Slide 1: Third quarter results 2019
Third quarter results 2019
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
Slide 3: Executive summary
Executive summary • Improving Net interest income and Net commission income compared to previous quarter coming from higher business volumes • Increasing market share on mortgages in all countries • EUR 3.7bn inflow in Assets under Management (5% annualised) • Net fair value under pressure due to si
Slide 4: Executive summary
Executive summary • New plan to significantly improve operating performance • New financial targets • Return on Equity above 10% in 2022 • Cost to Income ratio of 50% in 2022 • Expect to reach a cost base of below EUR 4.7bn in 2020 • Management buffer of 150-200 bps above capital requirement in 2020
Slide 5: Group financial highlights third quarter 2019
Group financial highlights third quarter 2019 Income statement, EURm Q3 2019 Q3 2019 Q2 2019 Q3/Q2 change Q3 2018 Q3/Q3 change excluding local curr. local curr. IAC* excl. IAC excl. IAC Net interest income 1,083 1,083 1,071 2% 1,123 -1% Net fee and commission income 756 756 743 2% 703 9% Net fair va
Slide 6: Net interest income – volume growth improving
Net interest income – volume growth improving Quarterly bridge, EURm Comments +2% 1,092 • Higher activities supported NII volume growth 9 1,083 14 1,071 9 5 • Largely stable lending and deposit margins 3 • Solid contribution from volume growth Q219 Lending Volumes Other NII Day- Q319 FX Q319 & depos
Slide 7: Mortgage lending - growth rates picking up
Mortgage lending - growth rates picking up Mortgage lending Denmark – QoQ growth rate Mortgage lending Finland – QoQ growth rate 0.7% 0.8% 0.5% 0.4% 0.3% 0.3% Q418 Q119 Q219 Q319 -0.3% -0.3% Q418 Q119 Q219 Q319 Mortgage lending Norway* – QoQ growth rate Mortgage lending Sweden – QoQ growth rate 1.6%
Slide 8: Net fee and commission income – improvement compared to Q2
Net fee and commission income – improvement compared to Q2 Quarterly bridge, EURm Comments +2% 758 756 • Strong lending fees mainly supported by 11 2 743 mortgage refinancing activities in Denmark 17 21 7 • Largely unchanged asset management fees • Brokerage & corporate finance seasonally low Q219 B
Slide 9: Assets under Management – net inflow continues
Assets under Management – net inflow continues Flow, EURbn Comments 3.8 3.7 • Net inflow of EUR 3.7bn, corresponding to 1.0 5% of AuM annualised -0.6 • AuM is underlying at all-time-high level • Strong investment performance, 88% of -2.8 Q318 Q418 Q119 Q219 Q319 composites outperforming benchmarks Y
Slide 10: Net fair value – market conditions remain challenging
Net fair value – market conditions remain challenging NFV development, EURm Comments • Customer areas impacted by seasonality, in 264 283 47 line with Q3 last year 110 205 182 12 42 211 • Treasury down from a strong Q2 16 39 16 48 • Market conditions remain challenging 223 217 203 161 157 -11 -23 -2
Slide 11: Personal Banking
Personal Banking Key ratios Total income, EURm Comments +8% 772 • Highest quarterly profit since Q1 2018 750 • Lending growth of 4% YoY 731 716 723 • Strong trend in customer-driven activity continued in Q3 • Lending volume growth across all countries • Market share within new mortgage lending incre
Slide 12: Commercial and Business Banking
Commercial and Business Banking Key ratios Total income, EURm Comments +2% 534 • Underlying positive income trend maintained 519 • Norway and Sweden continue to be the main growth areas 499 489 483 • Somewhat lower margins in the quarter and negative valuation adjustment in Q3 Q318 Q418 Q119 Q219 Q3
Slide 13: Wholesale Banking
Wholesale Banking Key ratios Total income, EURm Comments 435 -8% • Lending volume +4% YoY with stabilising margins 395 401 • Strong momentum in both ECM and DCM 393 366 • Challenging trading environment continued • Total cost -11% from previous quarter • Increased loan loss provisions following ECB
Slide 14: Asset & Wealth Management
Asset & Wealth Management Key ratios Total income, EURm Comments 407 0% • Underlying AuM at all-time-high with flow of 3.7bn in 404 401 Q3 399 • Third consecutive quarter of positive flows 391 • All channels contributing Q318 Q418 Q119 Q219 Q319 Cost/Income ratio*, % Operating profit*, EURm 0% 49 21
Slide 15: Costs – underlying costs continued down
Costs – underlying costs continued down Quarterly bridge, EURm Comments 2,175 • Underlying costs continue downwards -1% 1,014 • Cost to Income ratio* unchanged at 58% 1,180 16 10 1,174 Other 13 • Negative one-offs of EUR 1bn; Staff • Expense relates to sale of Luminor shares of EUR 75m D&A Q219 Unde
Slide 16: Solid underlying asset quality
Solid underlying asset quality Total net loan losses*, EURm Comments • Underlying net loan losses EUR 49m • Additional provisions; 331 • EUR 229m following ECB dialogue 79 71 • Collective model upgrade EUR 53m 282 61 59 44 40 42 Outlook 30 49 • Our expectation for the coming quarters is that net los
Slide 17: Common Equity Tier 1 ratio development
Common Equity Tier 1 ratio development Q319 vs Q219 Comments • CET1 capital ratio increased by 60 bps 110 bps • Management buffer 110 bps 0.6 0.2 0.1 0.1 150-200 bps 15.4 14.8 14.3 ~13.0 Capital and dividend policy from 2020 • Management buffer 150-200 bps above regulatory Q219 FX & other Volumes Lu
Slide 18: Financial targets
Financial targets Cost/income ratio in FY22 Return on equity in FY22 50% >10% Capital policy from 2020 Dividend policy from 2020 60-70% pay-out of distributable 150-200 bps profits to shareholders* management buffer Excess capital intended to be distributed above the regulatory CET1 requirement to s
Slide 19: Nordea enters A New Phase
Nordea enters A New Phase
Slide 20: Appendix
Appendix 20
Slide 21: Personal Banking
Personal Banking Leading indicators Lending volume, EURbn Customer satisfaction (Customer Engagement Index) +4% 152.1 152.8 152.9 Q318 Q418 Q119 Q219 Q319 Trend 5.2 70 69 67 69 70 147.2 146.5 146.9 72 72 71 73 72 73 74 72 71 71 Q318 Q418 Q119 Q219 Q319 Effect from Gjensidige 65 63 66 69 68 Share of
Slide 22: Commercial and Business Banking
Commercial and Business Banking Leading indicators Lending volume, EURbn Customer satisfaction (Customer Engagement Index) 0% 82.5 82.1 81.9 Relationship 81.7 2018 Q219 Q319 Trend Customers (BB) 81.4 71 77 70 80 76 79 74 78 78 71 81 75 Q318 Q418 Q119 Q219 Q319 22
Slide 23: Wholesale Banking
Wholesale Banking Leading indicators Lending volume*, EURbn Nordic corporate bonds, % of market share Source: Dealogic +4% 45.9 45.8 45.4 19.3 19.7 17.8 17.5 44.5 15.6 43.7 Q318 Q418 Q119 Q219 Q319 Q318 Q418 Q119 Q219 Q319 Nordic syndicated loans, ranking Source: Dealogic Nordic ECM and M&A, ranking
Slide 24: Asset & Wealth Management
Asset & Wealth Management Leading indicators Assets under Management, EURbn Customer satisfaction (Customer Engagement Index) +1% Q318 Q418 Q219 Q319 314 310 307 301 77 76 80 77 281 78 76 78 80 77 77 81 80 81 83 84 78 Q318 Q418 Q119 Q219 Q319 n.b. CEI Q1 numbers not available Total net flows, EURbn
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