Slide 1: Interim Report Second Quarter 2005 Press conference
Interim Report Second Quarter 2005 Press conference 24 August 2005 Lars G Nordström President and Group CEO
Slide 2: Strong results in first half of 2005
Strong results in first half of 2005 z Operating profit up to EUR 1,572m (EUR 1,481m in first half of 2004), up 33% excluding the real estate gain of EUR 300m last year z Total income increased 8% to EUR 3,276m (EUR 3,031m) – Net interest income up 6% z Total expenses unchanged at EUR 1,816m (EUR 1,
Slide 3: Improving performance confirmed in Q2
Improving performance confirmed in Q2 z Net profit up 42% to EUR 705m (EUR 495m in Q1 2005) z Operating profit up 28% to EUR 884m (EUR 688m) z Total income up 7% z Total expenses largely unchanged z Positive net loan losses for the fifth consecutive quarter 3
Slide 4: Strong volume growth continues
Strong volume growth continues z Total lending up 13% year-on-year z Mortgage lending up 15% z Lending to small and medium-sized corporates up 12% z Consumer credits up 14% z Deposits up 8% z Assets under management EUR 142bn – up 15% z Lending in Poland and the Baltics up 39% 4
Slide 5: Total operating income grows
Total operating income grows EURm YoY: 1800 z Up 8% 1600 1646 1694 z Strong development in all 1569 1582 business areas 1400 1462 1450 z Strong volume growth more 1200 than offset margin pressure 1000 – total lending up 13% – total deposits up 8% 800 z Net gains/losses up 12% 600 400 QoQ: 200 z Up 7
Slide 6: The cost/income ratio improves continuously
The cost/income ratio improves continuously % 70 z Target: Continuous improvement z Flat costs while business volumes 60 64 62 continue to grow 60 50 55 – productivity gains 40 30 20 10 0 2002 2003 2004 H1/05 6
Slide 7: Strong credit quality and prudent risk management
Strong credit quality and prudent risk management z Credit expansion with maintained prudence and collateral coverage z Well diversified loan portfolio EURbn 100 88 91 93 87 85 85 85 84 84 82 83 80 78 79 80 58 60 55 56 60 48 49 50 53 44 44 46 42 41 42 40 16 16 17 17 17 18 19 20 14 14 14 14 15 15 10
Slide 8: Nordea strengthens market position in Poland
Nordea strengthens market position in Poland z In June, Nordea signed an agreement to purchase Sampo’s Polish life and pension companies z Acquisition provides enhanced platform for continued profitable growth in the Polish market – good cross-selling opportunities z Nordea has a strong market posit
Slide 9: Increasing contribution from emerging home markets
Increasing contribution from emerging home markets z Increased market shares in the fast growing housing loan markets z Lending increased by 39% YoY – mortgage lending up 59% z No. of new customers doubled in targeted segments, supported by newly launched customer programs Operating profit, EURm H1/
Slide 10: Strategic agreement with The Bank of New York regarding Securities Services
Strategic agreement with The Bank of New York regarding Securities Services z Nordea and The Bank of New York - a global leader in securities services - have established a strategic agreement that: z Provides global custody and value-added services to Nordea’s institutional clients z Strengthens Nor
Slide 11: In summary
In summary z A transformed Nordea delivers revenue growth and strong results z Volume growth in all business areas – Increased business volumes more than compensated for the pressure on margins z Costs remain unchanged z Fifth consecutive quarter with positive net loan losses z Going forward – Maint
Slide 12: Retail Banking in Nordea
Retail Banking in Nordea 24 August 2005 Peter Schütze Head of Retail Banking
Slide 13: Retail Banking overview
Retail Banking overview Market position Thousands HH customers 2,980 Branch offices 376 1 CO customers 333 Personnel 5,927 Finland HH customers 3,860 Branch offices 249 Sweden 2-3 CO customers 437 Personnel 4,255 Norway HH customers 620 Branch offices 125 2 Denmark CO customers 72 Personnel 1,923 HH
Slide 14: Customised multi-channel availability
Customised multi-channel availability z Convenient and easy access z Branches to ensure local presence of advisory services – Continuous adaptation to local development, competitive situation and potential efficiency gains z E-solutions to enable self-service as well as “day and night” access to the
Slide 15: Redefined Retail franchise - taking home the advantages of size, scale and scope
Redefined Retail franchise - taking home the advantages of size, scale and scope Retail Banking Peter Schütze Frans Lindelöw (Dep) Management Secretariat Planning & Control HR Customers and Regional Segments and Products Banks Frans Lindelöw Peter Schütze Western Product competence Segment Household
Slide 16: Strong growth of income in H1 2005
Strong growth of income in H1 2005 Growth in total income from H1 2004 to H1 2005 EURm 1H 05 1H 04 Change Net interest income 1,489 1,432 4.0% Net commission and other inc. 763 709 7.6% 12% Total income 2,252 2,141 5.2% Expenses (1,266) (1,261) 0.5% 10% Loan losses 63 (11) Operating profit 1,049 869
Slide 17: Housing - an important driver of growth
Housing - an important driver of growth Nordea mortgage lending market shares z Nordea has in general been taking H1 03 H1 04 H1 05 market share steadily since mid- Denmark 13.0 14.0 14.6 90s Finland 32.8 32.5 32.0 – Market shares increased in Denmark, Norway and Sweden whereas the market share in N
Slide 18: Consumer loans & cards provide additional growth opportunities
Consumer loans & cards provide additional growth opportunities Nordea consumer loans and debit/credit cards EURbn z Currently only one-third of 18 5 Nordea’s customers have a 3,7m 4,1m consumer loan or debit/credit card 4 16 3,4m 3 z Significant potential exists to grow 14 14,5 consumer loan volumes
Slide 19: Savings & wealth management area is also an area of additional growth opportunities
Savings & wealth management area is also an area of additional growth opportunities Savings assets* z Financial planning tool rolled out AuM Den Fin Nor Swe – Cutting-edge advisory concept EURbn 17 20 7 26 – Trained advisers within branches EURbn z Private banking key focus areas 70 – Affluent conce
Slide 20: The strong development is also reflected on the corporate side
The strong development is also reflected on the corporate side Corporate lending EURbn z Lending volume increasing by 12 % 70 under persisting margin pressure z Increasing focus on advice and sales of 60 65 derivatives has resulted in income growth of 61% (YoY) in this respect 57 58 50 z Corporate b
Slide 21: Customer programmes - Increasing business rewarding both customers & Nordea
Customer programmes - Increasing business rewarding both customers & Nordea Strong growth in core segment z Key elements in the programmes offered June 04 to June 05 to the customers: – More favourable prices the more business 14.5% you do - and for the core customers a named 5.5% personal banking a
Slide 22: Du kanske har rad med
Du kanske har rad med mer an du tror Gér det mdjligt Nordea ™
Slide 23: Interim Report Second Quarter 2005 Press conference
Interim Report Second Quarter 2005 Press conference 24 August 2005
Slide 24: Income statement summary
Income statement summary EURm H1/05 H1/04 Chg % Net interest income 1,810 1,700 6 Net fee and commission income 937 884 6 Net gains/losses on items at fair value 329 293 12 Equity method 35 25 40 Other income 165 129 28 Total operating income 3,276 3,031 8 Staff costs -1,030 -1,006 2 Other expenses
Slide 25: Income statement summary
Income statement summary EURm Q2/05 Q1/05 Chg % Net interest income 913 897 2 Net fee and commission income 484 453 7 Net gains/losses on items at fair value 214 115 86 Equity method 22 13 69 Other income 61 104 -41 Total operating income 1,694 1,582 7 Staff costs -515 -515 0 Other expenses -364 -35