Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Nordea — IPO Roadshow (March 2009)
28 slides from Nordea Bank Abp's IPO roadshow presentation, March 2009
Slide 1: Investor Presentation March 2009
Investor Presentation March 2009
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by, and is the sole responsibility of, the management of Nordea bank AB (publ) (the "Company") and its subsidiaries. It comprises the written materials for a presentation to institutional investors concerning the Company’s proposed offering (the “Rights
Slide 3: Transaction Overview
Transaction Overview Net Proceeds: approximately €2,500 million Type of Security: Ordinary Shares Subscription Ratio: 11 New Shares per 20 Existing Shares Shareholders receive 11 Subscription Rights for every Existing Share held on the Record Date Shareholders require 20 Subscription Right
Slide 4: Nordea – the leading Nordic bank
Nordea – the leading Nordic bank… Global Other Group¹ 17% 9A unique customer base Approx. 7.5 million HH customers in programmes Norway 12% Finland and 0.7 million active corporate customers 21% Sweden 22% ts 9Strong distribution power Approx. 1 400 branches Denmark ke 22% 6% ar M n ea 9Financial st
Slide 5: … on track from Good to Great…
… on track from Good to Great… Profit orientation – 9 Strong income growth - costs under control cost, risk and capital 9 Strong capital and funding position Ambitious vision and 9 In line with targets targets 9 Strategic initiatives work Clear growth strategy 9 More customers - more income per cust
Slide 6: …and with limited effects from extreme market volatility
…and with limited effects from extreme market volatility 9 Focus on providing traditional banking services primarily to Nordic corporate and household customers 9 Scalable business model with strong focus on risk, capital and liquidity management 9 Focus on customer driven business within Nordea cap
Slide 7: Despite the worst financial crises since the 1930s…
Despite the worst financial crises since the 1930s… 9 Reconsider 9 Capital business squeeze models 9 Loan losses 9 “Never again” 9 Funding and credit 9 Asset write- problems migration downs All banks and All banks Commercial many Investment banks customers banks Bail-outs Funding guarantees Ca
Slide 8: Nordea maintains strong income momentum - total income up 4% in 2008
…Nordea maintains strong income momentum - total income up 4% in 2008 Total operating income, EURm Net interest income – up 19% Strong increase in lending and deposit 8 200 7 886 volumes 7 365 Higher corporate margins reflecting re- pricing of credit risks Net fee and commission income – dow
Slide 9: Economic slowdown affecting the loan portfolio – loan losses on an expected rise
Economic slowdown affecting the loan portfolio – loan losses on an expected rise Net loan losses, EURm 257 Net loan losses EUR 466m for full year 60 2008 of which EUR 320m in Q4 Increase in loan losses stems from a large number of smaller and medium-sized exposures -466 2/3 of provisions relat
Slide 10: Impaired loans up from low levels – increased focus on risk management
Impaired loans up from low levels – increased focus on risk management Impaired loans and recivables, EURm Impaired loans up from low levels 835 675 Individual allowances increased in several 508 1 389 sectors 1 058 924 New net collective allowances of EUR 54m 2006 2007 2008 were made in 2008
Slide 11: Profit before loan losses up 1%
Profit before loan losses up 1% 3 820 3 862 3 883 Profit before loan losses up 1% from 3 396 high level – despite market turmoil Operating profit down 13% Net loan losses of EUR 466m compared to net recoveries of EUR 60m in the same period last year Profit before loan losses Operating profit F
Slide 12: Long term financial targets unchanged
Long term financial targets unchanged Long term financial targets Target 2007 2008 TSR (%) In the top quartile of # 3 of 20 # 2 of 20 European peer group Risk adjusted profit (EUR m)¹ Double in 7 years² 15.0% 16.7%³ RoE (%) In line with top Nordic peers 19.7% 15.3% Capital structure policy Policy 5
Slide 13: Maintained organic growth strategy but with speed adjusted to market conditions
Maintained organic growth strategy but with speed adjusted to prevailing market conditions Increase business with existing Exploit global and Supplement Nordic Nordic customers and attract new European growth through customers business lines investments in New European Markets Manage risk Existing c
Slide 14: Consolidate platform in New European Markets – focus on risk management
Consolidate platform in New European Markets – focus on risk management Russia – significantly reduce speed of growth − Lending growth down from high levels in 2007 and 2008 − Focus on enhancement of risk management procedures − No branch openings - household and SME expansion on hold − Launch Norde
Slide 15: Relationship-driven growth strategy proven successful
Relationship-driven growth strategy proven successful - more customers and more income per customer 9 113 000 new gold customers in 2008 – up 5% 9 100% more customer meetings per PBA Nordic Banking 9 Growth Plan Sweden: 35 000 new gold customers and 68 new branches in 2008 Private 9 5 000 new Privat
Slide 16: By applying the middle of the road the aim is to maintain business momentum
By applying the “middle of the road” the aim is to maintain the high business momentum Not reacting to the Over-reacting to the downturn Middle of the road situation 9 Unchanged lending 9 Focus on core customers – 9 Closing down growth growth selected new business initiatives opportunities 9 Unchang
Slide 17: Middle of the road approach balancing growth opportunities and risks
“Middle of the road approach” balancing growth opportunities and risks Top priorities… …in the context of Great Nordea • Maintain strong AA category rating as competitive Profit orientation – 9 Will take the advantage cost risk and capital lead Ambitious vision and targets 9 The strategy • Continue
Slide 18: Cost- risk- and capital management takes the lead
Cost- risk- and capital management takes the lead Costs 9 Accelerate ongoing efficiency programs – not least in branch offices 9 General right-sizing of staff – staff reduction during 2009 Profit orientation Risk Ambitious vision 9 Step up risk management – emphasising pro-activity and targets 9 Add
Slide 19: Continued stringent cost management – right sizing initiatives
Continued stringent cost management – right sizing initiatives Increased costs in 07 and 08 are EURm related to investments in growth 5000 4 338 areas, i.e. Private Banking, Growth 3 822 4 066 Plan Sweden, Capital Markets and 4000 New European Markets 3000 To adjust to the changed economic 2000
Slide 20: Step up risk management – emphasis on pro-activity
Step up risk management – emphasis on pro-activity Risk management initiatives 2009 Total lending to public end 2008 EUR 265bn Additional credit reviews in Commercial real estate Mortgage lending branch regions Construction Residential real estate Work-out teams reinforced in all Drybulk/Contain
Slide 21: Rights offering - a pro-active step
Rights offering - a pro-active step Maintain position as one of the stronger banks in Europe Establish an additional capital cushion in light of reduced visibility in the market and economic outlook Provide flexibility to capture high credit quality business opportunities arising in the market Provi
Slide 22: A fair and transparent market solution to existing share holders
A fair and transparent market solution to existing share holders Rights offering executed through; Underwritten rights offering with net proceeds of approximately EUR 2.5bn Subscription period: 20 March - 3 April Subscription price: EUR 1.81, SEK 20.75, DKK 13.49 per ordinary share – implied
Slide 23: Main rationale - keep position as one of the strongest banks in Europe
Main rationale - keep position as one of the strongest banks in Europe 14.5 * Core Tier 1 capital ratio excluding transition rules Nordea compared with its European peer group, % 12.1 * 10.4 10.0 9.7 9.1 8.9 8.8 8.6 8.3 7.8 8.3 7.6 7.2 6.6 6.5 6.5 6.2 6.2 5.6 Median Nordea Tier 1 capital ratio exclu
Slide 24: Proposal to reduce dividend
Proposal to reduce dividend Dividend payment 2008 dividend to be paid in 2009 EUR 1 297m (42%) reduced to 19% of net profit No change to long-term dividend policy (>40% of net profit) Strengthen core Tier 1 capital through increased retained earnings EUR 519m (19%) by approximately EUR 0.5bn
Slide 25: Improved capital position following capital measures of EUR 3bn
Improved capital position following capital measures of EUR 3bn and revised capital targets Capital ratios pro forma end 2008 including full implementation of Basel II, % Sizeable improvement in core 13.5 New targets capital 10.8 11.5 Tier 1 above new capital 10.0 targets to create financial 9.0
Slide 26: Organic growth creating shareholder value
Growth strategy Organic growth creating shareholder value 2009 priorities Profit before loan losses, EURm Existing relationships 3 862 3 820 Grow share of wallet through 3 543 less capital-consuming products Selective customer acquisition (Gold, Private banking, high- quality corporates) Secure corp
Slide 27: Concluding remarks and outlook 2009
Concluding remarks and outlook 2009 Solid performance despite financial turmoil and economic recession in 2008 Nordea is preparing for a challenging year – cost, risk and capital management takes the lead Focus on doing more business with existing customers and on selective basis attracting ne
Slide 28: The leading Nordic bank acknowledged for its people
The leading Nordic bank acknowledged for its people creating superior value for customers and shareholders. 28