Slide 1: Investor Presentation 3 May 2006
Investor Presentation 3 May 2006
Slide 2: CEO Presentation
CEO Presentation
Slide 3: Keeping the momentum - delivering ahead of financial targets
Keeping the momentum - delivering ahead of financial targets Operating profit in Q1 2006 increased by 25% compared to Q1 2005 to EUR 858m Gap between revenue and cost growth 8 percentage points Revenues increased by 11% to EUR 1,759m Costs increased by 3% to EUR 933m Cost/Income ratio cont
Slide 4: Operating profit – very strong business momentum
Operating profit – very strong business momentum YoY EURm 1,000 Up 25% 900 Strong revenue growth in all business 800 884 858 areas 700 728 748 Firm cost management 688 600 Focus on profitable growth 500 RoE 20% 400 Net profit up 34% 300 QoQ 200 Up 15% 100 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/0
Slide 5: Growth strategy and business model pay off – profitable growth in business volumes
Growth strategy and business model pay off – profitable growth in business volumes Strong sales to both corporate and personal customers – lending up 12% Strategic focus on the savings area increasingly visible – Assets under management up 18% and deposits up 8% New written premiums in Life up
Slide 6: Continued growth in operating income
Continued growth in operating income YoY EURm 1,800 Up 11% 1,759 1,600 1,694 1,696 Increased focus on top line growth 1,582 1,601 strong volume growth continues 1,400 1,200 Increased income from advisory services 1,000 Long-term savings 800 Markets-related products 600 Strong increase
Slide 7: Improved sales focus increases business volumes across business areas
Improved sales focus increases business volumes across business areas Strong lending growth adding approx. EUR 60m in revenues (YoY) lending up 12% to EUR 191bn driven by mortgages, SME lending, consumer finance, Shipping, Poland & Baltics Strong growth in long-term savings, adding approx. E
Slide 8: Volume growth more than compensates margin pressure
Volume growth more than compensates margin pressure YoY QoQ Lending, total 12% 1% – Mortgage lending 14% 2% – Consumer lending* 8% 2% – SME lending 11% 1% – CIB lending 4% -1% Deposits, total 8% -2% – Household deposits 7% 0% – SME deposits 11% -2% – CIB deposits -4% -4% * Retail consumer lending (c
Slide 9: Increased focus on advisory services – higher share of non-interest income
Increased focus on advisory services – higher share of income being non-interest income % 100 Increasing proportion of non- 90 interest income 80 39 40 43 44 47 still net interest income up 3% YoY 70 In line with strategy 60 61 60 50 57 56 Individual customer-focused advice 53 40 and product
Slide 10: Cost management culture firmly established in Nordea
Cost management culture firmly established in Nordea EURm 4,000 3,831 Costs down 7% 2002-2005 3,655 3,668 3,500 Nordea accepts a moderate increase in costs in the present 3,000 strong market environment 2,500 to capture profitable growth opportunities 2,000 Nordea has flexibility and ability
Slide 11: Cost/income ratio continues downwards
Cost/income ratio continues downwards % 70 Continued down to 53% in Q1 60 income up 11% 60 56 53 costs up 3% 50 Continuous efficiency improvements 40 Delivery in line with financial targets 30 20 10 0 2004 2005 Q1/06 11
Slide 12: Widened gap between income and cost development
Widened gap between income and cost development Percentage points 10 Increased efficiency when delivering top line growth 9 8 Capture profitable revenue 8 7 7 opportunities 7 Cost reductions were the main 6 driver for bottom line growth 2003- 5 2004 4 Top line increasingly contributing 3 M
Slide 13: Margin pressure continues – in a limited part of the business
Margin pressure continues – in a limited part of the business Competition continues to put pressure on margins in certain parts of the business Mortgage lending – approx. 9% of Nordea’s revenues in Q1 YoY margins on average down 17bp margins on new lending below average book margins QoQ la
Slide 14: Key growth areas
Key growth areas Accelerate market position within consumer credits including cards Continue to leverage on strong position within long-term savings Harness Nordea’s leading position in capital markets – leveraging Nordea’s customer base SME banking provides opportunities Use the mortgag
Slide 15: Increasing business through customer programmes rewards both customers & Nordea
Increasing business through customer programmes rewards both customers & Nordea Strong growth in core segment Q1/05 to Q1/06 Key elements in the programmes offered to the customers: 16.4% more favourable prices the more business customers 9.2% do - and for the core customers a named personal ban
Slide 16: Continuous increase in earnings per share
Continuous increase in earnings per share EUR 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 16
Slide 17: Outlook
Outlook Nordea’s growth strategy, incl. increased focus on cross-selling, is paying off and Nordea is confident to be able to continue delivering on financial targets Nordea’s expectation of achieving a gap of at least 5 percentage point’s between revenue and cost growth well exceeded in Q1 No
Slide 18: CFO Presentation
CFO Presentation CFO Presentation
Slide 19: Income statement summary
Income statement summary EURm Q1/06 Q1/05 Chg % Net interest income 927 897 3 Net fee and commission income 507 453 12 Net gains/losses on items at fair value 242 115 110 Equity method 25 13 92 Other income 58 104 -44 Total operating income 1,759 1,582 11 Staff costs -543 -515 5 Other expenses -367
Slide 20: Income statement summary
Income statement summary EURm Q1/06 Q4/05 Chg % Net interest income 927 933 -1 Net fee and commission income 507 529 -4 Net gains/losses on items at fair value 242 147 65 Equity method 25 21 19 Other income 58 66 -12 Total operating income 1,759 1,696 4 Staff costs -543 -532 2 Other expenses -367 -3
Slide 21: Net interest income
Net interest income YoY Up 3% EURm Up 6% in business areas 1,000 Total lending up 12% 900 933 927 897 913 920 mortgage lending up 14% 800 SME lending up 11% 700 Continued pressure on lending margins 600 mortgages and SME’s QoQ 500 400 Largely unchanged - volume growth 300 compensatin
Slide 22: Change in net interest income
Change in net interest income YoY QoQ Volume driven 77 23 -Lending volumes 64 21 -Deposit volumes 13 2 Margin driven -32 4 -Lending margins -55 -6 -Deposit margins 23 10 Treasury -19 -14 Other, net (incl. day count effect) 4 -19 Total 30 -6 22
Slide 23: Net commission income
Net commission income YoY EURm Up 12% 600 Savings commissions up 19% Asset Mgmt commissions up 22% 500 529 Brokerage up 38% 507 484 469 Custody services up 11% 453 400 Payment related commissions up 6% Cards up 16% 300 Lending commissions up 13% 200 QoQ 100 Down 4% from seasonally
Slide 24: Breakdown of commission income - gross
Breakdown of commission income - gross EURm 400 360 320 338 335 319 280 306 281 240 200 160 175 177 177 171 162 120 80 90 98 88 82 87 40 51 59 48 41 32 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Savings related Payments related Lending related Other Of which Asset Mgmt Of which Cards 24
Slide 25: Customer business drives increase in net/gains losses
Customer business drives increase in net/gains losses YoY EURm 200 Net gains/losses in BA’s increased by 60% 180 190 210 to EUR 210m 160 Strong success in selling Markets products 159 140 in Retail and CIB 120 131 134 Strong growth in customer driven business 100 80 structured products 80 60
Slide 26: Strong development in Nordea Markets
Strong development in Nordea Markets EURm Leveraging Nordea’s customer base 700 Customer driven growth 600 Focus on customer solutions rather 500 than product push 400 strong concepts in risk management and 300 asset-liability management increased capabilities in derivatives 200 F/X and
Slide 27: Group Treasury
Group Treasury Strong profit both in Group Investment and Group Funding mainly driven by successful position taking reduced net interest income Group Investment Group Funding EURm Q1/06 Q1/05 Q1/06 Q1/05 Q1/06 Q1/05 Net interest income 20 39 -18 -11 38 50 Net gains/losses 40 -15 36 9 4 -24 Oth
Slide 28: Continuous improvement in net/gains losses within business areas
Continuous improvement in net/gains losses within business areas – Treasury more volatile Net/gains losses, EURm Q1/06 Q4/05 Q3/Q5 Q2/05 Q1/05 Retail 83 64 47 57 48 CIB 87 83 74 51 76 Asset Mgmt 8 10 6 3 4 Life 32 33 32 23 3 Subtotal business areas 210 190 159 134 131 Group Treasury 40 -31 -21 68 -1
Slide 29: Total operating income
Total operating income YoY Up 11% Increased focus on top line growth EURm business model is paying off 1,800 1759 Increased income from advisory services 1,600 1694 1696 1582 1601 long term savings 1,400 Markets related products 1,200 Strong volume growth – compensating for pressure on
Slide 30: Expenses
Expenses YoY Up 3% - ambition to capture opportunities EURm in growth markets 1,000 956 933 Life costs up 39% 902 914 896 31 23 900 34 35 31 Asset Mgmt costs up 19% 800 393 367 Poland & Baltics up 11% 700 353 364 345 Staff costs up 5% 600 increase of FTEs by approx. 325 500 532 543 515 5
Slide 31: Number of FTEs
Number of FTEs 32,000 Shift towards increasing advisors and 28,725 28,824 28,730 28,925 29,052 sales related FTEs in BA’s and falling no. 28,000 of FTEs in processing and staff units 24,000 FTEs Q1/06 Q1/05 Chg YoY Q4/05 20,000 Retail 17,399 17,230 169 17,373 16,000 CIB 3,349 3,218 131 3,326 12,00
Slide 32: Cost/income ratio continues downwards
Cost/income ratio continues downwards % 70 Continued down to 53% in Q1 60 income up 11% 60 56 53 costs up 3% 50 Continuous efficiency improvements 40 Delivery in line with financial targets 30 20 10 0 2004 2005 Q1/06 32
Slide 33: Loan losses
Loan losses YoY EURm Positive loan losses following a 60 continued flow of several recoveries 40 Low new provisions 20 Positive loan losses for 8th 0 -6 -7 consecutive quarter -23 -20 -31 QoQ -40 -60 Loan losses positive as reversals -80 exceeded new provisions -101 writeback of groupwise
Slide 34: Impaired loans
Impaired loans Net impaired loans as per cent of total lending 18bp EURm. End of period Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Impaired loans, gross 1,712 1,820 1,994 2,006 2,097 Reserves -1,371 -1,481 -1,545 -1,581 -1,657 Impaired loans, net 341 339 449 425 440 Provisions/impaired loans, gross,% 80 81 78
Slide 35: Net profit
Net profit YoY EURm 800 Up 34% 700 Operating profit up 25% 705 665 Lower effective tax rate 600 563 500 506 QoQ 495 400 Up 31% 300 Operating profit up 15% 200 One-off tax expenses in Q4 100 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 35
Slide 36: Continuous increase in earnings per share
Continuous increase in earnings per share EUR 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 36
Slide 37: Return on equity
Return on equity % 20 20.0 RoE well above 2007 target of >17% 18 Profitable growth strategy delivers 18.0 16 results 15.8 14 Active capital management 12 10 8 6 4 2 0 2005 Q1/05 Q1/06 37
Slide 38: Capital position
Capital position % 8 Tier 1 ratio 6.8% 7 Profitable volume growth 7.0 7.0 6.8 6.8 6.8 Total capital ratio at 9.4% 6 Authorisation from AGM to purchase 5 up to 5% of no. of shares 4 3 2 1 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 38
Slide 39: Capital position in Basel II environment – according to QIS 5 study
Capital position in Basel II environment – according to QIS 5 study % Quantitative Impact Study (QIS 5) 10 measured effect on RWA in new Basel II 9.7 framework – pillar one only 9 conducted by the Basel Committee based 8 on Q3 2005 7 7.0 Pillar one comprises credit, market and 6 operational ri
Slide 40: Risk-weighted assets (RWA)
Risk-weighted assets (RWA) YoY EURbn 200 RWA up 14% 180 Total lending up 12% 174 160 169 159 162 140 153 120 QoQ 100 RWA up 3% 80 Lending up 1% 60 40 Increase in off balance sheet 20 business 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 40
Slide 41: Return on risk weighted assets, annualised
Return on risk weighted assets, annualised EURm % 200 2.0 180 1.77 1.8 160 169 174 1.6 159 162 1.53 140 153 1.39 1.4 1.29 120 1.20 1.2 100 1.0 80 0.8 60 0.6 40 0.4 20 0.2 0 0.0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 RWA Return on RWA (net profit, annualised) 41
Slide 42: Business trends
Business trends Business trends
Slide 43: Total lending
Total lending EURbn 200 191 189 182 180 175 170 161 160 156 155 147 147 149 146 148 140 120 100 80 60 40 20 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 Corporate Housing loans Other loans Public sector 43
Slide 44: Household mortgages, volumes and margins
Household mortgages, volumes and margins* EURbn % 70 1.6 65 1.5 64.5 65.8 60 62.6 1.4 60.4 55 57.7 1.3 56.3 50 54.5 1.2 52.6 48.9 50.0 45 48.2 1.1 44.3 45.7 40 1.0 35 0.9 30 0.8 25 0.7 20 0.6 15 0.5 10 0.4 5 0.3 0 0.2 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 * Vo
Slide 45: Retail consumer lending, volumes and margins
Retail consumer lending, volumes and margins* EURbn % 16 4.8 14 4.2 13.9 14.2 13.5 13.8 12.9 13.2 12 12.4 12.4 12.5 12.7 3.6 12.1 12.2 12.2 10 3.0 8 2.4 6 1.8 4 1.2 2 0.6 0 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 Retail consumer lending Retail consumer margi
Slide 46: Lending to corporates (SME), volumes and margins
Lending to corporates (SME), volumes and margins EURbn % 70 1.8 70.0 70.9 65 67.9 1.7 64.0 65.3 60 1.6 61.0 55 57.3 57.3 57.4 58.1 58.5 1.5 56.7 56.3 50 1.4 45 1.3 40 1.2 35 1.1 30 1.0 25 0.9 20 0.8 15 0.7 10 0.6 5 0.5 0 0.4 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/
Slide 47: CIB lending, volumes and margins
CIB lending, volumes and margins* EURbn % 30 1.5 28 1.4 26 1.3 24 1.2 22 22.6 1.1 22.5 20 21.7 21.4 21.4 21.7 21.2 1.0 20.3 20.8 18 19.0 0.9 18.4 18.1 18.0 16 0.8 14 0.7 12 0.6 10 0.5 8 0.4 6 0.3 4 0.2 2 0.1 0 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 * Excl.
Slide 48: Total deposits
Total deposits EURbn 120 116 113 110 105 106 108 105 100 98 97 95 96 91 93 92 90 80 70 60 50 40 30 20 10 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 Of which household deposits 48
Slide 49: Retail deposits, households, volumes and margins
Retail deposits, households, volumes and margins EURbn % 50 2.4 45 46.9 47.0 47.1 2.2 45.7 43.8 44.1 40 41.7 42.3 42.9 2.0 40.7 41.3 40.4 40.2 35 1.8 1.6 30 1.4 25 1.2 20 1.0 15 0.8 0.6 10 0.4 5 0.2 0 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 49
Slide 50: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on NII* Q1/06 Q4/05 Increasing market rates, 100bp 162 154 Decreasing market rates, 100bp -167 -175 Reduced sensitivity following completion of new ALM strategy in 2005 Numbers influenced by volume increases in Q1 2006 Downside sen
Slide 51: Retail deposits, SME, volumes and margins
Retail deposits, SME, volumes and margins EURbn % 40 1.6 35 1.4 33.4 32.6 30 31.5 1.2 30.5 30.1 28.9 28.8 29.4 28.3 28.4 25 26.2 26.3 26.7 1.0 20 0.8 15 0.6 10 0.4 5 0.2 0 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 51
Slide 52: CIB, deposits, volumes and margins
CIB, deposits, volumes and margins* EURbn % 24 1.2 22 23.2 1.1 22.1 20 21.0 21.2 1.0 20.4 18 0.9 18.0 18.5 17.9 16 0.8 14 15.4 15.2 14.9 0.7 14.4 12 13.3 0.6 10 0.5 8 0.4 6 0.3 4 0.2 2 0.1 0 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 * Excl. Markets, Poland and
Slide 53: Assets under management
Assets under management YoY EURbn 160 154 Up 18% 144 148 137 140 131 34 35 High inflow - new product 33 120 31 32 launches 23 100 21 22 21 21 7 7 7 9 Strong equity markets 80 7 8 8 9 8 8 60 33 34 36 Asset shift towards equities 29 31 40 20 36 38 41 42 45 QoQ 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06
Slide 54: Net inflows
Net inflows QoQ EURbn Net inflow EUR 3.4bn, 9% 5 annualised 3.4 4 launch of the new more flexible 3.0 retail funds 3 1.0 2 0.6 0.9 High activity level in Private 1 Banking and in Retail network 0 Solid net inflow of EUR 0.8bn -1 in Institutional customers -2 following improved Q1/05 Q2/05 Q3
Slide 55: Retail operating profit before loan losses
Retail operating profit before loan losses YoY EURm Double digit volume growth 600 550 577 Increased no. of core customers 544 556 500 Savings related and structured products 505 450 468 main engines behind profitable growth 400 Lending margins still under pressure 350 Improved efficiency
Slide 56: CIB operating profit before loan losses
CIB operating profit before loan losses EURm YoY 180 Strong result for all divisions 160 169 Lending increased in Shipping as well 140 as in Poland and the Baltics 144 120 132 125 A number of large and complicated 122 transactions in Q1 100 Strong result in Markets 80 customer driven sales
Slide 57: Asset Management product result
Asset Management product result YoY EURm 100 Up 39% 90 96 93 Higher AuM 80 New product launches with higher 70 77 margins 67 65 Economies of scale 60 50 Q1 largely unchanged compared to 40 seasonally strong Q4 30 20 10 Key ratios Q1/06 2005 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 C/I ratio, % 50 5
Slide 58: Life insurance, product result
Life insurance, product result YoY EURm 70 Net written premiums up 23% 65 Unit link premiums up 97% 60 Now accounting for 40% of total premiums 56 56 50 52 Business model continues to deliver 48 40 Increased financial buffers decreasing liabilities following increased 30 interest rates 2
Slide 59: In summary Q1 2006
In summary Q1 2006 Nordea ahead of financial targets Growth strategy and business model pays off – profitable growth in all business areas Gap between income and cost growth 8 percentage points Operating profit up 25% Net profit up 34% RoE 20% - well above 2007 target >17% Nordea incre
Slide 60: Facts & figures
Facts & figures
Slide 61: Facts & Figures, content
Facts & Figures, content Credit quality Page 62 Economic capital Page 71 Business areas Page 74 Balance sheet Page 103 Market shares Page 106 Appendix Page 114 61
Slide 62: Credit quality
Credit quality Credit quality
Slide 63: Loan portfolio by customer category
Loan portfolio by customer category* EURbn 100 100 101 97 90 93 91 80 85 84 83 84 82 80 78 79 70 60 65 66 63 58 60 50 55 56 53 48 49 50 40 44 46 30 20 18 19 19 20 20 15 15 16 16 17 17 17 10 14 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 Corporate lending Housing l
Slide 64: Loan portfolio by customer group
Loan portfolio by customer group End Q1/06, EUR 190.7bn End Q1/05, EUR 170.1bn Public Public sector sector 2.0% 2.1% Household customers Household 45.1% Companies customers Companies 52.9% 44.9% 53.0% 64
Slide 65: Lending to household customers
Lending to household customers End of Q1/06 EUR 86.0bn Strong growth Other loans 23.5% Other loans comprise consumer credits investment credits car financing overdraft facilities credit cards home equity credits Housing loans 76.5% 65
Slide 66: Lending to companies by industry
Lending to companies by industry End of Q1/06 EUR 100.8bn Shipping & Offshore Construction 5% 3% Agriculture & Fishing Real estate 6% 27% Transport and communication 6% Finance 9% Manufactoring Renting, consulting 14% and other services 10% Trade and services Other companies 10% 11% 66
Slide 67: Loan portfolio in figures
Loan portfolio in figures EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Household customers 86.0 84.6 81.7 78.9 75.3 Real estate 26.8 26.2 25.6 25.1 24.7 Construction 2.9 2.9 3.1 2.6 2.9 Transport, communication 5.8 5.6 5.1 5.6 4.9 Trade and services 9.9 9.9 9.9 9.8 9.4 Manufacturing 14.0 13.4 12.6 12.9 12.7
Slide 68: Lending by geographical area
Lending by geographical area End of Q1/06 EUR 190.7bn Asia USA 0.9% Latin America 1.0% 0.6% Nordic countries and P&B Other non OECD 93.0% 0.5% Other 7.0% Other OECD 0.4% Other EU countries Nordic countries and P&B, EURbn 3.6% Denmark 51.4 Finland 39.8 Norway 30.2 Sweden 52.8 P&B 3.4 68
Slide 69: Impaired loans
Impaired loans EURm. End of Q1/06 Gross Provisions Net Household customers 431 -260 171 Real estate 134 -108 26 Construction 48 -36 12 Transport, communication 57 -52 5 Trade and services 193 -153 40 Manufacturing 357 -330 27 Finance 24 -19 5 Renting, Consulting and other services 132 -116 16 Other
Slide 70: Loan losses
Loan losses YoY EURm 192 Positive loan losses following a 200 157 156 150 continued flow of several recoveries 91 92 100 Low new provisions 50 Positive loan losses for 8th 0 -6 -7 consecutive quarter -50 -23 -31 -100 -97 -101 QoQ -150 -123 -163 Loan losses positive as reversals -200 -250 -21
Slide 71: Economic capital
Economic capital Economic capital
Slide 72: Economic capital (EC)
Economic capital (EC) EURbn 10 9 8.8 8.9 9.0 9.0 EC per business area Q1/06 8 8.3 Retail Banking 5.4 7 CIB 1.9 6 Asset Mgmt 0.2 5 4 Life 1.0 3 Treasury 0.4 2 Other 0.1 1 Total 9.0 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 72
Slide 73: Economic capital – distribution
Economic capital – distribution End of Q1/06 Asset Mgmt Treasury Other Life risk 4% Operational & Life 1% 1% Business risk 13% risk 9% 11% CIB Market risk 21% Retail Credit risk 16% 61% 63% 73
Slide 74: Retail Banking
Retail Banking Retail Banking
Slide 75: Retail Banking lending and deposit volumes
Retail Banking lending and deposit volumes Lending, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Denmark 45.5 45.1 43.2 41.3 38.5 37.4 36.0 35.5 Finland 36.4 35.6 34.8 33.8 33.0 31.6 30.4 29.5 Norway 26.0 25.2 24.3 23.3 21.8 20.4 19.9 19.9 Sweden 46.5 46.1 45.2 43.3 44.0 42.6 40.9 40.0 Depo
Slide 76: Retail Banking breakdown of lending
Retail Banking breakdown of lending Denmark, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Corporate 18.2 18.1 17.0 16.1 14.7 14.3 13.7 13.8 Household mortgages 20.3 19.6 18.8 17.9 17.2 16.8 16.4 15.9 Consumer lending 5.8 5.8 5.8 5.7 5.5 5.3 5.2 5.1 Finland, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/
Slide 77: Retail Banking breakdown of lending
Retail Banking breakdown of lending Norway*, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Corporate 12.3 12.0 11.5 11.1 10.6 10.4 10.3 10.4 Household mortgages 12.8 12.4 11.9 11.4 10.5 10.1 9.6 9.3 Consumer lending 0.9 0.9 0.8 0.8 0.7 0.6 0.6 0.6 Sweden, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05
Slide 78: Retail Banking breakdown of deposits
Retail Banking breakdown of deposits Denmark, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Corporate 7.8 7.8 8.0 7.2 6.8 7.2 7.1 7.2 Households, current 3.1 3.2 3.1 3.1 2.9 2.9 2.9 2.9 accounts Households, savings 9.5 9.4 9.5 9.0 8.4 8.1 7.8 7.7 accounts Finland, EURbn Q1/06 Q4/05 Q3/05 Q2/
Slide 79: Retail Banking breakdown of deposits
Retail Banking breakdown of deposits Norway, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Corporate 7.7 7.4 6.9 6.3 6.2 5.7 5.6 5.7 Households, current 2.0 1.8 1.7 1.7 1.4 1.4 1.4 1.4 accounts Households, savings 3.7 3.7 3.9 3.8 3.6 3.5 3.5 3.4 accounts Sweden, EURbn Q1/06 Q4/05 Q3/05 Q2/05
Slide 80: Retail Banking margins
Retail Banking margins % Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Lending to SME’s 1.00 1.04 1.06 1.09 1.13 1.13 1.13 1.19 Mortgages, households* 0.75 0.76 0.81 0.85 0.92 0.93 0.85 0.92 Consumer loans, 3.66 3.74 3.81 4.04 4.07 4.18 4.05 4.08 households* Deposits, SME’s 0.88 0.85 0.83 0.89 0.8
Slide 81: Payments & transactions
Payments & transactions Payments & transactions
Slide 82: E-banking customers and payments
82 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Mill. Feb-00 June- Oct-00 Feb-01 June- Oct-01 Feb-02 June-02 Oct-02 Feb-03 Jun-03 Oct-03 Feb-04 E-banking customers Jun-04 Oct-04 Feb-05 Jun-05 Oct-06 Feb-06 0 5 10 15 20 25 30 35 40 45 50 55 Mill. Q1/00 Q3/00 Q1/01 E-banking customers, all customers Q3
Slide 83: Issued cards and card payments
83 0.0 1.0 2.0 3.0 4.0 5.0 Mill. Jan-01 May-01 Sept-01 Jan-02 May-02 Sept-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Cards, all customers Jan-05 Issued debit and credit cards May-05 Sep-05 Jan-06 0 20 40 60 80 100 120 140 160 180 Mill. Q1/01 Q3/01 Q1/02 Q3/02 Q1/03 Q3/03 Q1/04 Card payments Q3/04
Slide 84: Payment transactions, households
Payment transactions, households Mill. 180 160 140 120 100 80 60 40 20 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 Manual transactions Payments ATM Card payments Cash withdrawal ATMs Direct debit E-banking payments 84
Slide 85: Payment transactions, households
Payment transactions, households Mill. Q1/06 2005 2004 2003 2002 2001 Manual transactions 27.7 100.1 103.9 112.5 125.3 141.0 Payterminals 5.8 19.7 23.6 27.1 31.7 34.3 Card payments 158.4 603.6 527.8 459.9 395.5 333.5 Cash withdrawal ATM 39.3 181.7 190.4 197.4 204.4 207.2 Direct debit 26.9 101.3 98.5
Slide 86: Corporate and Institutional Banking
Corporate and Institutional Banking Corporate and Institutional Banking
Slide 87: CIB lending and deposit volumes and margins
CIB lending and deposit volumes and margins Lending, EURbn Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Corporate Banking Division 11.9 11.1 10.9 12.0 12.8 10.8 11.3 12.1 Financial Institutions Division 2.0 1.7 1.8 2.0 2.0 1.4 1.6 2.1 International and Shipping Division 8.6 8.5 8.1 7.7 6.5 5.9 6.
Slide 88: Nordea operations in Poland and the Baltic countries
Nordea operations in Poland and the Baltic countries End of Q1/06 Estonia Latvia Lithuania Poland Total Customers 46,100 33,700 25,400 334,700 1,168,900* Branches/salespoints 10 12 10 41 73 Number of FTEs 266 253 172 828 1,528 Total assets, EURm 1,101 928 653 1,599 4,281 Lending, EURm 966 943 730 1,
Slide 89: Asset Management & Life Insurance
Asset Management & Life Insurance Asset Management & Life Insurance
Slide 90: Breakdown of AuM by market and channels
Breakdown of AuM by market and channels Retail funds* Fund sales Q1/06 (sold through through Private Institutional Life & Total by EURbn own distribution) third-parties Banking customers Pensions market Denmark 17.2 - 15.0 9.8 17.6** 59.4 Finland 6.7 - 14.5 4.1 8.5** 33.5 Norway 1.9 - 1.5 3.4 4.7**
Slide 91: Asset Management - margins
Asset Management - margins YoY Bps 70 66 65 Income margin 12% up following a 60 58 57 58 continued high activity level in all 50 major segments 40 35 33 30 27 25 28 Improved result margin following 20 unchanged cost margins 10 0 -10 -20 -20 -20 -19 -20 -20 -30 -40 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 I
Slide 92: Asset structure
Asset structure* Q1/06 Q1/05 Int'l. fixed Int'l. fixed income income 13% 13% Nordic Nordic Nordic fixed equities Nordic equities income 13% fixed 15% 43% income 47% Int'l. Int'l. equities equities 29% 27% *Average AuM for Asset Management activities excl. Nordic Private Banking activities, in Q1 thi
Slide 93: European fund distribution
European fund distribution EURbn 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 -1,000 Q3/00 Q1/01 Q3/01 Q1/02 Q3/02 Q1/03 Q3/03 Q1/04 Q3/04 Q1/05 Q3/05 Q1/06 Inflow AuM 93
Slide 94: Life - breaking out profit drivers
Life - breaking out profit drivers Fee based on size of life provisions in “with profit” companies – DK, FI, SE Fee contribution Profit-sharing from the Norwegian business (existing model, change pending) Contribution from cost 25% of surplus/deficit from cost result in DK, 100% from FI and SE
Slide 95: Life - profit drivers
Life - profit drivers EURm Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Traditional insurance Fee contribution/profit sharing 36 33 43 35 30 Contribution from cost result -1 -1 0 0 1 Contribution from risk result 7 10 7 2 5 Inv. return on Shareholders Equity 0 1 3 4 3 Other profits 5 6 7 5 3 Total Profit Tradition
Slide 96: Life – net written premiums by market
Life – net written premiums by market End of Q1/06 EURm Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Denmark 237 296 222 210 230 Norway 236 147 90 104 195 Finland 241 273 164 212 260 Sweden 151 254 68 49 65 Other 107 111 33 70 38 Total 972 1,081 577 645 788 96
Slide 97: Life, investments
Life, investments EURbn Equities 35 29.9 30.5 predominantly listed equities 30 28.4 29.0 27.1 1/3 Nordic, 2/3 international 25 Bonds 20 ¾ Nordic issuers primarily govmn’t & mortgage inst. 15 10 5 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Equities Bonds Real Estate Unit linked Alternative investmen
Slide 98: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q1/06 Q4/05 Q1/06 Q4/05 Denmark 13.6 13.7 26 23 Finland 8.2 8.0 21 21 Norway 4.4 4.2 17 15 Sweden 3.3 3.1 4 2 Total 29.5 29.0 20 19 98
Slide 99: Life - solvency situation
Life - solvency situation End of Q1/06 Required Actual Solvency Solvency in % of EURm solvency solvency buffer requirement Denmark 490 584 94 119 Finland 228 711 482 311 Norway* 146 311 166 214 Sweden** 67 141 73 209 * Excluding unit linked companies ** Nordea Life Sweden I 99
Slide 100: Life – solvency sensitivity
Life – solvency sensitivity End of Q1/06 Denmark Finland Norway Sweden Solvency in % of requirement 119 311 214 209 Equities drop 12% 117 238 214 201 Interest rates down 50bp 118 338 214 236 Interest rates up 50bp 120 281 214 165 100
Slide 101: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q1/06 Q4/05 Q1/06 Q4/05 Denmark 1,354 1,172 12.4 10.5 Finland 296 278 5.5 5.2 Norway 217 181 6.4 5.6 Sweden 132 24 8.1 1.4 Total 1,999 1,654 9.4 7.7 * Financial buffers are defined in accordance with local regulations and practices 101
Slide 102: Life – buffer sensitivity
Life – buffer sensitivity End of Q1/06 EURm Denmark Finland Norway Sweden Financial buffers* 1,354 296 217 132 Equities drop 12% 1,146 130 162 124 Interest rates down 50bp 1,338 358 221 70 Interest rates up 50bp 1,426 227 113 186 102
Slide 103: Balance sheet
Balance sheet Balance sheet
Slide 104: Balance sheet
Balance sheet EURm 31 Mar 2006 31 Dec 2006 31 Mar 2005 Treasury bills and other eligible bills 7,056 7,280 7,522 Loans and receivables to credit institutions 31,819 31,578 25,935 Loans and receivables to the public 190,687 188,460 169,983 Derivatives 22,756 28,876 23,619 Other assets 68,957 69,355 6
Slide 105: Capital base
Capital base EURm Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Core equity 13,572 12,918 12,946 12,344 12,474 Hybrid capital loans 1,462 1,472 1,395 1,387 914 Deferred tax assets -308 -327 -460 -449 -448 Goodwill -1,795 -1,794 -1,804 -1,799 -1,771 Other items net -1,210 -831 -696 -431 -826 Tier 1 capital 11,721 11
Slide 106: Market shares
Market shares Market shares * Statistics mainly from February 2006
Slide 107: Market position in Nordic markets
Market position in Nordic markets Market shares Denmark Finland Norway Sweden Personal customers - mortgage lending 16.9% 31.5% 11.8% 15.7% - consumer lending 15.1% 31.1% 10.9% 9.3% - deposits 22.1% 33.2% 8.3% 18.2% Corporate customers - lending 19.1% 34.9% 16.4% 14.5% - deposits 22.4% 37.3% 16.3% 2
Slide 108: Personal customer deposits - market volume & share
108 Ja Ja 0 100 200 300 400 500 600 n M n-0 0 100 200 300 400 500 M -0 3 a 3 ar M r- 0 DKKbn M -03 ay 5 NOKbn ay - Ju -05 Ju 03 S l-0 l ep 5 Se -03 p N -0 ov 5 N -03 ov Ja -0 5 Ja -03 n M n-0 M -0 4 a 5 ar M r- 0 M -04 ay 5 ay - - Ju 05 Ju 04 S l-0 l-0 ep 5 Se 4 p N -0 N -04 ov 5 ov Ja -0 5 Ja -04 N
Slide 109: Corporate deposits - market volume & share
109 Ja Ja 0 100 200 300 400 500 0 100 200 300 400 M n-0 M n-0 a 3 a 3 DKKbn M r- 0 M r- 0 NOKbn ay 3 ay 3 Ju -03 Ju -03 S l-0 S l-0 ep 3 ep 3 N -0 N -0 o 3 o 3 Ja v-0 Ja v-0 3 3 M n-0 M n-0 ar 4 ar 4 M -0 M -0 ay 4 ay 4 Ju -04 Ju -04 S l-0 S l-0 ep 4 ep 4 N -0 N -0 ov 4 ov 4 Ja -0 4 Ja -0 4 Norway D
Slide 110: Personal customer lending - market volume & share
110 Ja Ja 0 100 200 300 400 M n-0 1000 0 200 400 600 800 M n-0 a 3 a 3 DKKbn M r- 0 NOKbn M r- 0 ay 3 ay 3 Ju -03 Ju -03 S l-0 S l-0 ep 3 ep 3 N -0 N -0 o 3 o 3 Ja v-0 Ja v-0 3 3 M n-0 M n-0 a 4 ar 4 M -0 M r- 0 ay 4 ay 4 Ju -04 Ju -04 S l-0 S l-0 ep 4 ep 4 N -0 N -0 o 4 ov 4 Ja v-0 Ja -0 4 4 Norway
Slide 111: Mortgage lending households - market volume & share
111 Ja Ja 0 200 400 600 800 M n-0 n- 0 200 400 600 800 1000 a 3 M 03 DKKbn M r- 0 NOKbn ay 3 ar - Ju -03 Ju 03 S l-0 n- ep 3 S 03 N -0 ep o 3 - Ja v-0 D 03 n 3 ec - M -0 a 4 M 03 M r- 0 ar ay 4 - Ju -04 Ju 04 n- S l-0 O 04 ep 4 ct N -0 o 4 - D 04 Ja v-0 ec 4 - Norway Denmark M n-0 a 5 M 04 ar M r- 0
Slide 112: Corporate lending - market volume & share
112 Ja Ja 0 100 200 300 400 500 600 M n-0 0 100 200 300 400 500 600 M n-0 a 3 a 3 DKKbn M r- 0 M r- 0 NOKbn ay 3 ay 3 Ju -03 Ju -03 S l-0 S l-0 ep 3 ep 3 N -0 N -0 o 3 o 3 Ja v-0 Ja v-0 3 3 M n-0 M n-0 ar 4 ar 4 M -0 M -0 ay 4 ay 4 Ju -04 Ju -04 S l-0 S l-0 ep 4 ep 4 N -0 N -0 ov 4 ov 4 Ja -0 4 Ja -
Slide 113: Investment funds - market volume & share
113 Ja Ja 0 100 200 300 400 500 600 700 M n-0 0 40 80 120 160 200 240 280 M n-0 a 3 a 3 M r- 0 DKKbn M r- 0 NOKbn ay 3 ay 3 - Ju -03 Ju 03 S -0l S l-0 ep 3 ep 3 N -0 N -0 o 3 o 3 Ja v-0 Ja v-0 3 3 M n-0 M n-0 a 4 ar 4 M -0 M r- 0 ay 3 ay 4 Ju -04 Ju -04 S l-0 S l-0 ep 4 ep 4 N -0 N -0 o 4 ov 4 Ja v-
Slide 114: Appendix
Appendix Appendix
Slide 115: Ratings
Ratings Moody’s S&P Fitch Short Long Short Long Short Long Nordea Bank AB P-1 Aa3 A-1+ AA- F1+ AA- Nordea Bank D P-1 Aa3 A-1+ AA- F1+ AA- Nordea Bank F P-1 Aa3 A-1+ AA- F1+ AA- Nordea Bank N P-1 Aa3 A-1+ AA- F1+ AA- Nordea Hypotek P-1 Aa3 A-1+ Covered bond rating Aaa AAA Norgeskreditt P-1 A1 115
Slide 116: Total Shareholder Return (TSR),%
Total Shareholder Return (TSR),% Nordea peer group* 1/1-06 – 11/4-06 % 25 20 23 21 18 18 15 14 15 13 13 10 11 12 11 10 9 9 5 7 6 0 1 4 0 -4 -5 S O K K S K S D B E S A R K BO IT N K N N BO N A BC R O N HB N K TS AL Y EB E O N ED BA BA BA BA IB K M A S BA LA S D N A H R D H R S R A EL S E R C O R nB Z
Slide 117: Largest registered shareholders, end of Q1/2006
Largest registered shareholders, end of Q1/2006 Shareholder Number of shares % Swedish state 515.6 19.9 Nordea Danmark fund 102.5 4.0 Alecta 70.4 2.7 Robur Funds 69.1 2.7 SBH/SPP Funds 67.9 2.6 SEB Funds 46.6 1.8 Nordea Funds 43.4 1.7 AMF Pension 40.8 1.6 Skandia Life Insurance 33.3 1.3 Second Swedi
Slide 118: Market development – interest rates
Market development – interest rates Change 30-12-05 31-03-06 % Q1/06 Short, EUR (one week) 2.33 2.56 +0.23 Long, EUR (5 years) 3.20 3.62 +0.42 Short, DK 2.40 2.71 +0.31 Long, DK 3.27 3.78 +0.51 Short, NO 2.32 2.44 +0.12 Long, NO 4.01 4.05 +0.04 Short, SE 1.54 2.05 +0.51 Long, SE 3.37 3.54 +0.17 118
Slide 119: Macro data – Nordic market
Macro data – Nordic market % 2006e 2007e 2008e Gross domestic product DK 2.9 2.2 2.5 FI 3.9 2.8 3.2 NO 2.8 2.1 2.6 SE 3.6 2.9 2.7 Inflation DK 1.9 1.7 1.6 FI 1.3 1.5 1.5 NO 2.4 1.6 2.2 SE 1.1 1.6 2.2 Private consumption DK 2.4 1.8 2.1 FI 3.3 2.2 2.6 NO 2.2 2.2 2.3 SE 3.5 3.0 2.5 Unemployment DK 4.8
Slide 120: Financial calendar 2006
Financial calendar 2006 Q2 report 2006 will be published on 19 July Q3 report 2006 will be published on 26 October www.nordea.com/ir 120