Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Q1 2007 Earnings Presentation
24 slides from Nordea Bank Abp's earnings presentation, April 2007
Slide 1: Interim Report First Quarter 2007 Press Conference
Interim Report First Quarter 2007 Press Conference Christian Clausen President and Group CEO
Slide 2: Key messages
Key messages Organic growth strategy continues to pay off Income EUR 1,873m, up 8% excl. contribution from International Moscow bank (IMB). (EUR 1,754 in the first quarter 2006) Operating profit EUR 895m, up 6% excl. IMB last year (EUR 853m) Costs up 6% - investing for future growth Strong
Slide 3: Strong performance in strategic growth areas
Strong performance in strategic growth areas Total lending Markets result 242 225 199 201 214 222 Up 16% 250 229 Increased selling of 200 191 207 Markets products to Compensating 200 194 175 180 SME’s 150 for margin 150 125 pressure Strong revenues 100 100 with FX, fixed Strong growth 75 i
Slide 4: Operating income
Operating income YoY EURm Up 8% when excluding IMB 2006 Reported up 6% 2,000 1,898 1,754 1,780 1,873 Net interest income up 8% 1,800 1,734 Volume growth largely compensating for pressure on 1,600 lending margins 1,400 Commission income up 6% 1,200 Lending related commissions up 14% Car
Slide 5: Robust volume growth continues
Robust volume growth continues YoY Q1oQ4 Lending, total 16% 4% – Mortgage lending 14% 2% – Consumer lending* 16% 5% – of which non collateralised lending 22% 7% – SME lending 14% 4% – CIB lending excl. Markets 8% 4% Deposits, total 12% 0% – Household deposits 9% 1% – SME deposits 14% 0% – CIB deposi
Slide 6: Cost/income ratio
Cost/income ratio % 70 64 63 60 60 Unchanged at 53% 56 53 53 Strong growth in revenues 50 Investments for future growth 40 30 20 10 0 2002 2003 2004 2005 2006 * Jan- Mar 07 * Excl. gain from sale of IMB shares 6
Slide 7: Gap between income and cost growth
Gap between income and cost growth Percentage points Gap of 1.2 percentage points in 10 Q1 – on track with financial 9 planning 8 Income up 7.5% 6.9 Expenses up 6.3% 7 6.6 6 Strong top line growth driven by 5.4 growth initiatives 5 4 Cost increase reflects investments in future growth 3
Slide 8: Well controlled expense growth
Well controlled expense growth Investments in prioritized 7% 6.3% growth areas 6% Increase in variable salaries 5.3% 5% Unchanged cost management 4% 3.7% alongside growth strategy On track with full year outlook 3% of cost increase of 4-5% 2% 1% 0% Reported Excl. variable Excl. variable sala
Slide 9: Operating profit
Operating profit YoY EURm Up 6% excluding contribution from 1,100 IMB in 2006 Reported up 5% 1,000 966 927 863 895 Strong profit trend continued in all 900 853 business areas 800 Lower loan loss recoveries in 2007 700 600 500 400 300 200 100 0 Q1/06 Q2/06 Q3/06 * Q4/06 Q1/07 * Excl. full imp
Slide 10: Continuous increase in earnings per share - rolling 12 months
Continuous increase in earnings per share - rolling 12 months EUR 1.2 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 Q4/06 Q1/07 Reported 10
Slide 11: Clearly identified strategic initiatives – to support the organic growth strategy
Clearly identified strategic initiatives – to support the organic growth strategy • Long term savings • Consumer credits and Cards Product areas in focus • Life insurance • Capital markets products • Private Banking Segments in focus • Gold customers • SME Geographical markets • Growth Plan Sweden i
Slide 12: Strengthened leadership within long term savings
Strengthened leadership within long term savings Accumulated net inflow (EURbn) Net inflow EUR 35bn 2003-2006 40 Private Banking EUR 14bn Retail funds EUR 13bn 35 European Fund Distribution EUR 1bn 30 Other EUR 7bn 25 Net inflow in Q1 2007 EUR 2.6bn 20 Majority of sales within innovati
Slide 13: Improved market position within consumer lending and cards
Improved market position within consumer lending and cards YoY Retail consumer lending Lending Margin Consumer lending up 16% EURbn % Non-collateralised up 22% 17 4.6 Approx. 540,000 new cards issued 16 16.4 15.6 4.0 In total 5.8 million cards issued 15 15.4 14.9 Of which approx. 16% credi
Slide 14: Continued stable result and increased premium income within Life
Continued stable result and increased premium income within Life Nordea Life & Pensions the largest Life product result and 12-month rolling Gross company on the Nordic market with a Written Premiums (GWP) market share of 10.8% EURm EURm-GWP 80 4,000 Net written premiums up 5% 70 3,500 Despite
Slide 15: Strong revenue growth in Nordea Markets
Strong revenue growth in Nordea Markets Strong revenue growth in Nordea Markets All time high revenues in Q1 EURm Customer activity continued at high 250 225 242 levels - increase in capital markets 229 200 207 transactions with large corporates 194 175 169 163 180 Increased cross-selling of M
Slide 16: 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 60 55 Strong asset growth in Nordic Private 50 9 10 Banking 45 9 40 9 9 Net inflow in Q1 21% annualised 8 9 35 8 8 Result of roll-out of new common advisory 30 concepts, particularly in Norway and 25 Swed
Slide 17: Strong growth in revenues with existing customers
Strong growth in revenues with existing customers - segmentation strategy pays off Share of Retail Household income in Q1 2007 Private Banking reached 10% share 61% of Retail Household revenues for the first time 15% 15% Increased deposit revenues benefits 10% all segments Bronze Silver Gold Pri
Slide 18: Continued revenue growth in all Retail corporate segments
Continued revenue growth in all Retail corporate segments Share of Retail Corporate income Q1 2007 Large companies accounts for more 56% than 50% of new growth potential in all segments 18% 26% Solid revenue growth in all segments across markets One Nordic customer area Small Medium Large Ga
Slide 19: Geographical markets in focus
Geographical markets in focus Growth plan Sweden Accelerated growth plan in Nordic markets, in particular Sweden Focus on advisory services and product segments with growth potential 200 advisors recruited and trained in Retail banking last 12 months Poland and Baltic countries Continued
Slide 20: Orgresbank
Orgresbank Acquisition finalised in Q1 2007 Balance sheet consolidated in Nordea Group accounts per 31 March 2007 Strong financial performance in Q1 Total income EUR 18m (EUR 55m full year 2006) Total expenses EUR 10m (EUR 31m full year 2006) Orgresbank will capture growth in the Russian
Slide 21: The next step towards improved operational efficiency
The next step towards improved operational efficiency Unified customer Free up time for sales Unified product delivery processes processes • Future branch: • Increase the time • Product and delivery chain to Personal bank advisors reduce time-to-market of our • Straighten out work and relationship m
Slide 22: New operating model to support growth
New operating model to support growth Banking & Capital Group Services Nordic Banking Market Products & Technology People & Identity Segment Household and Corporate Account Products Group Corporate Centre Cash Management & Payments Capital Market Products Group Credit & Risk Private Banking Control
Slide 23: Outlook
Outlook Nordeas’ growth strategy continues to pay off and Nordea will continue to deliver on its financial targets Nordea believes that strong revenue growth will continue in 2007 As previously stated the cost increase for the full-year 2007 is expected to be of the same magnitude as in 2006,
Slide 24: Summary
Summary Organic growth strategy continues to pay off Revenues up 8% Total lending up 16% AuM up 12 % Strong performance in all business areas Cost management unchanged alongside growth plans Clearly identified strategic initiatives to improve performance further New organisation and