Nordea Bank Abp · OMXHEX:NDA_FI

Nordea Bank Abp — Nordea — Q1 2011 Earnings Presentation

33 slides from Nordea Bank Abp's earnings presentation, Apr 28, 2011

  1. Slide 1: First Quarter Report 2011 Press and analyst conference

    First Quarter Report 2011 Press and analyst conference 28 April 2011 Christian Clausen President and Group CEO

  2. Slide 2: Disclaimer

    Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Nordea believes that the expectations reflected in such forward-looking statements are reasonable, no assurance

  3. Slide 3: Key messages

    Key messages  Strong business momentum continues  Strong platform and relationship strategy delivers  Taking Nordea into New Normal  Maintain business momentum and focus on returns Capital efficiency Cost efficiency RoE 3 28 April 2011 First Quarter Report 2011

  4. Slide 4: Result highlights

    Result highlights EURm Q1/11 Q4/10 Chg % Q1/10 Chg % Net interest income 1,324 1,365 -3 1,235 7 Net fee and commission income 602 618 -3 475 27 Net result items at fair value 544 504 8 548 -1 Other income 40 20 45 Total income 2,510 2,507 0 2,303 9 Staff costs -768 -675 14 -687 12 Total expenses -1,

  5. Slide 5: Strong start of the year - record level income

    Strong start of the year - record level income Total income, EURm  Continued strengthening of 2,507 2,510 relationships 2,359 2,363 2,279 2,277 2,303  More ancillary income 2,158 2,161  Strong business momentum Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 5 28 April 2011 First Quarter Re

  6. Slide 6: Stable net interest income

    Stable net interest income Net interest income, EURm  Solid trend in customer areas 1 365  Deposit volumes and margins 1 356 1 305 1 321 1 299 1 310 1 324 1 235 1 249 continue to increase  Limited loan demand from large corporates  High capital markets activity  Household lending up 4% annualis

  7. Slide 7: Net fee and commission remains strong

    Net fee and commission remains strong Net fee and commission income, EURm  Down 3% from high level 618  Seasonal effects 602 538 525  Asset management commissions 437 463 475 continue to increase 412 381  89% of all composite index outperform index over the past 36 months  Record high level of

  8. Slide 8: Fair value result up 8%

    Fair value result up 8% Net result from items at fair value, EURm  Customer areas continue to perform well  Good trading environment  Strong results in Group Corporate 411 Centre 339 333 296 302 298 297 283 291 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Customer areas 1 Other areas 2 ¹

  9. Slide 9: Expenses down Q-o-Q

    Expenses down Q-o-Q Total expenses, EURm  Expenses down 6%, adjusted for FX and one-off gain in 4Q10 1,270 1,265 1,219 1,186 1,196  Currency effect of 4% y-o-y 1,164 1,116 1,090 1,087  Number of staff up 2% y-o-y Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 9 28 April 2011 First Quarter

  10. Slide 10: Net loan losses on low levels

    Net loan losses on low levels Net loan losses, EURm  22bps¹ – in line with expected losses over a business cycle 425  EUR 67m from Amagerbanken – 356 358 347 Danish deposit system provision  Write-backs in the Baltics 261 245 207 22bps¹ 166 175 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/1

  11. Slide 11: Improved credit quality

    Improved credit quality Corporate rating distribution EAD 20% Increased Decreased  Positive rating migration 15% continues - reducing RWA 10% 5%  Increased impaired loans 0% Rating due to technical reasons 6+ 5+ 4+ 3+ 2+ 1+ 6 5 4 3 2 1 6- 5- 4- 3- 2- 1- Q1 2010 Q1 2011 Impaired loans, EURm 2 011 2

  12. Slide 12: Solid capital position

    Solid capital position Risk-Weighted Assets (RWA), EURbn  RWA excl. transition rules down 215 214 1.8% driven by 198 179 185 182  RWA optimisation activities  Improved credit quality  Lower volumes in international Q1/10 Q4/10 Q1/11 network Transition rules Fully implemented Basel II Core Tier 1

  13. Slide 13: Strong capital generation

    Strong capital generation Core tier 1 capital, EURm  Ability to adjust asset growth without jeopardising returns  CAGR in core equity of 9.1% after dividend and rights issue 19 103 19 408 17 766 14 313 11 689 12 821 2006 2007 2008 2009 2010 Q1 2011 Dividend payout 13 28 April 2011 First Quarter Re

  14. Slide 14: Customer acquisition trend continues

    Customer acquisition trend continues Number of Gold and Private Banking  Award-winning value proposition customers¹, 000 continue to attracts customers in relationship segments 3 041 2 994  Gold and Private Banking customers 2 826 increased by 47,000 in Q1  Increase by 6% p.a since 2007 Q1 2010 Q

  15. Slide 15: Growth in CMB mainly driven by ancillary business

    Growth in CMB mainly driven by ancillary business CMB Sweden ”lead Revenues, EURm Lending, EURbn relationships” %¹ 339 36 36 43 298 31 Q1 2010 Q1 2011 Q1 2010 Q1 2011 2008 2010  Leading corporate relationship bank in 3 of the 4 Nordic markets 15 28 April 2011 First Quarter Report 2011 ¹ Greenwich s

  16. Slide 16: The Nordea platform – strong starting point

    The Nordea platform – strong starting point 16 28 April 2011 First Quarter Report 2011

  17. Slide 17: Relationship strategy delivers

    Relationship strategy delivers Household Corporate New European Markets New Markets  Move existing customers up to  Increase market  Continue successful relationship segments share with largest organic growth path  Attract new customers customers in Poland to relationship segments  Proactive ad

  18. Slide 18: The platform is being upgraded

    The platform is being upgraded Infrastructure Product Distribution & platforms capabilities Integrated New customer PB IT infrastructure savings acquisition (PB, Gold) • NTP offering Household • New IBM contract Branch network focus Multi- on advice not manual • Finance processes channel service tra

  19. Slide 19: What the platform delivers

    What the platform delivers  Increased customer acknowledgement  Improved market positions  Productivity and efficiency  Low risk  Strong financials 19 28 April 2011 First Quarter Report 2011

  20. Slide 20: Increased customer acknowledgement and improved market positions

    Increased customer acknowledgement and improved market positions Total Group CSI CSI gap to peers Position in Prospera equity 71.8 ranking, Nordic avg. 3.0 5 70.6 12 -0.6 2007 2010 2007 2010 2006 2010 Household lending market share Private Banking, market share AuM, growth 2007-2010* Nordic avg. 21%

  21. Slide 21: Improved productivity and efficiency ratios

    Productivit y Improved productivity and efficiency ratios Business volumes¹/FTE, EURm Income/customer, EURt 20.7 221 219 20.2 19.6 18.9 203 207 205 207 18.6 201 200 200 17.6 17.8 16.3 16.8 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 ¹Le

  22. Slide 22: Loan losses in line with expected losses over a business cycle

    Loan losses in line with expected losses over a business cycle Loan losses, bps Income statement 2010, EURm 20 Total operating income 9,334 10 Total operating expenses -4,816 0 Profit before loan losses 4,518 -10 Expected losses, 25bp Net loan losses -879 -20 -30 -40 -50 -60 H1 H2 H1 H2 H1 H2 H1 H2

  23. Slide 23: Top-league risk-adjusted profit and shareholder return

    Top-league risk-adjusted profit and shareholder return Risk-adjusted profit, 2007- 2011 Ytd Total shareholder return, 2007 - 2011 Ytd 52.3.% 40 20 38.7% 6.5 0 -20 -40 Top quartile -60 -80 -100 Ro lling fo ur quarter co mpared with FY 2006 EUR 1,957m Nordea Peers Peers Peers Peers Peers Peers Peers P

  24. Slide 24: Best in class profitability

    Best in class profitability - Positive impact from operational performance Adjusted¹ Return on Equity 2007- 2011 Ytd 2010 RoE impact from different variables compared to 2007, % 20 19,1 6 17,6 14,8 4 15 14,1 12,0 2 11,3 11,3 10 0 9,7 9,3 7,6 -2 5 -4 2,2 -6 0 2007 2008 2009 2010 Average Q1 2011 -8 20

  25. Slide 25: Adapting to New Normal

    Adapting to New Normal 25 28 April 2011 First Quarter Report 2011

  26. Slide 26: Changed environment – higher raw material costs

    Changed environment – higher raw material costs Core Tier 1 capital ratio (excl. Hybrids), % Increased capital requirements… 10,7 7,5 2007 Q1 2011 Liquidity buffer, EURbn …as well as liquidity buffer 56 23 2007 Q1 2011 Average bond maturity, years …and prolonged long-term funding 3,7 3,0 2,3 2,1 200

  27. Slide 27: Committed to continue deliver RoE in the top league

    Committed to continue deliver RoE in the top league Return on Equity (RoE)  Best performing European banks will probably reach ROE 12,8 levels of around 15% 12,0 12,2 12,0 11,7 11,3  Nordea is committed to take 9,5 necessary steps to maintain 8,1 position in the top league Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

  28. Slide 28: Increase capital efficiency

    Increase capital efficiency  Negative effect from new regulations is expected to be offset by:  Advanced IRB  Efficiency gains - optimise use of RWA  Mitigation actions – less capital intensive solutions  RWA efficiency initiatives covering processes, data and methodologies  Focus on capital l

  29. Slide 29: Increase focus on cost efficiency

    Increase focus on cost efficiency  Adjust group initiatives to mainly support efficiency and profitability  Level of cost increase will be reduced during 2H2011¹  Continuing into 2012 29 28 April 2011 First Quarter Report 2011 ¹ In local currencies

  30. Slide 30: New organisation - focus on momentum and efficiency

    New organisation - focus on momentum and efficiency  Three main Business Areas  Retail Banking  Wholesale Banking  Wealth Management  All parts of value chains to be incorporated  Objective to improve efficiency, increase RoE and deepen customer relationship 30 28 April 2011 First Quarter Repo

  31. Slide 31: Changes in the Group Executive Management

    Changes in the Group Executive Management  Peter Schütze to retire from Nordea Two new members:  Torsten Hagen Jørgensen Head of Group Operations and Other Lines of Business  Peter Nyegaard Chief Operating Officer of Wholesale Banking 31 28 April 2011 First Quarter Report 2011

  32. Slide 32: Key messages

    Key messages  Strong business momentum continues  Strong platform and relationship strategy delivers  Taking Nordea into New Normal  Maintain business momentum and focus on returns Capital efficiency Cost efficiency RoE 32 28 April 2011 First Quarter Report 2011

  33. Slide 33: First Quarter Report 2011 Press and analyst conference

    First Quarter Report 2011 Press and analyst conference 28 April 2011 Christian Clausen President and Group CEO

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