Slide 1: Second Quarter Report 2011
Second Quarter Report 2011 Press and analyst conference 19 July 2011 Christian Clausen President and Group CEO
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: Key messages
Key messages • Solid business momentum is maintained • Good revenue growth in customer areas • Trading result down from last quarter’s high level • Loan losses are at the lowest level since 2008 • A solid foundation for implementing new normal plan • Ambition: ROE in top league of European banks ~15
Slide 4: Result highlights
Result highlights EURm Q2/11 Q1/11 Chg % Q2/10 Chg % Net interest income 1,326 1,324 0 1,249 6 Net fee and commission income 623 602 3 538 16 Net result items at fair value 356 544 -35 339 5 Other income 37 40 -8 35 6 Total income 2,342 2,510 -7 2,161 8 Staff costs -744 -768 -3 -701 6 Total expenses
Slide 5: Stable total income after strong Q1
Stable total income after strong Q1 Total income, EURm Continued strengthening of 2 507 2 510 relationships 2 359 2 363 2 277 2 303 2 342 Strong trend in customer areas 2 158 2 161 Trading result has decreased from last quarter’s high level Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11
Slide 6: Solid growth in customer areas
Solid growth in customer areas Total income, EURm Income up 5% in customer areas q-o-q and 10% compared to Q210 2 302 2 302 2 126 2 193 Volatility in financial markets has 2 089 lowered the trading result from last quarter’s high level Increased and prolonged funding Q2/10 Q3/10 Q4/10 Q1/11 Q2
Slide 7: Net interest income – solid trend in customer areas
Net interest income – solid trend in customer areas Net interest income, EURm Deposit volumes and margins continue to increase 1 365 1 305 1 321 1 299 1 310 1 324 1 326 1 235 1 249 Lending volumes increases and stable lending margins Lower level in Treasury Increased and prolonged funding
Slide 8: Record high net fee and commission income
Record high net fee and commission income Net fee and commission income, EURm Increase of 3% 618 623 Savings commissions remain on a 602 538 high level 525 475 437 463 Good trend in payment 412 commissions Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 8 19 July 2011 Second Quarter Repo
Slide 9: Fair value result affected by market turmoil
Fair value result affected by market turmoil Net result from items at fair value, EURm Stable trend in customer areas Difficult trading conditions due to financial turmoil Lower risk appetite from investors 414 339 332 296 302 298 297 303 291 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/
Slide 10: Expenses largely at the same level as in Q111
Expenses largely at the same level as in Q111 Total expenses, EURm Staff cost decreased by 3% 1 270 1 265 1 275 1 219 1 186 1 196 1 164 1 116 1 087 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 10 19 July 2011 Second Quarter Report 2011
Slide 11: Net loan losses on low levels
Net loan losses on low levels Net loan losses, EURm 12bps¹ – the lowest level since Q208 425 Denmark shows clear signs of 358 347 improvement 261 245 EUR 20m from Danish deposit 207 175 system provision 166 118 12bps¹ Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Provision related to D
Slide 12: Total lending is up 10% vs. Q210
Total lending is up 10% vs. Q210 Total lending, EURbn Corporate and household lending is up 2% q-o-q in local 331 332 303 314 314 currencies 293 278 283 282 Increased demand from largest corporate Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 12 19 July 2011 Second Quarter Report 2011
Slide 13: Improved credit quality
Improved credit quality Corporate rating distribution In Q211 72% (70% in Q1) EAD 20% Increased Decreased of the exposure is a high 15% rating of 4- or higher 10% 5% Rating 0% 6+ 5+ 4+ 3+ 2+ 1+ 6 5 4 3 2 1 6- 5- 4- 3- 2- 1- Q2 2010 Q2 2011 Impaired loans, EURm Impaired loans down by 4% 2 011 2 1
Slide 14: Solid capital position
Solid capital position Risk-weighted Assets (RWA), EURbn Core Tier 1 ratio increased 70 bps in H1 2011 215 214 213 185 182 180 Reduction in Risk Weighted Assets Continued positive rating Q4/10 Q1/11 Q2/11 migration in corporate portfolio Transition rules Fully implemented Basel II (2,4% vs 0,7
Slide 15: Strong capital generation
Strong capital generation Core Tier 1 capital, EURm CAGR in core equity of 9.1% since 2006 19 103 19 846 High profitability in our capital 17 766 position 14 313 12 821 A key to maintaining high rating and 11 689 low funding costs 2006 2007 2008 2009 2010 Q2 2011 Dividend payout Dividend accru
Slide 16: Development per customer segment
Development per customer segment 16 19 July 2011 Second Quarter Report 2011
Slide 17: Corporate customers
Corporate customers Corporate customer income, EURm Up 6% vs. Q111 and 8% vs. Q210 1 229 Improved relationships in CMB 1 140 1 163 segment – driver for ancillary income Q2/10 Q1/11 Q2/11 17 19 July 2011 Second Quarter Report 2011
Slide 18: Household customers
Household customers Household customer income, EURm Up 2.5% vs. Q111 and 14% vs. Q210 928 905 Increase in Gold customers by 814 41,000 in Q211 and by 183,000 since Q210 Improved deposit margins Q2/10 Q1/11 Q2/11 18 19 July 2011 Second Quarter Report 2011
Slide 19: Increase in relationship channels
Increase in relationship channels New applications for smart phones and tablets 6.4 million e-banking customers 250,000 mobile banking customers Growing presence on Facebook 19 19 July 2011 Second Quarter Report 2011
Slide 20: Adapting to the New Normal
Adapting to the New Normal 20 19 July 2011 Second Quarter Report 2011
Slide 21: New organisation from 1st June - focusing on momentum and efficiency
New organisation from 1st June - focusing on momentum and efficiency Three main Business Areas: Retail Banking Wholesale Banking Wealth Management Builds on the value chain thinking Objective to improve efficiency, increase RoE and deepen customer relationship Financial reporting will
Slide 22: Nordea's ambition is to be top-league
Nordea’s ambition is to be top-league European banks ROE 2013 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Retail Wholesale Global banks banks banks 15% is top- 22 28league April 2011 19 July 2011 Second Quarter Report 2011
Slide 23: Efficiency initiatives: Asset efficiency
Efficiency initiatives: Asset efficiency Risk-weighted assets excl. transition rules vs. Low growth of risk-weighted total lending assets 120 A decrease of 1% q-o-q 115 RWA optimization and 110 improved credit quality 105 100 95 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Lending RWA
Slide 24: Efficiency initiatives: Cost efficiency
Efficiency initiatives: Cost efficiency Total operating expenses. EURm Implement plans to contain cost growth 1 270 1 275 1 265 Thereafter keep costs largely 1 186 1 196 1 164 unchanged for a prolonged period of time Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 24 19 July 2011 Second Quarter Report 2011
Slide 25: Improved productivity and efficiency ratios
Improved productivity and efficiency ratios Business volumes / FTE Netbank transactions % +10% +25 Q2 2009 Q2 2011 Q2 2009 Q2 2011 Income per customer Manual branch transactions -25 +10% % Q2 2009 Q2 2011 Q2 2009 Q2 2011 25 19 July 2011 Second Quarter Report 2011
Slide 26: Top-league risk-adjusted profit and shareholder return
Top-league risk-adjusted profit and shareholder return Risk-adjusted profit, 2007- 2011 Total shareholder return, 2007 - 2011 Ytd Ytd 40 56.1% 20 4% 45.1% 0 -20 -40 Top quartile -60 -80 -100 Ro lling fo ur quarter co mpared with FY 2006 EUR 1,957m Nordea Peer Peer Peer Peer Peer Peer Peer Peer Peer
Slide 27: Key messages
Key messages • Solid business momentum is maintained • Good revenue growth in customer areas • Trading result down from last quarter’s high level • Loan losses are at the lowest level since 2008 • A solid foundation for implementing new normal plan • Ambition: ROE in top league of European banks ~15
Slide 28: Second Quarter Report 2011
Second Quarter Report 2011 Press and analyst conference 19 July 2011 Christian Clausen President and Group CEO