Slide 1: Presentation for Investors August 2003
Presentation for Investors 20 August 2003
Slide 2: Contents
Contents l Press slides Page 3 l Financial highlights Q2/03 Page 15 l Credit quality Page 56 l Economic capital Page 73 l Nordea Page 78 l Business areas Page 86 l Balance sheet Page 129 l Market shares Page 136 l Appendix Page 150 2
Slide 3: Interim Report Second Quarter 2003 Press conference
Interim Report Second Quarter 2003 Press conference 20 August 2003 Lars G Nordström
Slide 4: Short-term top priorities
Short-term top priorities l Reduce volatility l Improve cost control l Ensure capital efficiency l Maintain credit portfolio quality 4
Slide 5: Key words guiding performance improvements
Key words guiding performance improvements l “Focus” - concentrating on our strengths – change, close down or divest businesses and activities which are • not core business • underperforming • not profitable l “Speed” - being quick and flexible – having smooth and efficient operations – always adjus
Slide 6: “Focus” and “speed”
“Focus” and “speed” l Changing (examples) – Changed business model for investment banking activities implemented – Changed business models in the Life & Pension operations under implementation – Unified business organisation in Retail Banking implemented l Divestment of non-core assets – Finnish col
Slide 7: Reduce complexity - from “too many” to “just one”
Reduce complexity - from “too many” to “just one” l Mid and back office production processes being unified – Group Processing and Technology established – Negotiations with IBM on partnership for IT production • Group functions and support processes – Transformed into central service and support uni
Slide 8: Improved performance in first half 2003…
Improved performance in first half 2003… l Operating profit up 37% to EUR 959m (EUR 702m in H1/02) l Total income up 1% to EUR 2,837m (EUR 2,807m) l Total expenses down to EUR 1,819m (EUR 1,827m) l Earnings per share, rolling 12 months, EUR 0.40 l Return on equity, excl. goodwill, 15.2% (9.5%) 8
Slide 9: ...and in Q2
...and in Q2 l Operating profit up 52% to EUR 579m (EUR 380m in Q1) l Total income up 6% to EUR 1,463m (EUR 1,374m) l Total expenses down 2% to EUR 902m (EUR 917m) l Loan losses EUR 92m (EUR 98m), or 0.25% of loans and guarantees, annualised l Earnings per share EUR 0.14 (EUR 0.09) l Return on equit
Slide 10: Reduced earnings volatility from capital markets exposure
Reduced earnings volatility from capital markets exposure Investment earnings and insurance l Investment earnings up in Q2 operating profit Q1/02-Q2/03 2003 mainly due to fixed income EURm portfolio 100 – benefited from reduced market 81 rates 75 41 44 50 l Strong operating profit in Life 50 39 31 2
Slide 11: Cost development well within target
Cost development well within target Costs and C/I ratio Q1/02-Q2/03 l Total costs down 2% in Q2 2003 EURm % and unchanged in first half of 2003 1200 100 l Underlying costs in first half of 1000 993 2003 down by EUR 40m or 2% 905 922 925 917 902 80 – LG Petro Bank 64.0 66.0 800 65.0 60 – higher restr
Slide 12: Capital efficiency - strong capital position
Capital efficiency - strong capital position Economic capital and risk-weighted l Economic capital reduced by assets 01/02-Q2/03 EUR 1bn since end of 2002 EURbn – decreased market risk capital in 160 Life 140 136 137 137 – sale of real estate holdings 140 135 135 120 l Regulatory capital ratios 100
Slide 13: Credit quality maintained
Credit quality maintained Credit losses Q1/01-Q1/03 l Loan loss level at 0.25% of loans and guarantees, annualised, in EURm % Q2 (0.26% in first half of 2003), 125 0.9 still well below target of max. 0.8 0.40% 100 0.7 98 l Majority of loan losses stemming 92 0.6 from the Norwegian lending 75 76 0.5
Slide 14: In summary
In summary l We are on the right track l We are increasing focus l We have improved our performance l We start seeing results at an increased speed 14
Slide 15: Financial highlights Q2/03
Financial highlights Q2/03 } WON te Ww a. \. ’ s \ | 15
Slide 16: Improved performance for Q2…
Improved performance for Q2… l Operating profit up 52% to EUR 579m (EUR 380m in Q1) l Total income up 6% to EUR 1,463m (EUR 1,374m) l Total expenses down 2% to EUR 902m (EUR 917m) l Loan losses EUR 92m (EUR 98m), or 0.25% of loans and guarantees l Earnings per share EUR 0.14 (EUR 0.09) l Return on e
Slide 17: …and for the first half 2003
…and for the first half 2003 l Operating profit up 37% to EUR 959m (EUR 702m in H1/02) l Total income up 1% to EUR 2,837m (EUR 2,807m) l Total expenses down to EUR 1,819m (EUR 1,827m) l Earnings per share, rolling 12 months, EUR 0.40 l Return on equity, excl.goodwill, 15.2% (9.5%) 17
Slide 18: Increasing focus
Increasing focus l Nordisk Renting sold l Real estate broker, Huoneistokeskus, sold l Legal restructuring initiated l Changed business model for Life under implementation l Harmonised business organisation in Retail l Investment banking activities reorganised l Negotiations with IBM on partnership f
Slide 19: Market development – stock market indexes
Market development – stock market indexes % 30 25 20 15 10 5 0 -5 -10 -15 -20 Q1/03 Q2/03 Copenhagen Helsinki Oslo Stockholm Nasdaq Dow Jones 19
Slide 20: Market development – interest rates
Market development – interest rates % 31-03-03 30-06-03 Change Short, EUR (one week) 2.50 2.13 -0,37 Long, EUR (5 years) 3.27 2.97 -0.30 Short, DK 2.70 2.05 -0.65 Long, DK 3.41 3.18 -0.23 Short, NO 5.50 4.05 -1.45 Long, NO 5.11 4.06 -1.05 Short, SE 3.55 3.08 -0.47 Long, SE 4.09 3.61 -0.48 20
Slide 21: Net interest income
Net interest income EURm 1000 l Continued fall in short-term interest rates Q2 874 885 l Compensated by increased 800 855 835 843 volumes l Efforts made to limit effect of 600 falling short-term rates 400 l NII stable, H1/03 vs H1/02 l Volumes increased 200 l Pressure on deposit margins 0 l Corporat
Slide 22: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on NII Q2/03 Q1/03 Increasing market rates, 100bp 63* 92* Decreasing market rates, 100bp -127* -177* *Approximately, end of period l Reduced SIIR in Q2 – derivatives used to reduce effect of lower short-term market rates SIIR is defined
Slide 23: Commission income
Commission income EURm 388 500 396 371 366 50 61 353 l Commissions up 4% 50 40 44 400 91 95 86 88 87 l AuM up 7% to EUR 102bn 46 38 35 20 – strengthening of equity 300 24 183 195 191 markets 189 179 – strong net inflow 200 l Payment commissions up 7% – increased number of 100 115 101 108 104 114 tra
Slide 24: Trading
Trading EURm 180 l Maintained at a high level 160 157 155 l Leading Nordic provider of 140 137 derivatives and debt capital 120 127 130 100 market services 80 l High quality earnings 60 – customer driven revenue 40 stream 20 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 24
Slide 25: Income statement summary
Income statement summary EURm Q2/03 Q1/03 Change % Income 1,463 1,374 6 Expenses -902 -917 -2 Loan losses -92 -98 -6 Equity method 19 14 36 Profit before inv. earnings and insurance 488 373 31 Investment earnings, banking 81 29 Operating profit, life insurance 50 19 Operating profit, general insuran
Slide 26: Expenses
Expenses EURm 993 1000 922 925 448 917 902 l Down 2% compared to Q1 408 404 397 363 – despite seasonal effects 800 l Underlying cost reductions 600 – restructuring costs somewhat 545 539 higher than in Q1 514 521 520 400 200 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Personnel Other 26
Slide 27: Income statement summary
Income statement summary EURm Jan-Jun Jan-Jun Change Full year 2003 2002 % 2002 Income 2,837 2,807 1 5,670 Expenses -1,819 -1,827 0 -3,745 Loan losses -190 -119 60 -261 Equity method 33 32 3 52 Profit before inv. earnings and insurance 861 893 -4 1,716 Investment earnings, banking 110 42 122 Operati
Slide 28: Underlying expenses – development
Underlying expenses – development EURm 2000 l Ongoing initiatives showing 1800 effect 1827 1819 1600 l Somewhat better than 1400 anticipated 1200 1000 l Underlying expenses approx. EUR 40m lower y-o-y 800 – LG Petro Bank 600 – higher restructuring costs 400 – higher variable salaries 200 0 l On sche
Slide 29: Development of FTEs
Development of FTEs 40000 FTEs Q2/03 Q4/02 35000 34,271 32,949 Retail 19,246 20,300 30000 CIB 2,316 2,444 25000 20000 AM & Life 1,837 1,866 15000 GPT 7,780 7,710 10000 Other 1,770 1,951 5000 Total 32,949 34,271 0 Change -4% Q4/02 Q2/03 End of period 29
Slide 30: Loan losses
Loan losses EURm 100 90 98 l Loan losses concentrated to 92 80 Norwegian retail portfolio 70 76 l Vast majority within fish farming 60 66 l Loan losses at manageable level 50 56 – 0.25% of total loans and 40 guarantees, annualised, in Q2 30 20 10 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 30
Slide 31: Investment earnings, banking
Investment earnings, banking EURm 100 l Increased by EUR 52m 90 l Gains mainly on fixed-income 80 81 portfolio 70 60 l Benefited from reduced 50 market rates 40 39 41 30 31 29 20 10 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 31
Slide 32: Income statement summary
Income statement summary EURm Q2/03 Q1/03 Change % Income 1,463 1,374 6 Expenses -902 -917 -2 Loan losses -92 -98 -6 Equity method 19 14 36 Profit before inv. earnings and insurance 488 373 31 Investment earnings, banking 81 29 Operating profit, life insurance 50 19 Operating profit, general insuran
Slide 33: Income statement summary
Income statement summary EURm Jan-Jun Jan-Jun Change Full year 2003 2002 % 2002 Income 2,837 2,807 1 5,670 Expenses -1,819 -1,827 0 -3,745 Loan losses -190 -119 60 -261 Equity method 33 32 3 52 Profit before inv. earnings and insurance 861 893 -4 1,716 Investment earnings, banking 110 42 122 Operati
Slide 34: Net profit
Net profit EURm 800 l Increased by 78% 700 l Improved operating profit 600 660 – also when adjusting for loss in 500 General Insurance H1/02 400 l Allocation to pension fund in 300 371 H1 2002 (EUR 152m) 200 100 0 Jan-Jun 2002 Jan-Jun 2003 34
Slide 35: Key figures
Key figures EUR Earnings per share % Return on equity (excl. goodwill) 0.15 20 18 0.12 16 14 0.09 12 10 0.06 8 6 0.03 4 2 0.00 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 35
Slide 36: Earnings per share – 12 months rolling
36 Q 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 Earnings per share – 12 months rolling Q 4/ 20 02 Q 1/ 20 03 Q 2/ 20 03
Slide 37: Deferred tax asset
Deferred tax asset l Change process of the Group’s legal structure initiated l Following sale of NBD, NBN, and NBS from NBF to Nordea AB a tax deductible loss is materialising l Advance tax ruling received from Finnish tax authorities l Deferred tax asset to be booked in H2 2003 based on advance rul
Slide 38: Balance sheet - key items
Balance sheet - key items Change, 12 EURbn Q2/03 Q4/02 Q2/02 months % Lending 147 146 143 2 Deposits 89 92 90 -1 Shareholders’ equity 12 12 12 2 Total assets 270 250 251 7 Risk-weighted assets 135 135 136 -1 End of period 38
Slide 39: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 147 146 147 147 91 92 92 143 80 90 89 120 100 60 80 60 40 40 20 20 0 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 End of period 39
Slide 40: Real estate assets
Real estate assets l Profit from previously announced sales of residential property in Denmark included in Q2, EUR 41m l Corresponding provision made to cover potential losses on further real estate disposals l The ongoing process of reducing real estate assets expected to have marginal overall net
Slide 41: Capital adequacy
Capital adequacy Tier 1 ratio Total capital ratio % % 10 12 9 10 8 9.9 9.8 7 7.5 8 7.1 6 5 6 4 4 3 2 2 1 0 0 Q4/02 Q2/03 Q4/02 Q2/03 End of period 41
Slide 42: Pension commitments
Pension commitments l Defined benefit plans in Sweden, Finland and Norway mainly covered by pension funds under local regulation l Defined contribution plan in Denmark l Aggregated deficit of EUR 25m not recognised in balance sheet – reflecting surpluses in Finland, Sweden and Denmark – deficit of E
Slide 43: Pension commitments
Pension commitments Finland Sweden Norway Denmark Total EURm Q2/03 Q1/03 Q2/03 Q1/03 Q2/03 Q1/03 Q2/03 Q1/03 Q2/03 Q1/03 Assets 577 558 748 717 278 280 80 77 1,683 1,632 Pension commitments 545 537 863 854 454 465 87 86 1,948 1,942 Funded status 32 21 (115) (137) (176) (185) (6) (9) (265) (310) - su
Slide 44: Results by business area
Results by business area EURm 400 383 348 300 200 100 135 109 94 91 53 58 0 -87 -100 -162 -200 Retail CIB Asset Mgmt & Group Other Life* Treasury Q1/03 Q2/03 *Product result for Asset Management and Life 44
Slide 45: Retail Banking operating profit
Retail Banking operating profit EURm 500 l Increased business volumes 450 l Sale of Huoneistokeskus 400 424 418 – gain of EUR 43m 350 383 345 348 l Loan losses in Retail Norway 300 250 l Harmonised business organisation 200 in all four countries 150 100 50 Key ratios Q2/03 Q1/03 0 C/I ratio, % 57 60
Slide 46: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Quarterly averages 2.5 l Falling short-term rates 2.3 2.1 – pressure on deposit margins 1.9 l Stable lending margins 1.7 1.5 l Shift towards mortgage 1.3 lending 1.1 0.9 0.7 0.5 02 02 02 02 03 03 1/ 2/ 3/ 4/ 1/ 2/ Q Q Q Q Q Q Lending to corporates Lendin
Slide 47: CIB operating profit
CIB operating profit EURm 150 l RoE improved to 19% 138 135 l Continued strong deal flow 120 123 123 l Low loan losses 109 90 l Restructuring costs within Nordea Securities, EUR 13m 60 30 Key ratios Q2/03 Q1/03 C/I ratio, % 52 50 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 RoE, % 19 15 47
Slide 48: Asset Management, product result
Asset Management, product result EURm 60 l Revenues up following improved market conditions and net inflow 50 49 l Reduced costs 40 42 l Net inflow of EUR 2.4bn 38 35 – 9% inflow annualised 30 31 l AuM up 7% to EUR 102bn 20 10 Key ratios Q2/03 Q1/03 C/I ratio*, % 64 74 0 AuM, EURbn 102 95 Q2/02 Q3/0
Slide 49: Life Insurance, product result
Life Insurance, product result EURm 60 l Investment return improved to 3.3% (1.4% in Q1) 50 52 48 40 l Gradual implementation of 30 changed business model 20 22 10 0 -11 -10 -25 Key ratios Q2/03 Q1/03 -20 Inv return, % 3.3 1.4 -30 Financial 4.8 3.0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 buffers*, % 49 * Fina
Slide 50: Life - solvency situation
Life - solvency situation End of Q2/03 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 426 487 61 114 Finland 208 510 302 245 Norway 118 197 79 167 Sweden 64 128 64 201 50
Slide 51: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q2/03 Q1/03 Q2/03 Q1/03 Denmark 588 363 6.2 3.9 Finland 175 123 3.9 2.8 Norway 41 5 1.6 0.2 Sweden 65 44 4.3 2.9 Total 869 535 4.8 3.0 51 * Financial buffers are defined in accordance with local regulations and practices.
Slide 52: Group Treasury operating profit
Group Treasury operating profit EURm 100 l High investment earnings 90 91 80 – benefited from reduced market rates 70 60 l Somewhat increased interest rate 50 58 exposure compared to Q1 40 – active position taking within 30 established risk limits 31 20 27 21 10 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 52
Slide 53: Other column
Other column Q2/03 Q1/03 l Funding cost for acquisition of Income -22 -55 Nordea Bank Norway l Gain on sale of Nordisk Renting Expenses -66 -99 l Results from real estate holdings Loan losses 5 9 (non-owner occupied) Equity method 9 9 l Expenses in Group functions not defined as service offered to I
Slide 54: Changed business model within Life
Changed business model within Life l Guaranteed capital rather than guaranteed return – new products being introduced l Fee-based compensation to life company – based on total life provisions – sharply reduced dependence on investment return l Segregation of shareholders’ equity and policyholders’ r
Slide 55: Outlook 2003
Outlook 2003 l Still expectation for growth in the global as well as the Nordic economies going forward l Scope for revenue growth slightly improved as uncertainty of an economic turnaround reduced l Sharp attention on cost control will be maintained, and expenses for the full year are expected to b
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 Q2/03 EUR 147.0bn Public sector 2% Personal customers 41% Companies 57% 57
Slide 58: Lending to personal customers
Lending to personal customers End of Q2/03 EUR 60.2bn Other loans l Continuing 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 Q2/03 EUR 83.5 bn Shipping & Offshore 5% Construction Agriculture & 4% Fishing Real estate 5% 26% Transport, communication 5% Other companies 6% Renting, consulting and other services 8% Manufacturing Commerce and 15% services 11% Finance 59 15%
Slide 60: Loan portfolio
Loan portfolio EUR bn Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Personal customers 60.2 58.6 57.9 56 55 Real estate 22.0 22.6 22.4 23 22 Construction 2.8 2.9 3.1 3 3 Transport, communication 3.8 3.5 3.5 3 4 Trade and services 9.1 8.9 8.3 9 9 Manufacturing 12.5 13.5 13.9 15 15 Finance 12.2 10.7 9.1 9 8 Renting,
Slide 61: Lending by geographical area
Lending by geographical area End of Q2/03 EUR 147bn Asia Latin America USA 0.5% 0.6% Non-OECD 1.4% 0.8% Other OECD Nordic countries 0.5% 90.5% Other 9.5% The Baltic states and Poland 0.9% Other EU countries Nordic countries, EUR 132.9bn 4.8% l Denmark 37.2 l Finland 32.0 l Norway 22.2 l Sweden 41.5
Slide 62: Transfer risk exposure
Transfer risk exposure EURm. End of Q2/03 Asia 646 Latin America 254 -of which China 258 -of which Brazil 141 South Korea 124 Mexico 44 Indonesia 28 Chile 22 Panama 21 Argentina 3 Middle East 309 -of which Iran 104 Turkey 71 62
Slide 63: Nordea telecom financing portfolio
Nordea telecom financing portfolio End of Q2/03 Total exposure approx. EUR 5.1 bn Manufactures l Total outstanding EUR 3.3bn 27% l Majority of exposure related to – major Nordic equipment manufacturers – major Nordic telecom operators l ECA or cash cover for 9% of exposure Operators 73% 63
Slide 64: Nordea fisheries financing
Nordea fisheries financing End of Q2/03 Total exposure approx. EUR 2.4 bn Fish processing/ export l Total outstanding EUR 2.0bn 24% Fish l Mainly Norwegian exposure farming 43% l Fish farming the troubled area l Salmon prices still depressed Fishing vessels 33% 64
Slide 65: Nordea shipping portfolio
Nordea shipping portfolio Distribution by type of vessel End of Q2/03 Total exposure approx. EUR 5.8bn Reefers Combined Other dry cargo 4% vessels l Outstanding, EUR 5.0bn 1% 4% Misc.loans Cruise 12% l Well diversified portfolio by 7% Crude tankers type of vessel 12% Gas tankers l Focus on large ind
Slide 66: Nordea real estate financing portfolio
Nordea real estate financing portfolio End of Q2/03 Total exposure approx. EUR 22.3bn l Largest industry exposure Denmark 7.7% l Relatively large and financially Norway strong companies 18.9% Sweden 51.8% l High level of collateral coverage l Lending to residential real estate companies approx 50% F
Slide 67: Impaired loans
Impaired loans EURm. End of period Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Impaired loans, gross 2,851 2,892 3,260 3,136 3,180 Provisions -2,015 -2,087 -2,153 -2,290 -2,305 Of which: Specific provisions -1,571 -1,630 -1,698 -1,834 -1,836 Appraised by category -65 -64 -64 -79 -79 General provisions -379 -393 -
Slide 68: Impaired loans
Impaired loans EURm. End of Q2/03 Gross Provisons Net Personal customers 510 300 210 Real estate 189 130 59 Construction 76 63 13 Transport, communication 220 157 63 Trade and services 253 182 71 Manufacturing 288 212 76 Finance 126 104 22 Renting, Consulting and other services 243 204 39 Other comp
Slide 69: Loan losses
Loan losses EURm 300 246 l Loan losses at manageable 236 219 level 200 184 181 – 0.25% of total loans and guarantees annualised in Q2 98 92 100 56 66 76 l Loan losses concentrated to Norwegian retail portfolio 0 l Vast majority within fish farming -100 -128 -115 -143 -138 -154 -200 Q2/02 Q3/02 Q4/02
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 Telecom l Nordic operators have strengthened their positions l Handsets keeping up fairly well as new applications introduced l Delayed investments in 3G affect equipment suppliers and subcontractors l Consolidation in the industry continues 71
Slide 72: Comments on certain industries
Comments on certain industries Shipping and Offshore industry l Slower economic growth generally affects the industry negatively l Container ships recovering, tanker rates very volatile l Industrial shipping doing reasonably well l Cruising market affected by global uncertainty l Offshore industry s
Slide 73: Economic capital
Economic capital 73
Slide 74: 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 75: Economic capital
Economic capital EURbn 12 l Decreased market risk 11 10 capital in Life 10.4 10.1 9.9 9 9.5 – more efficient usage of 9.1 8 financial buffers 7 l Sale of real estate holdings 6 5 l EC reduced by EUR 1bn 4 since Q4/02 3 2 1 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 75
Slide 76: Economic capital per business area
Economic capital per business area End of Q2/03 EUR 9.1bn Other 10% Treasury 5% Asset Mgmt & Life 11% Retail 51% CIB 23% 76
Slide 77: Distribution of economic capital - by risk category
Distribution of economic capital - by risk category End of Q2/03 Real estate risk Life risk 5% 1% Business risk 10% Operational risk 8% Market risk Credit risk 15% 61% 77
Slide 78: 78
78
Slide 79: 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 80: Strategic direction and top priorities
Strategic direction and top priorities Sustainable growth of economic profit Top priorities l Reduce volatility and ensure growth of income Establish a Ensure stable and operational l Speed-up integration Optimise risk broadly excellence and unification taking and based and cost use of capital l Imp
Slide 81: 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 82: Financial targets
Financial targets Key performance indicator H1/03 2002 Target Total shareholder return, peer group 16 15 In the top five of the peer group ranking Return on equity excluding goodwill, % 15.2 11.3 Sustainable RoE>15% from 2004 Costs, EURm 1,819 3,745 Same cost level through 2004 as in 2002 Cost/incom
Slide 83: European banks by market cap
European banks by market cap HSBC RBOS BNP PARIBAS HBOS BARCLAYS SANTANDER LLOYDS TSB GP BBVA SOCIETE GENERALE UNICREDITO ABN AMRO CREDIT AGRICOLE BANCA INTESA DEXIA NORDEA SAN PAOLO IMI DANSKE BANK ALLIED IRISH BANKS KBC BANK OF IRELAND 0 10 20 30 40 50 60 70 80 90 100 110 120 Source: Nordea Securi
Slide 84: 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 9,626 Sweden Branch offices 263 Helsinki Personnel 8,165 Stockholm St Petersburg Norway Oslo Tallinn Branch offices 146 Copenhagen Riga Personnel 4,267 Vilnius Moscow Hamburg Denmark Warzawa
Slide 85: 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) 610 300 220 460 35 1,630 Net banking customers (1,000) 490
Slide 86: Business areas
Business areas 86
Slide 87: Results by business area
Results by business area EURm 400 383 350 348 300 250 200 150 135 100 109 94 91 50 53 58 0 Retail CIB Asset Mgmt & Group Treasury Life* Q1/03 Q2/03 *Product result for Asset Management and Life 87
Slide 88: Retail Banking
Retail Banking 88
Slide 89: Retail Banking operating profit
Retail Banking operating profit EURm 500 l Increased business volumes 450 l Sale of Huoneistokeskus 400 – gain of EUR 43m 424 418 350 383 l Loan losses in Retail Norway 345 348 300 l Harmonised business organisation 250 in all four countries 200 150 100 50 Key ratios Q2/03 Q1/03 0 C/I ratio, % 57 60
Slide 90: Retail Banking operating profit by markets
Retail Banking operating profit by markets Retail DK FI NO SE P&B EURm Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Net interest income 759 744 202 197 195 198 120 116 231 222 10 10 Non-interest income 373 319 89 89 125 76 39 42 108 101 8 10 Total income 1,132 1,063 291 286 320 274 159 158 339 323 18 20 Tota
Slide 91: Retail Banking lending
Retail Banking lending EURbn 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden Q1/03 Q2/03 End of period 91
Slide 92: Retail Banking deposits
Retail Banking deposits EURbn 25 20 15 10 5 0 Denmark Finland Norway Sweden Q1/03 Q2/03 End of period 92
Slide 93: Retail Banking deposits
Retail Banking deposits EURbn. End of Q2/03 25 9.5 20 4.6 15 2.7 6.5 6.7 6.2 1.3 10 3.8 9.2 5 6.1 6.2 6.0 0 Denmark Finland Norway Sweden Corporate Personal customer - saving accounts 93 Personal customer - current accounts
Slide 94: Retail Banking, volumes and margins
Retail Banking, volumes and margins Volumes Margins EURbn Q2/03 Q1/03 Q2/03 Q1/03 Lending to corporates 59.0 58.5 1.2% 1.2% Lending to personal customers 59.2 57.2 1.6% 1.7% Total lending 118.2 115.8 1.4% 1.4% Deposits from corporates 28.5 28.1 1.0% 1.1% Deposits from personal customers 41.3 40.1 1.
Slide 95: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Margin development 2.5 l Falling short-term rates 2.3 2.1 – pressure on deposit margins 1.9 l Stable lending margins 1.7 1.5 l Shift towards mortgage 1.3 lending 1.1 0.9 0.7 0.5 02 02 02 02 03 03 1/ 2/ 3/ 4/ 1/ 2/ Q Q Q Q Q Q Lending to corporates Lendin
Slide 96: E-banking & transactions
E-banking & transactions 96
Slide 97: E-banking customers
97 Ja n 1 1.5 2 2.5 3 3.5 4 -0 Mill. Ju 0 ne -0 0 No v- 00 Ap r il -0 Se 1 pt -0 1 Fe b- 02 Ju ly - E-banking customers 02 De c- 0 M 2 E-banking customers ay -0 3 Ja n- 0 50 100 150 200 250 300 350 0 Ju 0 (1,000) ne -0 0 No v- 0 Ap 0 ril -0 Se 1 pt -0 1 Fe b- 02 Ju ly- 0 Equity trading customers De
Slide 98: 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 00 00 01 01 02 02 03 1/ 3/ 1/ 3/ 1/ 3/ 1/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q Denmark Finland Norway Sweden Denmark Finland Norway Sweden 98
Slide 99: Penetration on the net
Penetration on the net Mutual funds penetration rate Equity trading penetration rate % % Executed trades 25 80 70 20 60 15 50 40 10 30 20 5 10 0 0 2 Se 0 Se 1 3 02 00 0 01 1 ep 03 1 02 01 1 2 3 3 02 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 n- n- n- -S n- ay ay ay ay n- n- pt pt p- ay pt ay n ay Ja Ja Ja Ja
Slide 100: 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 02 2 1 1 2 02 01 2 2 1 03 3 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 n- n- n- n- ay ay pt ay n pt ar pt ay pt ay Ja Ja Ja Ja Ja Se Se M Se Se M M M M M 100
Slide 101: Payment transactions, households
Payment transactions, households Payment transactions Mill. 250 l Payment transactions up 240 5% in Q2 230 220 l Card payments up 11% in 210 Q2 200 l Continued migration from 190 transactions in branches to 180 e-banking 170 160 150 01 01 01 01 02 02 02 02 03 03 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ Q Q Q Q
Slide 102: Corporate and Institutional Banking (CIB)
Corporate and Institutional Banking (CIB) ~ <nes 102
Slide 103: CIB operating profit
CIB operating profit EURm 150 l RoE improved to 19% 138 135 120 l Continued strong deal flow 123 123 109 l Low loan losses 90 l Restructuring costs within Nordea Securities, EUR 13m 60 30 Key ratios Q2/03 Q1/03 C/I ratio, % 52 50 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 RoE, % 19 15 103
Slide 104: Stock market development
Stock market development Market Volume Market index Q2 2003, Chg Q2 vs Q1, % Q2 2003, % EURbn Denmark 13.4 17.5 15.1 Finland 31.0 -18.8 10.8 Norway 17.0 27.8 29.0 Sweden 60.4 1.3 16.1 Nordic average -0.6 Source: Nordea securities 104
Slide 105: CIB operating profit by main area
CIB operating profit by main area International Corporate Inv. & Shipping Other Markets* CIB Division Banking Division EURm Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Total income 273 276 209 208 50 40 17 12 -3 16 132 162 Total expenses -143 -137 -61 -63 -13 -13 -30 -16 -39 -45 -57 -63 Profit bef. loan los
Slide 106: CIB lending volume
CIB lending volume EURbn 30 25 20 15 10 5 0 Corporate Division International & Shipping Total Division Q1/03 Q2/03 End of period 106
Slide 107: Asset Management & Life
Asset Management & Life 107
Slide 108: Asset Management, product result
Asset Management, product result EURm 60 l Revenues up following improved 50 market conditions 49 l Reduced costs 40 42 l Net inflow of EUR 2.4bn 38 30 35 – 9% inflow annualised 31 l AuM up 7% to EUR 102bn 20 10 Key ratios Q2/03 Q1/03 C/I ratio*, % 64 74 0 AuM, EURbn 102 95 Q2/02 Q3/02 Q4/02 Q1/03 Q
Slide 109: Assets under management, volumes
Assets under management, volumes EURbn 120 102 100 Life & pensions 80 Institutional clients 60 European private banking & fund distribution 40 Nordic private banking 20 Nordic retail funds 0 Q1/03 Q2/03 109
Slide 110: Asset structure – Investment Management
Asset structure – Investment Management* Q1/03 Q2/03 EUR 63.4bn EUR 67.4bn Int'l. fixed Int'l. fixed income income 13% 11% Nordic Nordic equities equities 12% 13% Nordic Nordic fixed fixed income income Int'l. Int'l. 56% 56% equities equities 19% 20% 110 *Including mgmt of own investment funds
Slide 111: Asset structure – Investment Funds
Asset structure – Investment Funds Q1/03 Q2/03 EUR 31.7bn EUR 35.6bn Balanced Balanced funds funds 12% 11% Fixed Fixed income income funds Equity funds Equity 51% funds 50% funds 37% 39% 111
Slide 112: Investment Funds volumes and margins
Investment Funds volumes and margins EURbn % Margins 16 1.4 14 1.2 12 1.0 10 0.8 8 0.6 6 0.4 4 2 0.2 0 0.0 DK FI NO SE DK* FI NO SE Q1/03 Q2/03 Q1/03 Q2/03 End of period * Net margin 112
Slide 113: European Fund distribution
European Fund distribution EURm 3000 l More than 1000 active distribution agreements 2500 l Assets by country of source: 2000 – 29% from Germany 1500 – 24% from Switzerland – 16% from Spain 1000 – 11% from Austria 500 – 7% from France 0 – 6% from Luxembourg – 7% from Other 00 01 01 02 02 03 3/ 1/ 3/
Slide 114: Life Insurance, product result
Life Insurance, product result EURm 60 l Investment return improved to 50 3.3% (1.4% in Q1) 52 48 40 30 l Gradual implementation of 20 changed business model 22 10 0 -11 -10 -25 Key ratios Q2/03 Q1/03 -20 Inv return, % 3.3 1.4 -30 Financial 4.8 3.0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 buffers*, % 114 * Fin
Slide 115: Life - breakdown of product result
Life - breakdown of product result EURm Q2/03 Q1/03 Normalised operating margin 54 86 Fluctuations compared to normalised investment return 297 -14 Change in discount rate for life provisions -126 -48 Allocation to policy-holders -13 -8 Allocation from financial buffers -165 11 Operating profit Unit
Slide 116: Life
Life EURm Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 TRADITIONAL LIFE Premiums written net 461 499 595 381 486 Normalised investment. return 247 250 284 285 239 Benefits paid and change in provision -626 -636 -770 -511 -643 Insurance operating expenses -28 -27 -30 -26 -29 Normalised operating margin 54 86 79 129
Slide 117: Life
Life EURm Denmark Finland Norway Sweden Other Total TRADITIONAL LIFE Premiums written net 189 165 78 27 2 461 Normalised investment return 117 59 44 21 5 247 Benefits paid and change in provision -289 -197 -105 -33 -2 -626 Insurance operating expenses -13 -2 -8 -2 -3 -28 Normalised operating margin
Slide 118: Life - investments
Life - investments EURbn 25 23.1 l Equities 20 – predominantly listed equities – 50/50 Nordic/international 15 l Bonds 10 – ¾ Nordic issuers – primarily govmn’t & mortgage inst. 5 0 Q1/02 Q3/02 Q4/02 Q1/03 Q2/03 Equities Bonds Real estate Unit linked 118 End of period
Slide 119: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q2/03 Q1/03 Q2/03 Q1/03 Denmark 11.0 10.6 16* 14* Finland 6.0 5.6 16 13 Norway 3.0 3.1 7 6 Sweden 2.6 2.4 3 2 Total 22.6 21.7 13 11 Total equity exposure including hedge, % 6 *Hedged 119
Slide 120: Life - solvency situation
Life - solvency situation End of Q2/03 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 426 487 61 114 Finland 208 510 302 245 Norway 118 197 79 167 Sweden 64 128 64 201 120
Slide 121: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q2/03 Q1/03 Q2/03 Q1/03 Denmark 588 363 6.2 3.9 Finland 175 123 3.9 2.8 Norway 41 5 1.6 0.2 Sweden 65 44 4.3 2.9 Total 869 535 4.8 3.0 121 * Financial buffers are defined in accordance with local regulations and practices.
Slide 122: Life – solvency sensitivity, end of Q2/03
Life – solvency sensitivity, end of Q2/03 Denmark Finland Norway Sweden % Solvency in % of requirement 114 245 167 201 Equities drop 12% 114 224 155 188 Interest rates down 50bp 109 275 170 243 Interest rates up 50bp 110 222 164 161 122
Slide 123: Life – buffer sensitivity, end of Q2/03
Life – buffer sensitivity, end of Q2/03 Denmark Finland Norway Sweden EURm Financial buffers* 589 175 41 65 Equities drop 12% -12 -45 -12 -8 Interest rates down 50bp 66 62 3 27 Interest rates up 50bp -59 -49 -3 -26 * Financial buffers are defined in accordance with local regulations and practices. 1
Slide 124: Group Treasury
Group Treasury 124
Slide 125: Group Treasury operating profit
Group Treasury operating profit EURm 100 l High investment earnings 90 91 80 – benefited from reduced market rates 70 60 l Somewhat increased interest rate 50 58 exposure vs Q1 40 – active position taking within 30 established risk limits 31 20 27 21 10 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 125
Slide 126: 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 Q2/03 Q1/03 Q2/03 Q1/03 Q2/03 Q1/03 Q2/03 Q1/03 Income 60 30 19 2 24 37 Expenses -3 -2 -1 -1 -8 -8 Profit excl. Investment earnings 16 29 16 29 Investment earnin
Slide 127: Group Treasury - investments
Group Treasury - investments EURbn 20 l Equities 16.0 – listed, unlisted & private equity 15 funds l Bonds 10 – ¾ Nordic issuers – primarily government and mortgage inst. 5 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Fixed income Equities End of period 127
Slide 128: Treasury – risk management
Treasury – risk management End of Q2/03 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 129: Balance sheet
Balance sheet 129
Slide 130: Balance sheet - key items
Balance sheet - key items Change, EURm Q2/03 Q4/02 Q2/02 12 months % Lending 146,950 145,740 143,448 2 Deposits 89,099 91,663 89,691 -1 Shareholders’ equity 11,810 11,897 11,543 2 Total assets 269,683 249,619 251,297 7 Risk-weighted assets 135,110 134,670 135,921 -1 End of period 130
Slide 131: Balance sheet structure - assets
Balance sheet structure - assets EURbn 150 146 147 120 90 60 30 36 28 32 28 24 22 22 25 5 5 0 Lending Interest Loans and Assets, Other assets, Other bearing advances to insurance banking securities credit inst. End of period Q4/02 Q2/03 131
Slide 132: Real estate holdings
Real estate holdings Book value. EURbn Q2/03 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 133: Balance sheet structure – liabilities and equity
Balance sheet structure – liabilities and equity EURbn 100 90 92 89 80 70 60 62 64 50 40 30 38 38 29 20 26 20 21 10 12 12 9 7 0 Deposits Debt Deposits by Other Liabilities, Shareholder´s Other securities in credit inst. liabilities, insurance equity issue banking End of period Q4/02 Q2/03 133
Slide 134: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 147 146 147 147 91 92 92 143 80 90 89 120 100 60 80 60 40 40 20 20 0 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 End of period 134
Slide 135: Capital base
Capital base EURm End of Q2/03 Shareholders’ equity 11,810 Deductions insurance companies and other -167 Shareholders’ equity in the capital base 11,643 Hybrid capital 345 Minority interests 13 Group goodwill -1,856 Other deductions -65 TIER 1 CAPITAL 10,080 TIER 2 CAPITAL (subordinated debt) 4,814
Slide 136: Market shares (statistics as of May 2003)
* Statistics as of May 2003 136
Slide 137: Market shares, personal customer deposits
Market shares, personal customer deposits % 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden May 02 May 03 137
Slide 138: Personal customer deposits - market volume & share
138 M Ju ay n 0 100 200 300 400 0 100 200 300 400 500 Au -00 S -0 g ep 0 DKKbn NOKbn N - 00 D -00 ov ec Fe - 00 M - 00 b ar M -01 - ay Ju 01 Au -01 n S -01 g ep N - 01 D - 01 ov ec Fe - 01 M - 01 b ar M -02 - Norway Ju 02 Denmark ay Au -02 n S -02 g ep N - 02 02 -02 ov -D Fe - 02 03 ec b -M M -03 03
Slide 139: Market shares, corporate deposits
Market shares, corporate deposits % 50 45 40 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden May 02 May 03 139
Slide 140: Corporate deposits - market volume & share
140 M Ju ay n 0 100 200 300 0 100 200 300 A -00 S -00 ug ep DKKbn NOKbn N - 00 D - 00 ov ec - F e - 00 M 00 b ar -0 M -01 ju 1 ay n A -01 S -01 ep ug N - 01 D - 01 ov ec - F e - 01 M 01 b ar M -02 Norway Ju -02 Denmark ay n A -02 S -02 ug ep N - 02 D - 02 ov ec - F e - 02 M 03 b ar M -03 ay Ju -03 -
Slide 141: Market shares, personal customer lending
Market shares, personal customer lending % 35 30 25 20 15 10 5 0 Denmark Finland Norway Sweden May-02 May-03 141
Slide 142: Personal customer lending - market volume & share
142 M Ju ay n 0 50 100 150 200 250 0 100 200 300 400 500 600 700 A -00 S -00 ug ep DKKbn NOKbn N - 00 D - 00 ov ec - F e - 00 M 00 b ar M -01 Ju -01 ay n A -01 S -01 ug ep N - 01 D - 01 ov ec - F e - 01 M 01 b ar M -02 Norway Ju -02 Denmark ay n A -02 S -02 ug ep N - 02 D - 02 ov ec - F e - 02 M 03
Slide 143: Market shares, corporate lending
Market shares, corporate lending % 60 50 40 30 20 10 0 Denmark Finland Norway Sweden May 02 May 03 143
Slide 144: Corporate lending - market volume & share
144 M Ju n ay 0 50 100 150 200 250 300 350 400 S -00 0 100 200 300 400 500 A -00 ep DKKbn ug NOKbn D - 00 N - 00 ec ov - F e - 00 M 00 ar b M -01 Ju -01 ay n A -01 S -01 ug ep N - 02 D - 01 ec ov - F e - 02 M 01 b ar M -02 Ju -02 Norway Denmark ay n A -02 S -02 ug ep N - 02 D - 02 ov ec - F e - 02 M
Slide 145: 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% 99 S 2 03 0 3 0 1 2 2 01 3 2 2 3 3 99 0 0 -0 -0 -0 -0 -0 -0 l- 0 -0 -0 -0 -0 n- n- n- 0 n- ar ar ep ep ec ec - p- n ar ct pr J
Slide 146: 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 03 1 2 1 2 02 03 2 3 01 02 -0 -0 0 0 r-0 r-0 n- n- n- g- b- g- b- - - ct ct ec ec Ap Ap Ju Ju Ju Au Au
Slide 147: 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 D - 01 D - 02 Ju 2 Ju 3 A u 01 A p 02 A u 02 A p 03 3 N 01 N 02 S e 01 S e 02 F e 02 F e 03 Ju ay Ju 03 M 02 M 03 02 -02 M 03 O 1 J
Slide 148: Investment funds, net inflow, Sweden
Investment funds, net inflow, Sweden Market volume, Nordea volume, and accumulated market share ytd SEKm 18bn % 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 1 1 2 2 2 2 2 2 3 3 3 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 u n g ct c b p r u n g ct c b p r n
Slide 149: Market share, equity dealing - Nordea Securities
Market share, equity dealing - Nordea Securities % Equity market turnover EURbn 16 Q2/03 Q1/03 14 Denmark 13.4 11.4 12 Finland 31.0 38.2 10 Norway 17.0 13.3 8 Sweden 60.4 59.6 6 4 2 0 ki o en m sl sin ol ag O kh el h oc H en St op C Q1/03 Q2/03 149
Slide 150: Appendix
Appendix l Financials Page 151 l Nordea share Page 160 l Other Page 166 l Macro statistics Page 171 150
Slide 151: Appendix: Financials
Appendix l Financials 151
Slide 152: Operational income statement
Operational income statement EURm Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Net interest income 843 835 885 874 855 Commission income 366 353 388 371 396 Trading 155 157 130 127 137 Other 99 29 54 34 37 Income 1,463 1,374 1,457 1,406 1,425 Personnel expenses -539 -520 -545 -521 -514 Other expenses -363 -397 -44
Slide 153: Statutory income statement
Statutory income statement EURm Q2/03 Q2/02 Interest income 2,352 2,598 Interest expenses -1,395 -1,667 Net interest income 957 931 Dividends received 26 22 Net commission income 372 405 Net result from financial operations 97 60 Other income 98 40 Total income 1,550 1,458 General administrative exp
Slide 154: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory accounts Operational Trading Investment Other Statutory EURm Jan-Jun 2003 income activities Insurance adjustment Jan-June 2003 Net interest income 1,678 141 1) 57 6) 1,876 Dividends received 5 4) 29 9) 36 Commission income 719 16 2) 735 Trading 312 -312 5)
Slide 155: 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 156: Expenses - breakdown
Expenses - breakdown EURm Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Personnel 1) 541 521 547 523 515 Information technology 2) 85 99 136 111 113 Marketing 23 18 34 21 36 Postage, telephone and office 49 58 62 50 52 expenses Rents, premises and real estate 81 82 89 79 74 expenses Other 128 142 130 146 134 Expens
Slide 157: Total IT-related expenses
Total IT-related expenses* EURm 250 200 216 182 184 177 174 150 100 50 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 *Total IT-related costs, including computer operations, service expenses, consultants and 157 personnel personnel etc (excluding IT expenses in insurance operations)
Slide 158: C/I ratio
C/I ratio C/I ratio, banking C/I ratio, banking % % 70 70 66 65 60 63 64 60 64 58 58 50 50 40 40 30 30 20 20 10 10 0 0 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 2001 2002 158
Slide 159: Gains and losses on various disposals etc
Gains and losses on various disposals etc EURm Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Huoneistokeskus 43 Nordisk Renting 32 Europay AS 24 Contant Oy 22 Sale of General Insurance -4 -40 Real Invest -16 DLR 30 Total 75 24 2 -10 159
Slide 160: Appendix: Nordea share
Appendix l Nordea share 160
Slide 161: Nordea share price vs DJ STOXX European banks
Nordea share price vs DJ STOXX European banks 6 March 2000* - 6 August 2003 % 180 160 140 120 100 80 60 June-00 June-01 June-02 Nordea DJ STOXX European Banks * Date of announcement of MNB/Unidanmark merger 161
Slide 162: Shareholder structure, end of June 2003
Shareholder structure, end of June 2003 4.0% 1.9% 6.1% 6.8% 31.6% Swedish institutions International institutions 8.3% Swedish state Danish institutions Finnish institutions Finnish public Danish public Swedish public 18.5% 22.9% Number of shareholders approx 506,000 162
Slide 163: Largest registered shareholders, end of June 2003
Largest registered shareholders, end of June 2003 Shareholder Number of shares % Swedish state 542,015,102 18.51 Alecta 114,575,426 3.91 Nordea Danmark fonden 102,529,423 3.50 Tryg i Danmark smba 92,609,801 3.16 Robur fonder 78,434,007 2.68 Nordea fonder 70,556,914 2.41 AMF Pension 65,900,000 2.25 F
Slide 164: 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 165: Data per share
Data per share H1/03 2002 2001 2000 19991) 1998 EUR EUR SEK SEK SEK Dividend 0.23 0.23 2.00 1.75 1.64 Shareholders equity per share, EUR 4.03 4.06 4.00 3.74 3.43 2.68 Earnings per share, EUR 0.23 0.30 0.53 0.58 0.55 0.53 Share price, end of period, 38.6 38.4 55.5 71.5 50 52 SEK P/E ratio 10.4 14.0 1
Slide 166: Appendix: Other
Appendix l Other 166
Slide 167: 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 168: 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 169: Legal structure
Legal structure Nordea AB (Publ) Sweden Nordea Bank Nordea Bank Nordea Bank Nordea Asset Nordea Nordea Life Danmark A/S Finland Plc Sweden AB (publ) Management AB Securities AB Holding A/S Denmark Finland Sweden Sweden Sweden Denmark Various Various Various subsidiaries subsidiaries subsidiaries Nor
Slide 170: 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 171: Appendix: Macro statistics and estimates
Appendix l Macro statistics and estimates Source: Nordea Economic Research Estimates from May 2003 171
Slide 172: Macro data
Macro data % 2002e 2003e 2004e Gross domestic product DK 2.1 1.2 2.1 FI 2.2 2.0 3.3 NO 1.3 1.0 2.5 SE 1.9 1.5 2.7 Inflation DK 2.4 2.5 2.0 FI 1.5 1.7 1.5 NO 1.4 3.0 1.7 SE 2.2 2.4 1.9 Private consumption DK 1.9 1.5 2.3 FI 1.5 3.4 2.7 NO 3.7 2.5 3.0 SE 1.3 2.1 2.5 Unemployment DK 5.1 5.7 5.5 FI 9.1 9
Slide 173: Market development - GDP
Market development - GDP % 2001 2002 2003e 2004e Denmark 1.4 2.1 1.2 2.1 Finland 1.2 2.2 2.0 3.3 Norway 1.9 1.3 1.0 2.5 Sweden 1.3 1.9 1.5 2.7 Source: Nordea Economic Research, May 2003 In Norway, forecasts are for mainland GDP 173
Slide 174: 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 174
Slide 175: Inflation
Inflation % 14 12 10 8 6 4 2 0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Denmark Finland Norway Sweden 175
Slide 176: 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 176
Slide 177: Household savings ratio
Household savings ratio % 12 10 8 6 4 2 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Denmark Finland Norway Sweden 177
Slide 178: Unemployment
Unemployment % of labour force 20 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 178 Denmark Finland Norway Sweden
Slide 179: 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 179
Slide 180: 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 180
Slide 181: Exchange rate, EUR/USD
181 1/ 1 /9 0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2 USD 8 1/ 5 /9 8 1/ 9 /9 8 1/ 1 /9 1/ 9 5 /9 9 1/ 9 /9 9 1/ 1 /0 0 1/ 5 /0 0 1/ 9 /0 0 1/ 1 /0 Exchange rate, EUR/USD 1/ 1 5 /0 1 1/ 9 /0 1 1/ 1 /0 1/ 2 5 /0 2 1/ 9 /0 2 1/ 1 /0 1/ 3 5 /0 3
Slide 182: Exchange rate, EUR/SEK
182 1/ 1 /9 8 8.4 8.8 9.2 9.6 10 8 SEK 1/ 5 /9 8 1/ 9 /9 8 1/ 1 /9 1/ 9 5 /9 9 1/ 9 /9 9 1/ 1 /0 0 1/ 5 /0 0 1/ 9 /0 0 1/ 1 /0 Exchange rate, EUR/SEK 1/ 1 5 /0 1 1/ 9 /0 1 1/ 1 /0 1/ 2 5 /0 2 1/ 9 /0 2 1/ 1 /0 1/ 3 5 /0 3
Slide 183: Exchange rate, EUR/NOK
183 1/ 1 /9 7 7.5 8 8.5 9 9.5 10 8 NOK 1/ 5 /9 8 1/ 9 /9 8 1/ 1 /9 1/ 9 5 /9 9 1/ 9 /9 9 1/ 1 /0 0 1/ 5 /0 0 1/ 9 /0 0 1/ 1 /0 1/ 1 Exchange rate, EUR/NOK 5 /0 1 1/ 9 /0 1 1/ 1 /0 1/ 2 5 /0 2 1/ 9 /0 2 1/ 1 /0 1/ 3 5 /0 3
Slide 184: Oilprice development, Brent, USD/Barrel
184 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 Oilprice development, Brent, USD/Barrel 2 1/ 1 /0 3
Slide 185: Stock exchange indices
185 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 186: Money market, 3 months rates
186 1/ 1 /9 2 3 4 5 6 7 8 9 8 % 1/ 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 Finland 5 /0 1/ 0 9 /0 1/ 0 1 /0 Norway 1/ 1 5 /0 1/ 1 9 /0 1/ 1 Money market, 3 months rates 1 Sweden /0 2 1/ 5 /0 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 3
Slide 187: Government bond, 10 year
187 1/ 1 /9 % 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 1/ 5 /9 8 1/ 9 /9 8 1/ 1 /9 1/ 9 5 /9 9 Denmark 1/ 9 /9 9 1/ 1 /0 0 1/ Finland 5 /0 0 1/ 9 /0 0 1/ 1 /0 Norway 1/ 1 5 Government bond, 10 year /0 1 1/ 9 /0 1 Sweden 1/ 1 /0 1/ 2 5 /0 2 1/ 9 /0 2 1/ 1 /0 1/ 3 5 /0 3
Slide 188: Financial calendar 2003
Financial calendar 2003 l Q3 report 2003 will be published on 29 October 2003 www.nordea.com/ir 188