Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Nordic Baltic Holding — H1 2000 Earnings Presentation
55 slides from Nordea Bank Abp's earnings presentation, August 2000
Slide 1: Nordic Baltic Holding January – June 2000
Nordic Baltic Holding January – June 2000
Slide 2: The leading financial services group in the Nordic and Baltic Sea region
The leading financial services group in the Nordic and Baltic Sea region Helsinki Bergen Stockholm St. Petersburg Oslo Tallinn Tartu Copenhagen Gdynia Riga Moscow Hamburg Vilnius Gdansk Berlin Warsaw Luxemburg Frankfurt National network Branch office or subsidiary Branch office of an associated bank
Slide 3: Strong earnings growth
Strong earnings growth l Operating profit up 29%, to EUR 1,359m (SEK 11,4bn) l Earnings per share January-June EUR 0.33, up by 14% l Total income up 16%, expenses up 4% (both excluding acquired business) l Return on equity 18.6% l Strong growth in interest and commission income l Improved ratings
Slide 4: Strong performance in growth areas
Strong performance in growth areas l Strong Retail earnings l E-banking leadership: – e-customers more than 1.6 million, up 0.6 million since the year end – strong growth in customers using online equity trading l Significant growth in Asset Management – EUR 104 bn under management
Slide 5: Decisive steps for Nordic leadership
Decisive steps for Nordic leadership • Merger process: Business integration continues according to plan • Continued expansion in the Baltic Sea region • New bid for Christiania Bank og Kreditkasse, NOK 44 per share • The leading financial services group in the Nordic and Baltic region – Market capit
Slide 6: Merger process proceeds according to plan
Merger process proceeds according to plan l The overall structure of business organisation in place l Integration of foreign units proceeds globally l Common trading floors for foreign exchange and fixed income trading established l Product and service concept integration in progress in all business
Slide 7: Continued expansion in the Baltic Sea region
Continued expansion in the Baltic Sea region l New branches l Tartu in Estonia l Vilnius in Lithuania l Warsaw (Bank Komùnalný) in Poland l New services l Internet services in Estonia l Life insurance operations in Poland expected to begin in the second half of the year
Slide 8: New cash offer for Christiania Bank og Kreditkasse
New cash offer for Christiania Bank og Kreditkasse l Parliamentary decision in Norway to sell the state held shares l A new offer to acquire all shares in Christiania Bank og Kreditkasse at NOK 44 per share l Increased price - greater potential of Christiania Bank og Kreditkasse in the new Group l T
Slide 9: The leading financial services group in the Nordic and Baltic Sea region
The leading financial services group in the Nordic and Baltic Sea region Customer base 9 million private customers 600.000 corporate customers 500 large corporate and many institutional clients Distribution network 1 100 branch offices 125 insurance service centres Leading Internet services Comprehe
Slide 10: The leading financial services group in the Nordic and Baltic Sea region
The leading financial services group in the Nordic and Baltic Sea region Market shares Finland Denmark Sweden Norway Retail Banking Private customers 35% 23% 20% - Corporate customers 46% 25% 16% - Life insurance and pensions 30% 9% 6% 5% Non-Life insurance - 22% - 19%
Slide 11: The largest financial services group in the Nordic region
The largest financial services group in the Nordic region Market capitalisation of Nordic banking groups, August 15, 2000 NBH Handelsbanken FöreningsSparbanken SEB Den Danske Bank Den norske Bank Christiania Bank RealDanmark 0 5 10 15 20 25 bnEUR
Slide 12: Increased profit
Increased profit Jan-June Jan-June Change 2000 1999 Operating profit, mEUR 1,359 1,054 + 29% Return on equity, % 18.6 19.9 Return on equity before goodwill depreciation, % 19.2 - Cost/income ratio (before loan losses), banking 52 57
Slide 13: Key figures – result
Key figures – result % Return on equity % Cost/income ratio * 60 25 20 55 15 10 50 5 0 45 Jan-Jun Jan-Jun Jan-Jun Jan-Jun 2000 1999 2000 1999 * Before loan losses.
Slide 14: Income statement
Income statement Jan - June Jan - June Change mEUR 2000 1999 % Net interest income 1,502 1,386 8 Net commission income 761 536 42 Operating income from insurance 321 255 26 Net result from financial operations 236 140 69 Other income 212 204 4 Total income 3,032 2,521 20 Personnel expenses -913 -812
Slide 15: Income statement
Income statement Jan - June Jan - June Change 2000 1999 % Profit before loan losses 1,413 1,046 35 Loan losses, net -37 -55 -33 Profit from companies accounted for under the equity method 32 81 -60 Op. profit bef. goodwill depreciation 1,408 1,072 31 Goodwill depreciation -49 -18 172 Operating profi
Slide 16: Net interest and commission income
Net interest and commission income mEUR 3000 Net interest income 2500 Net 2000 comission 1500 income 1000 500 0 Q2 Q1 Jan- Jan- Full 2000 2000 June June year 2000 1999 1999
Slide 17: Income from insurance and financial operations
Income from insurance and financial operations mEUR 700 Operating 600 income from insurance 500 400 Net result from 300 financial 200 operations 100 0 Q2 Q1 Jan- Jan- Full 2000 2000 June June year 2000 1999 1999
Slide 18: Expenses
Expenses mEUR 3000 Other 2500 expenses 2000 Personnel expenses 1500 1000 500 0 Q2 Q1 Jan- Jan- Full 2000 2000 June June year 2000 1999 1999
Slide 19: Continued stringent cost control
Continued stringent cost control Factors explaining the expense increase l Acquisition of Vesta and other new business – accounts for more than 50 % of the expense increase l Provisions for bonus payments and other variable salaries related to increased earnings
Slide 20: Profit by business area
Profit by business area Jan-June 2000 mEUR 800 700 Product result 600 500 Operating profit 400 300 200 100 0 Retail Corporate & Investment Asset Life Non-life Instutional Banking Management Insurance & Insurance Pensions
Slide 21: Retail banking
Retail banking Jan-June 2000 l Improved C/I ratio l Continued high sales of e-banking products l Net interest income showed a positive trend l Continued strong growth in commission income l Operating profit EUR 746m l Return on equity 26 %
Slide 22: Group net banking services customers
Group net banking services customers Million 1,6 Denmark 1,4 Sweden 1,2 Finland 1,0 0,8 0,6 0,4 0,2 0,0 Dec Jun Dec Jun Dec Jun Dec Jun 1996 1997 1997 1988 1998 1999 1999 2000
Slide 23: Log-ons by net banking customers
Log-ons by net banking customers Seasonally adjusted Million per month 4,5 4,0 Denmark 3,5 Sweden 3,0 Finland 2,5 2,0 1,5 1,0 0,5 0,0 Dec Jun Dec Jun Dec Jun Dec Jun 1996 1997 1997 1998 1998 1999 1999 2000
Slide 24: Bill payments in the net
Bill payments in the net Seasonally adjusted Million per month 5,0 4,5 Denmark 4,0 Sweden 3,5 3,0 Finland 2,5 2,0 1,5 1,0 0,5 0,0 Dec Jun Dec Jun Dec Jun Dec Jun 1996 1997 1997 1998 1998 1999 1999 2000
Slide 25: Internet banking targets
Internet banking targets l Targets for 2000/2001 – 6 million log-ons in December 2000 – 6 million bill payments per month – 2 million Internet/PC banking customers by the beginning of 2001 l Impact on result – Internet expansion estimated to create possibilities for increased earnings of 350 - 400 m
Slide 26: Corporate and Institutional Banking
Corporate and Institutional Banking Jan-June 2000 l Strong activity in the corporate banking market l Increased demand for foreign exchange products l Operating profit EUR 226m l Return on equity 15 %
Slide 27: Investment Banking
Investment Banking Jan-June 2000 l High ranking in Europe for ArosMaizels Corporate Finance l Strong market position in the Nordic region for ArosMaizels Equities l Operating profit EUR 43m l Product result, equity trading EUR 75m
Slide 28: Asset management
Asset management Jan-June 2000 l Strong growth in assets under management l Top rating for Investment management - one of the leading organisations in Europe l Strong growth and increased profitability in Mutual funds l Largest Nordic private banking operation in Luxemburg l Operating profit, custom
Slide 29: Assets under management
Assets under management bnEUR bnEUR 120 120 100 100 80 Private 80 Danmark banking Finland 60 60 Institutional Sweden 40 40 20 20 0 0 Q2 Q1 Q4 Q2 Q1 Q4 2000 2000 1999 2000 2000 1999
Slide 30: Life Insurance and Pensions
Life Insurance and Pensions Jan-June 2000 l Strong growth in premiums and life insurance provisions - especially in Finland l High investment return l Focus on unit-linked and corporate pension schemes l Return on equity 14 % l Product result EUR 61m
Slide 31: Life insurance, gross premiums
Life insurance, gross premiums mEUR Finland mEUR Sweden mEUR Denmark 500 500 500 400 400 400 300 300 300 200 200 200 100 100 100 0 0 0 Q2 Q1 Q4 Q2 Q1 Q4 Q2 Q1 Q4 2000 2000 1999 2000 2000 1999 2000 2000 1999 Traditional Unit-linked Vesta (traditional)
Slide 32: Non-Life Insurance
Non-Life Insurance Jan-June 2000 l Improved technical result except for a run-off loss from December 1999 hurricane in Denmark (EUR 63m) l Reduced cost base l Operating profit EUR 31m l Return on equity 11 % (33 % excl. the impact of the hurricane)
Slide 33: Balance sheet
Balance sheet bnEUR 200 150 100 50 0 Total assets Loans Deposits June 2000 End 1999
Slide 34: Balance sheet - assets
Balance sheet - assets June 30 Dec 31 Change bnEUR 2000 1999 % Loans to credit institutions and central banks 21 20 5 Loans to the public 109 104 5 Interest-bearing securities Current assets 18 20 -10 Financial fixed assets 6 6 1 Shares and participations 3 3 0 Shares and participations in Group and
Slide 35: Balance sheet - liabilities
Balance sheet - liabilities June 30 Dec 31 Change bnEUR 2000 1999 % Due to credit institutions and central banks 27 26 1 Deposits from the public 65 65 1 Other borrowing from the public 2 2 29 Debt instruments outstanding 47 45 3 Other liabilities, banking 17 15 7 Liabilities, insurance 19 17 11 Sub
Slide 36: Loan portfolio by customer group
Loan portfolio by customer group EUR 108.5 bn (June 30, 2000) Public sector 3% Households 38 % Companies 59 %
Slide 37: Lending to households
Lending to households EUR 40.7 bn (June 30, 2000) Other lending 26.2 % Housing loans 73.8 %
Slide 38: Lending to companies
Lending to companies EUR 64.6 bn (June 30, 2000) Other companies Real estate 19 % 20 % Renting, consulting and Construction other services 4% 12 % Transport 9% Financial operations 8% Commerce & Manufacturing Services 17 % 11 %
Slide 39: Doubtful loans
Doubtful loans mEUR % 4000 Gross 3500 Net 3000 2500 2000 1500 1000 500 0 June 30 2000 June 30 1999
Slide 40: Loan losses, net
Loan losses, net mEUR 100 75 50 25 0 Q2 Q1 Jan- Jan- Full 2000 2000 June June year 2000 1999 1999
Slide 41: Loan losses and doubtful loans, net
Loan losses and doubtful loans, net Per cent of net lending % 1,2 1,0 Net loan losses 0,8 0,6 Net doubtful 0,4 loans 0,2 0,0 June 30 Dec 31 June 30 2000 1999 1999
Slide 42: Ratings, August 2000
Ratings, August 2000 Merita Nord- Uni- NB Uni- Bank banken bank Hypotek kredit Moody's Short-term P-1 P-1 P-1 P-1 Long-term Aa3 Aa3 Aa3 Aa3 Aa2 S&P Short-term A-1 A-1 A-1 A-1 Long-term A A Fitch IBCA Short-term F1 F1 F1 Long-term A+ A+ A+ Thomson Bankwatch Short-term TBW-1 TBW-1 TBW-1 Long-term AA-
Slide 43: Earnings per share
Earnings per share EURO 0,60 0,50 0,40 0,30 0,20 0,10 0,00 Jan-June 2000 Jan-June 1999 Full year 1999
Slide 44: Equity per share
Equity per share EURO 4,00 3,00 2,00 1,00 0,00 June 2000 Year end 1999 June 1999
Slide 45: Share price development in 2000
Share price development in 2000 Dec 31, 1999 =100 160 140 120 100 80 60 Jan Feb March Apr May Jun July Aug DJ Europe Stoxx Banks Nordic Baltic Holding
Slide 46: Operative goal
Operative goal To create value to the shareholders in line with the best among European financial services companies. Value to the shareholders is realised through market value growth per share and dividends.
Slide 47: Creating Value
Creating Value Shareholders Maximising value Customers Employees Maximum level of Most attractive satisfaction among employer in the growing number of region with a loyal customers commitment to world- class competence
Slide 48: Creation of added value
Creation of added value Strategic focus • Leading role in the Nordic and the Baltic Sea region • Financial solutions in co-operation with customers • Europe’s leading provider of Internet banking services • Competence a competitive asset
Slide 49: Creation of added value
Creation of added value Operating efficiency • Common values • Integrated organisation and common identity • Cost awareness • One share - one group - one bank
Slide 50: Creation of added value
Creation of added value Optimal financial structure • Capital limited to operating requirements Credible profit growth • Regional leader • Added value through operating objectives
Slide 51: NBH financial objectives
NBH financial objectives Return on equity l to exceed the risk-free Euro interest rate + 8 percentage points Tier 1 capital l A core capital ratio of 6.5 per cent in banking deemed sufficient Dividend pay out l As a rule to exceed 40 per cent of net profit
Slide 52: NBH financial objectives
NBH financial objectives Expenses lcost/income ratio before loan losses < 55 per cent in banking lcombined ratio <100 per cent in non-life insurance Risk exposure lAverage loan losses over a business cycle <0,4 per cent of the loan portfolio
Slide 53: Group structure
Group structure Group Management Group Staffs & Service Units Corporate & Life Investment Asset Retail Non-life Institutional Insurance & Banking Management Banking Insurance Banking Pensions Retail Retail Retail Banking Banking Banking Denmark Finland Sweden Retail Banking Baltic & Poland
Slide 54: Legal structure, June 2000
Legal structure, June 2000 Nordic Baltic Holding (NBH) AB (publ) 60% 99,2% Merita Plc 40% MeritaNordbanken Plc Unidanmark A/S Other Other Merita Bank Plc Nordbanken AB Unibank A/S Tryg-Baltica A/S operations operations Vesta Forsikring A/S
Slide 55: Contact information
Contact information Nordic Baltic Holding Investor Relations SE-105 71 STOCKHOLM FIN-00020 MERITA Telephone:+ 46 8 614 7850 + 358 9 165 42646 Telefax: +46 8 614 8710 + 358 9 612 1264 E-mail: investor.relations@nb.se merita.investorrelations@merita.fi P.O.BOX 850 DK-0900 COPENHAGEN INFORMATION ON THE
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