Slide 1: First Quarter Report 2010
First Quarter Report 2010 Press and analyst conference 28 April 2010 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: Strong first quarter results
Strong first quarter results Total income up 7% Total expenses down 5%* Loan losses 37bps Q1 2009 Q4 2009 Q1 2010 Q1 2009 Q4 2009 Q1 2010 Q1 2009 Q4 2009 Q1 2010 Operating profit up 48% Risk-adjusted profit up 27% Return on Equity 11.3% Q1 2009 Q4 2009 Q1 2010 Q1 2009 Q4 2009 Q1 2010 Q1 2009 Q4 2009
Slide 4: Result highlights
Result highlights EURm Q1/10 Q4/09 Chg % Q1/09 Chg % Net interest income 1,235 1,299 -5 1,356 -9 Net fee and commission income 475 463 3 381 25 Net result from items at fair value 548 351 56 515 6 Other income 45 45 0 27 67 Total income 2,303 2,158 7 2,279 1 Staff costs -687 -702 -2 -665 3 Total exp
Slide 5: Net interest income down 5% from high levels
Net interest income down 5% from high levels Net interest income, EURm Remains subdued by the low interest rate levels 1,356 1,299 1,235 Underlying increase in customer operations – volumes and margins Decrease in Group Treasury Negative impact from day count Total lending up 4% Continue
Slide 6: Positive trend continues - Net fee and commission income up 3%
Positive trend continues - Net fee and commission income up 3% Net fee and commission, EURm Strong performance in savings area 463 475 Asset management commissions up 6% from a strong Q4 381 Lending commissions up 8% Payment commissions up 7% Commission expenses for state schemes largely u
Slide 7: Strong demand for risk management products
Strong demand for risk management products Net result from items at fair value, Capital markets activities in customer EURm areas continues to perform 548 Underlying corporate demand for fixed 515 income and FX products stabilising High demand for credit bonds from 351 institutional clients
Slide 8: Total expenses according to plan
Total expenses according to plan Total operating expenses, EURm Underlying expenses down 2% - adjusting for restructuring expenses 1,219 1,164 in Q4 and changes in exchange 1,090 rates Up 3% compared Q1 2009 Underlying staff costs up 1% in Q1 Number of employees increased by 130 Cost/incom
Slide 9: Credit quality continue to stabilise
Credit quality continue to stabilise Net loan losses, EURm Net loan loss ratio 37bps (52bps) 54bps 26bps individual (40bps) 52bps 356 347 11bps collective (12bps) 37bps 166bps in the Baltic countries (338bps) 261 Lower loan losses mainly found in Denmark, Sweden and the Baltic countries
Slide 10: Growth in impaired loans continues to level out
Growth in impaired loans continues to level out Impaired loans, EURm Impaired loans gross up 5% to EUR 1 868 2 076 4,453m or 140 bps of total lending – 4% 1 116 in local currencies 1 849 2 372 2 377 7% in Q4, 9% in Q3 and 19% in Q2 Q1 2009 Q4 2009 Q1 2010 53% impaired loans are still performin
Slide 11: Operating profit high and stable
Operating profit high and stable Operating profit, EURm 978 1.078 932 895 885 883 878 847 833 832 818 781 592 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Operating profit Loan losses Write backs 11 28 April 2010 First Quarter Report 2010
Slide 12: Continued delivery on long-term targets
Continued delivery on long-term targets Risk-adjusted profit TSR 2007 - Q1 2010 - on track to reach 2013 target 20 2% 0 38.9% 38.0% -20 -40 Top quartile -60 -80 -100 Allied Irish Banks Bank of Ireland Intesa Sanpaolo DnBNOR Unicredit Santander Lloyds Barclays Commerzbank Swedbank Nordea Bank Societe
Slide 13: Outlook 2010
Outlook 2010 Nordea expects the macro economic recovery to continue in 2010, but the development is still fragile and hence uncertainty remains Excluding currency effects in 2010, cost growth is expected to be broadly in line with 2009 – including the effects from growth and efficiency initiativ
Slide 14: Business development
Business development 14 28 April 2010 First Quarter Report 2010
Slide 15: Continued strong customer demand in household segment
Continued strong customer demand in household segment Total income household The strong underlying customer segment, EURm volume- and margin development 784 766 765 continues Pressure on income from deposit remains The strengthened Nordea brand name continues to attract customers in Q1 2009 Q4
Slide 16: Building strong relationships with key customers
Building strong relationships with key customers The 3600 meeting Increased customer activity Savings and investments 360-degree meetings at record levels Daily Planned pro-active sales Insurance banking Continued increase in number of transactions - funds, equity trading and Lending structu
Slide 17: Positive macro signs drives corporate activity
Positive macro signs drives corporate activity Total income CMB and Large, Increased business confidence among EURm corporate customers in Q1 604 549 567 Lending volumes slightly up Lending margins continues to improve reflecting re-pricing of credit risk and higher liquidity premiums Q1 2009
Slide 18: Institutional & International Banking
Institutional & International Banking Shipping, Oil Services & International – confidence returning to the market Somewhat increase in activity level Margins continued up in the quarter Financial Institutions – several mandates won Strong market standing enabled Nordea to further strengthe
Slide 19: Continued high customer activity within Capital Markets Products
Continued high customer activity within Capital Markets Products Product result CMP, EURm Increased competition and tightening of spreads across all products 472 390 356 Strong corporate demand for risk- management products despite decreasing market volatility Q1 2009 Q4 2009 Q1 2010 Increased
Slide 20: Asset under Management at record level
Asset under Management at record level Asset under Management (AuM), EURbn AuM EUR 169bn 169 157 158 Up 7% or EUR 11.2bn in Q1 126 Net inflow EUR 3.1bn – 8% annualised 2007 2008 2009 Q1 2010 Increased market shares Net flows AuM, EURbn 3.5 3.1 2.9 2.8 0.9 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Nordic
Slide 21: High business activity within in Life & Pensions
High business activity within in Life & Pensions Gross Premiums Written, EURm Gross premiums written at record levels 1,398 Growth noted in all countries 1,222 1,105 GPW within unit-linked business at all time high Continued success within the Swedish ITP* Solid performance continued to bu
Slide 22: Nordea in a position of strength – implications from new regulatory proposals
Nordea in a position of strength – implications from new regulatory proposals 22 28 April 2010 First Quarter Report 2010
Slide 23: Strong capital position
Strong capital position Capital ratios Q1 2010 13.6 11.2 Capital policy – 10.1 12.3 11.5 Basel II over the 9.0 business cycle 10.1 9.2 Core Tier 1 (excl. Tier 1 ratio Capital ratio hybrids) Transition rules Fully implemented Basel II 23 28 April 2010 First Quarter Report 2010
Slide 24: A clear funding advantage
A clear funding advantage 5-year secondary market spreads senior unsecured, bps 121 89 75 72 68 69 n.a. Nordea Nordic peers Source: Bloomberg as of 29th March 2010, BofA Merrill Lynch 24 28 April 2010 First Quarter Report 2010
Slide 25: Nordea one of the most stable banks in Europe
Nordea one of the most stable banks in Europe - low volatility in operating profit Quarterly variation operating profit*, % >250 183 156 59 38 18 14 Nordea Average European Nordic peers** Peers 25 28 April 2010 First Quarter Report 2010 * Calculation based on covariance of 12 quarters operating prof
Slide 26: Nordea fully support regulatory efforts
Nordea fully support regulatory efforts Each element in the proposals seem logical and right but the combined effects could impact customers and harm economic growth Need for further analysis and calibration Quality is more important than speed when implementing new regulations Flexibility o
Slide 27: Successful start of the Prudent growth strategy
Successful start of the Prudent growth strategy 27 28 April 2010 First Quarter Report 2010
Slide 28: Moving from “profitable organic growth” via “middle of the road” to “prudent growth”
Moving from “profitable organic growth” via “middle of the road” to “prudent growth” Middle of the Profitable organic growth Prudent growth road Great 07 08 09 10 11 12 Nordea Next level strategy based Organic growth strategy on stronger position 9 Keep income growth momentum Group initiatives 9 Cos
Slide 29: Next generation of Group initiatives support “prudent growth”
Next generation of Group initiatives support “prudent growth” Increase business with Exploit global Supplement Nordic existing Nordic customers and European growth through and attract new customers business lines investments in New European Markets 1. Future distribution 6. Growth plan Poland 2. New
Slide 30: Group initiatives to support long-term target of doubling Risk-adjusted profit in seven years
Group initiatives to support long-term target of doubling Risk-adjusted profit in seven years Future distribution Risk adjusted profit, EURm New customer acquisition 3,914 10% CAGR Growth plan Finland required CMB Sweden 2,786 Customer driven Markets business 2,239 2,279 1,957 Growth plan Poland Top
Slide 31: Activities related to the initiatives are well on track and have started in all areas
Activities related to the initiatives are well on track and have started in all areas Future distribution 10 branches transformed to new branch format Number of 360-degree advisory meetings up 60% in new format Time spent on direct customer interaction up 6% Growth in number of customers Ste
Slide 32: Activities related to the initiatives are well on track and have started in all areas
Activities related to the initiatives are well on track and have started in all areas Growth Plan Corporate Merchant Banking (CMB) Sweden Increased share of wallet – cash management mandates won Growth Plan Poland Preparatory work develops according to plan for new branch openings in the latter
Slide 33: Key messages
Key messages Strong result Income up 7% Underlying expenses down 2% Loan losses 37bps (52bps) Operating profit up 48% Risk-adjusted profit up 27% - on track toward long-term target Increased inflow of new customers – confirms the positive trend 12.500 new Gold and Private Banking cus