Slide 1: Interim Report Second Quarter 2007
Interim Report Second Quarter 2007 Press conference 19 July 2007 Christian Clausen President and Group CEO
Slide 2: Growth strategy consistently delivers strong results
Growth strategy consistently delivers strong results Income EUR 3,830m, up 8% (EUR 3,534m in the first half year of 2006) Costs EUR 2,000m, up 6% (EUR 1.878m) Profit before loan losses EUR 1,830m up 11% (EUR 1,656m) Risk-adjusted profit EUR 1,197m, up 17% (EUR 1,024m) Operating profit EUR
Slide 3: On the route to Great Nordea
On the route to Great Nordea Profit orientation High ambitions Growth strategy Strong customer-orientated culture Operating model Values 3
Slide 4: Operating income up 8% H1 2007
Operating income up 8% H1 2007 Profit orientation High ambitions Growth strategy Strong customer-oriented culture YoY Operating model EURm Continued growth in Net interest income 1,957 2,000 1,898 1,873 – up 9% 1,780 1,800 1,734 Double-digit lending growth compensating for margin pressure 1,600
Slide 5: Moderate cost increase while investing in future growth
Moderate cost increase while investing in Profit orientation High ambitions Growth strategy future growth Strong customer-oriented culture Operating model Cost growth according to plan YoY 7% 6.3% 6% 5.4% Expense growth on track to meet full 5% year target 4% 3% Unchanged cost focus in parallel
Slide 6: Profit before loan losses up 11% H1 2007
Profit before loan losses up 11% H1 2007 Profit orientation High ambitions Growth strategy Strong customer-oriented culture Operating model EURm 1,100 Strong contribution from all Business 1,000 949 Areas – driven by revenue generation 882 881 900 835 806 Consistent delivery of growth initiative
Slide 7: Gap between income and cost growth on track
Gap between income and cost growth Profit orientation High ambitions Growth strategy on track Strong customer-oriented culture Operating model %-points Gap of 2.6%-points in H107 – excl. 8 banking operations in Russia 7 Income up 8.5% Expenses up 5.9% 6 5.4 Improved gap in Q2 vs Q1– in line
Slide 8: Cost/income ratio continued down
Cost/income ratio continued down Profit orientation High ambitions Growth strategy Strong customer-oriented culture Operating model % 70 64 63 60 60 56 Strong revenue generation 53 52 50 Moderate cost growth despite high activity level 40 Continued productivity gains 30 20 10 0 2002 2003 2004
Slide 9: Strong and well diversified credit portfolio
Strong and well diversified credit portfolio Profit orientation High ambitions Growth strategy Strong customer-oriented culture Net loan losses, EURm Operating model 0 -10 -13 -20 -30 Continued recoveries and limited new provisions in H1 -28 -40 -50 -60 -55 Credit quality remains stable cross se
Slide 10: Basel II approval in place for Corporate and Institutions
Basel II approval in place for Profit orientation High ambitions Growth strategy “Corporate and Institutions” Strong customer-oriented culture Operating model Nordea’s IRB model approved Corporate and Institutions Covering approx. 50% of Nordea’s total credit portfolio Standardised model for
Slide 11: Ambitious financial targets
Ambitious financial targets Profit orientation High ambitions Growth strategy Strong customer-oriented culture Operating model Long term financial targets Target In the top quartile of Total Shareholder Return (%) European peer group Risk adjusted profit (EUR m) Double in 7 years Return on Equity (%
Slide 12: Total shareholder return (TSR)
Profit orientation Total shareholder return (TSR) High ambitions Growth strategy Jan – June 2007 Strong customer-oriented culture Operating model % Top quartile 45 35 25 15 3.7 5 -5 -15 -25 ro D nk nd cr s s N k Ll k ito h s ed k r er C N B nB ke R en P B S a e de U o yd Sa la y an n bo n de O Am N
Slide 13: Risk Adjusted Profit up 17% H1 2007
Risk Adjusted Profit up 17% H1 2007 Profit orientation High ambitions Growth strategy Strong customer-oriented culture Operating model EURm % 30 600 Doubling of risk adjusted profit in 7 500 years implies a 10% growth in profit 20 every year 400 Strong revenue generation – organic 300 growth str
Slide 14: Return on equity (ROE) – Nordic Peers
Return on equity (ROE) – Nordic Peers Profit orientation High ambitions Growth strategy Strong customer-oriented culture Operating model % 25 23.6 Nordea’s RoE consistently above 22.4 22.6 21.1 21.5 Nordic average 20.2 20 19.7 Combined focus on 18 17.8 Organic growth Operational efficiency 1
Slide 15: Growth strategy continues to pay off
Growth strategy continues to pay off Profit orientation High ambitions Growth strategy Strong customer-oriented culture Each focus area has clearly identified initiatives Operating model Migrate customers up the Private Banking segments - Gold customers segments in focus Small & Medium Enterpr
Slide 16: Increasing number of customers in premium segments drives income growth
Increasing number of customers in Profit orientation High ambitions Growth strategy premium segments drives income growth Strong customer-oriented culture Operating model Gold segment YoY 15.2% 6.3% Strong growth in business with 8.4% 169 Gold customers generated by 71 146 2.4 67 Increased numbe
Slide 17: Continued revenue growth in all Retail corporate segments
Continued revenue growth in all Retail Profit orientation High ambitions Growth strategy corporate segments Strong customer-oriented culture Operating model Income growth YoY Strong revenue growth in all Retail 11% corporate segments Accelerating revenue growth Q2/Q1 8% Increase in both lendin
Slide 18: Successful penetration of SME segment
Successful penetration of SME segment Profit orientation High ambitions Growth strategy Strong customer-oriented culture Total revenues in Markets related to Retail Operating model corporate clients Increased penetration of Retail EURm 70 65 corporates of products from Nordea 60 57 56 Markets 50 5
Slide 19: Further strengthened position within long term savings
Further strengthened position within long Profit orientation High ambitions Growth strategy term savings Strong customer-oriented culture Operating model Accumulated net inflow (EURbn) 35 Net inflow in H1 2007 EUR 1.3bn Outflow in Q2 mainly on institutional clients 30 Strongest inflow within P
Slide 20: Improved market position within consumer lending and cards
Improved market position within consumer Profit orientation High ambitions Growth strategy lending and cards Strong customer-oriented culture Operating model YoY Retail consumer lending Lending Margin Consumer lending up 14% EURbn % Non-collateralised up 17% 17 Strong growth in home equity pro
Slide 21: Profitability in Life continues to improve
Profitability in Life continues to improve Profit orientation High ambitions Growth strategy Strong customer-oriented culture Life product result and 12-month rolling Gross Operating model Written Premiums (GWP) Product result up by 29% Q2/Q2 and EURm EURm-GWP 80 4,000 16% YoY 70 3,500 Swedish L
Slide 22: Strong revenue growth in Nordea Markets
Profit orientation Strong revenue growth in Nordea Markets High ambitions Growth strategy Strong customer-oriented culture Operating model Total revenues Nordea Markets EURm Customer activity continues at high 250 level 225 229 242 242 All segments showing high business 200 activity 194 175 180
Slide 23: Growth plan in Sweden well on track
Growth plan in Sweden well on track Profit orientation High ambitions Growth strategy Customer orientation Operating model Number of Gold customers up 6% in Q2 Gold customers Regional banks in Sweden annualised – accelerating growth rate 735 746 since launch of growth plan 725 714 719 Growth Pla
Slide 24: Growth in revenues from New European Markets
Growth in revenues from New European Profit orientation High ambitions Growth strategy Markets YoY Strong customer-oriented culture Operating model Total income New European Orgresbank consolidated in income statement as per Markets* EURm Q2 with revenues of EUR 19m 70 60 63 New European Markets
Slide 25: Updated vision and values to support growth strategy
Profit orientation Updated vision and values to support High ambitions Growth strategy growth strategy Strong customer-oriented culture Operating model Mission The leading Nordic bank, Vision acknowledged for its people creating superior value for customers and shareholders Great customer It’s all a
Slide 26: New operating model to support growth strategy – implementation on track
New operating model to support growth Profit orientation High ambitions Growth strategy strategy – implementation on track Strong customer-oriented culture Operating model Banking & Capital Group Services People & Identity Household & Corporate Nordic Banking Market Products & Technology Account Pro
Slide 27: Outlook 2007
Outlook 2007 The strong revenue growth is expected to continue in the second half of 2007 As previously stated cost increase for the full-year 2007 is expected to be of the same magnitude as in 2006, ie 4-5% Incl. Orgresbank and planned investments in Russia the cost increase is expected to be
Slide 28: Summary – Second Quarter 2007
Summary – Second Quarter 2007 Consistent delivery on organic growth strategy – on track with financial targets Revenues up 8% Profit before loan losses 11% Risk adjusted profit up 17% Gap between revenue and cost increase of 2.6%-points in H107 RoE 19.5% Double digit increase in busine
Slide 29: Disclaimer
Disclaimer Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or