Slide 1: Fourth Quarter Report 2010
Fourth Quarter Report 2010 Press and analyst conference 2 February 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 9 2010 - important milestone on the journey towards Great Nordea 9 Record level income, operating profit and customer satisfaction 9 Strengthened position – significant customer inflow 9 Increased customer activity in all segments 3 2 February 2011 Fourth Quarter Report 2010
Slide 4: Solid trends in customer business
Solid trends in customer business Net interest income Total income Net loan losses Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Operating profit Risk-adjusted profit Number of Gold customers Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 4 2 Februa
Slide 5: Result highlights
Result highlights EURm Q4/10 Q3/10 Chg % Q4/09 Chg % FY 10 FY 09 Chg % Net interest income 1,365 1,310 4 1,299 5 5,159 5,281 -2 Net fee and commission income 618 525 18 463 33 2,156 1,693 27 Net result items at fair value 504 446 13 351 44 1,837 1,946 -6 Other income 20 82 45 182 153 Total income 2,
Slide 6: Total income at record level
Total income at record level - solid income growth in customer business Total income, EURm Prudent growth strategy delivers 9,334 9,073 Strong contribution from group initiatives 8,697 Decrease in extraordinarily high 7,933 +10% income from Markets and Group Treasury offset by high customer ac
Slide 7: Net interest income up 4%
Net interest income up 4% Net interest income, EURm Solid trend in customer areas remains 1,356 1,365 1,305 1,321 1,299 1,310 1,235 1,249 Deposit volumes and margins continue to increase Higher average funding costs Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 7 2 February 2011 Fourth Quart
Slide 8: Net fee and commission up 18%
Net fee and commission up 18% Net fee and commission income, EURm Strong asset management 618 commissions 538 525 Increased AuM volumes 463 475 437 Higher lending and brokerage fees 412 381 Danish guarantee scheme expired Positive seasonal effects from performance fees Q1/09 Q2/09 Q3/09 Q4
Slide 9: Strong growth in AuM continues
Strong growth in AuM continues – proves customer satisfaction Asset under Management (AuM), EURbn Net inflow of EUR 9.5bn in 2010 +21% Positive inflow in all main segments 191 180 169 170 2010 – 78% of all investment 158 149 composites outperformed 137 125 benchmarks 74% with a 3-year horizo
Slide 10: Fair value result up 13%
Fair value result up 13% Net result from items at fair value, EURm Strong income in customer areas Record level in Nordic Banking Continued strong Life & Pensions results 408 339 331 296 291 302 301 283 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Customer areas Other areas ¹ Nordic Banking
Slide 11: Expenses well in line with outlook
Expenses well in line with outlook Total expenses, EURm Total expenses 2010 up 7% 4,816 Excluding FX effects cost 4,512 +3.1% growth 3.1% Including investment costs from strategic initiatives Negative seasonal effects in Q4 2009 2010 Group initiatives FX effect 11 2 February 2011 Fourth Quar
Slide 12: Net loan losses continues down
Net loan losses continues down Net loan losses, EURm No provisions related to the 425 expired Danish guarantee scheme 356 358 347 23bps – in line with expected 261 losses over a business cycle 245 207 23bps Baltic improvements – 26bps 166 (88bps) Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10
Slide 13: Improved credit quality
Improved credit quality Rating distribution 20% 15% Increased Decreased 10% 5% 0% 6 5 4 3 2 1 6- 5- 4- 3- 2- 1- 6+ 5+ 4+ 3+ 2+ 1+ Q4 2009 Q4 2010 13 2 February 2011 Fourth Quarter Report 2010
Slide 14: The regulatory framework is becoming gradually more concrete
The regulatory framework is becoming gradually more concrete Industry challenges Capital requirements Revised Short-term liquidity Pressure on return on equity business models Long-term funding 14 2 February 2011 Fourth Quarter Report 2010
Slide 15: Unchanged Core Tier 1 ratio
Unchanged Core Tier 1 ratio Core Tier 1 capital ratio (excl. Hybrids), % High net profit support: Increased volumes – lending up 11% 10.3 10.3 Dividend payout ratio 44% End 2009 End 2010 Fully implemented Basel II 15 2 February 2011 Fourth Quarter Report 2010
Slide 16: Strong capital position
Strong capital position – compliant with proposed regulations Nordea # 3 among European peers in Standard&Poor’s Risk-adjusted capital (RAC) analysis 9.1 DnBNOR Generale BBVA SHB RBS SEB Santander. UniCredit Commerzbank BNP Paribas KBC Nordea Agricole Societe Sanpaolo Dexia Danske Bank Erste Bank Ll
Slide 17: Prudent liquidity risk management
Prudent liquidity risk management Liquidity buffer, EURbn Increased liquidity buffer, EUR 61bn +38 61 High quality assets with 56 characteristics similar to Basel III liquid assets +18 38 23 Short-term funding Liquidity buffer End 2007 End 2010 17 2 February 2011 Fourth Quarter Report 2010
Slide 18: Well matched average behavioural maturities
Well matched average behavioural maturities Average behavioural maturity, years Prudent match fund of behavioural maturities 2.7 Same liquidity risk as NSFR 2.3 intends to address Secures a sustainable lending/deposit mix Assets Liabilities 18 2 February 2011 Fourth Quarter Report 2010
Slide 19: Further development of business model
Further development of business model Return on Equity (RoE) Mitigate the effects on capital, 12.8 liquidity and funding 12.2 Objective to increase return on equity from today’s levels 8.1 Q4 2009 Q3 2010 Q4 2010 19 2 February 2011 Fourth Quarter Report 2010
Slide 20: Ambitious long-term targets remain
Ambitious long-term targets remain - no outlook for 2011 Risk-adjusted profit, 2007-2010 Total shareholder return, 2007 - 2011 Ytd 48.6% 40 20 10.1 34.0% 0 -20 -40 Top quartile -60 -80 -100 Allied Irish Banks Bank of Ireland BBVA Danske Bank Nordea Intesa Sanpaolo Societe Generale Unicredit SHB DnBN
Slide 21: The history of Nordea – 10 years of progress
The history of Nordea – 10 years of progress 21 2 February 2011 Fourth Quarter Report 2010
Slide 22: Nordea created through a string of mergers
Nordea created through a string of mergers Start: 300 1970: 80 banks 1980: 30 banks 1990: 4 banks 2010: Nordea One operating model Unique diversification Proven business model 22 2 February 2011 Fourth Quarter Report 2010
Slide 23: 10 years of progress building a Great Nordea
10 years of progress building a Great Nordea… Profitable organic growth 2007- +183% Stability and profitability 2002-06 The complex Total shareholder return (TSR) point of departure 2000-01 23 2 February 2011 Fourth Quarter Report 2010
Slide 24: …with significant growth…
…with significant growth… Profit before loan losses, Cost/Income ratio, % Total assets, EURm EURm 581 4,518 58 52 +127% 6pp +159% 1,988 224 2000 2010 2000 2010 2000 2010 10-year growth 24 2 February 2011 Fourth Quarter Report 2010
Slide 25: …and strong credit management
…and strong credit management Loan loss ratio 20 10 0 -10 -20 Credit risk appetite 25bps -30 -40 -50 -60 H1 2002 H2 2002 H1 2003 H2 2003 H1 2004 H2 2004 H1 2005 H2 2005 H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 25 2 February 2011 Fourth Quarter Report 2010
Slide 26: Solid position in nine home markets
Solid position in nine home markets Nordea’s nine home markets 11 million customers 1,400 branches and 6 million e-banking customers AA credit rating A top 10 European retail bank and 1 of 2 Nordic companies on Forbes 100 26 2 February 2011 Fourth Quarter Report 2010
Slide 27: Strong customer business momentum
Strong customer business momentum 27 2 February 2011 Fourth Quarter Report 2010
Slide 28: Nordic economies show strength
Nordic economies show strength GDP growth, %, y/y 7 .5 D e n m ark 7 .5 Solid growth rates N o rw a y F in la n d 5 .0 5 .0 Sw eden 2 .5 2 .5 Modest inflation 0 .0 0 .0 -2 .5 - 2 .5 Strong public finances -5 .0 - 5 .0 Improvements in labour markets -7 .5 - 7 .5 - 1 0 .0 -1 0 .0 Q4 Q2 Q4 Q2 Q
Slide 29: Strengthened market position…
Strengthened market position… Number of Gold customers¹, 000 CAGR 6% 2,900 2,700 2,549 2,444 Award-winning value proposition continue to attracts customers in all segments 2007 2008 2009 2010 Customer acquisition trend Q3/09 – Q3/10 Nordic market AuM development, % accelerated in 2010 – especial
Slide 30: …with an all-time-high customer satisfaction level
…with an all-time-high customer satisfaction level Customer Satisfaction Index¹ (CSI), Despite economic recession aggregate Strong focus on relationship 71.7 71.8 banking 71.5 70.6 2007 2008 2009 2010 30 2 February 2011 Fourth Quarter Report 2010 ¹ Equal weight from the four Nordic countries
Slide 31: …increases business activity in all segments
…increases business activity in all segments Total income monthly average Solid growth trends in relationship segments¹ Customer business gaining momentum Jul-09 Nov-09 Jun-10 Jul-10 Nov-10 Aug-09 Jan-10 May-10 Aug-10 Oct-09 Sep-09 Mar-10 Apr-10 Oct-10 Dec-09 Feb-10 Sep-10 Dec-10 Rolling 3 month
Slide 32: Group initiatives are on track in all areas
Group initiatives are on track in all areas Household relationship Corporate relationship New European Markets strategy strategy 1. Future distribution 4. Growth plan CMB 6. Growth plan Poland 2. New customer 5. Customer-driven acquisition Markets business 3. Growth plan Finland Efficiency initiativ
Slide 33: Specialising and focusing our branches
Future Specialising and focusing our branches distribution Focused branches supports the 360- Increased customer satisfaction, degree meeting sales and lower cost to serve 82 branches operating in new The 3600 meeting Savings and investments formats Daily Insurance banking Significant increase
Slide 34: Continued strong demand in household segment
New customer Growth plan Continued strong demand in acquisition Finland household segment Household¹ volumes increase 2010, Record inflow of new customers EURbn 136.7 200,000 Gold and Private Banking of Lending up 14% which 65% new customers to Nordea Improved service level in Finnish 74.5 Dep
Slide 35: Strong income growth within CMB
Growth plan Strong income growth within CMB CMB Total income CMB, EURm 436 Growth plan CMB Sweden proceeds 378 as planned 307 Total income up 19% Improved customer relations – several new mandates won Q4 2009 Q3 2010 Q4 2010 Strategy to build house-bank relations Income growth 2007-2010, CAG
Slide 36: High ranking in equity and bond markets
High ranking in equity and bond markets Markets business Nordic Primary Equity Market league table 2010 Nordic Corporate Eurobond benchmark league table 2009 – 2010 Bookrunner Bookrunner Pos. Bank name Deal value EURm No. Pos. Bank name Deal value EURm No. % share Goldman Sachs 6,433 6 1 Deutsche Ba
Slide 37: New European Markets – a growth area
New European Markets – a growth area Growth plan Poland Total income NEM, EURm CAGR 36% 664 Solid income growth continues 553 492 Increased lending and deposit volumes Improved credit quality 265 25,000 new Gold customers welcomed 2007 2008 2009 2010 45 new branches in Poland opened Number
Slide 38: Strong efficiency improvements in customer areas
Strong efficiency improvements in customer areas Income per FTE # customers per FTE New customer acquisition Nordic Banking Nordic Banking from outside Nordea* Nordic Banking +2% +14% +13% Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Business volumes per # 360 meetings/PBA
Slide 39: Solid productivity improvements
Solid productivity improvements # manual transactions in AM costs / portfolio IT production costs1 / branch network production volumes Household customers +2% -23% -13% -19% 2008 2009 2010 2008 2009 2010 2008 2009 2010 #contracts/loans/cards/ Corporate payment Square meters / invoices / FTE transact
Slide 40: Key messages
Key messages 9 2010 - important milestone on the journey towards Great Nordea 9 Record level income, operating profit and customer satisfaction 9 Strengthened position – significant customer inflow 9 Increased customer activity in all segments 40 2 February 2011 Fourth Quarter Report 2010
Slide 41: Fourth Quarter Report 2010
Fourth Quarter Report 2010 Press and analyst conference 2 February 2011 Christian Clausen President and Group CEO