Slide 1: Presentation for Investors April 2004
Presentation for Investors 28 April 2004
Slide 2: Contents
Contents l Press slides Page 3 l Financial highlights Q1/04 Page 20 l Credit quality Page 52 l Economic capital Page 68 l Nordea Page 73 l Business areas Page 82 l Balance sheet Page 125 l Market shares Page 132 l Appendix Page 147 2
Slide 3: Interim Report First Quarter 2004 Press conference
Interim Report First Quarter 2004 Press conference 28 April 2004 Lars G Nordström President and Group CEO
Slide 4: Strong results in Q1
Strong results in Q1 l Operating profit up 52% to EUR 584m (EUR 383m in Q4 2003) l Net profit more than doubled to EUR 418m (EUR 202m) l Total income up 2% to EUR 1,421m (EUR 1,399m) l Total expenses down 10% to EUR 873m (EUR 973m) l Loan losses down by 50% to EUR 42m (EUR 84m) l Earnings per share
Slide 5: Continued progress confirmed year-on-year
Continued progress confirmed year-on-year l Operating profit up 54% to EUR 584m (EUR 380m in Q1 2003) l Net profit up 64% to EUR 418m (EUR 255m) l Total income up 3% to EUR 1,421m (EUR 1,374m) and costs down 5% to EUR 873m (EUR 917m) l Loan losses down by 57% to EUR 42m (EUR 98m) 5
Slide 6: Growth in business volumes and increased focus
Growth in business volumes and increased focus l Assets under Management at new all-time high EUR 121.9bn, up EUR 8.6bn in Q1 l Continued strong performance in Life operations l Strong mortgage sales l Strengthened position among large corporate clients, particularly in Sweden l Real estate divestme
Slide 7: Increased income
Increased income Quarter-on-quarter: Income Q1/03-Q1/041 Total income up 2% EURm l Net interest income maintained 2000 – Volume growth in Retail Banking – Deposit margins declined 1600 1,463 1,403 1,399 1,421 1,374 l Commission income up 2% 1200 – Positive development in equity markets – AuM up 8% t
Slide 8: Lending to households - mortgages
Lending to households - mortgages EURbn 60 50 Market shares, % 48.9 50.0 48.2 45.7 Q1/04 Q1/03 Q1/02 44.3 40 DK 13.3 12.7 11.9 30 FI 32.5* 32.8 n.a NO 10.8* 10.3 9.9 20 SE 16.0 15.7 15.5 10 *Data from January 2004 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 8
Slide 9: Strong growth in assets under management
Strong growth in assets under management EURbn 140 l Nordea market leader within 121.9 120 113 retail funds in the Nordic 107 102 region 100 95 – Holds 20% of all Nordic 80 investment fund assets 60 l AuM up 8% in Q1 to EUR 40 121.9bn 20 l Large distribution capacity 0 – Inflow of EUR 4.2bn in Q1 Q1
Slide 10: Continued strong performance in Life & Pensions
Continued strong performance in Life & Pensions Life and Pensions operating profit Quarter-on-quarter: Q1/03-Q1/04 EURm l Continued strong 60 performance 50 50 47 l Investment return improved 40 40 40 l Increased financial buffers 30 20 19 Year-on-year: l Improved result reflecting the 10 changed bu
Slide 11: E-banking customers and payments
E-banking customers and payments E-banking customers E-banking payments Mill. Mill. 4 50 45 3.8 40 35 3.6 30 25 3.4 20 15 3.2 10 5 3 0 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 11 Denmark Finland Norway Sweden
Slide 12: Strengthened position among large corporate clients, particularly in Sweden
Strengthened position among large corporate clients, particularly in Sweden l Completion of several large transactions, not least in Sweden l Clearly improved position in Sweden – A significantly increased number of clients regard Nordea as Lead Bank l Growth in all product areas within Markets l In
Slide 13: Cost management culture in place
Cost management culture in place Quarter-on-quarter: Costs and C/I ratio Q1/03-Q1/04 l Reported expenses down 10% EURm % 1,200 100 l Underlying expenses down 4% 973 1,000 917 902 881 873 80 l EUR 15m reserved for profit 800 65 67 sharing in 2004 60 600 61 59 l Other expenses down 11% 58 40 – Despite
Slide 14: Number of employees down
Number of employees down Full time equivalents (FTEs) Q1/03-Q1/04 (end of period) Quarter-on-quarter: Number of FTEs l Down by approx. 800 FTEs or 40,000 2.6% 35,000 33,792 32,862 32,140 30,674 29,880 30,000 Year-on-year: 25,000 20,000 l Down by almost 12% 15,000 – Outsourcing - approx. 1,300 FTEs 1
Slide 15: Focus, consolidation and reducing complexity
Focus, consolidation and reducing complexity Joint venture with IBM (Nordic Processor) - ongoing: l IT production Norway transferred to Nordic Processor Procurement and outsourcing projects: l Office equipment l Telecom l Paper based payments in Sweden Legal structure: l Nordea AB (publ) --> Nordea
Slide 16: Good credit quality - loan losses down
Good credit quality - loan losses down Loan losses Q1/03-Q1/04 Quarter-on-quarter: % EURm l Down 50% 125 0.9 l Loan loss ratio 0.11% in Q1 0.8 100 0.7 l No provisions in fish-farming 98 92 89 0.6 l Majority central provisions 75 84 0.5 – Conservative evaluation of a few 0.4 commitments 50 0.3 42 25
Slide 17: Real estate divestment process completed
Real estate divestment process completed l Very comprehensive process successfully completed l Properties and real estate shares divested during the last 12 months represent a book value of approx. EUR 1.6bn l Sale of central business district properties in Finland, Norway and Sweden l A gain of EUR
Slide 18: Group financial targets
Group financial targets Key performance indicator 2003 Q1/04 Target Total shareholder return, % #3 # 15 In the top five of the peer group of 20 banks 1) RoE, excluding goodwill, % 16.7 18.2 > 15% Costs, EURm 3,673 873 Same cost level as in 2003 Loan losses ratio, % 0.25 0.11 < 0.40% of loans and gua
Slide 19: In summary
In summary l Strong result in the first quarter of 2004 l Continued progress confirmed year-on-year - Efforts to improve performance increasingly visible in financials - Total income up 3% - Cost down 5% - Loan losses more than halved l Well positioned to capture growth l Focus on strict cost and ri
Slide 20: Financial highlights Q1/04
Financial highlights Q1/04 20
Slide 21: Market development – stock market indexes
Market development – stock market indexes % 25 20 19.9 15 12.7 12.1 12.7 13.3 10 11.5 8.1 7.1 5 5.9 2.6 0 -2.0 -0.9 -5 Q4/03 Q1/04 Copenhagen Helsinki Oslo Stockholm Nasdaq Dow Jones 21
Slide 22: Market development – interest rates
Market development – interest rates Change 31-12-03 31-03-04 % Q1/04 Short, EUR (one week) 2.07 2.00 -0.07 Long, EUR (5 years) 3.50 3.06 -0.44 Short, DK 2.12 2.13 +0.01 Long, DK 3.64 3.34 -0.30 Short, NO 2.22 1.88 -0.34 Long, NO 3.84 3.50 -0.34 Short, SE 2.80 2.37 -0.43 Long, SE 4.14 3.37 -0.77 22
Slide 23: Short interest rates - average (one week)
Short interest rates - average (one week) % 6.0 5.85 5.0 5.05 4.0 3.74 3.41 3.42 3.0 2.95 2.86 2.81 2.75 2.44 2.51 2.57 2.52 2.0 2.09 2.07 2.03 2.10 2.11 2.15 1.99 1.0 0.0 EUR DKK SEK NOK Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 23
Slide 24: Net interest income
Net interest income EURm QoQ: 1000 l Total lending up 1% l Continued volume growth in Retail – increased market shares in mortgages 800 835 843 838 850 846 l Deposit margins declined – lower interest rates in Sweden and Norway 600 l Hedge effect in Q1 EUR 10-15m – hedge now largely expired 400 YoY:
Slide 25: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on Nii* Q1/04 Q4/03 Increasing market rates, 100bp 298 275 Decreasing market rates, 100bp -263 -251 *Approx. end of period l Hedging arrangement has now largely expired SIIR is defined as the effect on net interest income (Nii) in the ne
Slide 26: Net commission income
Net commission income EURm 388 397 QoQ: 500 379 47 49 353 366 47 l Positive development in 44 40 equity markets 400 88 90 88 – brokerage improved 87 88 35 44 28 300 24 20 200 192 l AuM up 8% to EUR 121.9bn 191 194 179 l Asset Mgmt revenues 200 maintained at high level l No. of payments down 4% 100 1
Slide 27: Trading
Trading EURm QoQ: 180 l Up 25% 160 157 155 156 l Strengthened position in large 140 corporate client segment, 120 130 125 particularly in Sweden 100 l Volume growth in all product 80 areas 60 40 YoY: 20 0 l Same high level Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 27
Slide 28: Expenses
Expenses EURm QoQ: 1000 973 46 l Reported expenses down 10% 917 902 873 881 416 397 15 363 350 l Underlying expenses down 4% 800 370 l Profit sharing Q1 EUR 15m 600 l Other expenses down 11% 520 539 531 511 – despite full effect of IBM JV staff 488 transfer 400 – lower IT and marketing costs as well
Slide 29: Development of FTEs
Development of FTEs 40,000 FTEs Q1/04 2003 35,000 33,792 32,862 Retail 17,882 18,320 30,000 32,140 30,674 29,880 CIB 1,974 2,102 25,000 AM & Life 1,797 1,796 20,000 GPT 6,554 6,772 15,000 Other 1,673 1,684 10,000 Total 29,880 30,674 5,000 Change -2.6% 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 End of period 29
Slide 30: Loan losses
Loan losses EURm QoQ: 120 l Down 50% 100 l Loan loss ratio 0.11% in Q1 98 92 89 l No provisions in fish-farming 80 84 l Majority central provisions 60 – conservative evaluation of a few commitments 40 42 YoY: 20 l Down 57% 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 30
Slide 31: Investment earnings, banking
Investment earnings, banking EURm QoQ: 100 90 l Favourable positioning 80 – active use of risk limits 81 70 l Falling long-term rates 60 62 l Rising equity markets 50 40 30 33 YoY: 29 27 20 l Larger gains on both equities 10 and fixed income 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 31
Slide 32: Operating profit, Life insurance
Operating profit, Life insurance EURm QoQ: 60 l Continued strong performance 50 50 l Investment return improved 47 40 l Increased financial buffers 40 40 30 YoY: 20 19 l Improved profit reflecting the 10 changed business model 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 32
Slide 33: Income statement summary
Income statement summary EURm Q1/04 Q4/03 Chg % Q1/03 Chg % Total income 1,421 1,399 2 1,374 3 Total expenses -873 -973 -10 -917 -5 Loan losses, net -42 -84 -50 -98 -57 Equity method 9 14 14 Profit before inv. earnings and 515 356 373 insurance Investment earnings, banking 62 33 88 29 114 Operating
Slide 34: Net profit
Net profit EURm QoQ: 700 l Up 107% 600 628 l Write-down of real estate 500 reduced profit in Q4 400 418 405 300 YoY: 255 200 l Up 64% 202 100 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 34
Slide 35: Key figures
Key figures EUR Earnings per share % Return on equity (excl. goodwill) 0.25 30 25 26.5 0.20 0.21 20 0.15 0.15 18.1 18.2 0.14 15 0.10 12.2 0.09 10 9.7 0.07 0.05 5 0.00 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 EPS 2003 EUR 0.51 RoE 2003 16.7% EPS 2003 adjusted to standard tax EUR
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/ 20 EUR 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 02 Q 1/ 20 03 Q Earnings per share – 12 months rolling 2/ 20 03 Q 3/ 20 03 Q 4/ 20 03 Q 1/ 20 04
Slide 37: Balance sheet - key items
Balance sheet - key items Change, 12 EURbn Q1/04 Q4/03 Q1/03 months % Lending 148.0 145.6 147.0 1 Deposits 92.1 95.6 94.6 -3 Shareholders’ equity 11.3 12.2 12.1 -7 Total assets 257.6 262.2 261.9 -2 Risk-weighted assets 135.2 134.4 136.6 -1 End of period 37
Slide 38: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 149 95 96 147 147 146 148 91 93 92 80 120 100 60 80 60 40 40 20 20 0 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 End of period 38
Slide 39: Capital position
Capital position Tier 1 ratio % 8 l IAS19/RR29 (pensions) in place – equity reduced by EUR 183m 7 7.5 7.5 7.3 7.2 6.7 – Tier 1 reduced by approx. 15bp 6 5 l Buyback of 63 mill shares in Q1 4 l Q1 profit not included 3 2 1 l Authorisation from AGM to purchase 0 up to 10% of the total no. of shares Q1
Slide 40: Real estate divestment process completed
Real estate divestment process completed l Sale of central business district properties in Finland, Norway and Sweden l A gain of approx. EUR 300m will be reflected in Q2 accounts l Properties and real estate shares divested during the last 12 months represent a book value of approx. EUR 1.6bn l Net
Slide 41: Result by business area
Result by business area EURm 500 400 428 433 300 200 100 154 100 60 60 44 53 62 55 0 -100 -131 -200 -268 -300 Retail CIB Asset Mgmt* Life* Group Group Treasury Functions *Product result for Asset Management and Life and Eliminations Q4/03 Q1/04 41
Slide 42: Retail Banking operating profit
Retail Banking operating profit EURm l Strong sales of mortgages 500 450 l Signs of growth in the corporate 400 428 433 segment 395 350 376 l Sharply reduced loan losses 345 300 250 200 150 100 50 Key ratios Q1/04 Q4/03 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 C/I ratio, % 58 55 RoE, % 26 26 42
Slide 43: Lending to households - mortgages
Lending to households - mortgages EURbn 60 Market shares, % 50 Q1/04 Q1/03 Q1/02 48.9 50.0 48.2 45.7 44.3 DK 13.3 12.7 11.9 40 FI 32.5* 32.8 n.a 30 NO 10.8* 10.3 9.9 20 SE 16.0 15.7 15.5 *Data from January 2004 10 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 43
Slide 44: 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 Somewhat declining deposit 1.9 margins 1.7 – including hedge effect 1.5 1.3 l Average Nordic mortgage margin 1.1 approx. 100bp 0.9 0.7 0.5 02 02 02 02 03 03 03 03 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ Q Q
Slide 45: CIB operating profit
CIB operating profit EURm 180 l Strong revenue growth in Markets 150 154 l Pick up in activity within M&A 120 131 l Nordic equity markets continued the positive trend 107 90 100 92 l Positive loan losses 60 30 Key ratios Q1/04 Q4/03 0 C/I ratio, % 48 54 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 RoE, % 25 15 45
Slide 46: Asset Management product result
Asset Management product result EURm 80 l Result maintained at high level 70 l AuM up EUR 8.6bn to EUR 60 121.9bn in Q1 60 60 50 – net inflow of EUR 4.2bn in Q1 48 40 l Asset appreciation EUR 4.4bn 41 30 31 20 10 Key ratios Q1/04 Q4/03 0 C/I ratio, % 56 56 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 AuM, EURbn 12
Slide 47: Assets under management
Assets under management EURbn 140 l Strong distribution capacity 121.9 120 113 l Nordea market leader within 107 102 100 95 retail funds in the Nordic 80 region 60 – holds 20% of all Nordic investment fund assets 40 20 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Nordic retail funds Nordic private banking Intern
Slide 48: Life Insurance, product result
Life Insurance, product result EURm 80 l High result at stable level 70 l Increased financial buffers 60 l Effect of changed business 50 53 model increasingly visible 52 40 43 44 30 20 22 10 Key ratios Q1/04 Q4/03 0 Inv return, % 3.2 0.7 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Financial 5.6 4.7 buffers*, % 48
Slide 49: Group Treasury operating profit
Group Treasury operating profit EURm 100 l Favourable positioning 90 91 80 – strong investment earnings 70 l Falling long-term interest rates 60 62 50 58 55 l Rising equity markets 40 30 35 20 10 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 49
Slide 50: Group Functions and Eliminations
Group Functions and Eliminations QoQ: Q1/04 Q4/03 l IBM JV start-up costs EUR 30m Income -5 -69 Q4 l Full-year profit sharing in Q4 Expenses -66 -173 l Central loan loss provisions Q1 Loan losses -35 -14 General: Equity method -1 6 l Results from real estate holdings (non-owner occupied) Operating p
Slide 51: Outlook 2004
Outlook 2004 l First quarter results were strong l Short-term interest rates have continued to decline – increase not expected in the short term l Challenging to maintain net interest income going forward l Outlook for increased revenues is positive, although at a moderate level l Sharp attention on
Slide 52: Credit quality
Credit quality : WTS > Ww om - \. \ ' NaS 52
Slide 53: Loan portfolio by customer group
Loan portfolio by customer group End of Q1/04 EUR 148.0bn Public sector 2% Household customers 45% Companies 53% 53
Slide 54: Lending to household customers
Lending to household customers End of Q1/04 EUR 66.3bn l Continued strong growth in Other loans 25% mortgage lending l Other loans comprise – consumer credits – investment credits – car financing – overdraft facilities – credit cards Housing loans 75% 54
Slide 55: Loan portfolio by customer category
Loan portfolio by customer category* EURbn 100 87 88 83 82 84 85 85 85 84 82 80 78 79 80 77 60 48 49 50 44 44 46 42 41 42 36 37 37 39 40 35 20 14 14 14 14 15 15 16 16 13 13 12 12 12 10 0 03 04 00 01 01 01 01 02 02 02 02 03 03 03 1/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q C
Slide 56: Lending to companies by industry
Lending to companies by industry End of Q1/04 EUR 78.6 bn Shipping & Offshore Construction Transport and 5% 3% communication 6% Real estate 27% Agriculture & Fishing 6% Renting, consulting and other services 8% Other companies 8% Manufacturing 15% Commerce and services Finance 11% 11% 56
Slide 57: Loan portfolio in figures
Loan portfolio in figures EURbn Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Household customers 66.3 64.7 63.5 60.2 58.6 Real estate 20.9 21.2 22.0 22.0 22.6 Construction 2.7 2.6 2.5 2.8 2.9 Transport, communication 4.3 4.4 4.6 3.8 3.5 Trade and services 8.8 8.7 9.1 9.1 8.9 Manufacturing 11.9 12.5 13.2 12.5 13.5
Slide 58: Lending by geographical area
Lending by geographical area End of Q1/04 EUR 148.0bn Other non OECD Latin America 0.9% 0.6% USA Nordic countries 1.2% Other OECD and P&B 0.6% 92.9% Other Asia 7.1% 0.5% Other EU countries Nordic countries and P&B 3.3% l Denmark 39.4 l Finland 32.3 l Norway 22.3 l Sweden 42.4 l P&B 1.1 58
Slide 59: Transfer risk exposure
Transfer risk exposure EURm. End of Q1/04 Asia 585 Latin America 212 -of which China 235 -of which Brazil 127 South Korea 128 Mexico 38 Indonesia 27 Chile 10 Panama 13 Argentina 2 Middle East 273 -of which Iran 100 Turkey 57 59
Slide 60: Nordea fisheries financing
Nordea fisheries financing End of Q1/04 Total exposure approx. EUR 2.0 bn Fish processing/ export l Total outstanding EUR 1.7bn 22% Fish l Mainly Norwegian exposure farming 41% l Fish farming – represents approx. 0.6% of total loan book – further increases in salmon prices in 2004 – no further provi
Slide 61: Nordea shipping portfolio
Nordea shipping portfolio Distribution by type of vessel End of Q1/04 Total exposure approx. EUR 5.7bn Reefers Combined 3% vessels Other dry cargo 1% 5% Crude tankers 13% l Outstanding, EUR 5.0bn Pure car carries 6% Misc. loans l Well diversified portfolio by Feries 12% type of vessel 6% l Focus on
Slide 62: Nordea real estate financing portfolio
Nordea real estate financing portfolio End of Q1/04 Total exposure approx. EUR 20.9bn Denmark 9.2% Sweden l Largest industry exposure Norway 47.5% 20.3% l Relatively large and financially strong companies l High level of collateral coverage l Lending to residential real estate companies approx 50% F
Slide 63: Impaired loans
Impaired loans EURm. End of period Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Impaired loans, gross 2,615 2,649 2,916 2,851 2,892 Provisions 1,929 -1,936 -2,072 -2,015 -2,087 Of which: Specific provisions -1,449 -1,468 -1,624 -1,571 -1,630 Appraised by category -60 -62 -64 -65 -64 General provisions -420 -406 -3
Slide 64: Impaired loans
Impaired loans EURm. End of Q1/04 Gross Provisons Net Household customers 524 343 181 Real estate 191 146 45 Construction 70 62 8 Transport, communication 231 182 49 Trade and services 226 175 51 Manufacturing 307 235 72 Finance 75 62 13 Renting, Consulting and other services 241 187 54 Other compan
Slide 65: Loan losses
Loan losses EURm QoQ: 300 236 246 229 l Down 50% 221 200 l Loan loss ratio 0.11% in Q1 128 l No provisions in fish-farming 98 92 89 84 100 l Majority central provisions 42 – conservative evaluation of a few 0 commitments -100 YoY: -86 -138 -132 l Down 57% -154 -145 -200 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04
Slide 66: Comments on certain industries
Comments on certain industries Real estate l Vacancy rates for office buildings high particularly in the Stockholm region 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
Slide 67: Comments on certain industries
Comments on certain industries Shipping and Offshore industry l China the driving force for shipping boom 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 Nordea´
Slide 68: Economic capital
Economic capital 68
Slide 69: 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: – composition of risk exposures – changes i
Slide 70: Economic capital
Economic capital EURbn 10 QoQ: 9 9.5 l EC somewhat reduced 9.1 9.0 8.9 8.7 8 within Life 7 6 YoY: 5 l EC reduced by EUR 4 0.8bn 3 2 1 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 70
Slide 71: Economic capital per business area
Economic capital per business area End of Q1/04 Treasury Other 6% EC per business area, Q1/04 9% EURbn Asset Mgmt Retail Banking 4.8 & Life 11% CIB 1.7 Asset Mgmt 0.1 Retail 55% Life 0.8 CIB Treasury 0.5 20% Other 0.8 Total 8.7 71
Slide 72: Distribution of economic capital - by risk category
Distribution of economic capital - by risk category End of Q1/04 Real estate risk 4% Life risk Operational risk 1% 8% Business risk 11% Credit risk Market risk 60% 16% 72
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Slide 74: Developing Nordea
Benefiting from Developing Nordea the Nordic vision One bank Adjusting to changed market conditions Resuming top-line growth 2003 Focus, speed and performance Changes of business models Divestment of non-core assets Shaping the new reality 2002 Reduction of complexity Customer organisation, customer
Slide 75: Mission: 'Making it possible'
Mission: ‘Making it possible’ By providing a broad set of easily accessible and competitive financial services and solutions, Nordea helps customers to reach their objectives. Vision We will be valued as the leading financial services group in the Nordic and Baltic markets with a substantial growth
Slide 76: Strategic themes 2004
Strategic themes 2004 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 a
Slide 77: Strategic themes firmly anchored throughout the Group
Strategic themes firmly anchored throughout the Group Retail Banking Corp. and Inst. Banking Asset Management & Life Group / Group functions • Increase sales to all existing • Increase share of wallet • Capture share of growth in customers • Further enhance position the long-term savings and Ensure
Slide 78: Financial targets
Financial targets Key performance indicator Q1/04 2003 Target Total shareholder return, peer group 15th 3rd In the top five of the peer group ranking Return on equity excluding goodwill, % 18.2 16.7 Sustainable RoE>15% from 2004 Costs, EURm 873 3,673 Same cost level as in 2003 Cost/income ratio, % 5
Slide 79: Peer group by market cap, EURbn
Peer group* by market cap, EURbn 19 April 2004 RBOS BARCLAYS BNP HBOS LLOYDS TSB SOCIETE GENERALE ABN AMRO NORDEA KBC DANSKE BANK HYPOVEREINSBANK SHB ALLIED IRISH BANK BANK OF IRELAND ABBEY NATIONAL COMMERZBANK SEB SWEDBANK DnB NOR SAMPO 0 10 20 30 40 50 60 70 80 79 *As defined by Nordea
Slide 80: 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 8,792 Sweden Branch offices 256 Helsinki Personnel 7,500 Stockholm St Petersburg Norway Oslo Tallinn Branch offices 130 Copenhagen Riga Personnel 3,553 Vilnius Moscow Denmark Warzaw Branch of
Slide 81: 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 1,620 2,960 630 4,100 280 9,590 Corporate customers 80 320 65 440 30 935 Life insurance customers (1,000) 615 315 235 510 55 1,735 E-banking customers (1,000) 558 1
Slide 82: Business areas
Business areas 82
Slide 83: Retail Banking
Retail Banking 83
Slide 84: Retail Banking operating profit
Retail Banking operating profit EURm 500 l Strong sales of mortgages 450 l Signs of growth in the corporate 400 428 433 segment 395 350 376 345 l Sharply reduced loan losses 300 250 200 150 100 50 Key ratios Q1/04 Q4/03 0 C/I ratio, % 58 55 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 RoE, % 26 26 84
Slide 85: Retail Banking operating profit by markets
Retail Banking operating profit by markets Retail DK FI NO SE P&B EURm Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Net interest income 727 758 200 208 187 198 113 117 211 225 12 11 Non-interest income 345 356 88 87 91 99 36 35 120 124 8 8 Total income 1,072 1,114 288 295 278 297 149 152 331 349 20 19 Total
Slide 86: Retail Banking lending
Retail Banking lending EURbn 40.0 35.0 37.7 38.3 37.8 34.4 30.0 33.1 31.0 25.0 26.9 27.7 25.0 20.0 20.6 18.9 19.3 15.0 10.0 5.0 0.0 Denmark Finland Norway Sweden Q1/03 Q4/03 Q1/04 End of period 86
Slide 87: Retail Banking deposits
Retail Banking deposits EURbn 25 22.6 22.6 20 21.5 21.2 19.9 19.9 15 15.7 14.8 15.3 10 11 10.0 10.3 5 0 Denmark Finland Norway Sweden Q1/03 Q4/03 Q1/04 End of period 87
Slide 88: Retail Banking deposits
Retail Banking deposits EURbn. End of Q1/04 25 9.5 20 4.0 15 2.6 6.7 6.6 6.3 10 1.2 3.5 9.2 5 6.5 6.8 5.6 0 Denmark Finland Norway Sweden Corporate Household customer - saving accounts 88 Household customer - current accounts
Slide 89: Retail Banking, volumes and margins
Retail Banking, volumes and margins Volumes Margins EURbn Q1/04 Q4/03 Q1/04 Q4/03 Lending to corporates 56.8 56.0 1.2% 1.2% Lending to household customers 64.3 63.0 1.6% 1.6% Household mortgages 50.0 48.9 0.9% 1.0% Total lending 121.1 119.0 1.4% 1.4% Deposits from corporates 28.6 29.0 1.0% 1.0% Depo
Slide 90: 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 Somewhat declining deposit 1.9 margins 1.7 – including hedge effect 1.5 1.3 l Average Nordic mortgage margin 1.1 approx. 100bp 0.9 0.7 0.5 02 02 02 02 03 03 03 03 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ Q Q
Slide 91: E-banking & transactions
E-banking & transactions 91
Slide 92: E-banking customers
92 Ja n 1 1.5 2 2.5 3 3.5 4 -0 Ju 0 Mill. ne - No 00 v- Ap 00 r il - Se 01 pt -0 Fe 1 b- 0 Ju 2 ly - 0 De 2 c- M 02 E-banking customers ay -0 O 3 ct -0 E-banking customers M 3 ar -0 4 Ja n- 0 50 100 150 200 250 300 350 400 Ju 00 (1,000) ne - No 0 0 v- Ap 00 ril Se -01 pt -0 Fe 1 b- 0 Ju 2 ly- De 02
Slide 93: Payments and log-ons
Payments and log-ons E-banking payments E-banking log-ons Mill. Mill. 50 50 45 45 40 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 04 00 00 01 01 02 02 03 03 04 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Denmark Finland Norway S
Slide 94: Penetration on the net
94 Ja 0 5 10 15 20 25 30 35 n- % 01 M ay -0 Se 1 pt -0 1 Ja n- 02 M ay -0 Se 2 p- 02 Ja n- 0 M 3 ay -0 3 Se p- 03 Mutual funds penetration rate Ja n- 04 Penetration on the net Ja 0 10 20 30 40 50 60 70 80 n- % 0 M 0 ay - Se 00 pt -0 Ja 0 n- 0 M 1 ay - Se 01 pt -0 Ja 1 n- M 02 ay - 02 02 Executed tra
Slide 95: Cards
95 Ja 0 10 20 30 40 50 60 n- Mill. 01 M ay -0 Se 1 pt -0 1 Cards Ja n- 0 M 2 ay -0 Se 2 pt -0 2 Ja n- 0 Card payments M 3 ay -0 Se 3 p- 03 Ja n- 04 Ja n 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 -0 Mill. 1 M ay -0 Se 1 pt -0 1 Ja n- 02 M ay -0 Se 2 pt -0 2 Ja n- 03 M ay -0 3 Se p- Issued debit and
Slide 96: Payment transactions, households
Payment transactions, households Payments transactions, households Breakdown of transactions Mill. Mill. 300 140 275 120 100 250 80 225 60 200 40 175 20 150 0 Q 01 Q 01 Q 01 Q 01 Q 02 Q 2 Q 02 Q 02 Q 03 Q 03 Q 03 Q 03 04 1 1 2 2 3 3 4 0 0 0 0 0 0 0 0 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 1/ 3/ 1/ 3
Slide 97: Corporate and Institutional Banking (CIB)
Corporate and Institutional Banking (CIB) ~ <nes
Slide 98: CIB operating profit
CIB operating profit EURm 180 l Strong revenue growth in Markets 150 l Pick up in activity within M&A 154 120 131 l Nordic equity markets continued the positive trend 107 90 100 92 l Positive loan losses 60 30 Key ratios Q1/04 Q4/03 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 C/I ratio, % 48 54 RoE, % 25 15 98
Slide 99: Stock market development
Stock market development Market Volume Market index Q1 2004, Chg Q1 vs Q4, % Q1 2004, % EURbn Denmark 23.4 +36.8 5.9 Finland 56.5 +50.3 11.5 Norway 27.1 +38.3 13.4 Sweden 115.6 +50.1 8.1 Source: Nordea Securities 99
Slide 100: CIB operating profit by main area
CIB operating profit by main area Corporate Financial International CIB Banking Instititutions and Shipping Other Markets Division Division Division EURm Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Total income 276 238 127 98 88 58 43 45 18 37 180 141 Total expenses -134 -129 -39 -38 -28 -31 -10 -13 -57 -47
Slide 101: CIB lending volume
CIB lending volume EURbn 25 20 20 19.6 15 10 11.9 11.9 5 6.4 6.5 1.7 1.2 0 Corporate Banking Financial International and Total Division Institutions Division Shipping Division Q4/03 Q1/04 End of period 101
Slide 102: Asset Management & Life
Asset Management & Life / | sal
Slide 103: Asset Management product result
Asset Management product result EURm 80 l Result maintained at high level 70 l AuM up EUR 8.6bn to EUR 60 121.9bn in Q1 60 60 – net inflow of EUR 4.2bn in Q1 50 48 l Asset appreciation EUR 4.4bn 40 41 30 31 20 Key ratios Q1/04 Q4/03 10 C/I ratio, % 56 56 0 AuM, EURbn 122 113 Q1/03 Q2/03 Q3/03 Q4/03
Slide 104: Assets under management
Assets under management EURbn 140 l Strong distribution capacity 121.9 120 113 l Nordea market leader within 107 102 100 95 retail funds in the Nordic 80 region 60 – holds 20% of all Nordic investment fund assets 40 20 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Nordic retail funds Nordic private banking Intern
Slide 105: Net inflows
Net inflows EURbn 6 5.7 5 Life & pensions 4.2 4 Institutional clients 3 International wealth 2.4 2.4 2.0 mgmt & funds 2 Nordic private banking 1 Nordic retail funds 0 -1 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 105
Slide 106: Asset structure – Investment Management
Asset structure – Investment Management* Q1/04 Q4/03 EUR 77.7bn EUR 73.7bn Int'l. fixed Int'l. fixed income income 12% 11% Nordic Nordic equities equities 14% 14% Nordic Nordic fixed fixed income income 52% 53% Int'l. Int'l. equities equities 22% 22% 106 *Including mgmt of own investment funds
Slide 107: Asset structure – Investment Funds
Asset structure – Investment Funds Q1/04 Q4/03 EUR 45.5bn EUR 41.2bn Balanced Balanced funds funds 10% 10% Fixed income Fixed funds income 45% funds 46% Equity Equity funds funds 45% 44% 107
Slide 108: Investment Funds, volumes and margins
Investment Funds, volumes and margins EURbn % Margins 20 1.4 18 1.2 16 1.21 1.22 16.6 16.0 14 1.0 1.06 1.07 14.5 12 13.0 0.88 0.8 0.81 10 8 0.6 0.60 0.53 6 0.4 6.2 4 5.2 0.2 2 1.5 1.6 0 0.0 DK FI NO SE DK* FI NO SE Q4/03 Q1/04 Q4/03 Q1/04 End of period * Net margin 108
Slide 109: European Fund distribution
European Fund distribution EURm 6000 l Net inflow amounted to EUR 0.5bn in Q1 5000 l More than 1000 active distribution agreements 4000 l Assets by country of source: 3000 – 25% from Switzerland 2000 – 25% from Germany – 16% from Spain 1000 – 10% from Luxembourg – 8% from Austria 0 – 7% from UK 00 0
Slide 110: Life Insurance, product result
Life Insurance, product result EURm 80 l High result at stable level 70 l Increased financial buffers 60 l Effect of changed business model increasingly visible 50 53 52 40 43 44 30 20 22 Key ratios Q1/04 Q4/03 10 Inv return, % 3.2 0.7 0 Financial 5.6 4.7 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 buffers*, % 11
Slide 111: Life - breakdown of product result
Life - breakdown of product result EURm Q1/04 Q4/03 Normalised operating margin 45 62 Fluctuations compared to normalised investment return 347 -114 Change in discount rate for life provisions -98 111 Allocation to policy-holders -30 -6 Allocation to/from financial buffers -218 -10 Net profit from o
Slide 112: Life
Life EURm Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 TRADITIONAL LIFE Premiums written net 491 533 370 461 499 Normalised investment. return 234 244 236 247 250 Benefits paid and change in provision -655 -687 -532 -626 -636 Insurance operating expenses -25 -28 -24 -28 -27 Normalised operating margin 45 62 50 54
Slide 113: Life
Life EURm Denmark Finland Norway Sweden Other Total TRADITIONAL LIFE Premiums written net 167 175 109 34 6 491 Normalised investment return 117 60 36 17 3 234 Benefits paid and change in provision -259 -209 -133 -41 -12 -655 Insurance operating expenses -11 -2 -8 -2 -2 -25 Normalised operating margi
Slide 114: Life - investments
Life - investments EURbn 30 l Equities 24.8 25 23.1 23.4 23.9 – predominantly listed equities 22.1 20 – 50/50 Nordic/international l Bonds 15 – ¾ Nordic issuers 10 – primarily govmn’t & mortgage inst. 5 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Equities Bonds Real estate Unit linked 114 End of period
Slide 115: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q1/04 Q4/03 Q1/04 Q4/03 Denmark 11.6 11.2 18 16* Finland 6.6 6.3 18 17 Norway 3.3 3.2 12 10 Sweden 2.8 2.7 4 3 Total 24.3 23.4 15 14 *Hedged 115
Slide 116: Life - solvency situation
Life - solvency situation End of Q1/04 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 451 509 58 113 Finland 225 594 369 264 Norway 120 196 76 163 Sweden 66 145 79 219 116
Slide 117: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q1/04 Q4/03 Q1/04 Q4/03 Denmark 717 623 7.3 6.5 Finland 204 145 4.3 3.1 Norway 55 62 2.0 2.3 Sweden 83 48 5.2 3.0 Total 1,058 878 5.6 4.7 117 * Financial buffers are defined in accordance with local regulations and practices.
Slide 118: Life – solvency sensitivity, end of Q1/04
Life – solvency sensitivity, end of Q1/04 Denmark Finland Norway Sweden % Solvency in % of requirement 113 264 163 219 Equities drop 12% 112 234 139 205 Interest rates down 50bp 110 282 167 251 Interest rates up 50bp 115 247 159 137 118
Slide 119: Life – buffer sensitivity, end of Q1/04
Life – buffer sensitivity, end of Q1/04 Denmark Finland Norway Sweden EURm Financial buffers* 717 204 55 83 Equities drop 12% -151 -68 -33 -10 Interest rates down 50bp 29 26 5 21 Interest rates up 50bp -1 -24 -5 -25 * Financial buffers are defined in accordance with local regulations and practices.
Slide 120: Group Treasury
Group Treasury 120
Slide 121: Group Treasury operating profit
Group Treasury operating profit EURm 100 90 l Favourable positioning 91 80 – strong investment earnings 70 60 l Falling long-term interest rates 62 50 58 55 l Rising equity markets 40 30 35 20 10 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 121
Slide 122: Group Treasury operating profit by main areas
Group Treasury operating profit by main areas Group Investment Group Funding Total Fixed income Equity portfolios portfolios EURm Q1/04 Q4/03 Q1/04 Q4/03 Q1/04 Q4/03 Q1/04 Q4/03 Income 48 5 18 32 1 37 Expenses -3 -3 -1 -1 -8 -8 Profit excl. Investment earnings -7 29 -7 29 Investment earnings 62 33 4
Slide 123: Group Treasury - investments
Group Treasury - investments EURbn 20 l Equities 17.2 16.0 15.9 16.2 – listed, unlisted & private equity 14.8 funds 15 l Bonds 10 – ¾ Nordic issuers – primarily government and mortgage inst. 5 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Fixed income Equities End of period 123
Slide 124: Treasury – risk management
Treasury – risk management End of Q1/04 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 125: Balance sheet
Balance sheet 125
Slide 126: Balance sheet - key items
Balance sheet - key items Change, EURm Q1/04 Q4/03 Q1/03 12 months % Lending 147,979 145,644 147,009 1 Deposits 92,149 95,556 94,600 -3 Shareholders’ equity 11,262 12,177 12,145 -7 Total assets 257,592 262,190 261,938 -2 Risk-weighted assets 135,175 134,396 136,646 -1 End of period 126
Slide 127: Balance sheet structure - assets
Balance sheet structure - assets EURbn 160 147 148 120 80 40 30 32 34 30 21 21 23 25 5 4 0 Lending Bonds and Loans and Assets, Other assets, Other other interest advances to insurance banking bearing credit inst. securities End of period 31/03/03 31/03/04 127
Slide 128: Real estate holdings
Real estate holdings Book value. EURbn Q1/04 2003 2002 2001 2000 Owner occupied properties 0.4 0.4 1.2 1.5 1.4 Non owner occupied properties 0.1 0.1 0.2 0.3 0.6 Shares in real estate holding 0.1 0.2 0.4 0.3 0.4 companies Investments of the insurance 2.1 2.1 1.9 2.0 1.6 companies Total 2.7 2.8 3.7 4.
Slide 129: Balance sheet structure – liabilities and equity
Balance sheet structure – liabilities and equity EURbn 100 90 95 92 80 70 60 66 66 50 40 30 35 33 30 20 25 20 23 10 12 11 6 6 0 Deposits and Debt Deposits by Provisions and Liabilities, Shareholder´s Other other securities in credit other liabilities, insurance equity borrowings issue institutions b
Slide 130: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 149 95 93 96 147 147 146 148 91 92 80 120 100 60 80 60 40 40 20 20 0 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 End of period 130
Slide 131: Capital base
Capital base EURm End of Q1/04 Shareholders’ equity 11,262 Deductions insurance companies and other -769 Shareholders’ equity in the capital base 10,493 Hybrid capital 285 Minority interests 6 Group goodwill -1,721 Other deductions -62 TIER 1 Capital 9,002 TIER 2 Capital (subordinated debt) 5,053 De
Slide 132: Market shares (statistics as of February 2004)
* Statistics as of February 2004 132
Slide 133: Market shares, personal customer deposits
Market shares, personal customer deposits % 40 35 34.6 34.1 30 25 20 21.9 22.1 19.7 19.1 15 10 5 8.5 8.5 0 Denmark Finland Norway Sweden Feb 03 Feb 04 133
Slide 134: Personal customer deposits - market volume & share
134 Fe 01 b -F 0 100 200 300 400 500 0 100 200 300 400 500 M -01 01 eb ay -m DKKbn NOKbn Au -01 01 ay g -A N - 01 01 ug ov -N Fe - 01 02 ov b -F M -02 02 eb ay -m Au -02 02 ay g -A N - 02 02 ug ov -N Fe - 02 03 ov Norway b Denmark -F M -03 03 eb ay -M Au -03 03 ay g -A N - 03 03 ug ov -N Fe - 03 04
Slide 135: Market shares, corporate deposits
Market shares, corporate deposits % 45 40 41.5 35 36.8 30 25 25.1 20 22.5 22.9 22.3 15 16.1 15.9 10 5 0 Denmark Finland Norway Sweden Feb 03 Feb 04 135
Slide 136: Corporate deposits - market volume & share
136 Fe Fe b b 0 100 200 300 400 0 50 100 150 200 250 300 M -01 M -01 ay ay DKKbn NOKbn 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 ug ug N - 02 N - 02 ov ov F e - 02 Norway Fe - 02 Denmark b b M -03 M -03 ay ay A -03 A -03 ug ug N - 03 N - 03 ov ov F e -
Slide 137: Market shares, personal customer lending
Market shares, personal customer lending % 35 30 32.2 32.0 25 20 18.5 17.4 15 14.0 14.1 10 11.0 10.5 5 0 Denmark Finland Norway Sweden Dec 02 Dec 03 137
Slide 138: Personal customer lending - market volume & share
138 Fe Fe b b 0 200 400 600 800 0 50 100 150 200 250 300 M -01 M -01 DKKbn ay ay NOKbn 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 ug ug N - 02 N - 02 ov ov F e - 02 Norway F e - 02 Denmark b b M -03 M -03 ay ay A -03 A - 03 ug ug N - 03 N - 03 ov ov F
Slide 139: Mortgage lending households - market volume & share
139 Ju Q 1/ l-0 0 0 200 400 600 800 1000 0 100 200 300 400 500 600 O 1 Q 1 DKKbn ct 2/ -0 0 NOKbn Ja 1 Q 1 3/ n- 0 0 A 2 Q 1 4/ pr -0 0 Q 1 Ju 2 1/ 0 l-0 Q 2 O 2 2/ 0 ct -0 Q 2 Ja 2 3/ 0 n- 0 Q 2 Norway A 3 4/ Denmark 0 pr -0 Q 2 1/ Ju 3 0 l-0 Q 3 2/ O 3 0 ct Q 3 -0 3/ Ja 3 0 n- Q 3 4/ 04 03 Market
Slide 140: Market shares, corporate lending
Market shares, corporate lending % 40 35 35.5 35.6 30 25 20 23.6 23.7 15 17.9 17.5 14.5 13.6 10 5 0 Denmark Finland Norway Sweden Feb 03 Feb 04 140
Slide 141: Corporate lending - market volume & share
141 Fe Fe b b 0 50 100 150 200 250 300 350 400 0 100 200 300 400 500 M -01 M -01 ay ay DKKbn NOKbn 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 Au -02 ug g N - 02 N - 02 ov ov F e - 02 Norway Denmark F e - 02 b b M -03 M -03 ay ay A -03 Au - 03 ug N - 03 g ov
Slide 142: Investment funds - market volume & share
Investment funds - market volume & share DKKbn Denmark EURbn Finland 500 32% 30 34% 400 30% 32% 25 28% 30% 300 20 26% 28% 15 200 26% 24% 10 100 24% 22% 5 22% 0 20% 0 20% Fe 2 Fe 3 M 1 A 2 N 2 N 3 A 3 M 3 04 Ju 0 03 1 3 4 -0 -0 01 D 2 2 D 3 3 0 -0 -0 -0 -0 0 -0 -0 -0 -0 n- -0 -0 -0 -0 b- b- n- ov ov
Slide 143: 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 02 03 2 2 3 3 4 03 04 ay 3 2 3 -0 -0 l-0 -0 l-0 -0 0 0 -m - - n- n- p- p- ov ov ar ar ar ay Ju Ju Ja Ja Se S
Slide 144: Investment funds, net inflow, Finland
Investment funds, net inflow, Finland Market volume, Nordea volume, and accumulated market share ytd EURm % 1400 40 1200 32 1000 24 800 600 16 400 8 200 0 0 -8 -200 -400 -16 D - 02 D - 03 Ju 2 Ju 3 A u - 02 A u 03 A p 02 A p 03 4 N 02 N 03 S e 02 S e 03 F e 03 F e 04 Ju ay Ju 03 M 03 M 04 M 03 02 0
Slide 145: Investment funds, net inflow, Sweden
Investment funds, net inflow, Sweden Market volume, Nordea volume, and accumulated market share ytd SEKm % 14,000 28 18bn 19bn 12,000 19bn 24 10,000 20 8,000 16 6,000 12 4,000 8 2,000 4 0 0 -2,000 -4 -0 2 -0 2 l- 0 2 -0 2 - 02 -0 3 -0 3 -0 3 l- 0 3 -0 3 - 03 -0 4 -0 4 ar a y u p ov n ar a y u p ov n
Slide 146: Market share, equity dealing - Nordea Securities
Market share, equity dealing - Nordea Securities % Equity market turnover EURbn 14 Q1/04 Q4/03 12 12.0 Denmark 23.4 17.1 10 10.510.1 Finland 56.5 37.6 8 Norway 27.1 19.6 Sweden 115.6 77.0 6 6.4 6.1 5.8 4 4.5 3.9 2 0 ki o en m sl sin ol ag O kh el h oc H en St op C Q4/03 Q1/04 146
Slide 147: Appendix
Appendix l Financials Page 148 l Nordea share Page 158 l Other Page 165 l Macro statistics Page 170 147
Slide 148: Appendix: Financials
Appendix l Financials 148
Slide 149: Pension obligations
Pension obligations l RR29/IAS19 implemented 1 January 2004 – defined benefit plans reflected on balance sheet Pension Obligation, national GAAP, net liability EUR 298m Effect of implementation of RR29/IAS19 EUR 256m* Net liability 1 January 2004 EUR 554m *EUR 183m adjustment of equity (after tax) l
Slide 150: Operational income statement
Operational income statement EURm Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Net interest income 846 850 838 843 835 Net commission income 397 388 379 366 353 Trading income 156 125 130 155 157 Other income 22 36 56 99 29 Total income 1,421 1,399 1,403 1,463 1,374 Personnel expenses -488 -511 -531 -539 -520 Prof
Slide 151: Statutory income statement
Statutory income statement EURm Q1/04 Q1/03 Interest income 1,980 2,539 Interest expenses -1,116 -1,620 Net interest income 864 919 Dividends received 4 10 Net commission income 407 363 Net result from financial operations 195 85 Other income 17 29 Total income 1,487 1,406 General administrative exp
Slide 152: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory accounts Operational Trading Investment Other Statutory EURm Q1/04 income activities Insurance adjustment Q1/03 Net interest income 846 27 1) -9 6) 864 Dividends received 2 4) 2 9) 4 Commission income 397 10 2) 407 Trading 156 -156 5) Net result from finan
Slide 153: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory acounts 1. Net interest income from trading transactions in Nordea 10. Amortisation of goodwill related to insurance included in Markets (for example interest related to swaps etc.), one-line consolidation of insurance activities (Operating reclassified as
Slide 154: Expenses - breakdown
Expenses - breakdown EURm Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Staff 1) 489 512 532 541 521 Profit sharing 15 46 - - - Information technology 2) 112 136 88 85 99 Marketing 14 27 14 23 18 Postage, telephone and office expenses 52 56 53 49 58 Rents, premises and real estate expenses 75 87 74 81 82 Other 120
Slide 155: Total IT-related expenses
Total IT-related expenses* EURm 250 l Approx. 20% of total costs 200 208 184 174 150 166 165 100 50 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 *Refers to IT operations, service expenses and consultant fees including personnel etc, but 155 excluding IT expenses in insurance operations
Slide 156: C/I ratio
C/I ratio C/I ratio, banking C/I ratio, banking % % 70 70 65 67 60 60 64 63 61 59 58 58 50 50 40 40 30 30 20 20 10 10 0 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 2001 2002 2003 156
Slide 157: Gains and losses on various disposals etc
Gains and losses on various disposals etc EURm Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 P&L BA Write-down real estate -115 Own line Other Retail Finland 10 Other Retail OM/HEX shares 27 Other Other Inkassosentralen 8 Other Retail Huoneistokeskus 43 Other Retail Nordisk Renting 32 Other Other Total 0 -105 35 75
Slide 158: Appendix: Nordea share
Appendix l Nordea share 158
Slide 159: Increased dividend
Increased dividend l Per share, EUR 0.25 l Total, EURm 712 l Pay-out ratio (of the net profit, target >40%) 48% l Dividend yield (calculated on share price Dec 30, 2003) 4.2% l Dividend yield on payment date (14 April, 2004) 4.4% 159
Slide 160: Total shareholder return (TSR) Ytd 2004
AB 160 BE Y C N O AT -20 -10 0 10 20 30 40 % M BA M ION N ER AL H K Z YP O B O F IR ANK VE E RE LA I N ND S AB BA *As defined by Nordea N NK L AL L O AM LI RO ED YD S T Source: Bloomberg 19/4-2004 IR IS SB H BA N K BA SH R B C LA N YS O RD EA SO C D BN IE n P TE B G N EN O R SW ER A ED L E BA Nordea
Slide 161: Shareholder structure, end of Q1/04
Shareholder structure, end of Q1/04 4.1% 2.1% 6.5% 27.5% 7.2% Swedish institutions International institutions 7.0% Swedish state Danish institutions Finnish institutions Finnish public Danish public 19.5% Swedish public 26.1% Number of shareholders approx. 504,000 161
Slide 162: Largest registered shareholders, end of Q1/04
Largest registered shareholders, end of Q1/04 Shareholder Number of shares % Swedish state 542.0 19.5 Alecta 117.1 4.2 Nordea Danmark fonden 102.5 3.7 Robur fonder 74.9 2.7 Nordea fonder 62.8 2.3 Tryg i Danmark smba 52.2 1.9 SEB fonder 49.0 1.8 Fjärde AP-fonden 44.3 1.6 Skandia 36.3 1.3 SHB/SPP fond
Slide 163: 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 164: Data per share
Data per share Q1/04 2003 2002 2001 2000 EUR EUR EUR SEK Dividend n.a 0.25 0.23 0.23 2.00 Shareholders’ equity per share, EUR 4.30 4.28 4.06 4.00 3.74 Earnings per share, EUR 0.15 0.51 0.30 0.53 0.58 Share price, end of period, 51.5 54.0 38.4 55.5 71.5 SEK P/E ratio2) 9.8 11.7 14.0 11.3 14.0 1) Pro
Slide 165: Appendix: Other
Appendix l Other 165
Slide 166: 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 167: 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 168: Legal structure
Legal structure Nordea Bank AB (Publ) Sweden Nordea Bank Nordea Bank Nordea Bank Nordea Bank Nordea Asset Nordea Life Nordea Danmark A/S Finland Plc Norge ASA Polska SA Management Holding A/S Securities AB Denmark Finland Norway Polamd AB Sweden Denmark Sweden Various Various Various Various Various
Slide 169: Group Executive Management
Group Executive Management Lars G Nordström President and Group CEO Christian Clausen Head of Asset Management & Life Carl-Johan Granvik Head of Group Credit and Risk Control, Group CRO Kari Jordan Head of Retail Banking Arne Liljedahl Head of Group Corporate Centre, Group CFO Markku Pohjola Head of
Slide 170: Appendix: Macro statistics and estimates
Appendix l Macro statistics and estimates Source: Nordea Markets Economic Research Estimates mainly from January 2004 170
Slide 171: Macro data
Macro data % 2003e 2004e 2005e Gross domestic product DK 0.4 2.3 2.4 FI 1.7 3.2 3.5 NO 0.7 3.4 2.9 SE 1.6 2.5 2.9 Inflation DK 2.1 1.5 2.0 FI 1.3 0.6 1.8 NO 2.5 1.0 2.1 SE 2.1 0.4 1.5 Private consumption DK 1.3 2.8 2.0 FI 3.8 3.3 2.6 NO 3.7 4.7 3.5 SE 2.0 2.3 2.5 Unemployment DK 6.1 6.2 5.6 FI 9.0 9
Slide 172: Market development - GDP
Market development - GDP % 2002 2003e 2004e 2005e Denmark 1.0 0.4 2.3 2.4 Finland 2.2 1.7 3.2 3.5 Norway 1.7 0.7 3.4 2.9 Sweden 2.1 1.6 2.5 2.9 In Norway, forecasts are for mainland GDP 172
Slide 173: Gross domestic product
Gross domestic product Change in % YoY 10 8 6 4 2 0 -2 -4 -6 -8 -10 Q1/90 Q1/93 Q1/96 Q1/99 Q1/02 Denmark Finland Norway Sweden 173
Slide 174: Inflation
Inflation % 14 12 10 8 6 4 2 0 -2 1990 1992 1994 1996 1998 2000 2002 2004 Denmark Finland Norway Sweden 174
Slide 175: Private consumption
Private consumption Change in % YoY 10 8 6 4 2 0 -2 -4 -6 -8 Q1/90 Q1/93 Q1/96 Q1/99 Q1/02 Denmark Finland Norway Sweden 175
Slide 176: Household saving rates
Household saving rates % 12 10 8 6 4 2 0 -2 -4 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Denmark Finland Norway Sweden 176
Slide 177: Unemployment
Unemployment % of labour force 20 15 10 5 0 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 199 199 199 199 199 199 199 199 199 199 200 200 200 200 200 Denmark Finland Norway Sweden 177
Slide 178: Credit growth total lending to non-bank sector
Credit growth total lending to non-bank sector Change in % YoY 15 10 5 0 -5 -10 ch ch ar ne ne pt pt ec ec p ec e -M Se Se ar ar Ju Ju D D -D -S M M 02 96 99 02 03 97 00 98 01 96 99 Denmark Finland Norway Sweden 178
Slide 179: 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 04 n- n- n- n- n- n- n- n- n- n- n- Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Denmark Finland Norway Sweden 179
Slide 180: Exchange rate, EUR/USD
180 2/ 1 /9 0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2 1.25 1.3 2/ 8 4 USD /9 2/ 8 7 2/ /9 8 10 /9 2/ 8 1 /9 2/ 9 4 /9 2/ 9 7 2/ /9 9 10 /9 2/ 9 1 /0 2/ 0 4 /0 2/ 0 7 2/ /0 0 10 /0 2/ 0 1 /0 2/ 1 4 /0 2/ 1 7 Exchange rate, EUR/USD 2/ /0 1 10 / 2/ 01 1 /0 2/ 2 4 /0 2/ 2 7 2/ /0 2 10 / 2/ 02 1 /0 2/ 3 4 /0
Slide 181: Exchange rate, EUR/SEK
181 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 /0 Exchange rate, EUR/SEK 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 1/ 3 1 /0 4
Slide 182: Exchange rate, EUR/NOK
182 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 /0 1/ 1 9 Exchange rate, EUR/NOK /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 1/ 3 1 /0 4
Slide 183: Oil price development, Brent, USD/Barrel
183 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 1/ 1 /0 Oil price development, Brent, USD/Barrel 3 1/ 1 /0 4
Slide 184: Stock exchange indices
Stock exchange indices Index 100 = 1997 800 700 600 500 400 300 200 100 0 7 7 8 8 9 9 0 0 1 1 2 2 3 3 4 /9 /9 /9 /9 /9 /9 /0 /0 /0 /0 /0 /0 /0 /0 /0 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ KAX Index HEX Index Oslo Total Index AFGX Index 184
Slide 185: Money market, 3 month rates
185 1/ 1 /9 1.75 2.75 3.75 4.75 5.75 6.75 7.75 8.75 9.75 % 1/ 8 4 /9 1/ 8 7 /9 1/ 8 10 /9 1/ 8 1 /9 1/ 9 4 /9 1/ 9 7 Denmark /9 1/ 9 10 /9 1/ 9 1 /0 1/ 0 4 /0 0 Finland 1/ 7 /0 1/ 0 10 /0 1/ 0 1 /0 1/ 1 4 /0 1 Norway 1/ 7 /0 1/ 1 10 /0 1/ 1 1 /0 Money market, 3 month rates 1/ 2 4 /0 Sweden 1/ 2 7 /0
Slide 186: Government bond, 10 year
186 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 1/ 9 Denmark 9 /9 1/ 9 1 /0 1/ 0 5 /0 Finland 1/ 0 9 /0 1/ 0 1 /0 1/ 1 5 /0 Norway 1/ 1 9 /0 Government bond, 10 year 1/ 1 1 /0 1/ 2 5 /0 Sweden 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 1/ 3 1 /0 4
Slide 187: Financial calendar 2004
Financial calendar 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 187