0 10 20 30 40 50 60 70 82 *As defined by Nordea
Slide 83: 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 9,430 Sweden Branch offices 262 Helsinki Personnel 8,041 Stockholm St Petersburg Norway Oslo Tallinn Branch offices 146 Copenhagen Riga Personnel 4,041 Vilnius Moscow Hamburg Denmark Warzaw B
Slide 84: 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 1,600 3,000 600 4,200 260 9,700 Corporate customers 80 330 65 460 30 965 Life insurance customers (1,000) 610 305 220 465 60 1,660 Net banking customers (1,000) 510
Slide 85: Business areas
Business areas 85
Slide 86: Results by business area
Results by business area EURm 450 400 403 350 381 300 250 200 150 100 135 50 94 91 42 48 52 43 35 0 -50 -85 -100 -128 -150 Retail CIB Asset Mgmt* Life* Group Other Treasury Q2/03 Q3/03 *Product result for Asset Management and Life 86
Slide 87: Retail Banking
Retail Banking 87
Slide 88: Retail Banking operating profit
Retail Banking operating profit EURm 500 l Strong sales 450 l Continued growth in household 400 415 mortgages 403 350 381 347 l Sale of Inkassosentralen 341 300 l Loan losses in Retail Banking 250 Norway 200 150 100 50 Key ratios Q3/03 Q2/03 0 C/I ratio, % 56 57 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 RoE, %
Slide 89: Retail Banking operating profit by markets
Retail Banking operating profit by markets Retail DK FI NO SE P&B EURm Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 Net interest income 768 758 202 202 191 193 133 120 228 231 10 10 Non-interest income 357 368 96 89 84 122 50 39 119 108 7 8 Total income 1,125 1,126 298 291 275 315 183 159 347 339 17 18 Total
Slide 90: Retail Banking lending
Retail Banking lending EURbn 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Q2/03 Q3/03 End of period 90
Slide 91: Retail Banking deposits
Retail Banking deposits EURbn 25 20 15 10 5 0 Denmark Finland Norway Sweden Q2/03 Q3/03 End of period 91
Slide 92: Retail Banking deposits
Retail Banking deposits EURbn. End of Q3/03 25 9.7 20 4.3 15 7.1 2.7 6.8 6.1 1.2 10 3.9 9.4 5 6.0 6.1 6.1 0 Denmark Finland Norway Sweden Corporate Personal customer - saving accounts 92 Personal customer - current accounts
Slide 93: Retail Banking, volumes and margins
Retail Banking, volumes and margins Volumes Margins EURbn Q3/03 Q2/03 Q3/03 Q2/03 Lending to corporates 58.3 59.0 1.2% 1.2% Lending to personal customers 61.5 59.2 1.7% 1.6% Total lending 119.8 118.2 1.5% 1.4% Deposits from corporates 28.6 28.5 0.9% 1.0% Deposits from personal customers 41.8 41.3 1.
Slide 94: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Quarterly averages 2.5 l Stable lending margins 2.3 2.1 l Overall deposit margins 1.9 relatively stable 1.7 l Falling short-term rates 1.5 1.3 – compensated by hedges 1.1 0.9 0.7 0.5 02 02 02 02 03 03 03 1/ 2/ 3/ 4/ 1/ 2/ 3/ Q Q Q Q Q Q Q Lending to corp
Slide 95: E-banking & transactions
E-banking & transactions 95
Slide 96: E-banking customers
Ja 96 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 -0 Se 1 pt -0 Fe 1 b- 0 Ju 2 ly - 0 E-banking customers De 2 c- 0 M 2 ay E-banking customers -0 3 Ja n- 0 50 100 150 200 250 300 350 0 Ju 0 (1,000) ne -0 No 0 v- 0 Ap 0 ril -0 Se 1 pt -0 Fe 1 b- 0 Ju 2 ly- 0 De 2 Equity trading cust
Slide 97: Payments and log-ons
Payments and log-ons E-banking payments E-banking log-ons Mill. Mill. 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 Sw
Slide 98: Penetration on the net
Ja 98 0 5 10 15 20 25 30 n- % 01 M ay -0 1 Se pt -0 1 Ja n- 02 M ay -0 2 Se p- 02 Ja n -0 3 M ay -0 Mutual funds penetration rate 3 Se Penetration on the net p- 0 3 Ja 0 10 20 30 40 50 60 70 80 n- % 0 M 0 ay -0 Se 0 pt -0 0 Ja n- 01 M ay -0 Se 1 pt -0 1 Ja n- 0 M 2 ay Executed trades -0 02 2 -S ep J
Slide 99: Cards
Cards Card payments Issued debit and credit cards Mill. Mill. 40 5.0 35 4.5 4.0 30 3.5 25 3.0 20 2.5 15 2.0 1.5 10 1.0 5 0.5 0 0.0 1 1 3 3 02 2 1 1 2 02 01 2 2 1 03 3 03 -0 -0 -0 l-0 -0 -0 -0 -0 -0 -0 -0 -0 n- n- n- n- ay p- ay pt ay n pt ar pt ay pt ay Ju Ja Ja Ja Ja Ja Se Se Se M Se Se M M M M M 9
Slide 100: Payment transactions, households
Payment transactions, households Payment transactions Mill. 250 l Payment transactions up 2% 240 in Q3 230 220 l Card payments up 5% in Q3 210 l Continued migration from 200 transactions in branches to 190 e-banking 180 170 160 150 01 01 01 01 02 02 02 02 03 03 03 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ Q
Slide 101: Corporate and Institutional Banking (CIB)
Corporate and Institutional Banking (CIB) ~ <nes
Slide 102: CIB operating profit
CIB operating profit EURm 150 l Markets income reduced but still at good level 138 135 120 – reflected in FID income 123 109 l Custody Services 90 94 – pressure on prices l Seasonal decline in customer 60 demand l Nii down following lower volumes 30 Key ratios Q3/03 Q2/03 0 Q3/02 Q4/02 Q1/03 Q2/03 Q
Slide 103: Stock market development
Stock market development Market Volume Market index Q3 2003, Chg Q3 vs Q2, % Q3 2003, % EURbn Denmark 17.6 31.6 10.8 Finland 38.8 25.4 0.9 Norway 19.5 14.3 6.3 Sweden 75.2 24.5 7.3 Nordic average 24.0 Source: Nordea Securities 103
Slide 104: 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 Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 Total income 218 273 121 135 47 74 47 50 14 17 -11 -3 107 132 Total expenses -122 -14
Slide 105: CIB lending volume
CIB lending volume EURbn 30 25 20 15 10 5 0 Corporate Banking Financial International and Total Division Institutions Division Shipping Division Q2/03 Q3/03 End of period 105
Slide 106: Asset Management & Life
Asset Management & Life / | sal
Slide 107: Asset Management product result
Asset Management product result EURm 50 l Product result up 14% 45 48 l Net inflow of EUR 2.4bn 40 42 – 9% inflow annualised 35 38 35 – ytd inflow EUR 6.7bn 30 31 l AuM up 5% to EUR 107bn 25 20 15 10 Key ratios Q3/03 Q2/03 5 C/I ratio, % 60 63 0 AuM, EURbn 107 102 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 107
Slide 108: Assets under management
Assets under management EURbn 120 107 100 Life & pensions 80 Institutional clients 60 European private banking & fund distribution 40 Nordic private banking 20 Nordic retail funds 0 Q1/03 Q2/03 Q3/03 108
Slide 109: Asset structure – Investment Management
Asset structure – Investment Management* Q3/03 Q2/03 EUR 70.4bn EUR 67.4bn Int'l. fixed income Int'l. fixed 13% income 11% Nordic Nordic equities equities 13% 13% Nordic fixed Nordic income fixed 54% income Int'l. Int'l. equities equities 56% 20% 20% 109 *Including mgmt of own investment funds
Slide 110: Asset structure – Investment Funds
Asset structure – Investment Funds Q3/03 Q2/03 EUR 38.4bn EUR 35.6bn Balanced Balanced funds funds 11% 11% Fixed income funds Fixed 48% income Equity funds Equity funds 50% funds 41% 39% 110
Slide 111: 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 Q2/03 Q3/03 Q2/03 Q3/03 End of period * Net margin 111
Slide 112: European Fund distribution
European Fund distribution EURm 3500 l More than 1000 active distribution agreements 3000 l Assets by country of source: 2500 – 25% from Germany 2000 – 25% from Switzerland – 18% from Spain 1500 – 10% from Austria 1000 – 8% from France 500 – 7% from Luxembourg – 7% from Other 0 l Adding volume of EU
Slide 113: Life Insurance, product result
Life Insurance, product result EURm 60 l Product result down 17%, still high level 50 52 48 l Lower volatility 40 43 l Implementation of changed 30 business model 20 l Investment return decreased in 22 10 Q3 0 Key ratios Q3/03 Q2/03 -11 -10 Inv return, % 0.4 3.3 -20 Financial 4.6 4.8 Q3/02 Q4/02 Q1/
Slide 114: Life - breakdown of product result
Life - breakdown of product result EURm Q3/03 Q2/03 Normalised operating margin 50 54 Fluctuations compared to normalised investment return -151 297 Change in discount rate for life provisions 126 -126 Allocation to policy-holders -13 -13 Allocation to/from financial buffers 28 -165 Operating profit
Slide 115: Life
Life EURm Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 TRADITIONAL LIFE Premiums written net 370 461 499 595 381 Normalised investment. return 236 247 250 284 285 Benefits paid and change in provision -532 -626 -636 -770 -511 Insurance operating expenses -24 -28 -27 -30 -26 Normalised operating margin 50 54 86 79
Slide 116: Life
Life EURm Denmark Finland Norway Sweden Other Total TRADITIONAL LIFE Premiums written net 161 130 52 25 2 370 Normalised investment return 123 60 33 17 3 236 Benefits paid and change in provision -258 -166 -72 -33 -2 -532 Insurance operating expenses -10 -1 -9 -1 -2 -24 Normalised operating margin 1
Slide 117: Life - investments
Life - investments EURbn 25 23.4 l Equities 20 – predominantly listed equities – 50/50 Nordic/international 15 l Bonds 10 – ¾ Nordic issuers – primarily govmn’t & mortgage inst. 5 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Equities Bonds Real estate Unit linked 117 End of period
Slide 118: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q3/03 Q2/03 Q3/03 Q2/03 Denmark 11.0 11.0 17* 17 Finland 6.1 6.0 17 19 Norway 3.1 3.0 10 7 Sweden 2.7 2.6 4 4 Total 22.9 22.6 15 15 Total equity exposure including hedge, % 10 *Hedged 118
Slide 119: Life - solvency situation
Life - solvency situation End of Q3/03 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 427 509 82 119 Finland 213 506 293 237 Norway 120 196 76 164 Sweden 67 119 52 178 119
Slide 120: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q3/03 Q2/03 Q3/03 Q2/03 Denmark 595 588 6.2 6.2 Finland 153 175 3.4 3.9 Norway 39 41 1.5 1.6 Sweden 54 65 3.4 4.3 Total 842 869 4.6 4.8 120 * Financial buffers are defined in accordance with local regulations and practices.
Slide 121: Life – solvency sensitivity, end of Q3/03
Life – solvency sensitivity, end of Q3/03 Denmark Finland Norway Sweden % Solvency in % of requirement 119 237 164 178 Equities drop 12% 118 213 147 165 Interest rates down 50bp 117 263 166 221 Interest rates up 50bp 120 209 162 141 121
Slide 122: Life – buffer sensitivity, end of Q3/03
Life – buffer sensitivity, end of Q3/03 Denmark Finland Norway Sweden EURm Financial buffers* 595 153 39 54 Equities drop 12% -51 -50 -21 -9 Interest rates down 50bp 116 56 3 95 Interest rates up 50bp -54 -59 -3 -39 * Financial buffers are defined in accordance with local regulations and practices.
Slide 123: Group Treasury
Group Treasury 123
Slide 124: Group Treasury operating profit
Group Treasury operating profit EURm 100 QoQ: 90 91 80 l Financial markets focused on 70 economic recovery 60 l Increased medium and long-term 50 58 interest rates 40 – loss on bond portfolio 30 35 31 20 27 l Gain on equities 10 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 124
Slide 125: 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 Q3/03 Q2/03 Q3/03 Q2/03 Q3/03 Q2/03 Q3/03 Q2/03 Income -3 60 33 19 17 24 Expenses -3 -3 0 -1 -9 -8 Profit excl. Investment earnings 8 16 8 16 Investment earnings
Slide 126: Group Treasury - investments
Group Treasury - investments EURbn 20 l Equities 15.9 – listed, unlisted & private equity 15 funds l Bonds 10 – ¾ Nordic issuers – primarily government and mortgage inst. 5 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Fixed income Equities End of period 126
Slide 127: Treasury – risk management
Treasury – risk management End of Q3/03 l Price risk – price risk in interest-rate positions, calculated as a parallel shift assuming a change in market interest rates of 100bp l Equity risk (VaR) – risk related to equities, calculated as VaR, comprise all equities including listed, unlisted and pri
Slide 128: Balance sheet
Balance sheet 128
Slide 129: Balance sheet - key items
Balance sheet - key items Change, EURm Q3/03 Q4/02 Q3/02 12 months % Lending 148,688 145,740 147,252 1 Deposits 92,928 94,177 92,556 0 Shareholders’ equity 12,539 11,897 11,545 9 Total assets 260,680 249,619 251,776 4 Risk-weighted assets 135,113 134,660 136,910 -1 End of period 129
Slide 130: Balance sheet structure - assets
Balance sheet structure - assets EURbn 150 146 149 120 90 60 30 28 30 30 23 25 22 23 25 5 5 0 Lending Bonds and Loans and Assets, Other assets, Other other interest advances to insurance banking bearing credit inst. securities End of period Q4/02 Q3/03 130
Slide 131: Real estate holdings
Real estate holdings Book value. EURbn Q3/03 2002 2001 2000 1999 Owner occupied properties 0.8 1.2 1.5 1.4 1.4 Non owner occupied properties 0.2 0.2 0.3 0.6 2.1 Shares in real estate holding 0.3 0.4 0.3 0.4 0.4 companies Investments of the insurance 1.9 1.9 2.0 1.6 1.6 companies Total 3.2 3.7 4.1 4.
Slide 132: Balance sheet structure – liabilities and equity
Balance sheet structure – liabilities and equity EURbn 100 90 94 93 80 70 60 67 62 50 40 30 36 29 20 26 25 20 22 10 12 13 6 5 0 Deposits and Debt Liabilities to Provisions and Liabilities, Shareholder´s Other other securities in credit inst. other liabilities, insurance equity borrowings issue banki
Slide 133: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 147 147 147 149 93 94 95 93 146 91 80 120 100 60 80 60 40 40 20 20 0 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 End of period 133
Slide 134: Capital base
Capital base EURm End of Q3/03 Shareholders’ equity 12,539 Deductions insurance companies and other -805 Shareholders’ equity in the capital base 11,734 Hybrid capital 341 Minority interests 9 Group goodwill -1,832 Other deductions -54 TIER 1 Capital 10,198 TIER 2 Capital (subordinated debt) 4,745 D
Slide 135: Statistics as of August 2003
* Statistics as of August 2003 135
Slide 136: Market shares, personal customer deposits
Market shares, personal customer deposits % 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Aug 02 Aug 03 136
Slide 137: Personal customer deposits - market volume & share
137 M 00 ay -A 0 100 200 300 400 0 100 200 300 400 500 Au -00 00 ug g -N DKKbn NOKbn N - 00 o 01 ov F e v- 0 -F b 0 01 eb -m M -01 ay 01 ay Au -01 -A g 01 ug N - 01 o -N 02 ov F e v- 0 -F b 1 02 eb M -02 -m ay 02 ay Norway Denmark Au -02 -A g 02 ug N - 02 o -N F e v- 0 03 ov b 2 -F M -03 03 eb ay -M
Slide 138: Market shares, corporate deposits
Market shares, corporate deposits % 50 45 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Aug 02 Aug 03 138
Slide 139: Corporate deposits - market volume & share
139 A A ug ug 0 100 200 300 0 100 200 300 N - 00 N - 00 ov ov DKKbn NOKbn F e - 00 Fe - 00 b b M -01 M -01 ay ay A -01 A -01 ug ug N - 01 N - 01 ov ov F e - 01 Fe - 01 b b M -02 M - 02 ay ay A -02 A -02 Norway Denmark ug ug N - 02 N - 02 ov ov F e - 02 Fe - 02 b b M -03 M -03 ay ay A -03 A -03 ug ug
Slide 140: Market shares, personal customer lending
Market shares, personal customer lending % 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Aug 02 Aug 03 140
Slide 141: Personal customer lending - market volume & share
141 A A ug ug 0 100 200 300 400 500 600 700 0 50 100 150 200 250 N - 00 N - 00 DKKbn ov ov NOKbn F e - 00 F e - 00 b b 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 Norway Denmark ug ug N - 02 N - 02 ov ov F e - 02 F e - 02 b b M -03 M -
Slide 142: Market shares, corporate lending
Market shares, corporate lending % 50 45 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Aug 02 Aug 03 142
Slide 143: Corporate lending - market volume & share
143 A A ug ug 0 50 100 150 200 250 300 350 400 0 100 200 300 400 500 N - 00 N - 00 DKKbn ov ov NOKbn F e - 00 F e - 00 b b 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 Norway Denmark ug ug N - 02 N - 02 ov ov F e - 02 F e - 02 b b M -03
Slide 144: 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% M 9 S 2 S 3 D 0 Ju 3 S 0 Ju 1 D 2 M 2 3 00 03 D 1 3 9 Se 1 D 2 2 3 9 0 0 -0 -0 -0 -0 -0 -0 -0 -0 -0 n- n- n- -9 -0 0 -0 -0 n-
Slide 145: 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 01 02 2 2 3 3 02 03 ay 3 1 2 3 -0 -0 l-0 -0 l-0 0 0 0 -m - - n- n- p- p- p- ov ov ar ar ay Ju Ju Ja Ja Se Se
Slide 146: 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 01 02 2 2 3 3 2 3 ay 3 1 2 3 -0 l-0 -0 -0 l-0 -0 -0 0 0 0 -m - - p- p- p- ov ov ar ar n n ay Ju Ju Ja Ja Se Se Se 02 M M N N M Mark
Slide 147: Investment funds, net inflow, Sweden
Investment funds, net inflow, Sweden Market volume, Nordea volume, and accumulated market share ytd SEKm 18bn 19bn % 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 1 2 2 02 2 2 2 3 3 03 3 3 -0 -0 -0 -0 - -0 -0 -0 -0 -0 - -0 -0 e p ov a n ar ay J ul e p ov a n ar ay J
Slide 148: Market share, equity dealing - Nordea Securities
Market share, equity dealing - Nordea Securities % Equity market turnover EURbn 12 Q3/03 Q2/03 10 Denmark 17.6 13.4 Finland 38.8 31.0 8 Norway 19.5 17.0 6 Sweden 75.2 60.4 4 2 0 ki o en m sl sin ol ag O kh el h oc H en St op C Q2/03 Q3/03 148
Slide 149: Appendix
Appendix l Financials Page 150 l Nordea share Page 162 l Other Page 168 l Macro statistics Page 173 149
Slide 150: Appendix - Financials
Appendix l Financials 150
Slide 151: Deferred tax asset
Deferred tax asset l Taxes showed a positive contribution of EUR 159m in Q3 l A result of the change in the Group’s legal structure l A loss has materalised in the taxation of NBF in connection with the sale of NBD, NBN, and NBS to Nordea AB – deferred tax asset of approx. EUR 300m 151
Slide 152: Pension commitments
Pension commitments l Defined benefit plans in Sweden, Norway and partly Finland and Denmark, mainly covered by pension funds under local regulation l Aggregated deficit of EUR 12m not recognised in balance sheet – reflecting surpluses in Finland (EUR 41m), Sweden (EUR 6m) and Denmark (EUR 5m) – def
Slide 153: Pension commitments
Pension commitments End of period Finland Sweden Norway Denmark Total EURm Q3/03 Q2/03 Q3/03 Q2/03 Q3/03 Q2/03 Q3/03 Q2/03 Q3/03 Q2/03 Assets 589 577 772 748 287 278 81 80 1,729 1,683 Pension commitments 548 545 894 863 471 454 85 87 1,998 1,949 Funded status 41 32 (122) (115) (184) (176) (4) (6) (2
Slide 154: Operational income statement
Operational income statement EURm Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Net interest income 838 843 835 885 874 Commission income 379 366 353 388 371 Trading 130 155 157 130 127 Other 56 99 29 54 34 Income 1,403 1,463 1,374 1,457 1,406 Personnel expenses -531 -539 -520 -545 -521 Other expenses -350 -363 -39
Slide 155: Statutory income statement
Statutory income statement EURm Q3/03 Q3/02 Interest income 2,361 2,674 Interest expenses -1,462 -1,703 Net interest income 899 971 Dividends received 6 6 Net commission income 393 379 Net result from financial operations 101 34 Other income 33 58 Total income 1,432 1,448 General administrative expe
Slide 156: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory accounts Operational Trading Investment Other Statutory EURm Jan-Sep 2003 income activities Insurance adjustment Jan-Sep 2003 Net interest income 2,516 168 1) 91 6) 2,775 Dividends received 11 4) 31 9) 42 Commission income 1,098 30 2) 1,128 Trading 442 -44
Slide 157: Reconciliation of operational and statutory acounts
Reconciliation of operational and statutory acounts 1. Net interest income from trading transactions in Nordea 10. Costs related to investment activities, reclassified from Markets (for example interest related to swaps etc.), relevant category of cost in the statutory accounts, to being reclassifie
Slide 158: Expenses - breakdown
Expenses - breakdown EURm Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Personnel 1) 532 541 521 547 523 Information technology 2) 88 85 99 136 111 Marketing 14 23 18 34 21 Postage, telephone and office 53 49 58 62 50 expenses Rents, premises and real estate 74 81 82 89 79 expenses Other 123 128 142 130 146 Expense
Slide 159: Total IT-related expenses
Total IT-related expenses* EURm 250 200 216 184 177 174 150 166 100 50 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 *Total IT-related costs, including computer operations, service expenses, consultants and 159 personnel personnel etc (excluding IT expenses in insurance operations)
Slide 160: C/I ratio
C/I ratio C/I ratio, banking C/I ratio, banking % % 70 70 66 65 60 64 60 64 61 58 58 50 50 40 40 30 30 20 20 10 10 0 0 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 2001 2002 160
Slide 161: Gains and losses on various disposals etc
Gains and losses on various disposals etc EURm Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 P&L BA OM/HEX shares 27 Other Other Inkassosentralen 8 -4 Other Retail Huoneistokeskus 43 Other Retail Nordisk Renting 32 Other Other Europay 24 Inv e Retail Contant Oy 22 Inv e Retail General Ins -4 -40 GI GI Real In
Slide 162: Appendix - Nordea share
Appendix l Nordea share 162
Slide 163: Nordea share price vs DJ STOXX European banks
Nordea share price vs DJ STOXX European banks 6 March 2000* - 15 October 2003 % 180 160 140 120 100 80 60 June-00 June-01 June-02 June-03 Nordea DJ STOXX European Banks * Date of announcement of MNB/Unidanmark merger 163
Slide 164: Shareholder structure, end of Sep 2003
Shareholder structure, end of Sep 2003 3.9% 2.1% 6.1% 31.6% 6.9% Swedish institutions International institutions 7.0% Swedish state Danish institutions Finnish institutions Finnish public Danish public 18.5% Swedish public 23.8% Number of shareholders approx. 505,000 164
Slide 165: Largest registered shareholders, end of Sep 2003
Largest registered shareholders, end of Sep 2003 Shareholder Number of shares % Swedish state 542,015,102 18.51 Alecta 110,587,426 3.78 Nordea Danmark fonden 102,529,423 3.50 Robur fonder 77,972,802 2.66 Nordea fonder 72,154,933 2.46 AMF Pension 68,000,000 2.32 SEB fonder 62,379,204 2.13 Tryg i Danm
Slide 166: 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 167: Data per share
Data per share Q3/03 2002 2001 2000 19991) 1998 EUR EUR SEK SEK SEK Dividend n.a 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 0.21 0.30 0.53 0.58 0.55 0.53 Share price, end of period, 44.1 38.4 55.5 71.5 50 52 SEK P/E ratio 8.9* 1
Slide 168: Appendix - Other
Appendix l Other 168
Slide 169: 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 170: 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 171: Legal structure, Oct 2003
Legal structure, 28 Oct 2003 Nordea AB (Publ) Sweden Nordea Bank Nordea Bank Nordea Bank Nordea Bank Nordea Asset Nordea Nordea Life Danmark A/S Finland Plc Norge ASA Sweden AB Management Securities AB Holding A/S Denmark Finland Norway (publ) Sweden AB Sweden Sweden Denmark Various Various Various
Slide 172: Group Executive Management
Group Executive Management Lars G Nordström Group CEO Christian Clausen Head of Asset Management & Life Carl-Johan Granvik Head of Group Credit and Risk Control Kari Jordan Head of Retail Banking Arne Liljedahl Head of Group Corporate Centre, Group CFO Markku Pohjola Head of Group Processing and Tec
Slide 173: Appendix - Macro statistics and estimates
Appendix l Macro statistics and estimates Source: Nordea Markets Economic Research Estimates from September 2003 173
Slide 174: Macro data
Macro data % 2003e 2004e 2005e Gross domestic product DK 0.7 2.2 2.5 FI 1.7 3.0 3.5 NO 0.9 2.9 2.8 SE 1.6 2.5 2.9 Inflation DK 2.2 1.8 2.0 FI 0.9 0.6 1.8 NO 2.2 1.0 2.3 SE 2.1 1.5 1.9 Private consumption DK 0.8 2.5 2.3 FI 3.1 3.0 2.6 NO 3.2 4.3 3.5 SE 2.2 2.5 2.7 Unemployment DK 6.0 5.8 5.1 FI 9.2 9
Slide 175: Market development - GDP
Market development - GDP % 2002 2003e 2004e 2005e Denmark 2.1 0.7 2.2 2.5 Finland 2.2 1.7 3.0 3.5 Norway 1.3 0.9 2.9 2.8 Sweden 1.9 1.6 2.5 2.9 Source: Nordea Economic Research, September 2003 In Norway, forecasts are for mainland GDP 175
Slide 176: Gross domestic product
Gross domestic product Change in % YoY 10 8 6 4 2 0 Q1/90 Q1/95 Q1/00 -2 -4 -6 -8 Denmark Finland Norway Sweden 176
Slide 177: 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 177 Denmark Finland Norway Sweden
Slide 178: Private consumption
Private consumption Change in % YoY 10 8 6 4 2 0 Q1/90 Q1/95 Q1/00 -2 -4 -6 -8 Denmark Finland Norway Sweden 178
Slide 179: Household savings ratio
Household savings ratio % 12 10 8 6 4 2 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Denmark Finland Norway Sweden 179
Slide 180: Unemployment
Unemployment % of labour force 20 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 180 Denmark Finland Norway Sweden
Slide 181: Credit growth total lending to non-bank sector
Credit growth total lending to non-bank sector Change in % YoY 15 10 5 0 ch ch ch ch ch ch 3 02 r pt pt pt pt pt p ep a -0 e -M Se Se Se Se Se ar ar ar ar ar ar -S -S ar -5 M M M M M M 02 01 M 96 97 98 99 00 96 97 98 99 00 01 -10 Denmark Finland Norway Sweden 181
Slide 182: 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 182
Slide 183: Exchange rate, EUR/USD
183 1/ 1 /9 0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2 USD 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 Exchange rate, EUR/USD 1/ 1 5 /0 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 3
Slide 184: Exchange rate, EUR/SEK
184 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 Exchange rate, EUR/SEK /0 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 3
Slide 185: Exchange rate, EUR/NOK
185 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 Exchange rate, EUR/NOK /0 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 3
Slide 186: Oilprice development, Brent, USD/Barrel
186 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 Oilprice development, Brent, USD/Barrel 1/ 1 /0 3
Slide 187: Stock exchange indices
Stock exchange indices Index 100 = 1990 800 700 600 500 400 300 200 100 0 7 7 8 8 9 9 0 0 1 1 2 2 3 3 /9 /9 /9 /9 /9 /9 /0 /0 /0 /0 /0 /0 /0 /0 1 7 1 7 1 7 1 7 1 7 1 7 1 7 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ HEX Index Affärsvärldens General Index 187 Oslo Total Index KFX Index
Slide 188: Money market, 3 months rates
188 1/ 1 /9 2 3 4 5 6 7 8 9 8 % 1/ 4 /9 8 1/ 7 /9 1/ 8 10 /9 1/ 8 1 /9 9 1/ 4 /9 9 1/ Denmark 7 /9 1/ 9 10 /9 1/ 9 1 /0 0 1/ 4 Finland /0 0 1/ 7 /0 1/ 0 10 /0 1/ 0 1 /0 1 Norway 1/ 4 /0 1 1/ 7 /0 1/ 1 10 /0 1/ 1 1 Sweden /0 Money market, 3 months rates 1/ 2 4 /0 2 1/ 7 /0 1/ 2 10 /0 1/ 2 1 /0 3 1/ 4
Slide 189: Government bond, 10 year
189 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 Finland /0 1/ 0 9 /0 1/ 0 1 /0 Norway 1/ 1 5 /0 Government bond, 10 year 1/ 1 9 /0 1/ 1 1 /0 Sweden 1/ 2 5 /0 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 3
Slide 190: Stock exchange indices
190 31 /1 0 200 400 600 800 1000 1200 1400 31 /97 /5 30 /97 /9 31 /97 /1 Index 100 = 1990 31 /98 /5 HEX Index 30 /98 /9 31 /98 Oslo Total Index /1 31 /99 /5 30 /99 /9 31 /99 /1 31 /00 /5 30 /00 Stock exchange indices /9 31 /00 /1 31 /01 /5 30 /01 /9 KFX Index 31 /01 /1 31 /02 /5 30 /02 /9 31 /02 /1
Slide 191: Financial calendar 2004
Financial calendar 2004 l Q4 report 2003 will be published on 18 February 2004 l AGM will be held on 31 March 2004 l Q1 report 2004 will be published on 28 April 2004 l Q2 report 2004 will be published on 18 August 2004 l Q3 report 2004 will be published on 27 October 2004 www.nordea.com/ir 191