Slide 1: Interim Report Third Quarter 2006 Press Conference
Interim Report Third Quarter 2006 Press Conference Lars G Nordström President and Group CEO
Slide 2: Continued strong results – exceeding targets
Continued strong results – exceeding targets Income up 12% to EUR 5,478m (EUR 4,877m in the first nine months of 2005) Gain on sale of shares in International Moscow Bank (IMB) of EUR 199m included in the third quarter Net profit up 29% to EUR 2,277m (EUR 1,763m) Operating profit up 24% to E
Slide 3: Organic growth strategy consistently pays off – strong momentum in key growth areas
Organic growth strategy consistently pays off – strong momentum in key growth areas Consumer lending up 12% Number of credit cards increased by 22% SMEs lending up 10% Increased cross-selling of Markets’ products to SMEs Assets under Management up 10% Strong growth in Private Banking N
Slide 4: Robust performance despite volatile markets
Robust performance despite volatile markets 4.1 5900 4.0 5800 3.9 5700 Strong rebound in equity markets and 3.8 5600 decreased concern for a hard landing 3.7 5500 in the US economy 3.6 5400 Market turbulence has had limited Percent Index 3.5 5300 3.4 5200 fundamental effects on Nordea 3.3 5100
Slide 5: Operating profit
Operating profit YoY Up 24% Up 15% excl. gain from sale of IMB shares EURm 1,100 1,063 Operating profit in BAs up 16% excl. 1,000 932 gain from sale of IMB shares 884 900 858 864 Business model and growth strategy 800 728 748 consistently pay off 688 700 Decision to invest in profitable gr
Slide 6: Continuous increase in earnings per share - rolling 12 months
Continuous increase in earnings per share - rolling 12 months EUR 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Reported Excl. gain from sale of IMB 6
Slide 7: Revenue growth in Nordea
Revenue growth in Nordea +149 5,478 EURm +199 + 101 +142 + 10 4,877 Income Volumes, Savings: AM, Markets Gain from Other Income Jan-Sep/05 margins Life, brokerage sale of Jan-Sept/06 lending and savings IMB accounts shares 7
Slide 8: Unchanged cost focus
Unchanged cost focus EURm 3,000 2,806 Costs up 3% 2,800 2,712 2,600 In line with increased growth focus 2,400 Approx. half of the cost increase (EUR 2,200 45m) related to investments in growth 2,000 areas 1,800 1,600 General wage inflation above 3% 1,400 1,200 1,000 800 600 400 200 0 Jan-Sep
Slide 9: Cost/income ratio continues downwards
Cost/income ratio continues downwards % 70 Continued down to 53% in Jan- 60 Sept/06 (excl. gain from sale of IMB 60 56 shares) 53* income up 8% 50 costs up 3% 40 reported C/I incl. IMB 51% Continuous strong growth in 30 revenues 20 Delivery in line with financial targets 10 0 2004 2005 J
Slide 10: Gap between income and cost development
Gap between income and cost development Percentage points 10 9 9 Reported gap of 9%, excl. full 8 impact from sale of IMB 5.1% 7 7 7 Capture profitable revenue 6 opportunities 5 5 Top line increasingly contributing 4 Maintaining a gap secures delivery 3 of net profit and RoE 2 1 high value
Slide 11: Key growth areas – progress already visible
Key growth areas – progress already visible Accelerate market position within consumer credits incl. cards Consumer lending up 12%, sale of credit cards up 23% Continue to leverage on strong position within long-term savings, eg Private Banking and Retail funds Strong increase in AuM - total
Slide 12: Customer programmes - increasing business rewards both customers & Nordea
Customer programmes - increasing business rewards both customers & Nordea Strong growth in core segment Sep 05 to Sep 06 Key focus 14.6% converting intermediate customers to core 7.6% customers 6.4% 160 customer satisfaction and loyalty 140 114 business volume per customer 1.4 106 1.3 Stro
Slide 13: Continue to leverage on strong position within long-term savings – Private Banking
Continue to leverage on strong position within long- term savings – Private Banking EURbn 50 45 Strong asset growth in Nordic Private 9 40 9 9 Banking 9 8 net inflow in Q3 13% annualised 35 8 8 30 result of roll-out of new common advisory concepts, particularly in Norway and 25 Sweden 20 39 36
Slide 14: Accelerate market position within consumer lending and cards
Accelerate market position within consumer lending and cards YoY EURbn Retail consumer lending Consumer lending up 12% 16 Approx. 400 000 new cards issued 15.5 14 13.9 14.2 14.9 In total 5.4 million cards issued 13.8 13.5 12 12.9 13.2 of which approx. 27% credit cards no. of credit cards u
Slide 15: Stepwise increase in premiums in Life
Continue to leverage on strong position within long term savings – stepwise increase in premiums in Life EURm Net written premiums up 32% 1,200 1,100 Unit linked share of premiums 40% 474 1,000 390 404 Increased penetration in the customer 900 800 base – successful cooperation between 700 198
Slide 16: Growth in Sweden delivering according to targets
Growth in Sweden delivering according to targets To capture growth potential, more than 200 advisors and specialists have been recruited during the year Target areas for new recruitment have been; Private advisory services in the branches (90) Life & pension (62) Private Banking (20) Cor
Slide 17: Increased cross-selling of Markets related products to SMEs
Increased cross-selling of Markets related products to SMEs EURm Nordea Markets Successful penetration 700 Leveraging Nordea’s customer base 600 SME segment still under penetrated 500 Focus on customer solutions rather 400 than product push strong concepts in risk management and 300 asset-
Slide 18: Outlook
Outlook Nordea continues its successful execution of the organic growth strategy Nordea is confident in reaching the ambition of at least 5 %-points gap between revenue and cost growth for 2006 even when excluding the impact from the sale of shares in IMB A cost increase in line with the first
Slide 19: Summary
Summary Continued strong result despite fierce competition – exceeding targets RoE excl. gain from sale of IMB shares 20.7% Gap between revenue and cost growth 5 percentage points when excluding the full impact of IMB sale Improved cost efficiency Cost/income ratio down to 53% when excludi
Slide 20: Interim Report Third Quarter 2006 Press Conference
Interim Report Third Quarter 2006 Press Conference Lars G Nordström President and Group CEO
Slide 21: Income statement summary
Income statement summary EURm Jan-Sept 06 Jan-Sept 05 Chg % Net interest income 2,863 2,730 5 Net fee and commission income 1,525 1,406 8 Net gains/losses on items at fair value 609 468 30 Equity method 72 46 57 Other income 409 227 80 Total operating income 5,478 4,877 12 Staff costs -1,645 -1,550
Slide 22: Income statement summary
Income statement summary EURm Q3/06 Q2/06 Chg % Q3/05 Net interest income 979 957 2 920 Net fee and commission income 497 521 -5 469 Net gains/losses on items at fair value 188 179 5 139 Equity method 17 30 -43 11 Other income 253 98 158 62 Total operating income 1,934 1,785 8 1,601 Staff costs -550