Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Q2 2014 Earnings Presentation
28 slides from Nordea Bank Abp's earnings presentation, Jun 30, 2014
Slide 1: Christian Clausen, President and Group CEO
Christian Clausen, President and Group CEO
Slide 2: Highlights
Highlights Nordea delivers solid results Income holding up despite continued low lending demand, interest rates and volatility Cost programme delivering according to plan Loan losses are down to 16 bps in the quarter Operating profit up 7% YTD* More customers choose Nordea Continued inflow
Slide 3: Q2 2014 financial results highlights
Q2 2014 financial results highlights 14
Slide 4: Financial results
Financial results EURm Q2/14 Q1/14 Chg % H1/14 H1/13 Chg % Net interest income 1,368 1,362 0 2,730 2,749 (1) 3 Net fee & commission income 708 704 1 1,412 1,287 10 13 Net fair value result 356 411 (13) 767 860 (11) (10) Total income* 2,456 2,501 (2) 4,957 4,996 (1) 2 Staff costs -907 -756 20 -1,663
Slide 5: Net interest income
Net interest income NET INTEREST INCOME DEVELOPMENT, EURm COMMENTS 1,391 1,386 1,390 1,362 1,368 • NII flat on Q1/14 • Up 2% in customer areas • Lower yield on fixed income holdings Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 5•
Slide 6: Net interest margin and volumes
Net interest margin and volumes BLENDED NET INTEREST MARGIN DEVELOPMENT COMMENTS 1.09% 1.07% 1.08% 1.07% 1.08% • Blended net interest margin up 1 bps • Underlying lending margins under pressure • Deposit margins largely unchanged Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 • Household and corporate lending volume
Slide 7: Net fee and commission income
Net fee and commission income NET FEE AND COMMISSION DEVELOPMENT, EURm COMMENTS 703 704 708 664 652 • Up 10% YTD compared to H1/13 180 194 162 • Lending commissions 170 172 Continued strong activity in the 145 147 148 Payments & cards savings- and corporate advisory 143 150 business 411 398 430 Savi
Slide 8: Net fair value
Net fair value NET FAIR VALUE DEVELOPMENT, EURm COMMENTS 416 411 • Low interest rates 346 333 356 • Low volatility 142 168 93 123 82 274 251 263 223 243 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Customer areas Other areas 8•
Slide 9: Expenses under solid control
Expenses under solid control TOTAL EXPENSES*, EURm COMMENTS 1,256 1,283 1,234 1,237 1,196 • Costs are down 3% compared to previous quarter • Cost/income ratio improved 0.8% to 48.7% Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 * Excluding restructuring charge in Q2/14 9•
Slide 10: Cost efficiency programme on track
Cost efficiency programme on track Total deliveries amounting to EUR 300m* of which EUR 45m in Q2/14 Customer behaviour driven Simplification actions adaptation • Streamlining of product offering • Distribution optimisation • Centralised and improved processes P P • Reduced cash handling Increasing
Slide 11: Improved credit quality
Improved credit quality TOTAL NET LOAN LOSSES, EURm COMMENTS 236 241 203 198 • Ten year average of 16 bps reached 186 180 171 158 for first time since Q3/11 135 • Continued improvement in Denmark • Net reversals in Shipping Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 • Stable credit qualit
Slide 12: Solid funding operations
Solid funding operations LCR DEVELOPMENTS, % COMMENTS 140 159 140 159 • Issuance of EUR 6bn during Q2 134 127 127 117 114 • Conservative liquidity management • LCR compliant • Liquidity buffer EUR 62bn • 74% of the wholesale funding is Q4/13 Q1/14 Q2/14 long-term funded Combined USD EUR • Long-term
Slide 13: Risk exposure amount
Risk exposure amount RISK EXPOSURE AMOUNT, EURbn* COMMENTS 181 179 • Efficiencies of EUR 6.4bn in the 168 168 quarter 162 160 159 155 152 • Divestment of Polish operations finalised • REA reduced by EUR 2.3bn Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 RISK EXPOSURE AMOUNT DEVELOPMENT, EUR
Slide 14: CET 1 ratio up 60 bps
CET 1 ratio up 60 bps COMMON EQUITY TIER 1 RATIO DEVELOPMENT, % 0.6% -0.5% 0.2% 15.2% 0.3% 14.6% Common Equity Tier 1 Poland Efficiencies Other Profit net dividend* Common Equity Tier 1 ratio Q1/14 ratio Q2/14 * Assuming a payout ratio of 56% 14 •
Slide 15: Improved return in Business Areas
Improved return in Business Areas RETURN DEVELOPMENT YTD, GROUP AND BUSINESS AREAS GROUP RETAIL BANKING WHOLESALE BANKING WEALTH MANAGEMENT RaRoCaR RaRoCaR RaRoCaR RaRoCaR 15% 30% 15% 14% 14% 25% 14% 13% H1/13 H1/14 H1/13 H1/14 H1/13 H1/14 H1/13 H1/14 INCOME -1% INCOME -1% INCOME -1% INCOME 9% COSTS
Slide 16: Progress on 2015 plan
Progress on 2015 plan PROGRESS ON NORDEA FINANCIAL PLAN 2015 IN Q2/14 CET1 capital ratio • CET 1 capital ratio up 60 bps to 15.2% P • Risk Exposure Amount Total efficiencies of EUR 24bn of which 6bn in the quarter P Income growth • Income holding up (P) Costs • Cost programme delivering according to
Slide 17: Customer development
Customer development 14
Slide 18: More relationship customers choose Nordea
More relationship customers choose Nordea RELATIONSHIP CUSTOMERS (GOLD, PREMIUM AND PB), ‘000s COMMENTS 3,219 3,094 3,145 2,850 3,016 • 46,300 new relationship customers in 2,675 H1, 5% more than H1 2013 2,558 2,417 Denmark • 3.22 million relationship customers in Finland total, up 33% since beginni
Slide 19: Leading provider to large corporates and institutions
Leading provider to large corporates and institutions NORDIC ECM Q2/14, EURm COMMENTS Nordea 1,603 Peer 1,561 • Leading provider in capital markets Peer 1,295 Peer 1,215 activities Peer 1,086 Peer 1,062 • No.1 arranger of syndicated loans Peer 787 Peer 726 • Awarded best Equity Research House Peer 6
Slide 20: Record high savings inflow
Record high savings inflow AUM DEVELOPMENT, EURbn COMMENTS 248.3 • Highest quarterly net inflow ever, 238.7 232.1 EUR 4.8bn 226.8 217.8 • All time high AuM at EUR 248bn • Strong interest among Nordic and International retail customers Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 • Record high net flow in Nordic NE
Slide 21: Strong momentum in life operations
Strong momentum in life operations GROSS WRITTEN PREMIUMS DEVELOPMENT, EURm COMMENTS 8 ,000 6,000 • Strong AuM growth at unchanged solvency requirement as customers 4,000 choose capital-light products 2,000 • Further strengthened position as 0 largest Life & Pensions company in 2009 2010 2011 2012 2
Slide 22: The relationship bank is moving online
The relationship bank is moving online 14
Slide 23: Customers welcome online advisory meetings
Customers welcome online advisory meetings ONLINE MEETINGS HELD IN AND OUTSIDE OPENING HOURS* COMMENTS 55% • Up to half of the customers prefer 45% online advisory meetings • 45% of meetings are held outside opening hours - customers appreciate convenience* • High satisfaction - 95% would prefer onl
Slide 24: Swift digitalisation of daily transactions
Swift digitalisation of daily transactions TRANSACTIONS VIA BRANCHES VS. MOBILE BANK COMMENTS • Transactions via Mobile Bank increased 77% YoY • 50% more transactions via Mobile Bank than via branches in H1 • New features in cash machines H1/10 H1/11 H1/12 H1/13 H1/14 • 500+ Automated Deposit Transa
Slide 25: Strong drive towards e-solutions also among corporates
Strong drive towards e-solutions also among corporates TRANSACTIONS VIA e-MARKETS COMMENTS • Corporates and institutions increasingly use e-Markets for electronic trading, market information and tools for risk management and hedging • Increase in e-Transactions by 61% 2012/2013 2010 2011 2012 2013 •
Slide 26: Summary
Summary 14
Slide 27: Summary
Summary Nordea delivers solid results More customers choose Nordea The relationship bank is moving online 27 •
Slide 28: Christian Clausen, President and Group CEO
Christian Clausen, President and Group CEO