Slide 1: Presentation for Investors August 2004
Presentation for Investors 18 August 2004
Slide 2: Contents
Contents l Press slides Page 3 l Financial highlights Q2/04 Page 19 l Credit quality Page 54 l Economic capital Page 70 l Nordea Page 75 l Business areas Page 84 l Balance sheet Page 127 l Market shares Page 132 l Appendix Page 146 2
Slide 3: Interim Report Second Quarter 2004 Press conference
Interim Report Second Quarter 2004 Press conference 18 August 2004 Lars G Nordström President and Group CEO
Slide 4: Strong results in first half of 2004
Strong results in first half of 2004 l Operating profit up 15% to EUR 1,100m (EUR 959m in first half-year 2003) l Net profit up 64% to EUR 1,082m (EUR 660m), including gain related to the completed real estate divestment process l Total income maintained at EUR 2,825m (EUR 2,837m). Net interest and
Slide 5: Solid underlying development in Q2
Solid underlying development in Q2 l Operating profit EUR 516m (EUR 584m in first quarter 2004) l Net profit up 59% to EUR 664m (EUR 418m) l Total income maintained and costs down 3%. Net interest and commission income up l Trading income and investment earnings influenced by difficult market condit
Slide 6: Growth in business volumes and increased focus
Growth in business volumes and increased focus l Continued growth in lending to personal customers, up 15% l Lending to small and medium-sized corporate customers up 1% l Deposits up 7% l Assets under Management increased by 21% to EUR 123bn l Number of netbank customers up 9% to more than 3.8 milli
Slide 7: Net interest income up
Net interest income up EURm Quarter-on-quarter (QoQ): 1000 l Up 3% l Growth in volumes 868 – total lending up 5% 800 843 838 850 846 – total deposits up 7% l Corporate lending increased 600 l Lending margins – households and large corporate 400 margins slightly down – SME margins stable 200 H1oH1: l
Slide 8: Net commission income up
Net commission income up EURm 388 397 405 QoQ: 500 379 47 49 60 366 l Up 2% 47 40 35 44 40 28 l Strong payment commissions 400 20 88 90 90 87 88 – total transactions up 5% 300 114 120 129 127 124 l Asset Mgmt commissions – mgmt fees stable 200 – transaction fees slightly down 191 194 200 192 199 l B
Slide 9: Strong growth in mortgage lending to personal customers
Strong growth in mortgage lending to personal customers EURbn 60 Market shares, % 50 52.6 Q2/04 2003 48.9 50.0 48.2 45.7 DK 14.0% 13.1% 40 FI 32.5% 32.7% 30 NO 10.9% 10.5% 20 SE 16.1% 15.8% 10 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 9
Slide 10: Trading income affected by difficult market conditions especially in Q2
Trading income affected by difficult market conditions especially in Q2 EURm QoQ: 180 160 l Reduced to EUR 104m due to: 155 156 140 – challenging market conditions 120 130 125 – jower customer activity 100 104 80 H1oH1: 60 l Down 17% on high level last 40 year 20 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 10
Slide 11: Expenses continue down
Expenses continue down QoQ: EURm 1000 973 l Reported expenses down 3% 902 46 881 873 363 416 15 849 l Underlying expenses down 2% 350 15 800 370 378 l Staff costs down 7% – continued reduction of FTEs 600 – lower variable salaries 539 531 511 488 400 456 l Other expenses up 2% – higher marketing 200
Slide 12: Loan loss level reflects healthy credit portfolio
Loan loss level reflects healthy credit portfolio EURm 100 QoQ: 90 92 l Positive net provisions 89 80 84 – reversals exceeded new provisions 70 – no major problem areas 60 50 H1oH1: 40 42 l Loan loss ratio down to 5bp 30 from 26bp annualised 20 l No new losses in fish farming 10 0 -3 -10 Q2/03 Q3/03
Slide 13: Investment earnings negative in Q2
Investment earnings negative in Q2 EURm QoQ: 100 l Loss of EUR 61m resulting 80 81 from 60 – difficult market conditions 62 40 – loss on holding in OMHEX AB 33 20 27 0 H1oH1: -20 l Reduced to EUR 1m -40 – very high level last year -61 -60 – mixed market conditions this -80 year Q2/03 Q3/03 Q4/03 Q1/
Slide 14: Strong and stable result within Life & Pensions
Strong and stable result within Life & Pensions EURm QoQ: 60 l Up 9% 50 51 l Stabilisation at high level 50 47 40 l Investment return decreased 40 40 l Decreased financial buffers 30 20 H1oH1: 10 l Improved profit reflecting the changed business model 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 14
Slide 15: Real estate divestment process completed
Real estate divestment process completed l A gain of EUR 300m is reflected in Q2 accounts l Properties and real estate shares divested represent a book value of approx. EUR 1.6bn l Net financial effect of real estate disposals is a gain of EUR 185m (write-off of EUR 115m in Q4/03) l Nordea no longer
Slide 16: Assets under management continue to grow
Assets under management continue to grow EURbn 140 l Strong distribution capacity 121.9 123.3 120 113 l Nordea market leader within 107 102 100 retail funds in the Nordic 80 region 60 l Strong sales through 40 European fund distribution 20 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Nordic retail funds Nordic p
Slide 17: Pioneering new model for equity research
Pioneering new model for equity research l Nordea’s customers will gain access to Standard & Poor’s (S&P) independent equity research on 1,500 international and 200 Nordic stocks l Nordea will close existing Nordic company research department within Markets, and establish a new, integrated research
Slide 18: In summary
In summary l Strong results in the first half of 2004 – operating profit up 15% – total income maintained, Net interest and commission income up – costs down 5% l Solid underlying development in Q2 – efforts to improve performance increasingly visible in financials – total income maintained, Net int
Slide 19: Financial highlights Q2/04
Financial highlights Q2/04 19
Slide 20: Market development - GDP
Market development - GDP l Outlook for economic growth somewhat improved % 4.0 3.8 3.5 3.5 3.0 3.0 3.0 2.8 2.5 2.7 2.5 2.4 2.0 1.9 1.5 1.6 1.0 0.5 0.7 0.4 0.0 Denmark Finland Norway Sweden 2003 2004(e) 2005(e) Source: Nordea Markets. In Norway, forecasts are for mainland GDP 20
Slide 21: Market development – interest rates
Market development – interest rates l Sweden cut reference rate by 50bp on 7 April l Long-term Nordic interest rates up approx. 50bp in Q2 Change 31-03-04 30-06-04 % Q2/04 Short, EUR (one week) 2.00 2.05 +0.05 Long, EUR (5 years) 3.06 3.57 +0.51 Short, DK 2.13 2.17 +0.04 Long, DK 3.34 3.87 +0.53 Sho
Slide 22: Short interest rates - average (one week)
Short interest rates - average (one week) l Short interest rates likely to have bottomed out % 6.0 5.0 5.05 4.0 3.41 3.42 3.0 2.86 2.81 2.44 2.51 2.57 2.52 2.0 2.09 2.07 2.03 2.04 2.10 2.11 2.15 2.16 2.07 1.99 1.75 1.0 0.0 EUR DKK SEK NOK Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 22
Slide 23: Market development Q2 – stock market
Market development Q2 – stock market l Mixed index development l Reduced turnover volumes % % 15 30 10 20 5 6 6 10 3 1 1 0 0 -5 -10 -14 -21 -23 -10 -13 -20 -27 -15 -30 m n ow d aq i oc l o s m n i o nk nk e ne e sl ol s l ag ho si ag O si O kh as Jo el el h ck h N H en H en o St op St op D C C 23
Slide 24: Net interest income
Net interest income QoQ: EURm 1000 l Up 3% l Growth in volumes – total lending up 5% 868 800 843 838 850 846 – total deposits up 7% l Corporate lending increased 600 l Lending margins – household and large corporate 400 margins slightly down – SME margins stable 200 H1oH1: l Up 2% 0 l Strong growth
Slide 25: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on Nii* Q2/04 Q1/04 Increasing market rates, 100bp 294 298 Decreasing market rates, 100bp -248 -263 *Approx. end of period l Previous hedge arrangements expired l Active mgmt of non-trading interest rate risk SIIR is defined as the effec
Slide 26: Net commission income
Net commission income EURm 388 397 405 QoQ: 500 379 47 49 60 366 47 l Up 2% 40 35 44 40 28 l Strong payment commissions 400 20 88 90 90 87 88 – total transactions up 5% 300 114 120 129 127 124 l Asset Mgmt commissions – mgmt fees stable 200 – transaction fees slightly down 191 194 200 192 199 l Brok
Slide 27: Trading
Trading EURm QoQ: 180 l Reduced to EUR 104m due to: 160 155 156 – lower customer activity 140 – challenging market conditions 120 130 125 100 104 80 60 H1oH1: 40 l Down 17% on high level last 20 year 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 27
Slide 28: Expenses
Expenses EURm QoQ: 1000 973 902 46 l Down 3% 881 873 363 416 15 849 350 15 l Staff costs down 7% 800 370 378 – continued reduction of FTEs – lower variable salaries 600 539 531 l Other expenses up 2% 511 488 400 456 – higher marketing 200 H1oH1: l Down 5% 0 l Number of FTE’s down 11% Q2/03 Q3/03 Q4/
Slide 29: Expenses - development
Expenses - development Q2/04 vs. Q1/04 H1/04 vs. H1/03 Reported Underlying Reported Underlying Staff costs -7% -5% -11% -6% Other +2% +1% -2% -6% expenses Total -3% -2% -5% -6% expenses l Underlying expenses are adjusted for: – restructuring expenses – variable salaries – profit sharing – F/X effect
Slide 30: Development of FTEs
Development of FTEs l YoY down approx. 3,600 FTEs 35,000 of which 1,100 outsourced 32,862 – Q2 reduction 600 of which 170 32,140 30,000 30,674 outsourced 29,880 29,289 25,000 FTEs Q2/04 Q1/04 2003 20,000 Retail 17,638 17,882 18,320 CIB 1,941 1,974 2,102 15,000 AM & Life 1,796 1,797 1,796 10,000 GPT
Slide 31: Loan losses
Loan losses EURm 100 QoQ: 90 92 l Positive net provisions 89 80 84 – reversals exceeded new provisions 70 60 l No major problem areas 50 40 42 30 H1oH1: 20 l Loan loss ratio down to 5bp 10 from 26bp annualised 0 l No new losses in fish farming -3 -10 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 31
Slide 32: Investment earnings, banking
Investment earnings, banking EURm QoQ: 100 l Loss of EUR 61m resulting 80 81 from 60 – difficult market conditions 62 40 – loss on holding in OMHEX AB 33 20 27 0 H1oH1: -20 l Reduced to EUR 1m -40 – very high level last year -61 -60 – mixed market conditions this year -80 Q2/03 Q3/03 Q4/03 Q1/04 Q2/
Slide 33: Operating profit, life insurance
Operating profit, life insurance EURm QoQ: 60 l Up 9% 50 50 51 l Stabilisation at high level 47 40 l Investment return decreased 40 40 l Decreased financial buffers 30 20 H1oH1: 10 l Improved profit reflecting the changed business model 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 33
Slide 34: Income statement summary
Income statement summary EURm, Q2/04 Q1/04 Chg % Total income 1,404 1,421 -1 Total expenses -849 -873 -3 Loan losses, net 3 -42 -107 Equity method 9 9 0 Profit before inv. earnings and 567 515 10 insurance Investment earnings, banking -61 62 -198 Operating profit, life insurance 51 47 9 Goodwill amo
Slide 35: Income statement summary
Income statement summary EURm Jan-June Jan-June Chg 2004 2003 % Total income 2,825 2,837 0 Total expenses -1,722 -1,819 -5 Loan losses, net -39 -190 -79 Equity method 18 33 -45 Profit before inv. earnings and 1,082 861 26 insurance Investment earnings, banking 1 110 -99 Operating profit, life insura
Slide 36: Real estate divestment process completed
Real estate divestment process completed l A gain of EUR 300m is reflected in Q2 accounts below operating profit – write-down of EUR 115m in Q4 2003 l Reduced EC by EUR 260m and improved capital effiency l Lower RWA’s and improved Tier 1 capital l Nordea owns no major properties è Going forward the
Slide 37: Net profit
Net profit EURm QoQ: 700 664 l Up 59% 600 628 l Gain of EUR 300m increased 500 profit 400 418 405 300 200 H1oH1: 202 100 l Up 64% 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 37
Slide 38: Key figures
Key figures EUR Earnings per share % Return on equity (excl. goodwill) 0.25 30 0.24 28.1 25 26.5 0.20 0.21 20 0.15 0.15 18.1 18.2 0.14 15 0.10 10 9.7 0.07 0.05 5 0.00 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 EPS H1 2004 EUR 0.39 RoE H1 2004 23.1% EPS H1 2004 adjusted for real EU
Slide 39: Earnings per share – 12 months rolling
39 Q 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 1/ 20 EUR Q 00 2/ 20 Q 00 3/ 20 Q 00 4/ 20 Q 00 1/ 20 Q 01 2/ 20 Q 01 3/ 20 Q 01 4/ 20 Q 01 1/ 20 Q 02 2/ 20 Q 02 3/ 20 Q 02 4/ 20 Q 02 1/ 20 Q 03 2/ 20 Earnings per share – 12 months rolling Q 03 3/ 20 Q 03 4/ 20 Q 03 1/ 20 Q 04 2/ 20 04
Slide 40: Balance sheet - key items
Balance sheet - key items Change, 12 EURbn Q2/04 2003 Q2/03 months % Lending 156 146 147 6 Deposits 98 96 91 7 Shareholders’ equity 12 12 12 2 Total assets 262 262 270 -3 Risk-weighted assets 140 134 135 4 End of period 40
Slide 41: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 156 96 98 147 149 146 148 91 93 92 80 120 100 60 80 60 40 40 20 20 0 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 End of period 41
Slide 42: Capital position
Capital position Tier 1 ratio % 8 l RWA’s increased 7 7.5 7.5 – higher business volumes 7.3 7.0 6 6.7 l Tier 1 capital increased 5 – half-year profit included 4 3 l Total capital ratio 9.3% 2 1 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 End of period 42
Slide 43: Result by business area
Result by business area EURm 500 456 400 433 300 200 154 100 89 60 58 53 57 55 0 -27 -73 -100 -131 -200 Retail CIB Asset Mgmt* Life* Group Group Treasury Functions *Product result for Asset Management and Life and Eliminations Q1/04 Q2/04 43
Slide 44: Retail Banking operating profit
Retail Banking operating profit EURm l Increased lending volumes 500 450 l SME loan growth continued 456 400 428 433 l Strong increase in non-interest 395 350 376 income 300 l Positive net loan losses 250 200 150 100 50 Key ratios Q2/04 Q1/04 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 C/I ratio, % 58 58 RoE, %
Slide 45: Lending to households - mortgages
Lending to households - mortgages EURbn 60 Market shares, % 50 52.6 Q2/04 2003 2002 48.9 50.0 48.2 45.7 DK 14.0 13.1 12.1 40 FI 32.5 32.7 n.a 30 NO 10.9 10.5 10.0 20 SE 16.1 15.8 15.6 10 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 45
Slide 46: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Quarterly averages 2.6 l Overall stable lending 2.4 margins 2.2 2.0 – household margins slightly 1.8 down 1.6 1.4 – SME margins stable 1.2 1.0 l Declining deposit margins 0.8 0.6 0.4 0.2 0.0 02 02 02 02 03 03 03 03 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ Q Q
Slide 47: CIB operating profit
CIB operating profit EURm 180 l Increased lending volumes 150 154 l Markets income down – lower customer activity 120 131 – challenging market conditions 90 100 92 l Stable development in other areas 85 60 l Positive net loan losses 30 Key ratios Q2/04 Q1/04 0 C/I ratio, % 64 48 Q2/03 Q3/03 Q4/03 Q1
Slide 48: Asset Management product result
Asset Management product result EURm 80 l AuM up EUR 1.4bn to EUR 70 123.3bn 60 – net inflow of EUR 1.4bn in Q1 60 60 58 50 l Asset appreciation flat 48 l Asset Mgmt commissions 40 41 – mgmt fees stable 30 – transaction fees slightly down 20 10 Key ratios Q2/04 Q1/04 0 C/I ratio, % 57 56 Q2/03 Q3/03
Slide 49: Assets under management
Assets under management EURbn 140 l Strong distribution capacity 121.9 123.3 120 113 l Nordea market leader within 107 102 100 retail funds in the Nordic 80 region 60 – holds 19% of all Nordic investment fund assets 40 20 l Strong sales through European fund distribution 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2
Slide 50: Life Insurance, product result
Life Insurance, product result EURm 80 l Stabilisation at high level 70 l Decreased financial buffers 60 l Effect of changed business 57 model increasingly visible 50 52 53 40 43 44 30 20 10 Key ratios Q2/04 Q1/04 0 Inv return, % -0.4 3.2 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Financial 4.9 5.6 buffers*, % 5
Slide 51: Group Treasury operating profit
Group Treasury operating profit EURm 100 l Investment earnings down 80 91 – Influenced by difficult market conditions 60 62 55 – loss on holding in OMHEX AB 40 35 l Improved result in Group Funding 20 0 -20 -27 -40 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 51
Slide 52: Group Functions and Eliminations
Group Functions and Eliminations QoQ: Q2/04 Q1/04 l Unallocated expenses from Income -16 -5 GPT reduced Expenses -26 -66 General: Loan losses -8 -35 l Expenses in Group functions not defined as service offered Equity method 2 -1 to business areas Operating profit, Life 11 7 l Loan losses are central
Slide 53: Outlook 2004
Outlook 2004 l Outlook for economic growth improved l Short-term interest rates lowered in Q2 – likely to have bottomed out l Total income 2004 expected to exceed 2003 – despite high non-recurring revenues 2003 l Increased business volumes expected – primarily household sector – potential for increa
Slide 54: Credit quality
Credit quality 54
Slide 55: Loan portfolio by customer category
Loan portfolio by customer category* EURbn 100 87 88 83 82 84 85 85 85 84 82 83 80 78 79 80 77 60 53 48 49 50 44 44 46 42 41 42 36 37 37 39 40 35 20 14 14 14 14 15 15 16 16 17 13 13 12 12 12 10 0 02 03 03 03 03 04 04 00 01 01 01 01 02 02 02 4/ 1/ 2/ 3/ 4/ 1/ 2/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ Q Q Q Q Q Q Q
Slide 56: Loan portfolio by customer group
Loan portfolio by customer group Q2/04, EUR 155.5bn Q2/03, EUR 147.0bn Public Public sector sector 2% 2% Household Household customers Companies customers 41% Companies 45% 53% 57% 56
Slide 57: Lending to household customers
Lending to household customers End of Q2/04 EUR 69.5bn Other loans l Continued strong growth in 24% mortgage lending l Other loans comprise – consumer credits – investment credits – car financing – overdraft facilities – credit cards Housing loans 76% 57
Slide 58: Lending to companies by industry
Lending to companies by industry End of Q2/04 EUR 82.9 bn Shipping & Offshore Construction Transport and 5% 3% communication 5% Real estate 27% Agriculture & Fishing 6% Renting, consulting and other services 7% Other companies 8% Manufacturing Commerce and 16% services 11% Finance 12% 58
Slide 59: Loan portfolio in figures
Loan portfolio in figures EURbn Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Household customers 69.5 66.3 64.7 63.5 60.2 Real estate 22.4 20.9 21.2 22.0 22.0 Construction 2.8 2.7 2.6 2.5 2.8 Transport, communication 4.3 4.3 4.4 4.6 3.8 Trade and services 9.3 8.8 8.7 9.1 9.1 Manufacturing 12.9 11.9 12.5 13.2 12.5
Slide 60: Lending by geographical area
Lending by geographical area End of Q2/04 EUR 155.5bn Latin America USA 0.7% Other non OECD 1.1% 0.6% Nordic countries and P&B Other OECD 92.7% 0.5% Other Asia 7.3% 0.5% Other EU countries Nordic countries and P&B 3.9% l Denmark 41.0 l Finland 33.4 l Norway 23.5 l Sweden 44.5 l P&B 1.8 60
Slide 61: Transfer risk exposure
Transfer risk exposure EURm. End of Q2/04 Asia 527 Latin America 288 -of which China 200 -of which Brazil 192 South Korea 130 Mexico 39 Indonesia 21 Chile 5 Panama 13 Argentina 1 Middle East 367 -of which Iran 173 Turkey 62 61
Slide 62: Nordea fisheries financing
Nordea fisheries financing End of Q2/04 Total exposure approx. EUR 2.0 bn Fish processing/ export l Total outstanding EUR 1.7bn 22% Fish l Mainly Norwegian exposure farming 40% l Fish farming – represents approx. 0.5% of total loan book – increases in salmon prices in 2004 – no provisions in 2004 Fi
Slide 63: Nordea shipping portfolio
Nordea shipping portfolio Distribution by type of vessel End of Q2/04 Total exposure approx. EUR 6.1bn Reefers Combined 4% vessels Other dry cargo 1% 4% Bulkers 15% l Outstanding, EUR 5.4bn Pure car carries 5% Ferries l Well diversified portfolio by 5% Misc. loans type of vessel 13% Cruise 7% l Focu
Slide 64: Nordea real estate financing portfolio
Nordea real estate financing portfolio End of Q2/04 Total exposure approx. EUR 22.4bn Denmark 8.7% Sweden l Largest industry exposure Norway 49.2% 19.6% l Relatively large and financially strong companies l High level of collateral coverage l Lending to residential real estate companies approx 50% F
Slide 65: Impaired loans
Impaired loans EURm. End of period Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Impaired loans, gross 2,563 2,615 2,649 2,916 2,851 Provisions 1,898 1,929 -1,936 -2,072 -2,015 Of which: Specific provisions -1,406 -1,449 -1,468 -1,624 -1,571 Appraised by category -55 -60 -62 -64 -65 General provisions -436 -420 -40
Slide 66: Impaired loans
Impaired loans EURm. End of Q2/04 Gross Provisons Net Household customers 531 342 189 Real estate 189 141 48 Construction 72 62 10 Transport, communication 246 190 56 Trade and services 217 177 40 Manufacturing 282 228 54 Finance 73 58 15 Renting, Consulting and other services 265 178 87 Other compa
Slide 67: Loan losses
Loan losses EURm QoQ: 300 246 l Positive net provisions 221 229 – reversals exceeded new 200 provisions 128 129 l No major problem areas 92 89 84 100 42 0 -3 H1oH1: l Loan loss ratio down to 5bp -100 -86 from 26bp annualised -132 -132 -154 -145 l No new losses in fish farming -200 Q2/03 Q3/03 Q4/03
Slide 68: Comments on certain industries
Comments on certain industries Real estate l Vacancy rates for office buildings high particularly in the Stockholm region l Rent levels down from peak but still higher than original levels 3-5 years ago l Low interest rates help secure cash flow and secondary market values l New construction volumes
Slide 69: Comments on certain industries
Comments on certain industries Shipping and Offshore industry l China the driving force for shipping boom l Bulk market particularly strong l Tanker market strong but volatile l Crusing market recovering from global uncertainties l Nordea´s exposure well diversified with modern ships and globally co
Slide 70: Economic capital
Economic capital 70
Slide 71: Economic capital (EC)
Economic capital (EC) l EC is the capital required by Nordea to cover unexpected losses l 5 different risk categories are incorporated l The measurement period is one year l The confidence level is 99.97% l The economic capital may change over time due to: – composition of risk exposures – changes i
Slide 72: Economic capital
Economic capital EURbn 10 l Reduced EC due to 9 divestment of real estate 9.1 9.0 8.9 8 8.7 8.4 portfolio 7 l Market risk reduced within 6 Life and Treasury 5 l Increased lending 4 3 2 1 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 72
Slide 73: Economic capital per business area
Economic capital per business area End of Q2/04 Treasury Other EC per business area, Q2/04 5% Asset Mgmt 5% EURbn & Life 11% Retail Banking 4.9 CIB 1.7 Asset Mgmt 0.1 Retail Life 0.8 CIB 58% 21% Treasury 0.4 Other 0.5 Total 8.4 73
Slide 74: Distribution of economic capital - by risk category
Distribution of economic capital - by risk category End of Q2/04 Life risk Operational risk 1% 9% Business risk 11% Market risk 16% Credit risk 63% 74
Slide 75: Nordea
Nordea 75
Slide 76: Developing Nordea
Benefiting from Developing Nordea the Nordic vision One bank Adjusting to changed market conditions Resuming top-line growth 2003 Focus, speed and performance Changes of business models Divestment of non-core assets Shaping the new reality 2002 Reduction of complexity Customer organisation, customer
Slide 77: Mission Vision Corporate values and key words
Mission Making it possible Vision We will be valued as the leading financial services group in the Nordic and Baltic markets with a substantial growth potential. We will be in the top league or show superior profitable growth in every market and product area in which we choose to compete. We will ha
Slide 78: Strategic themes 2004
Strategic themes 2004 Sustainable growth of economic profit Ensure stable and Ensure operational Ensure capital profitable growth of excellence, strict cost efficiency and high income management and credit portfolio quality reduced complexity Attract, develop and retain highly motivated, competent a
Slide 79: Strategic themes firmly anchored throughout the Group
Strategic themes firmly anchored throughout the Group Retail Banking Corp. and Inst. Banking Asset Management & Life Group / Group functions • Increase sales to all existing • Increase share of wallet • Capture share of growth in customers • Further enhance position the long-term savings and Ensure
Slide 80: Group financial targets
Group financial targets Key performance indicator 2002 2003 H1/04 Target Total shareholder return, % # 15 #3 #8 In the top five of the peer group of 20 banks 1) 2) RoE, excluding goodwill, % 11.3 16.7 23.1 > 15% Costs, EURm 3,745 3,673 1,722 Same cost level as in 2003 Loan losses ratio, % 0.18 0.25
Slide 81: Peer group by market cap, EURbn
Peer group* by market cap, EURbn 3 August 2004 RBOS BARCLAYS BNP HBOS LLOYDS TSB SOCIETE GENERALE ABN AMRO NORDEA KBC DANSKE BANK ABBEY NATIONAL SHB ALLIED IRISH BANK BANK OF IRELAND HYPOVEREINSBANK COMMERZBANK SEB SWEDBANK DnBNOR SAMPO 0 10 20 30 40 50 60 70 80 81 *As defined by Nordea
Slide 82: Strong distribution network throughout the Nordic and Baltic Sea region
Strong distribution network throughout the Nordic and Baltic Sea region Finland Branch offices 416 Personnel 8,683 Sweden Branch offices 255 Helsinki Personnel 7,203 Stockholm St Petersburg Norway Oslo Tallinn Branch offices 130 Copenhagen Riga Personnel 3,488 Vilnius Moscow Denmark Warzaw Branch of
Slide 83: Large customer base with high penetration in e-banking
Large customer base with high penetration in e-banking Baltic Sea Total DK FI NO SE Region Banking customers (1,000) Personal customers 1,610 2,970 630 4,100 300 9,610 Corporate customers 80 320 60 440 40 940 Life insurance customers (1,000) 617 321 237 517 59 1,751 E-banking customers (1,000) 577 1
Slide 84: Business areas
usiness areas 84
Slide 85: Retail Banking
Retail Banking , », r i | ‘ an : wT — , cw N | , 85 a 4 \
Slide 86: Retail Banking operating profit
Retail Banking operating profit EURm l Increased lending volumes 500 450 l SME loan growth continued 456 400 428 433 l Strong increase in non-interest 395 350 376 income 300 l Positive net loan losses 250 200 150 100 50 Key ratios Q2/04 Q1/04 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 C/I ratio, % 58 58 RoE, %
Slide 87: Retail Banking operating profit by markets
Retail Banking operating profit by markets Retail DK FI NO SE P&B EURm Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Net interest income 721 727 205 200 188 187 112 113 196 211 16 12 Non-interest income 374 345 90 88 103 91 35 36 134 120 9 8 Total income 1,095 1,072 295 288 291 278 147 149 330 331 25 20 Total
Slide 88: Retail Banking lending
Retail Banking lending EURbn 40.0 39.5 35.0 38.0 38.3 35.0 30.0 32.0 33.1 28.9 25.0 25.8 26.9 20.0 20.8 20.2 18.9 15.0 10.0 5.0 0.0 Denmark Finland Norway Sweden Q2/03 Q4/03 Q2/04 End of period 88
Slide 89: Retail Banking deposits
Retail Banking deposits EURbn 25 22.7 20 21.9 22.6 21.2 20.2 20.1 15 15.6 15.3 16.1 10 11.0 10.0 10.4 5 0 Denmark Finland Norway Sweden Q2/03 Q4/03 Q2/04 End of period 89
Slide 90: Retail Banking deposits
Retail Banking deposits EURbn. End of Q2/04 25 9.6 20 4.2 15 2.6 6.7 6.9 6.3 10 1.4 3.6 9.2 5 6.6 6.8 5.5 0 Denmark Finland Norway Sweden Corporate Household customer - saving accounts 90 Household customer - current accounts
Slide 91: Retail Banking, volumes and margins
Retail Banking, volumes and margins Volumes Margins EURbn Q2/04 Q1/04 Q2/04 Q1/04 Lending to corporates 58.1 56.8 1.2% 1.2% Lending to household customers 67.5 64.3 1.5% 1.6% Household mortgages 52.6 50.0 0.9% 1.0% Total lending 125.6 121.1 1.4% 1.4% Deposits from corporates 28.8 28.6 0.9% 1.0% Depo
Slide 92: Retail Banking, lending and deposit margins
Retail Banking, lending and deposit margins % Quarterly averages 2.6 l Overall stable lending 2.4 margins 2.2 2.0 – household margins slightly 1.8 down 1.6 1.4 – SME margins stable 1.2 1.0 l Declining deposit margins 0.8 0.6 0.4 0.2 0.0 02 02 02 02 03 03 03 03 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ Q Q
Slide 93: E-banking & transactions
E-banking & transactions 93
Slide 94: E-banking customers
94 Ja n 1 1.5 2 2.5 3 3.5 4 Ju -00 Mill. ne - No 00 v- Ap 00 r il Se -01 pt - Fe 01 b- Ju 02 ly - De 02 c- M 02 ay E-banking customers -0 O 3 ct - M 03 E-banking customers ar -0 4 Ja n 0 50 100 150 200 250 300 350 400 Ju - 00 (1,000) ne - No 0 0 v Ap -00 ril Se -01 pt - Fe 01 b- Ju 02 ly- De 02 c- M
Slide 95: Payments and log-ons
Payments and log-ons E-banking payments E-banking log-ons Mill. Mill. 50 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 00 Q 0 Q 1 Q 1 02 Q 2 03 Q 3 04 Q 0 00 Q 1 01 Q 2 Q 2 Q 3 03 04 0 0 0 0 0 0 0 0 0 0 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ Q Q Q Q Q Q Q Q Denmark Finlan
Slide 96: Penetration on the net
96 Ja 0 5 10 15 20 25 30 35 n- % 0 M 1 ay -0 Se 1 pt -0 1 Ja n- 0 M 2 ay -0 Se 2 p- 02 Ja n- 0 M 3 ay -0 Se 3 p- 03 Ja n- 0 Mutual funds penetration rate M 4 ay Penetration on the net -0 4 Ja 0 10 20 30 40 50 60 70 80 n- % M 00 ay Se -00 pt -0 Ja 0 n- M 01 ay - Se 01 pt -0 Ja 1 n- M 02 ay - 02 02 -S
Slide 97: Cards
97 Ja 0 10 20 30 40 50 60 n- 0 Mill. M 1 ay - Se 01 pt -0 Cards Ja 1 n- 0 M 2 ay -0 Se 2 pt -0 Ja 2 n- 0 M 3 Card payments ay -0 Se 3 p- 03 Ja n- 0 M 4 ay -0 4 Ja n 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 -0 Mill. M 1 ay - S e 01 pt -0 1 Ja n- 0 M 2 ay -0 Se 2 pt -0 Ja 2 n- 0 M 3 ay -0 Se 3 p- 0
Slide 98: Payment transactions, households
Payment transactions, households Payments transactions, households Breakdown of transactions Mill. Mill. 300 140 275 120 100 250 80 225 60 200 40 175 20 150 0 Q 01 Q 01 Q 01 Q 01 Q 02 Q 02 Q 02 Q 02 Q 03 Q 03 Q 03 Q 03 Q 04 04 1 1 2 2 3 3 4 0 0 0 0 0 0 0 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 1/
Slide 99: Corporate and Institutional
x fe) O fe 0 Z Corporate and Institutional a (o>)
Slide 100: CIB operating profit
CIB operating profit EURm 180 l Increased lending volumes 150 154 l Markets income down – lower customer activity 120 131 – challenging market conditions 90 100 92 l Stable development in other areas 85 60 l Positive net loan losses 30 Key ratios Q2/04 Q1/04 0 C/I ratio, % 64 48 Q2/03 Q3/03 Q4/03 Q1
Slide 101: Stock market development
Stock market development Market Volume Market index Q2 2004, Chg Q2 vs Q1, % Q2 2004, % EURbn Denmark 20.1 -14 3 Finland 44.7 -21 -13 Norway 19.9 -27 6 Sweden 88.6 -23 1 Source: Nordea Markets 101
Slide 102: CIB operating profit by main area
CIB operating profit by main area Corporate Financial International CIB Banking Instititutions and Shipping Other Markets Division Division Division EURm Q2 Q1 Q2 Q2 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Total income 208 276 104 127 40 88 40 43 23 18 124 180 Total expenses -134 -134 -39 -39 -31 -28 -12 -10 -52 -5
Slide 103: CIB lending volume
CIB lending volume* EURbn 30 25 25.3 20 21.8 20.0 15 15.8 13.3 10 11.9 5 2.7 1.9 6.8 6.4 6.6 1.7 0 Corporate Banking Financial International and Total Division Institutions Division Shipping Division End of period Q2/03 Q4/03 Q2/04 *Excluding volumes within Markets 1
Slide 104: Nordea Asset Management & Life
Nordea Asset Management & Life 104
Slide 105: Asset Management product result
Asset Management product result EURm 80 l AuM up EUR 1.4bn to EUR 70 123.3bn 60 – net inflow of EUR 1.4bn in Q1 60 60 58 50 l Asset appreciation flat 48 l Asset Mgmt commissions 40 41 – mgmt fees stable 30 – transaction fees slightly down 20 10 Key ratios Q2/04 Q1/04 0 C/I ratio, % 57 56 Q2/03 Q3/03
Slide 106: Assets under management
Assets under management EURbn 140 l Strong distribution capacity 121.9 123.3 120 113 l Nordea market leader within 107 102 100 retail funds in the Nordic 80 region 60 – holds 19% of all Nordic investment fund assets 40 20 l Strong sales through European fund distribution 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2
Slide 107: Net inflows
Net inflows EURbn 6 5.7 5 Life & pensions 4.2 4 Institutional clients 3 International wealth 2.4 2.4 1.4 mgmt & funds 2 Nordic private banking 1 Nordic retail funds 0 -1 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 107
Slide 108: Asset structure – Investment Management
Asset structure – Investment Management* Q2/04 Q1/04 EUR 78.1bn EUR 77.7bn Int'l. fixed Int'l. fixed income income 11% 12% Nordic Nordic equities equities 14% 14% Nordic Nordic fixed fixed income income 53% 52% Int'l. Int'l. equities equities 22% 22% 108 *Including mgmt of own investment funds
Slide 109: Asset structure – Investment Funds
Asset structure – Investment Funds Q2/04 Q1/04 EUR 46.9bn EUR 45.5bn Balanced Balanced funds funds 10% 10% Fixed Fixed income income funds funds 45% 45% Equity Equity funds funds 45% 45% 109
Slide 110: Investment Funds, volumes and margins
Investment Funds, volumes and margins EURbn % Margins 20 1.4 18 1.2 1.22 16 16.6 16.8 1.15 14 1.0 1.07 1.08 14.5 14.4 12 0.8 0.87 0.82 10 8 0.6 0.53 6 6.9 0.4 0.48 6.2 4 0.2 2 1.6 1.8 0 0.0 DK FI NO SE DK* FI NO SE Q1/04 Q2/04 Q1/04 Q2/04 End of period * Net margin 110
Slide 111: European Fund distribution
European Fund distribution EURm 6000 l Net inflow of EUR 0.5bn in Q2 5000 l More than 1000 active distribution agreements 4000 l Assets by country of source: 3000 – 25% from Switzerland – 25% from Germany 2000 – 15% from Spain 1000 – 9% from Austria – 7% from UK 0 – 6% from France 00 01 01 02 02 03
Slide 112: Life Insurance, product result
Life Insurance, product result EURm 80 l Stabilisation at high level 70 l Decreased financial buffers 60 l Effect of changed business 57 model increasingly visible 50 52 53 40 43 44 30 20 10 Key ratios Q2/04 Q1/04 0 Inv return, % -0.4 3.2 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Financial 4.9 5.6 buffers*, % 1
Slide 113: Life - breakdown of product result
Life - breakdown of product result EURm Q2/04 Q1/04 Normalised operating margin 72 45 Fluctuations compared to normalised investment return -280 347 Change in discount rate for life provisions 159 -98 Allocation to policy-holders -26 -30 Allocation to/from financial buffers 124 -218 Net profit from
Slide 114: Life
Life EURm Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 TRADITIONAL LIFE Premiums written net 422 491 533 370 461 Normalised investment. return 236 234 244 236 247 Benefits paid and change in provision -560 -655 -687 -532 -626 Insurance operating expenses -26 -25 -28 -24 -28 Normalised operating margin 72 45 62 50
Slide 115: Life
Life EURm Denmark Finland Norway Sweden Other Total TRADITIONAL LIFE Premiums written net 175 143 73 27 4 422 Normalised investment return 117 61 38 16 3 236 Benefits paid and change in provision -266 -178 -84 -35 2 -560 Insurance operating expenses -11 -2 -8 -2 -3 -26 Normalised operating margin 16
Slide 116: Life - investments
Life - investments EURbn 30 l Equities 24.8 24.8 25 23.1 23.4 23.9 – predominantly listed equities 20 – 1/3 Nordic, 2/3 international l Bonds 15 – ¾ Nordic issuers 10 – primarily govmn’t & mortgage inst. 5 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Equities Bonds Real estate Unit linked 116 End of period
Slide 117: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q2/04 Q1/04 Q2/04 Q1/04 Denmark 11.6 11.6 19 18 Finland 6.6 6.6 15 18 Norway 3.2 3.3 12 12 Sweden 2.8 2.8 4 4 Total 24.2 24.3 15 15 117
Slide 118: Life - solvency situation
Life - solvency situation End of Q2/04 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 444 519 75 117 Finland* 209 456 247 218 Norway 125 206 81 165 Sweden 68 120 52 177 *Solvency buffer in Finland has decreased due to a change in Finnish solvency rules as
Slide 119: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q2/04 Q1/04 Q2/04 Q1/04 Denmark 688 717 7.1 7.3 Finland 158 204 3.3 4.3 Norway 30 55 1.1 2.0 Sweden 57 83 3.5 5.2 Total 933 1,058 4.9 5.6 119 * Financial buffers are defined in accordance with local regulations and practices.
Slide 120: Life – solvency sensitivity, end of Q2/04
Life – solvency sensitivity, end of Q2/04 Denmark Finland Norway Sweden % Solvency in % of requirement 117 218 165 177 Equities drop 12% 117 184 137 162 Interest rates down 50bp 115 245 141 211 Interest rates up 50bp 117 190 134 157 120
Slide 121: Life – buffer sensitivity, end of Q2/04
Life – buffer sensitivity, end of Q2/04 Denmark Finland Norway Sweden EURm Financial buffers* 688 158 30 57 Equities drop 12% -180 -71 -4 -10 Interest rates down 50bp -39 57 34 22 Interest rates up 50bp 26 -56 25 -14 * Financial buffers are defined in accordance with local regulations and practices.
Slide 122: Group Treasury
Group Treasury 122
Slide 123: Group Treasury operating profit
Group Treasury operating profit EURm 100 l Investment earnings down 80 91 – Influenced by difficult market conditions 60 62 55 – loss on holding in OMHEX AB 40 35 l Improved result in Group Funding 20 0 -20 -27 -40 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 123
Slide 124: Group Treasury operating profit by main areas
Group Treasury operating profit by main areas Group Investment Group Funding Total Fixed income Equity portfolios portfolios EURm Q2/04 Q1/04 Q2/04 Q1/04 Q2/04 Q1/04 Q2/04 Q1/04 Income -43 48 -15 18 42 1 Expenses -3 -3 0 -1 -8 -8 Profit excl. Investment earnings 34 -7 34 -7 Investment earnings -61 6
Slide 125: Group Treasury - investments
Group Treasury - investments EURbn 20 l Equities 16.0 15.9 16.2 16.0 – listed, unlisted & private equity 14.8 funds 15 l Bonds 10 – ¾ Nordic issuers – primarily government and mortgage inst. 5 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Fixed income Equities End of period 125
Slide 126: Treasury – risk management
Treasury – risk management End of Q2/04 l Interest rate risk (VaR) – risk related to interest rate positions, calculated as VaR l Equity risk (VaR) – risk related to equities, calculated as VaR, comprise all equities including listed, unlisted and private equity EURm, end of period Q2/04 Q1/04 Inter
Slide 127: Balance sheet
Balance sheet 127
Slide 128: Balance sheet structure - assets
Balance sheet structure - assets EURbn 160 156 147 120 80 40 32 36 30 28 26 23 22 23 5 4 0 Lending Bonds and Loans and Assets, Other assets, Other other interest advances to insurance banking bearing credit inst. securities End of period 30/06/03 30/06/04 128
Slide 129: Balance sheet structure – liabilities and equity
Balance sheet structure – liabilities and equity EURbn 120 100 98 80 89 60 64 64 40 38 38 31 29 20 21 23 12 12 7 6 0 Deposits and Debt Deposits by Provisions and Liabilities, Shareholder´s Other other securities in credit other liabilities, insurance equity borrowings issue institutions banking from
Slide 130: Lending and deposits
Lending and deposits Lending Deposits EURbn EURbn 160 100 140 156 96 98 147 149 146 148 91 93 92 80 120 100 60 80 60 40 40 20 20 0 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 End of period 130
Slide 131: Capital base
Capital base EURm End of Q2/04 Shareholders’ equity 12,041 Deductions insurance companies and other -657 Shareholders’ equity in the capital base 11,384 Hybrid capital 287 Minority interests 3 Group goodwill -1,711 Other deductions -56 TIER 1 Capital 9,907 TIER 2 Capital (subordinated debt) 4,838 De
Slide 132: Market shares (statistics as of June 2004)
* Statistics as of June 2004 132
Slide 133: Market shares, personal customer deposits
Market shares, personal customer deposits % 40 35 34.6 34.1 30 25 20 22.0 21.9 19.5 19.0 15 10 5 8.5 8.6 0 Denmark Finland Norway Sweden June 03 June 04 133
Slide 134: Personal customer deposits - market volume & share
134 M Ju ay n 0 100 200 300 400 500 0 100 200 300 400 500 Au -01 S -01 g ep DKKbn NOKbn N - 01 D - 01 ov ec Fe - 01 M - 01 b ar M -02 - ay Ju 02 n Au -02 S -02 g ep N - 02 02 -02 ov -D Fe - 02 03 ec b -M M -03 Norway ay 03 ar Denmark Au -03 - 03 Jun g -S N - 03 03 ep ov -D Fe - 03 04 ec b -M M -04 0
Slide 135: Market shares, corporate deposits
Market shares, corporate deposits % 45 40 40.8 39.0 35 30 25 20 24.6 22.8 22.7 22.6 15 15.8 15.8 10 5 0 Denmark Finland Norway Sweden June 03 June 04 135
Slide 136: Corporate deposits - market volume & share
136 M ju ay n 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 0 100 200 300 400 A -01 S -01 ug ep DKKbn NOKbn N - 01 D - 01 ov ec - F e - 01 M 01 b ar M -02 Ju -02 ay n A -02 S -02 ug ep N - 02 D - 02 ov ec - F e - 02 M 03 b ar M -03 Norway Ju -03 Denmark ay n A -03 S -03 ug ep N - 03 D - 03 ov ec - F
Slide 137: Market shares, personal customer lending
Market shares, personal customer lending % 35 30 32.1 32.0 25 20 18.5 15 16.8 14.0 14.2 10 11.1 10.6 5 0 Denmark Finland Norway Sweden Jun-03 Jun-04 137
Slide 138: Personal customer lending - market volume & share
138 M Ju ay n 0 50 100 150 200 250 300 0 200 400 600 800 A -01 S -01 ug ep DKKbn NOKbn N - 01 D - 01 ov ec - F e - 01 M 01 b ar M -02 Ju -02 ay n A -02 S -02 ug ep N - 02 D - 02 ov ec - F e - 02 M 03 b ar M -03 Norway Ju -03 Denmark ay n A -03 S -03 ug ep N - 03 D - 03 ec ov - F e - 03 M 03 b ar M -
Slide 139: Mortgage lending households - market volume & share
Morgage lending households - market volume & share DKKbn Denmark EURbn Finland 1000 20% 40 35% 800 16% 35 30 34% 600 12% 25 33% 20 400 8% 15 32% 200 4% 10 31% 5 0 0% 0 30% Ja 3 S 3 M 3 M 4 M 3 M 4 3 4 N 3 Q 01 Q 01 Q 01 Q 01 Q 02 Q 02 Q 02 Q 02 Q 03 Q 03 Q 03 Q 03 Q 04 04 -0 -0 l- 0 -0 -0 -0 -0 0 -0
Slide 140: Corporate lending - market volume & share
140 M Ju ay n 0 50 100 150 200 250 300 350 400 450 0 100 200 300 400 500 A -01 Se -01 ug p DKKbn NOKbn D - 01 N - 02 ec ov - F e - 02 M 01 b ar M -02 Ju -02 ay n A -02 S -02 ug ep N - 02 D - 02 ov ec - F e - 02 M 03 b ar M -03 Norway Ju -03 Denmark ay n A -03 Se -03 ug p N - 03 D - 03 ov ec F e - 03
Slide 141: Investment funds - market volume & share
Investment funds - market volume & share DKKbn Denmark EURbn Finland 500 32% 30 34% 400 30% 32% 25 28% 30% 300 20 26% 28% 15 200 26% 24% 10 100 24% 22% 5 22% 0 20% 0 20% Fe 2 Fe 3 2 2 3 3 4 M 3 M 4 2 3 02 3 3 4 03 04 -0 -0 -0 -0 -0 -0 -0 0 0 -0 -0 -0 -0 -0 b- b- n- ov ov ug ug ar ay ay b- b- ov ov u
Slide 142: Investment funds, net inflow, Norway
Investment funds, net inflow, Norway Market volume, Nordea volume, and accumulated market share ytd NOKm % 3,000 60 50 2,000 40 30 1,000 20 10 0 0 -10 -1,000 -20 -30 -2,000 -40 -50 -3,000 -60 02 03 04 2 3 2 3 03 04 3 4 02 03 -0 -0 0 0 r-0 r-0 n- n- n- g- b- g- b- - - ct ct ec ec Ap Ap Ju Ju Ju Au Au
Slide 143: Investment funds, net inflow, Finland
Investment funds, net inflow, Finland Market volume, Nordea volume, and accumulated market share ytd EURm % 1400 40 1200 32 1000 24 800 600 16 400 8 200 0 0 -8 -200 -400 -16 D - 02 D - 03 Ju 2 Ju 3 04 A u 02 A u 03 A p 03 A p 04 N 02 N 03 S e - 03 S e 02 F e 03 Fe -04 Ju 03 Ju 04 M 03 M 04 M 03 M 04
Slide 144: Investment funds, net inflow, Sweden
Investment funds, net inflow, Sweden Market volume, Nordea volume, and accumulated market share ytd SEKm % 14,000 19bn 28 19bn 12,000 24 10,000 20 8,000 16 6,000 12 4,000 8 2,000 4 0 0 -2,000 -4 2 2 2 2 3 3 3 3 3 3 4 4 4 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 u n g ct c b p r u n g ct c b p r n J A
Slide 145: Market share, equity dealing - Nordea Securities
Market share, equity dealing - Nordea Securities % Equity market turnover EURbn 12 Q2/04 Q1/04 10 Denmark 20.1 23.4 10.1 8 Finland 44.7 56.5 7.2 Norway 19.9 27.1 6 Sweden 88.6 115.6 5.8 6.1 6.1 4 4.9 3.9 3.6 2 0 ki o en m sl sin ol ag O kh el h oc H en St op C Q1/04 Q2/04 145
Slide 146: Appendix
Appendix l Financials Page 147 l Nordea share Page 157 l Other Page 163 l Macro statistics Page 168 146
Slide 147: Appendix - Financials
Appendix l Financials 147
Slide 148: Pension obligations
Pension obligations l RR29/IAS19 implemented 1 January 2004 – defined benefit plans reflected on balance sheet Pension Obligation, national GAAP, net liability EUR 298m Effect of implementation of RR29/IAS19 EUR 256m* Net liability 1 January 2004 EUR 554m *EUR 183m adjustment of equity (after tax) l
Slide 149: Operational income statement
Operational income statement EURm Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Net interest income 868 846 850 838 843 Net commission income 405 397 388 379 366 Trading income 104 156 125 130 155 Other income 27 22 36 56 99 Total income 1,404 1,421 1,399 1,403 1,463 Personnel expenses -456 -488 -511 -531 -539 Prof
Slide 150: Statutory income statement
Statutory income statement EURm Q2/04 Q2/03 Interest income 1,995 2,352 Interest expenses -1,136 -1,395 Net interest income 859 957 Dividends received 11 26 Net commission income 421 372 Net result from financial operations 41 97 Other income 328 98 Total income 1,660 1,550 General administrative ex
Slide 151: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory accounts Operational Trading Investment Other Statutory EURm H1/04 income activities Insurance adjustment H1/04 Net interest income 1,714 7 1) -19 6) 21 18) 1,723 Dividends received 9 4) 6 8) 15 Commission income 802 27 2) -1 828 Trading 260 -260 5) 0 Net
Slide 152: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory acounts 1. Net interest income from trading transactions in Nordea 10. Amortisation of goodwill related to insurance included in Markets (for example interest related to swaps etc.), one-line consolidation of insurance activities (Operating reclassified as
Slide 153: Expenses - breakdown
Expenses - breakdown EURm Q1/04 Q1/04 Q4/03 Q3/03 Q2/03 Staff 1) 457 489 512 532 541 Profit sharing 15 15 46 - - Information technology 2) 108 112 136 88 85 Marketing 23 14 27 14 23 Postage, telephone and office expenses 50 52 56 53 49 Rents, premises and real estate expenses 89 75 87 74 81 Other 11
Slide 154: Total IT-related expenses
Total IT-related expenses* EURm 250 l Approx. 20% of total costs 200 208 174 150 166 165 166 100 50 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 *Refers to IT operations, service expenses and consultant fees including personnel etc, but 154 excluding IT expenses in insurance operations
Slide 155: Cost/income ratio
Cost/income ratio C/I ratio, banking C/I ratio, banking % % 70 70 67 60 63 60 64 63 61 59 58 58 50 50 40 40 30 30 20 20 10 10 0 0 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 2001 2002 2003 155
Slide 156: Gains and losses on various disposals etc
Gains and losses on various disposals etc P&L P&L EURm Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 BA Operational Statutory Real estate sales and 300 Own line Other Other write downs Real estate sales and -115 Own line Own line Other write downs Retail Finland 10 Other Other Retail Net result OM/HEX shares 27 Oth
Slide 157: Appendix - Nordea share
Appendix l Nordea share 157
Slide 158: Total shareholder return (TSR) Ytd 2004
H 158 YP O VE R C EI N O % -20 -10 0 10 20 30 40 M SB M ER AN ZB K AN R K BA BO R S C *As defined by Nordea AB LA N YS LL AM O YD RO S Source: Bloomberg 4/8-2004 TS SO B H C BO IE TE S G S EN H B SW ER A ED L E BA N K SE B BA B N N NP O K RD AL O LI F E ED IRE A Nordea peer group* IR LA D ISH ND AN
Slide 159: Shareholder structure, end of Q2/04
Shareholder structure, end of Q2/04 3.9% 2.4% 6.4% 27.5% 6.0% International institutions Swedish institutions 7.3% Swedish state Finnish institutions Danish institutions Finnish public Danish public 19.5% Swedish public 26.9% Number of shareholders approx. 498,000 159
Slide 160: Largest registered shareholders, end of Q2/04
Largest registered shareholders, end of Q2/04 Shareholder Number of shares % Swedish state 542.0 19.5 Alecta 103.6 3.7 Nordea Danmark fonden 102.5 3.7 Robur fonder 75.4 2.7 Nordea fonder 62.5 2.3 SEB fonder 61.0 2.2 Fjärde AP-fonden 41.3 1.5 SHB/SPP fonder 34.4 1.2 Skandia 34.1 1.2 Första AP-fonden
Slide 161: Number of shares
Number of shares Type of Number of Outstanding Date transaction Subject shares issued shares Jan, 2000 New issue Merita 815,800,287 2,091,067,728 April, 2000 New issue Unidanmark 869,776,488 2,960,844,216 June, 2000 New issue Unidanmark 18,348,501 2,979,192,717 2000-2001 New issue Conversions* 3,473
Slide 162: Data per share
Data per share Q2/04 2003 2002 2001 2000 EUR EUR EUR SEK Dividend n.a 0.25 0.23 0.23 2.00 Shareholders’ equity per share, EUR 4.33 4.28 4.06 4.00 3.74 Earnings per share, EUR 0.24 0.51 0.30 0.53 0.58 Share price, end of period, 54.25 54.0 38.4 55.5 71.5 SEK P/E ratio1) 8.9 11.7 14.0 11.3 14.0 1)) Sh
Slide 163: Appendix - Other
Appendix l Other 163
Slide 164: Ratings
Ratings Moody’s S&P Fitch BFSR Short Long Short Long Short Long Individ. Nordea Bank D B P-1 Aa3 A-1 A+ F1+ AA- B Nordea Bank F B P-1 Aa3 A-1 A+ F1+ AA- B Nordea Bank N B- P-1 Aa3 A-1 A+ F1+ AA- B Nordea Bank S B P-1 Aa3 A-1 A+ F1+ AA- B Nordea Hypotek P-1 Aa3 A-1 Nordea Kredit Aaa Norgeskreditt P-1
Slide 165: Business structure
Business structure Board of Directors Internal Audit Activity CEO Lars G Nordström Group Management Secretariat Corporate and Asset Management Group Processing Group Corporate Retail Banking Group Staffs Institutional Banking & Life and Technology Centre Kari Jordan Peter Schütze Tom Ruud Christian
Slide 166: Legal structure
Legal structure Nordea Bank AB (Publ) Sweden Nordea Bank Nordea Bank Nordea Bank Nordea Bank Nordea Asset Nordea Life Nordea Life Danmark A/S Finland Plc Norge ASA Polska SA Management Holding A/S Holding Denmark Finland Norway Poland AB Sweden Denmark Finland Various Nordea Various Various Various
Slide 167: Group Executive Management
Group Executive Management Lars G Nordström President and Group CEO Christian Clausen Head of Asset Management & Life Carl-Johan Granvik Head of Group Credit and Risk Control, Group CRO Kari Jordan Head of Retail Banking (to leave Nordea later 2004) Arne Liljedahl Head of Group Corporate Centre, Gro
Slide 168: Appendix - Macro statistics and estimates
Appendix l Macro statistics and estimates Source: Nordea Markets Economic Research Estimates mainly from May 2004 168
Slide 169: Macro data
Macro data % 2003e 2004e 2005e Gross domestic product DK 0.4 2.5 2.4 FI 1.9 3.0 3.5 NO 0.7 3.8 2.8 SE 1.6 2.7 3.0 Inflation DK 2.1 1.3 1.9 FI 1.3 0.6 1.8 NO 2.5 0.4 1.9 SE 2.1 0.4 1.5 Private consumption DK 1.1 3.2 2.5 FI 3.6 3.3 2.7 NO 3.7 4.9 3.3 SE 2.0 2.6 2.9 Unemployment DK 5.9 6.1 5.6 FI 9.0 8
Slide 170: Market development - GDP
Market development - GDP % 2002 2003e 2004e 2005e Denmark 1.0 0.4 2.5 2.4 Finland 2.2 1.9 3.0 3.5 Norway 1.7 0.7 3.8 2.8 Sweden 2.1 1.6 2.7 3.0 In Norway, forecasts are for mainland GDP 170
Slide 171: Gross domestic product
Gross domestic product Change in % YoY 10 8 6 4 2 0 -2 -4 -6 -8 -10 Q1/90 Q1/93 Q1/96 Q1/99 Q1/02 Denmark Finland Norway Sweden 171
Slide 172: Inflation
Inflation % 14 12 10 8 6 4 2 0 -2 1990 1992 1994 1996 1998 2000 2002 2004 Denmark Finland Norway Sweden 172
Slide 173: Private consumption
Private consumption Change in % YoY 10 8 6 4 2 0 -2 -4 -6 -8 Q1/90 Q1/93 Q1/96 Q1/99 Q1/02 Denmark Finland Norway Sweden 173
Slide 174: Household saving rates
Household saving rates % 12 10 8 6 4 2 0 -2 -4 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Denmark Finland Norway Sweden 174
Slide 175: Unemployment
Unemployment % of labour force 20 15 10 5 0 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 199 199 199 199 199 199 199 199 199 199 200 200 200 200 200 Denmark Finland Norway Sweden 175
Slide 176: Credit growth total lending to non-bank sector
Credit growth total lending to non-bank sector Change in % YoY 15 10 5 0 -5 -10 ch ch ar n ne ne pt pt ec ec p ec u e -M Se Se ar ar Ju Ju -J D D -D -S M M 04 02 96 99 02 03 97 00 98 01 96 99 Denmark Finland Norway Sweden 176
Slide 177: Bankruptcies
Bankruptcies Number of bankruptcies per month 1800 1600 1400 1200 1000 800 600 400 200 0 94 95 96 97 98 99 00 01 02 03 04 n- n- n- n- n- n- n- n- n- n- n- Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Denmark Finland Norway Sweden 177
Slide 178: Exchange rate, EUR/USD
178 2/ 1 /9 0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2 1.25 1.3 2/ 8 4 USD /9 2/ 8 7 2/ /9 8 10 / 2/ 98 1 / 2/ 9 9 4 /9 2/ 9 7 2/ /9 9 10 / 2/ 99 1 / 2/ 0 0 4 / 2/ 0 0 7 2/ /0 0 10 / 2/ 00 1 /0 2/ 1 4 /0 2/ 1 7 2/ /0 1 Exchange rate, EUR/USD 10 / 2/ 01 1 / 2/ 0 2 4 / 2/ 0 2 7 2/ /0 2 10 / 2/ 02 1 / 2/ 0
Slide 179: Exchange rate, EUR/SEK
179 1/ 1 /9 8 8.4 8.8 9.2 9.6 10 SEK 1/ 8 5 /9 1/ 8 9 /9 1/ 8 1 /9 1/ 9 5 /9 1/ 9 9 /9 1/ 9 1 /0 1/ 0 5 /0 1/ 0 9 /0 1/ 0 1 /0 1/ 1 5 /0 1/ 1 9 /0 Exchange rate, EUR/SEK 1/ 1 1 /0 1/ 2 5 /0 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 1/ 3 1 /0 1/ 4 5 /0 4
Slide 180: Exchange rate, EUR/NOK
180 1/ 1 /9 7 7.5 8 8.5 9 9.5 10 1/ 8 NOK 5 /9 1/ 8 9 /9 1/ 8 1 /9 1/ 9 5 /9 1/ 9 9 /9 1/ 9 1 /0 1/ 0 5 /0 1/ 0 9 /0 1/ 0 1 /0 1/ 1 5 /0 1/ 1 9 /0 Exchange rate, EUR/NOK 1/ 1 1 /0 1/ 2 5 /0 1/ 2 9 /0 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 1/ 3 1 /0 1/ 4 5 /0 4
Slide 181: Oil price development, Brent, USD/Barrel
181 1/ 1 /9 0 5 10 15 20 25 30 35 40 45 50 0 Dollar 1/ 1 /9 1 1/ 1 /9 2 1/ 1 /9 3 1/ 1 /9 4 1/ 1 /9 5 1/ 1 /9 6 1/ 1 /9 7 1/ 1 /9 8 1/ 1 /9 9 1/ 1 /0 0 1/ 1 /0 1 1/ 1 /0 2 1/ 1 /0 3 Oil price development, Brent, USD/Barrel 1/ 1 /0 4
Slide 182: Stock exchange indices
Stock exchange indices Index 100 = 1997 800 700 600 500 400 300 200 100 0 7 7 8 8 9 9 0 0 1 1 2 2 3 3 4 4 /9 /9 /9 /9 /9 /9 /0 /0 /0 /0 /0 /0 /0 /0 /0 /0 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ 2/ KAX Index HEX Index Oslo Total Index AFGX Index 182
Slide 183: Money market, 3 month rates
183 1/ 1 /9 0 1 2 3 4 5 6 7 8 9 10 % 1/ 8 4 /9 1/ 8 7 1 / / 98 10 /9 1/ 8 1 /9 1/ 9 4 /9 1/ 9 7 Denmark 1 / / 99 10 /9 1/ 9 1 /0 1/ 0 4 /0 1/ 0 7 Finland 1 / / 00 10 /0 1/ 0 1 /0 1/ 1 4 /0 1/ 1 7 Norway 1 / / 01 10 /0 1/ 1 1 /0 1/ 2 4 Money market, 3 month rates /0 1/ 2 7 Sweden 1 / / 02 10 /0 1/ 2
Slide 184: Government bond, 10 year
184 1/ 1 /9 % 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 1/ 8 5 /9 1/ 8 9 /9 1/ 8 1 /9 1/ 9 5 /9 1/ 9 9 Denmark /9 1/ 9 1 /0 1/ 0 5 /0 1/ 0 9 Finland /0 1/ 0 1 /0 1/ 1 5 /0 1/ 1 9 Norway /0 Government bond, 10 year 1/ 1 1 /0 1/ 2 5 /0 1/ 2 9 /0 Sweden 1/ 2 1 /0 1/ 3 5 /0 1/ 3 9 /0 1/ 3 1 /0 1/ 4 5 /0 4
Slide 185: Financial calendar 2004
Financial calendar 2004 l Q3 report 2004 will be published on 27 October 2004 www.nordea.com/ir 185