Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Q4 2012 Earnings Presentation
35 slides from Nordea Bank Abp's earnings presentation, Jan 30, 2013
Slide 1: Fourth quarter 2012 results: Shaping the future relationship bank
Fourth quarter 2012 results Shaping the future relationship bank Media conference 30 January 2013 Christian Clausen, CEO
Slide 2: Agenda
• Q4 2012 financial results highlights • Shaping the future relationship bank • Nordea 2013 capital markets day
Slide 3: Key message: the foundation is laid to shape the future relationship bank
Key message: the foundation is laid to shape the future relationship bank In 2012, we had more customers, more capital and higher profit than ever before. We are ahead of the plan that was established in 2011 On that foundation we will shape the future relationship bank, with closer customer rel
Slide 4: Financial results Q4/12
Financial results Q4/12 Risk-adjusted profit increase of 20% in FY2012 EURm Q4/12 Q3/12 Change % FY12 FY11 Change % Net interest income 1,429 1,441 (1) 5,752 5,456 5 Net fee and commission income 692 605 14 2,504 2,395 5 Net fair value result 444 377 18 1,784 1,517 18 Total income1 2,630 2,469 7 10,
Slide 5: By delivering on the 2011 plan, we have laid the foundation
By delivering on the 2011 plan, we have laid the foundation for shaping the future of Nordea Relationship customers Retail customers / FTE (’000s) End of year 341 Relation- 3,079 Producti- ships 3,021 2% vity 314 9% 2011 2012 2011 2012 Total operating income Return on equity EURm % 11.6 10,236 Incre
Slide 6: Stable and consistent operating income
Stable and consistent operating income Total income development, EURm 2 606 2 630 2 507 2 510 2 558 2 531 2 469 2 342 494 444 504 2 091 506 469 377 544 356 111 588 596 611 605 692 618 602 623 582 1 365 1 379 1 427 1 420 1 462 1 441 1 429 1 324 1 326 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4
Slide 7: The blended margin has been slightly lowered over 2012
The blended margin has been slightly lowered over 2012 Net interest margin Comments (excl. liquidity buffer and repo rates) • Net interest margin remained 1.15% unchanged in Q4 1.10% 1.09% • Stable net interest margin from 1.05% 1.05% 2011 despite lower market interest rates and higher funding 1.00%
Slide 8: Income growth generated by customer meetings and strong inflow of new customers
Income growth generated by customer meetings and a strong inflow of new customers Customer meetings Household Comments Corporate (’000s) Total number of customer 97 meetings increased by 4% to 92 2 million in 2012 89 94 85 92 74 434 75 455 85,000 new customers, 388 384 402 401 resulting in a con
Slide 9: Expenses broadly flat over last nine consecutive quarters
Expenses broadly flat over last nine consecutive quarters Total expenses Total expenses, (excl. FX and variable pay1), EURm EURm 1 327 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 1 270 1 265 1 275 1 242 1 266 1 276 1 290 1 293 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q4/10 Q1/
Slide 10: Credit quality stabilisation and lower net loan losses
Credit quality stabilisation and lower net loan losses Reduced total net loan losses in Q4/12 Total net loan losses, EURm Comments 242 263 254 244 218 217 Underlying credit quality remains solid, with a positive rating migration in 166 institutions and household portfolios 118 112 Stabilisation
Slide 11: Denmark is stabilising and remains under control
Denmark is stabilising and remains under control Loan losses net, Retail Banking House price index1 Denmark 110 200 150 100 100 90 50 0 80 -50 70 -100 2008 2006 2008 2008 2010 2010 2012 2012 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Single-family houses Summer houses Flats Collectively assesse
Slide 12: Shipping collateral values seem to be bottoming out
USDm 0 30 60 90 120 150 180 Jan-00 Jan-01 Jan-02 Ship values1 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 0 30 60 90 120 150 180 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Shipping orderbook as % of existing fleet1 Jan-07 Jan-08 Shipping collateral values seem
Slide 13: Retail Banking: Key developments
Retail Banking: Key developments Key results, Change Relationship customers and FY12 FY11 EURm (%) income, EURm and ‘000 Total operating 3 000 5,553 5,272 5% 3.5 income 2 500 3.0 Total operating 2 000 (3,109) (3,170) (2)% 2.5 expenses 1 500 2.0 1.5 Net loan losses (610) (556) 10% 1 000 1.0 500 Group
Slide 14: Wholesale Banking: Key developments
Wholesale Banking: Key developments Key results, Change Markets Income, EURm FY12 FY11 EURm (%) Total operating 2,795 2,583 8% income 2 081 2 033 Total operating 1 801 1 758 (934) (843) 11% expenses 1 161 1 035 916 Net loan losses (314) (173) 82% 748 Operating profit 1,547 1,567 (1)% 2005 2006 2007
Slide 15: Wealth Management: Key developments
Wealth Management: Key developments Key results, Change AuM development (EURbn) FY12 FY11 EURm (%) Total operating 218 1,492 1,293 15% income 191 187 158 Total operating (782) (741) 6% 126 expenses Operating profit 708¹ 552 28% AuM full year growth of 16% to EUR 218bn Q4/12 net inflow EUR 3.1bn,
Slide 16: Wealth Management: Increasing AuM with net inflows and strong performance
Wealth Management: Increasing AuM with net inflows and strong performance Value added compared to benchmark 2012, bps Net inflow by Business Unit, EURbn Net inflow / 1.0% 0.6% 1.1% 1.4% 1.5% 4.9% AuM (BoP) Fixed Income 203 9.1 4.0 3.5 3.1 Local Equities & Fundamentals 166 2.7 3.0 2.5 1.7 2.1 2.0 1.2
Slide 17: Proposed dividend for 2012 of EUR 0.34
Proposed dividend for 2012 of EUR 0.34 Dividend and Payout ratio¹, EURm Comments EURm Dividend proposal of EUR 0.34 per share Payout ratio, % 1 370 — 44% payout ratio 1 168 EUR 0.34 New capital policy to maintain a Core Tier 1 048 per share 1 ratio above 13% no later than 1 Jan 2015 1 006 Exce
Slide 18: Agenda
• Q4 2012 financial results highlights • Shaping the future relationship bank • Nordea 2013 capital markets day
Slide 19: Nordea is shaping the future relationship bank
Nordea is shaping the future relationship bank A convincing Future relationship bank A strong equity story A sustainable business model brand with and market that delivers a ROE well above cost of capital clear values commitments on a fully loaded balance sheet 2015 plan – Closer relationships New N
Slide 20: The relationship strategy continues to be instrumental to Nordea
The relationship strategy continues to be instrumental to Nordea Since 2007, Nordea has consistently pursued its relationship strategy With the 2015 plan, taking Nordea forward towards the future relationship bank business model, the relationship strategy continues to be instrumental At the he
Slide 21: The relationship strategy: a superior model for working with customers
The relationship strategy: a superior model for working together with customers in the new environment Customer’s benefits … stability; a Confidence in … holistic advice … one provider of bank on both bank’s ability … in best interest … all services … sunny and rainy days Know Advise Service Commit
Slide 22: Nordea has delivered on targets and improved financial performance
Nordea has delivered on targets and significantly improved its financial performance throughout the financial crisis… 2006-2012 Key achievements annual growth (‘000s) 3,100 2,400 Focus on 4.5% Increase in number of relationship relationship customers customers 2006 2012 (EURm) Focus on 7 377 10 23
Slide 23: Will continue to deliver attractive total return to shareholders
… and will continue to deliver attractive total return to our shareholders going forward Strong capital generation A and return of excess capital to our shareholders ROE target of 15% at a Attractive CT1 ratio >13% and in a total B normalised interest rate shareholder environment return Delive
Slide 24: Significant capital generation achieved
A Significant capital generation achieved Core Tier 1 capital, EURm Capital generation2, EURm Acc. dividend Acc. retained equity 21 961 19 696 20 677 19 103 16 570 17 766 7 679 13 936 14 313 6 309 12 821 11 273 11 689 5 261 8 955 4 093 6 283 3 087 12 017 2 568 10 261 3 153 8 675 7 180 1 271 5 868 3
Slide 25: Core Tier 1 ratio expected to remain above 13%
A Core Tier 1 ratio expected to remain above 13% Core Tier 1 ratio development, % Excess capital The regulatory ~1% >13% environment remains 13.1% ~1.5% uncertain ~(1.5)% Core Tier 1 ratio ~(0.5)% expected to remain above 13% Excess capital over our policy requirement to be returned to shareho
Slide 26: RWAs remain nearly flat as efficiency offsets regulation
A RWAs remain nearly flat as identified efficiency initiatives offset the impact of regulation and allow for lending growth RWA development, EURbn ~20 ~5 ~10 168 ~168 ~168 ~(25) ~(10) 2012 Regulation Growth Efficiency 2013E Growth Efficiency 2015E including including migration migration During 2013
Slide 27: Further capital generation to be guided by ambitious ROE target
B Further capital generation to be guided by our ambitious ROE target Return on equity, % ~200bps >15% ~100bps ~100bps ~100bps 11.6% 2012 Income generation Cost efficiency Lower loan losses 2015 ROE Normalised ROE at normalised forecast interest rates 1 interest rates Basel Progression from Basel 2.
Slide 28: Strong execution on the flat cost plan, costs to remain flat
B Strong execution on the flat cost plan for nine quarters, costs to remain flat for another eight Total expenses (excl. FX and variable pay1), EURm Continued cost reductions with gross savings of ~EUR 450m more than off-setting cost inflation 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 Un
Slide 29: Nordea's business model has proven resilient
C Nordea’s business model has proven resilient… Largest geographic exposure vs. Net income volatility vs. Nordic Nordic peers1, % peers2, % ~90% 149 ~80% ~70% ~70% ~60% 73% 53 61 27% 23 10 10 Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Total loans to public by
Slide 30: As confirmed by the debt capital markets
C ... as confirmed by the debt capital markets CDS spread vs. European peers, Long-term funding, EURbn 5 yrs, bps Nordic peers European peers 385 374 33 32 29 276 273 27 263 174 174 161 158 158 141 139 138 128 127 119 96 96 94 93 92 92 87 82 77 76 68 Nordea 2009 2010 2011 2012
Slide 31: The plan is a natural next step in our relationship strategy
The plan is a natural next step in our relationship strategy Strong bank Safe and with low reliable funding and customer capital cost oriented bank More customers High capital and increased generation income ROE above Capital and cost of capital cost efficiency 31 •
Slide 32: Closer relationships, more customers, drives income
Closer relationships, more customers, drives income Total income and relationship customers 3 000 3.5 2 500 3.0 2 000 2.5 2.0 1 500 1.5 1 000 1.0 500 0.5 0 0.0 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q1/12 Total operating income, EURm (left axis) Number of Gold and Private Banking customers, millions (right a
Slide 33: Agenda
• Q4 2012 financial results highlights • Shaping the future relationship bank • Nordea 2013 capital markets day
Slide 34: Nordea 2013 capital markets day
Nordea 2013 capital markets day London, 6 March 2013 Presentation Presenter Key topics Shaping the future Nordea’s relationship strategy Christian Clausen relationship bank Plan to ensure attractive total shareholder return Path to achieving ROE target Financial initiatives Torsten Jørgensen
Slide 35: Fourth quarter 2012 results: Shaping the future relationship bank
Fourth quarter 2012 results Shaping the future relationship bank Media conference 30 January 2013 Christian Clausen, CEO