Slide 1: Quarterly Report January – March 2009
Quarterly Report January – March 2009 Press and analyst conference 29 April Christian Clausen President and Group CEO
Slide 2: Strong start of the year
Strong start of the year Organic growth Cost management Support to customers Revenues up 5%* Expenses down 5% Total lending up 2% Q1 2008 Q4 2008 Q1 2009 Q1 2008 Q4 2008 Q1 2009 Q1 2008 Q4 2008 Q1 2009 Loan losses in line Risk-adjusted profit Strong capital base with guidance 54 Bps Up 21% Target 9%
Slide 3: Result highlights
Result highlights EURm Q1 2009 Q4 2008* Chg % Q1 2008 Chg % Net interest income 1,356 1,386 -2 1,181 15 Net fee and commission income 381 390 -2 495 -23 Net gains/losses 515 325 58 284 81 Equity method 9 45 -18 Other income 18 20 19 Total operating income 2,279 2,166 5 1,961 16 Staff costs -665 -655
Slide 4: Underlying business trends
Underlying business trends Q1 2009 with unchanged Q1 2009 with translation unchanged EURm Q1 2009 Q4 2008 Chg % currencies Chg % translation currencies Chg % (compared with (compared with Q1 Q4 2008 excluding 2008) gain from NCSD) Total operating income 2,279 2,251 1 2,370 9 2,389 22 Total operating
Slide 5: Continued support to core corporate customers
Continued support to core corporate customers Total income corporate customers, Income from corporate customers EURm maintained at high level – up 3% in local 1 058 1 041 currency 870 Up 20% compared to first quarter 2008 - strong contribution from NII and customer driven capital markets operati
Slide 6: Increased activity among household customers
Increased activity among household customers Income from business with household Total income household customers, customers down 9% in Q1 2009 EURm Severe pressure on deposit margins 844 841 and lower savings-related fees in total 764 having a negative impact Both mortgage and consumer lendin
Slide 7: Net interest income – stable at record levels
Net interest income – stable at record levels Q1oQ4 Net interest income remained around record Net interest income, EURm levels – reported decrease entirely explained 1,426 by fewer banking days Despite the negative effect from heavy pressure on deposit margins – approx EUR 180m NII up 3% in l
Slide 8: Net fee and commission income stabilising
Net fee and commission income stabilising Net fee and commission, EURm Q1oQ4 495 Down 2% - up 2% in local currency Savings-related commission down 11% 390 381 Stabilising AuM - unchanged compared to previous quarter following rebound late in the quarter Lending-related commission up 16% Hi
Slide 9: Net gains/losses up 58% - record result in Capital Markets
Net gains/losses up 58% - record result in Capital Markets Q1oQ4 Strong result in Capital Markets Maintained high activity level in customer Net gains/losses, EURm areas 528 Increased demand for risk management products in volatile markets - mainly interest rate and FX- products Result benef
Slide 10: Continued focus on cost management – expenses in line with outlook
Continued focus on cost management – expenses in line with outlook Q1oQ4 Down 5% compared to previous quarter – Total operating expenses, EURm unchanged in local currencies 1 150 Cost/income ratio improved to 48%, 1 090 1 055 compared to 51% previous quarter – 54% one year ago Measurements to
Slide 11: Loan losses – in line with expectations
Loan losses – in line with expectations Net loan losses, EURm Q1oQ4 Net loan losses EUR 356m or 54bps in Q1 – 356 320 gross provisions somewhat lower Continued high provisioning both for collectively and individually assessed loans as well as lower reversals and recoveries 21 Loan losses conti
Slide 12: Weakening economy effecting impaired loans
Weakening economy effecting impaired loans Impaired loans and recivables, EURm Increased gross impaired loans in first quarter 1 116 835 – up 33% to 100bps of total lending 515 68bps net of allowances 1 849 1 389 928 62% of the impaired loans are still performing Q1 2008 Q4 2008 Q1 2009 Incr
Slide 13: Well provisioned Baltic portfolio
Well provisioned Baltic portfolio Annualised Q1 loan losses 119bps of which Corporate exposure Baltic countries 60% collective Increased impaired loans in the Baltic State; 7% State; 7% State; 3% countries, now amounting to EUR 256m or Small local; 342bps of total lending 2% Midsize Increase d
Slide 14: Approximately half of the credit portfolio is low risk – a few challenging areas
Approximately half of the credit portfolio is low risk – a few challenging areas Total lending to public Q1 2009, EUR 274bn Companies owned by Private Equity funds – 3% of total lending Commercial real estate Mortgage lending Well diversified between industries Construction Residential real esta
Slide 15: Operating profit up 7%
Operating profit up 7% 1 189 Q1oQ4 1 101 Despite high net loan losses operating 906 profit up 7% from Q4 and down 6% 885 781 833 compared to the level in Q1 2008 In local currencies profit before loan losses increased by 11% to a new record level Profit before loan losses Operating profit Q1 200
Slide 16: Long term financial targets unchanged
Long term financial targets unchanged Long term financial targets Target 2008 Q1 2009 TSR (%) In the top quartile of # 2 of 20 # 6 of 20 European peer group Risk adjusted profit (EUR m)¹ Double in 7 years² 16.7%³ 27.0%³ RoE (%) In line with top Nordic peers 15.3% 13.9% Capital structure policy Polic
Slide 17: Total shareholder return (TSR)
17 -60 -40 -20 0 20 40 60 % Allied Irish Bank RBS KBC Bank of Ireland Commerzbank Lloyds Intesa Sanpaolo BBVA 1/1 2009 – 27/4 2009 Erste Santander Societe Generale Swedbank Total shareholder return (TSR) Danske Unicredit SHB BNP Paribas SEB Nordea 35,9 Top quartile DnBNOR Barclays Source: ThomsonReu
Slide 18: Risk-adjusted profit
Risk-adjusted profit Accumulated risk-adjusted profit* Accumulated Risk-adjusted profit 27.0% since target introduced 27,0% January 1 2007 Strong result in Treasury operations and Nordea Markets the last two quarters 15,0% 15,3% 16,5% 12,6% 14,3% Up 21% compared to the fourth 8,4% 14,1% quarte
Slide 19: Middle of the road approach
Nordea ” Middle of the road approach
Slide 20: By applying the “middle of the road” the aim is to maintain the high business momentum
By applying the “middle of the road” the aim is to maintain the high business momentum Not reacting to the Over-reacting to the downturn Middle of the road situation 9 Unchanged lending 9 Focus on core customers – 9 Closing down growth growth selected new business initiatives opportunities 9 Unchang
Slide 21: Nordea maintain the organic growth strategy but adjust speed to prevailing market conditions
Nordea maintain the organic growth strategy but adjust speed to prevailing market conditions Increase business with existing Exploit global and Supplement Nordic Nordic customers and attract new European growth through customers business lines investments in New European Markets Manage risk Existing
Slide 22: Relationship-driven growth strategy proven successful
Relationship-driven growth strategy proven successful Nordea’s credibility and stability have positive impact on customer loyalty and customer acquisition Nordic 926 000 new Gold customers in Q1, in line with plans Banking Record high level of 360-degree customer meetings 9100% more customer meeting
Slide 23: Cost- risk- and capital management has taken the lead
Cost- risk- and capital management has taken the lead Costs 9 Accelerated ongoing efficiency programs – costs down in Q1 9 General right-sizing of staff – staff reduction during 2009 Profit orientation Risk Ambitious vision 9 Step up risk management – emphasising pro-activity and targets 9 Additiona
Slide 24: Continued good demand for Nordea issuance
Continued good demand for Nordea issuance During first quarter 2009 Nordea issued Total long-term funding issued approx EUR 7.3 bn long-term funding (EURbn) Covered bond issuance EUR 4,6bn 30,7 Nordea Bank Denmark EUR 1.5 bn issuance 27,5 based on the Danish Act of Financial Stability (Oct 200
Slide 25: Step up risk management – emphasis on pro-activity
Step up risk management – emphasis on pro-activity Special attention areas Risk management initiatives 2009 Commercial real estate Additional credit reviews in branch regions Construction Dry bulk/Container Work-out teams reinforced in all countries PE companies Core units in each country –exp
Slide 26: Successful outcome of the rights offering
Successful outcome of the rights offering Final outcome shows the aggregated total subscription level (including both with and without subscription rights) ended at slightly above 128% of total shares offered Since the rights-offering was clearly oversubscribed the underwriting guarantees was no
Slide 27: Nordea – one of the strongest banks in Europe
Nordea – one of the strongest banks in Europe Core Tier 1 capital ratio excluding transition rules Nordea compared with its 14,5 * European peer group, % 12,1* 10,4 10,0 9,7 9,1 8,9 8,8 8,6 8,3 7,8 7,6 8,0 7,3 7,2 7,2 6,6 6,5 6,5 6,0 5,8 Nordea Median Source: Public reports from respective banks Not
Slide 28: Capital position following capital measures
Capital position following capital measures Capital ratios for Q1/09 and Q4/08 including The core Tier 1 ratio and the Tier rights issue, % 1 ratio well above targets in 10,8 10,9 Nordeas capital policy 10,0 10,0 9,9 8,6 9,1 Target Following completion of rights 7,9 8,2 9.0 7,5 7,2 issue, the ca
Slide 29: By applying the “middle of the road” we trust we can maintain the high business momentum
Growth strategy By applying the “middle of the road” we trust we can maintain the high business momentum 2009 priorities 2 251 2 279 Existing relationships 2 022 1 957 1 961 1 992 1 996 1 898 1 873 1 914 Grow share of wallet through 1 754 1 780 1 734 less capital-consuming products Selective custome
Slide 30: Concluding remarks and outlook 2009
Concluding remarks and outlook 2009 Strong start of the year – record result in Markets Continued strong income momentum – high activity among customers Organic growth strategy adjusted – ‘Middle of the road’ Stringent cost management – expenses in line with outlook Net loan losses in Q1 i
Slide 31: The leading Nordic bank
The leading Nordic bank, acknowledged for its people, creating superior value for customers and shareholders. 31