Slide 1: First quarter 2013 results: Nordea delivers on its plan
First quarter 2013 results Nordea delivers on its plan International telephone conference 24 April 2013 Christian Clausen, 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 message
Key message We deliver on our plan Underlying profit up 8% Low activity in the corporate sector Flat costs for ten consecutive quarters Robust credit quality Flat RWA Increased Core Tier 1 ratio to 13.2% Awarded “Best bank 2013 in the Nordic region” by Global Finance magazine 3•
Slide 4: Q1 2013 financial results highlights
• Q1 2013 financial results highlights • Delivering on the plan
Slide 5: Financial results Q1/13
Financial results Q1/13 EURm Q1/13 Q4/12 Change % Q1/12 Change % Net interest income 1 400 1 429 (2) 1 420 (1) Net fee and commission income 632 692 (9) 596 6 Net fair value result 444 444 0 469 (5) Total income1 2 558 2 630 (3) 2 531 1 Staff costs (769) (764) 1 (771) 0 Total expenses (1 299) (1 327
Slide 6: Net interest income
Net interest income Net interest income development, EURm Comments NII slightly down in quarter 1 462 — Two interest days less 1 427 1 441 1 420 1 429 1 379 1 400 — Lower return on liquidity buffer 1 324 1 326 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 6•
Slide 7: Stable Net Interest Margin but lower volumes
Stable Net Interest Margin but lower volumes Blended net interest margin development, % Comments 1.5% Largely unchanged margin, up 2 bps to 107 bps in Q1 1.2% 107 bps Lower interest rates put pressure on deposit margins 0.9% Lending margins up somewhat in quarter 0.6% Improved in Finland and
Slide 8: Net fee and commission income
Net fee and commission income Net fee and commission income development, EURm Comments Good trend but down on a seasonally strong Q4 Higher deposit guarantee fees, EUR 14m 692 602 623 611 632 Strong development in Assets under Management 596 605 582 588 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/1
Slide 9: Assets under Management at all time high
Assets under Management at all time high Assets under Management development, EURbn Comments Assets under Management at all-time-high of EUR 223.8bn 218.3 223.8 Positive investment performance of EUR 5.9bn, 65% of 210.9 197.2 199.8 our composites outperformed their benchmarks 187.4 177.9 Stron
Slide 10: Net fair value at continued good levels
Net fair value at continued good levels Net fair value development, EURm Comments Unchanged on previous quarter Customer driven activities up by 14% in the quarter* Strong trend in Denmark 311 255 218 134 215 152 107 102 310 292 254 251 254 276 270 233 243 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q
Slide 11: Flat costs for ten consecutive quarters
Flat costs for ten consecutive quarters Total expenses (excl. FX and variable pay), EURm Comments 1 210 1 203 Expenses under solid control 1 164 1 173 1 193 1 163 1 177 1 168 1 196 1 164 Number of FTE’s down 4% y-o-y Flat costs for 10 quarters - to remain flat for an additional 7 quarters Q4/1
Slide 12: Robust credit quality
Robust credit quality Total net loan losses, EURm Comments 263 254 Underlying credit quality remains robust 242 244 218 217 199199 Stabilisation in level of impaired loans 118 Provisioning ratio increased to 43% 112 Credit quality remains solid in Finland, Norway, Sweden, Baltics and Poland
Slide 13: Denmark is stabilising
Denmark is stabilising House price index1 Loan losses net, Retail Banking Denmark 110 200 150 100 100 90 50 0 80 -50 70 -100 2006 2008 2010 2012 2013 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Single-family houses Flats Collectively assessed Portfolio assessed non-significant loans Indivi
Slide 14: Shipping credit quality is stabilising
Shipping credit quality is stabilising Shipping freight rates Loan losses net, shipping 80 ClarkSea index 60 000 60 50 000 40 000 40 30 000 20 20 000 0 10 000 -20 0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Source: Clarkson -40 Q1/11 Q2/11 Q3/1
Slide 15: Strong underlying performance in Q1
Strong underlying performance in Q1 Adjusted operating profit, EURm +7.5% 30 1 081 1 059 1 060 14 1 006 -23 -53 Q4/12 A Fee recognition Q4/12 Adj Q1/13 A Sale of portfolio Increased State Two interest Q1/13 Adj in Life guarantee fees days less 15 •
Slide 16: Strong access to funding
Strong access to funding Long term funding, EURbn Comments 33 32 29 Strong diversified funding platform Confirmed AA rating from Moody's and Fitch Conservative liquidity management - LCR compliant - Liquidity buffer EUR 67bn 7 One of the lowest funding costs of any bank in Europe 2010 2011 2
Slide 17: Capital generation
Capital generation Core Tier 1 capital , EURm Comments Continued strong profit generation 22 208 20 677 21 961 Negatively impacted by revised IAS 19 19 103 17 766 14 313 12 821 11 689 2006 2007 2008 2009 2010 2011 2012 Q1/13 Dividend payout Anticipated dividend Capital generation*, EURm Acc. Div
Slide 18: Risk weighted assets
Risk weighted assets Risk-weighted assets , EURbn* Comments RWA flat on previous quarter 183 185 182 180 182 181 - Increase due to yearly update of operational risk 179 168 168 - Higher risk weights for commercial and residential real estate exposures due to expired regulatory transition rules. In
Slide 19: Core Tier 1 ratio
Core Tier 1 ratio Core Tier 1 capital ratio, %* Comments Improved ratio 10 bps sine Q4/12 due to increased core 13.1 13.2 tier 1 capital driven by strong profit generation and reduced shortfall reduction 12.2 11.6 11.8 Compliant with our capital policy of a Core Tier 1 ratio of 11.2 10.7 11.0 11
Slide 20: Retail Banking: Deliveries on the plan
Retail Banking: Deliveries on the plan Financial performance Execution on 2015 financial plan Operating profit up 7% from Q1 last year Re-pricing of lending book continued according to plan in both household and corporate business Income up 1% YoY despite lower interest rates Cross-selling a
Slide 21: Wholesale Banking: Deliveries on the plan
Wholesale Banking: Deliveries on the plan Financial performance Execution on 2015 financial plan Lower activity and income due to continued challenging Relationship strategy strength further evidenced by economic outlook and strict business selection Greenwich Quality and Share Leader awards H
Slide 22: Wealth Management: Deliveries on the plan
Wealth Management: Deliveries on the plan Financial performance Execution on 2015 financial plan AuM growth of 13% in Q1/13 YoY 82% of Gross Written Premium were directed to capital-light products, up from 69% YoY and Gross Written Premium up Total income down on seasonally strong Q4/12 and up
Slide 23: Delivering on the plan
• Q1 2013 financial results highlights • Delivering on the plan
Slide 24: 2015 plan – progress against our published goals
2015 plan – progress against our published goals Nordea market commitments Key initiatives and levers Strong capital generation Capital initiatives to maintain CT1 ratio and return of excess capital >13% to our shareholders Initiatives for income generation ROE target of 15% at a CT1 ratio >13% and
Slide 25: RWA development in Q1 approx. flat
RWA development in Q1 approx. flat, as efficiency initiatives mitigate increase due to regulatory changes RWA development, EURbn Comments to RWA development in Q1 RWA largely unchanged on prior quarter Increase in RWA as a result of 1.1 2.0 1.6 Higher regulatory LGD:s for commercial and 0.0 0.
Slide 26: Core Tier 1 ratio +10 bps in Q1
Core Tier 1 ratio +10 bps in Q1 due to RWA efficiencies and profit generation Core Tier 1 ratio development, % 0.05% 0.15% 0.24% 13.2% 13.1% 0% 0.02% 0.12% 0.15% 0.09% Core Tier 1 Credit Quality Growth FX effects & Interimistic RWA Profit net Core Tier 1 IAS 19 impact Core Tier 1 ratio Q4/12 Other r
Slide 27: Income holding up – challenging environment mitigated
Income holding up – challenging environment mitigated Total income, EURm Comments to key income related activities in Q1 Re-pricing 2 630 Total lending margins +20 bps y/y (RB) 2 558 2 531 2 606 2 558 2 510 2 469 2 342 CIB/SOO lending margins +15 bps y/y (WB) 2 091 New customers Over 20,00
Slide 28: Costs in check – ten quarters of flat costs
Costs in check – ten quarters of flat costs Total expenses (excl. FX & variable pay1), EURm 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 1 164 1 164 Underlying costs Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Avg. '15 1 Variable pay
Slide 29: Cost initiatives progressing according to plan
Cost initiatives progressing according to plan – approx. 40m of gross savings realised in Q1 Streamline physical Optimisation of distribution mix, reduced cash-handling (RB) distribution Automating transaction and reporting processes (WB) Transfer of processes to NOC (Nordea’s near-shoring cen
Slide 30: Loan losses development in Q1
Loan losses development in Q1 – decreasing in line with plan Actual loan losses, bps Comments The credit quality continues to be robust 30 Loan losses still concentrated to two 20 specific areas, Denmark and 10 Shipping – but credit quality stabilised and improvements expected during 0 2013 (10)
Slide 31: RoE development YoY
RoE development YoY - challenging macro environment and increased capital offset strong underlying business performance RoE, per cent, Q1/Q1 Comments Strong re-pricing of lending margins Return on Equity since January 2012, and lower loan Q1 2012 – Q1 2013 losses Lower interest rates, higher sta
Slide 32: Progress in summary
Progress in summary Progress on Nordea financial plan 2013-2015, in Q1 2013 CT1 ratio Core Tier 1 ratio +10 bps in Q1 to 13.2% due to RWA efficiencies and profit generation RWA development in Q1 approx. flat, as efficiency initiatives mitigate increase due to RWA regulatory changes Income hold
Slide 33: First quarter 2013 results: Nordea delivers on its plan
First quarter 2013 results Nordea delivers on its plan International telephone conference 24 April 2013 Christian Clausen, Group CEO