Nordea Bank Abp · OMXHEX:NDA_FI

Nordea Bank Abp — Nordea — FY2007 Earnings Presentation

26 slides from Nordea Bank Abp's earnings presentation, Feb 13, 2008

  1. Slide 1: Nordea full year result 2007

    Nordea full year result 2007 Press conference 13 February 2008 Christian Clausen President and Group CEO

  2. Slide 2: Strong result – based on growth strategy and prudent risk management

    Strong result – based on growth strategy and prudent risk management ƒ Income EUR 7,886m (EUR 7,365m), up 8% on a comparable basis* ƒ Gap between income and cost growth of 2.0%-points* ƒ Risk-adjusted profit EUR 2,417m (EUR 2,107m), up 15% ƒ Profit before loan losses EUR 3,820m (EUR 3,543m), up 11%*

  3. Slide 3: Limited effects on Nordea from financial market turmoil

    Limited effects on Nordea from financial market turmoil ƒ Limited direct and indirect exposure to the sub-prime market as well as insignificant exposure to credit-linked structured investment vehicles ƒ Nordea benefits from a high quality balance sheet, well diversified and low risk business profile

  4. Slide 4: Operating income up 8%

    Operating income up 8% 2007/2006 ƒ Strong growth in Net interest income – up 11% EURm ƒ Double digit lending growth in all major segments, compensating for margin pressure 8 000 7 766 ƒ Increased deposit volumes and improved margins 7 166 ƒ Net commission income up 3% 7 000 ƒ Lending commission up 1

  5. Slide 5: Cost increase in line with guidance

    Cost increase in line with guidance Cost increas YoY 7% ƒ Cost increase in line with guidance given 6,4% in beginning of 2007 6% ƒ Cost growth reflecting execution of growth 5% strategy and related investments 4% ƒ Total number of employees up 8% in 2007 3,7% 3,1% ƒ Orgresbank accounts for approx. 1

  6. Slide 6: Profit before loan losses up 11%

    Profit before loan losses up 11% EURm 4 000 3 700 ƒ Top-line growth drives the profit increase 3 500 3 344 ƒ Contribution from all business units - 3 000 consistent delivery of Nordea’s organic 2 500 growth strategy 2 000 1 500 1 000 500 0 FY 2006 FY 2007 For comparison reasons two major non-recurri

  7. Slide 7: Full year gap guidance met

    Full year gap guidance met %-points 4,0 ƒ Full year gap of 2.0%-points 3,4 ƒ Income 8.4% 3,5 3,2 ƒ Costs 6.4% 3,0 ƒ Although significant investments in 2,5 growth areas and difficult market 2,0 2,0 conditions the gap guidance was reached 1,5 ƒ Solid performance in Q4 gave a positive 1,0 1,0 gap also

  8. Slide 8: Strong and well diversified credit portfolio

    Strong and well diversified credit portfolio Net loan losses EURm ƒ Recoveries maintained at high level and -10 limited new provisions -6 -13 -13 ƒ Credit quality remains stable cross sectors – -25 improved corporate ratings -28 -40 ƒ 15 quarters in a row with positive net loan -55 losses -70 ƒ EUR

  9. Slide 9: Bringing Nordea from Good to Great

    Bringing Nordea from Good to Great Profit orientation - Cost, risk and capital Ambitious vision and targets Strong customer oriented values and culture Clear growth strategy 9

  10. Slide 10: Ambitious vision and targets

    Ambitious vision and targets Long term financial targets Target 2007 TSR (%) In the top quartile of # 3 of 20 European peer group Risk adjusted profit (EUR m)* Double in 7 years** 15% RoE (%) In line with top Nordic peers # 19.7% (19.1% excl non-recurring items) Capital structure policy Policy Divid

  11. Slide 11: Total shareholder return (TSR) 2007

    11 B an k % of -50 -40 -30 -20 -10 0 10 20 30 40 50 Ire la nd H B A O lli S e d RB Iri O sh S B B ank ar c Sw la y ed s So ba ci nk ét é SE G en B er a D lé a Er ns st k e e (1/1 2007 – 28/12 2007) Ll Ba oy n ds k U T ni SB B c re N P dito C P om ar m iba er s zb D a nk N B Total shareholder return

  12. Slide 12: Strong growth in Risk-adjusted profit

    Strong growth in Risk-adjusted profit EURm 2500 2 417 ƒ Up 15% 2250 2 107 ƒ Driven by top-line growth and strict 2000 cost management 1750 ƒ A good start for the long term target 1500 – defined in 2006 1250 1000 750 500 250 0 2006 2007 Risk-adjusted profit 12

  13. Slide 13: Return on Equity (RoE) – in line with target

    Return on Equity (RoE) – in line with target % 25 ƒ 19.7% Jan - Dec 2007 21,4 ƒ 19.1% excl non-recurring items 19,6 19,1 20 ƒ Combined focus on ƒ Organic growth 15 ƒ Resource optimisation ƒ Risk awareness 10 ƒ Efficient capital management 5 0 FY 2006 FY 2007 Nordea Average Nordic Peers (Danske, SEB,

  14. Slide 14: Proposed dividend up 2%

    Proposed dividend up 2% EURm EUR 1400 1,0 1 271 1 297 0,9 1200 0,8 1000 0,7 908 766 0,6 800 0,50 0,49 0,5 600 0,35 0,4 0,28 400 0,3 0,2 200 0,1 0 0,0 2004 2005 2006 2007 Total amount EURm Dividend per share EUR 14

  15. Slide 15: A profitable organic growth strategy with clear initiatives

    A profitable organic growth strategy with clear initiatives Existing Nordic customers and new customers Global and New European European niche Markets businesses Household strategy Private banking Corporate strategy • Reinforced #1 • Expanded distribution • Migration to • Added advisory • New Corpor

  16. Slide 16: Significant potential in migrating household customers to higher segments

    Significant potential in migrating household customers to higher segments Income Customers* ƒ Gold and Private banking (Index) (millions) 800 4,0 customers are the engines for 700 3,5 revenue growth 700 600 3,0 ƒ A Gold customer generates 2.9 500 3,5x 2,5 8 times higher income than a 400 2.4 2,0 Bro

  17. Slide 17: Proactive sales drives growth in premium segments

    Proactive sales drives growth in premium segments Nordic Gold segment YoY (Jan-Dec) ƒ Proactive sales creates growth 10.9% momentum – strong increase in 7.2% 3.5% PBA meetings 146 59 61 132 ƒ Continued growth in business with 2.4 2.2 Gold customers ƒ 11% increase in business volume ƒ Increased numbe

  18. Slide 18: Growth Plan Sweden on track

    Growth Plan Sweden on track % Income growth % ƒ Continuous investments in Swedish 10 advisory capacity 8 6 7,3 ƒ Focus on services and product segments 4 5,2 with strongest growth potential 4,1 2 0 ƒ Initiative continues in 2008 2007/2006 Jan-Sep 2007 ƒ Converting 76 offices from Svensk Kassaservice

  19. Slide 19: Continued strong growth in Private Banking

    Continued strong growth in Private Banking Average income per customer FY 2007 (Silver customer = 100) 800 700 ƒ Growth success of Private Banking 600 3.5x continued in 2007 400 ƒ Net inflow of EUR 4.3bn 200 200 100 ƒ 120 new adviser 25 0 ƒ 13,000 new customers Private Gold* Silver Bronze ƒ Multiple

  20. Slide 20: Focus on Capital Markets products to corporate customers

    Focus on Capital Markets products to corporate customers ƒ Customer driven demand for Capital Total revenues in Markets related to EURm Nordic Banking customers markets products continue to increase 500 ƒ Structured solutions offered to medium 478 and large corporates highly successful +26% 400 ƒ Co

  21. Slide 21: Strong growth and well controlled risk exposure in New European Markets

    Strong growth and well controlled risk exposure in New European Markets New European Markets ƒ Continued prudent credit policies in the EURm Baltic countries enables Nordea to grow 90 with stable credit quality 80 83 70 ƒ Total lending up 78%, excl. Orgresbank 60 68 63* ƒ Increased number of Gold cu

  22. Slide 22: Outlook for 2008

    Outlook for 2008 ƒ Turbulent development in international capital markets has significantly increased uncertainty for 2008 ƒ Costs related to investments in growth areas are expected to amount to EUR 100-120m 2008 ƒ Continued investments in growth areas and increased wage inflation is expected to le

  23. Slide 23: Concluding remarks – full year result 2007

    Concluding remarks – full year result 2007 ƒ Strong result – based on growth strategy and prudent risk management ƒ Limited effects on Nordea from financial market turmoil ƒ Full year gap target met – 2%-points ƒ Risk-adjusted profit up 15% a good start for the long term target ƒ Continued strong vo

  24. Slide 24: Income statement summary

    Income statement summary* EURm 2007 2006 Chg % Net interest income 4,282 3,869 11 Net fee and commission income 2,140 2,074 3 Net gains/losses on items at fair value 1,187 1,036 15 Equity method 41 68 -40 Other income 116 119 -3 Total operating income 7,766 7,166 8 Staff costs -2,388 -2,251 6 Other

  25. Slide 25: Income statement summary

    Income statement summary EURm Q4/07* Q3/07 Chg % Q4/06 Chg % Net interest income 1,143 1,092 5 1,006 14 Net fee and commission income 526 531 -1 549 -4 Net gains/losses on items at fair value 314 264 19 310 1 Equity method 12 10 20 7 71 Other income* 27 17 59 26 4 Total operating income 2,022 1,914

  26. Slide 26: 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

Nordea — FY2007 Earnings Presentation on 6ix