Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — FY2014 Earnings Presentation
31 slides from Nordea Bank Abp's earnings presentation, Dec 31, 2014
Slide 1: Fourth Quarter and Full Year Results 2014
Second Quarter Results 2014 Investor presentation Fourth Quarter and Full Year Results 2014 Press Conference Christian Clausen, President and Group CEO
Slide 2: Highlights
Highlights Robust result in a challenging environment 2014 vs 2013 Revenues are up 2%* Costs are down 1%* Loan losses are down 26%* Operating profit is up 12%* Improved Common Equity Tier 1 ratio to 15.7% (13.9%) Proposed dividend of EUR 0.62 (EUR 0.43) More customers and strengthened cu
Slide 3: Q4 2014 financial results highlights
Q4 2014 financial results highlights 14
Slide 4: Financial results
Financial results Q4/14 Q3/14 Chg % 2014 2013 Chg % EURm Net interest income 1 356 1 396 -3 5 482 5 525 -1 2 Net fee & commission income 763 667 14 2 842 2 642 8 10 Net fair value result 367 291 26 1 425 1 539 -7 -6 Total income* 2 513 2 754 -9 10 224 9 891 3 6 Total income** 2 513 2 377 6 9 847 9 8
Slide 5: Net interest income
Net interest income NET INTEREST INCOME DEVELOPMENT, EURm COMMENTS 1 390 1 362 1 368 1 396 1 356 • Largely unchanged Net interest margin • Negative FX effect EUR 29m in the quarter • Lower NII in Group Treasury Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 5•
Slide 6: Net interest margin and volumes
Net interest margin and volumes BLENDED NET INTEREST MARGIN DEVELOPMENT, BPS COMMENTS 109 109 107 108 108 • Net interest margin largely unchanged at 108bps • Improving lending margins • Lower deposit margins Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 • Lower funding costs LENDING AND DEPOSIT VOLUMES*, EURbn • Le
Slide 7: Net fee and commission income
Net fee and commission income NET FEE AND COMMISSION DEVELOPMENT, EURm COMMENTS 763 703 704 708 667 • All time high level in the quarter 210 180 194 162 • Lending commissions 171 Strong momentum in savings 148 142 145 147 Payments & cards 160 • High capital markets activity for our corporate custome
Slide 8: Net fair value
Net fair value NET FAIR VALUE DEVELOPMENT, EURm COMMENTS 411 • Improved trend in customer areas 367 333 356 36 • Strong result in Life & 176 98 291 Pensions 88 69 • Challenging market making 331 258 conditions 245 235 222 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Customer areas Other areas 8•
Slide 9: Expenses under solid control
Expenses under solid control TOTAL EXPENSES*, EURm COMMENTS 1 283 1 237 1 196 1 172 1 227 • Cost to income ratio improved 0.5% to 48.8%* • Seasonal cost increase in the quarter • Higher provisioning for profit sharing to all employees Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 • Costs are down 4% Q4/Q4** • Costs
Slide 10: Stable credit quality
Stable credit quality TOTAL NET LOAN LOSSES, EURm COMMENTS 241 198 • Loan losses at 15bp – below 10 year 186 180 171 158 average 135 129 112 • Slight increase in Denmark • Collective provision in Denmark Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 related to agriculture sector IMPAIRED LOA
Slide 11: Special attention area 1(4) - Finland
Special attention area 1(4) - Finland Stable underlying fundamentals PD DEVELOPMENT, BANKING FINLAND COMMENTS • Slight improvement in household and corporate PD’s • Loan losses at moderate level of 17 bps, down from 20 bps Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Slow growth but underlying
Slide 12: Special attention area 2(4) - Russia
Special attention area 2(4) - Russia Strong international customer base KEY FINANCIALS, EURm COMMENTS FY 2014 Share of • Credit exposure mainly towards large Group, % international Russian corporates and Nordic corporates Total income 274 3 • 86% of credit portfolio in USD or Net loan losses -15 3 E
Slide 13: Special attention area 3(4) - Oil
Special attention area 3(4) - Oil Oil and Gas, Oil services and Off-shore DEVELOPMENT OF BRENT OIL PRICE COMMENTS 160 • Nordea’s direct exposure is limited 140 • Approx. 2% of total group 120 exposure 100 • Limited risk of increased loan 80 losses 60 • Stress tests performed on customer level 40 20
Slide 14: Special attention area 4(4) – Danish agriculture
Special attention area 4(4) – Danish agriculture Sector affected by world market price pressure GROSS MARGIN INDEX (crop, milk, pork) COMMENTS 130 • Agriculture sector affected by world market price pressure 120 • Negative effect on crop, milk and pork prices 110 • Exposure towards agriculture 2% of
Slide 15: Risk exposure amount
Risk exposure amount RISK EXPOSURE AMOUNT, EURbn* COMMENTS 168 168 162 160 159 • REA down EUR 7bn in the quarter 155 153 152 • Impact from capital 145 management EUR 4.4bn • Stable credit quality • FX effect mainly related to NOK Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 RISK EXPOSURE AM
Slide 16: CET 1 ratio up 10 bps
CET 1 ratio up 10 bps COMMON EQUITY TIER 1 RATIO DEVELOPMENT, % 0.5% -0.1% 0.1% 15.7% 15.6% -0.10% -0.3% 0% Q3/14 FX Credit quality and Stand., market Capital Profit Other CET1 Q4/14 growth risk and other management and changes dividend 16 •
Slide 17: Proposed dividend
Proposed dividend DIVIDENDS, EUR/SHARE COMMENTS 0.62 • Proposed dividend per share of EUR 0.62 0.50 0.43 • Representing a payout ratio of 0.34 70% of net profit* 0.29 0.25 0.26 0.20 2007 2008 2009 2010 2011 2012 2013 2014 * Adjusted for impairment charge in Q3/14 17 •
Slide 18: Customer activity
Customer activity 14
Slide 19: More relationship customers choose Nordea
More relationship customers choose Nordea RELATIONSHIP CUSTOMERS (GOLD, PREMIUM AND PB), COMMENTS MILLIONS 3.25 • 90,000 new relationship customers 3.12 3.18 2.94 3.07 were welcomed in 2014 Denmark • 3.25 million relationship customers in Finland total Norway Sweden • Number of Private Banking custo
Slide 20: Digital transformation continues at a high pace
Digital transformation continues at a high pace TRANSACTIONS, BRANCHES VS MOBILE, MILLIONS/QUARTER COMMENTS 17 • 1,000 new customers start using our mobile bank every day 8 • Mobile transactions up 90% YoY 3 • Steady decrease of manual transactions, down 19% YoY 0 • Continued development of solution
Slide 21: Taking the lead in increased capital markets activity
Taking the lead in increased capital markets activity SELECTED LEAGUE TABLES COMMENTS Nordic corporate bonds Nordic EQ trading* EURm EURm • Nordea has taken a leading role as Nordea 5 744 Nordea 113 794 Nordic corporates increasingly make Peer 1 3 902 Peer 1 94 161 Peer 2 3 860 Peer 2 63 783 use of
Slide 22: Reinforced position as leading bank for large corporates
Reinforced position as leading bank for large corporates GREENWICH NORDIC LARGE CORPORATE SURVEY COMMENTS 100% Nordea 90% • Wholesale Banking continued to Important relationships 80% leverage its core capabilities, scale 70% and strong local presence 60% Peer 3 Peer 4 50% Peer 2 40% • Supporting 95%
Slide 23: Continued strong momentum in assets under management
Continued strong momentum in assets under management AuM DEVELOPMENT, EURbn COMMENTS 262.2 254.5 • All time high AuM at EUR 262bn 248.3 232.1 238.7 • Record high net flow, EUR 18.6bn • Continuous strong and well diversified flow Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 • Net flow corresponds to 8% of AuM NET F
Slide 24: Strong fund exports increasingly support AuM growth
Strong fund exports increasingly support AuM growth EUROPEAN FUND NET FLOW RANKING, MORNINGSTAR* COMMENTS BlackRock • Record high net inflow from Global UBS Fund Distribution of EUR 4.8bn, representing 26% of total net flow JPMorgan Pioneer Investments • 6th largest fund sales in Europe in Vanguard
Slide 25: 2015 plan update
2015 plan update 14
Slide 26: The 2015 plan – an update
The 2015 plan – an update NORDEA MARKET COMMITMENTS KEY INITIATIVES AND LEVERS Strong capital generation and Capital initiatives to improve the CET1 ratio increased payout ratio in 2014 and 2015 while maintaining a strong capital base Initiatives for income generation To reach a ROE of 13% at the re
Slide 27: Strong capability to generate capital
Strong capability to generate capital CAPITAL GENERATION*, EURm COMMENTS Acc. Dividend incl. proposed dividend , EUR 2 501m, for 2014 Acc. retained equity 26 144 22 812 • Tier 1 ratio improved from 6.8% to 19 696 17.6% 11 914 16 570 9 413 13 936 7 679 • CET1 ratio up 180 bps in 2014 11 273 6 309 8 9
Slide 28: Cost development is driven by initiatives across the board
Cost development is driven by initiatives across the board EURbn ~6% reduction ~0,10 ~0,10 ~0,10 ~0,20 ~0,10 ~0,10 ~0,20 5 040m 4 832m ~0,10 ~0,10 2013 Re-investments Distribution & Streamlining and FX 2014 Re-investments Distribution Internal service Streamlining and FX 2015E 2013 Re-investments Di
Slide 29: RoE – strong underlying business performance
RoE – strong underlying business performance +1.9% 12.9% -1.3% Lending Capital margins increase Ancillary Interest income rates FX Lower costs Other 11.6% Volumes Lower loan losses 11.0% 2013 Business External 2014 performance factors Excluding restructuring charge in Q2/14 and IT impairment in Q3/1
Slide 30: Progress in summary
Progress in summary PROGRESS ON NORDEA FINANCIAL PLAN 2015 IN 2014 CET1 capital ratio • CET 1 capital ratio up 180 bps to 15.7% P • Impact from capital management of EUR Risk Exposure Amount 30bn of which 22bn in the year P Income growth • Income holding up P Costs • Cost programme delivering accord
Slide 31: Fourth Quarter and Full Year Results 2014
Second Quarter Results 2014 Investor presentation Fourth Quarter and Full Year Results 2014 Press Conference Christian Clausen, President and Group CEO