Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Nordea Kredit — Debt Investor Presentation (February 2024)
27 slides from Nordea Bank Abp's debt investor presentation, February 2024
Slide 1: Nordea Kredit Covered Bonds Q4 2023 Debt Investor Presentation
Nordea Kredit Covered Bonds Q4 2023 Debt Investor Presentation 1
Slide 2: Table of contents
Table of contents 1. Nordea covered bond operations 3 2. Nordea Kredit in brief 5 3. Cover pool key characteristics 7 4. Asset quality 14 5. Underwriting criteria 17 6. Danish covered bond framework 19 7. Macro 21 8. Links and contacts 26 2
Slide 3: 1. Nordea covered bond operations
1. Nordea covered bond operations 3
Slide 4: Nordea covered bond operations
Covered bonds Nordea covered bond operations Nordea Eiendomskreditt Nordea Hypotek Nordea Kredit Nordea Mortgage Bank Four aligned covered bond issuers with complementary roles Legislation Norwegian Swedish Danish Finnish Cover pool assets Norwegian residential Swedish residential Danish residential
Slide 5: 2. Nordea Kredit - in brief
2. Nordea Kredit - in brief alee fee: tly Nordea
Slide 6: Nordea Kredit – in brief
Nordea Kredit – in brief • 100% owned subsidiary of Nordea Bank Abp - the largest Nordic financial institution • Operates as a mortgage credit institution with the main purpose of granting mortgage credit loans funded by issuing covered bonds • Founded in 1993 and supervised by the Danish FSA (DFSA,
Slide 7: 3. Cover pool key characteristics
3. Cover pool key characteristics 7
Slide 8: Cover pool key characteristics
Cover pool key characteristics Q4 2023 Outstanding covered bonds EUR 57.4bn Mortgage credit loans secured by mainly residential property Cover pool content (total: EUR 63.1bn including substitute assets) Geographic distribution Throughout Denmark with concentration in urban areas Weighted average LT
Slide 9: Loan portfolio
Loan portfolio Q4 2023 Market share 1 by property category Market share 1 – overall Q4 2022 Q4 2023 16,8% 16,4% 20% 19% 13,9% 13,0% 18% 11,1% 11,0% 10,9% 10,6% 17% 16% 15% 13,9% 13,8% 13,7% 14% 13,6% 13,4% 13% 3,7% 3,4% 12% 11% 10% Other Private rental Commercial Agricultural Owner occ. Q4 2022 Q1 2
Slide 10: Loan portfolio
Loan portfolio Q4 2023 Loan portfolio by loan type Share of interest-only mortgages 53,4% 53,4% 53,1% 45,8% 42,7% 42,2% 41,9% 48,2% 50,8% 47,2% 24,0% 25,0% 25,0% 23,4% 21,2% 27,9% 28,5% 31,6% 31,3% 31,4% 2.9% 2.1% 1.7% 1.5% 1.7% Q4 2020 Q4 2021 Q4 2022 Q3 2023 Q4 2023 Q4 2020 Q4 2021 Q4 2022 Q3 2023
Slide 11: Loan portfolio
Loan portfolio Q4 2023 Loan balance by region Loan balance by property category 3% 2% 8% 21% 8% 46% 12% 13% 70% 17% Captital region Southern DK North DK Owner occ. dwellings Commercial properties Other properties Zealand region Central DK Rental Agri. properties 11
Slide 12: Green Bonds
Green Bonds Q4 2023 Green lending by asset category Green lending by property category - DKKm Sustainable management and living natural Pollution prevention and 6.618 6.593 resources (organic farms), DKKm 520 control, DKKm 449 Q3 2023 6.394 3,3% 2,9% 6.142 Q4 2023 Renewable energy, DKKm 366 2,3% DKK
Slide 13: Financed emissions – and portfolio by EPCs
Financed emissions – and portfolio by EPCs Q4 2023 Financed emissions 1) Portfolio by EPCs 1, 3) Total Total Financed Financed Total volume Coverage emission emission emission emission Type of property DKKbn (volume) tCO2 tCO2 CO2/DKKbn CO2/sqm EPC Volume DKKbn Owner. Occ. Dwellings 260 99.4% 496,92
Slide 14: 4. Asset quality
4. Asset quality 14
Slide 15: Loan to value (LTV) – loans for residential and commercial properties
Loan to value (LTV) – loans for residential and commercial properties Q4 2023 Loan type Residential loans Commercial loans Weighted average LTV – indexed 54.8% 41.3% LTV buckets Nominal (DKKm) % Loans Nominal (DKKm) % Loans > 0 - ≤ 40 % 244,086 71.0% 59,247 77.1% > 40 - ≤ 50 % 42,973 12.5% 10,242 13
Slide 16: Asset quality
Asset quality Q4 2023 Arrears (owner occupied dwellings and holiday homes) * Loan to value (LTV) weighted average (all loans) 48,8% 0,32% 48,6% 48,6% 0,30% 47,3% 0,28% 0,26% 46,3% 0,24% 0,22% 0,20% 44,1% Sector 0.15% 0,18% (0.15% last quarter) Nordea Kredit 0.15% 0,16% (0.15% last quarter 0,14% 0,12
Slide 17: 5. Underwriting criteria
5. Underwriting criteria alee fee: tly Nordea
Slide 18: Underwriting criteria
Underwriting criteria Private households Corporates, agriculture etc. • Behavioural score and individual credit assessment are • A financial analysis of the customer is made, including conducted based on income information, e.g. payslips and tax adjustments for current market conditions information
Slide 19: 6. Danish covered bond framework
6. Danish covered bond framework 19
Slide 20: Danish covered bond framework
Danish covered bond framework • Legal framework • The Financial Business Act • The Mortgage-Credit Loans and Mortgage-Credit Bonds, etc. Act with several implementing executive orders • Registration • An issuing institution is required to maintain a static cover pool • Mortgage deeds are registered
Slide 21: 7. Macroeconomy
7. Macroeconomy abe fee: tly Nordea
Slide 22: Soft landing
Nordic economic development Soft landing GDP Unemployment rate • The Nordic economies have shown mixed trends on the GDP, % y/y, Economic Outlook January 2024 back of surging inflation and higher interest rates. Country 2022 2023E 2024E 2025E • Central banks are done hiking policy rates. However, th
Slide 23: Past the peak
Nordic economies Past the peak Policy rates Public balance/debt, % of GDP, 2024E (IMF) • The Swedish Riksbank, ECB, Danmarks Nationalbank and Norges Bank are not expected to raise policy rates any further. • The Riksbank is expected to start cutting the policy rate in May, by 0.25 percentage points
Slide 24: Adapting to higher interest rates
Households Adapting to higher interest rates Household debt Household savings Private consumption • Household consumption will remain sluggish as households continue to adapt to the higher interest rates. • In all the Nordics, except for Norway, savings rates have risen whilst households’ debt ratio
Slide 25: Still under pressure from high interest rates
Housing markets Still under pressure from high interest rates Home prices Households’ credit growth • Home price development was mixed last year in the Nordic countries after rising to record-high levels in 2022. • Monetary policy will remain restrictive for most of 2024 despite central banks starti
Slide 26: 8. Links and Contacts
8. Links and Contacts alee fee tly Nordea
Slide 27: Links for more information and Contacts
Links for more information Nordea Kredit Legislation • Nordea Kredit ECBC harmonised transparency templates. • Danish mortgage credit institutions are supervised by the DFSA Link: https://www.nordea.com/en/investor-relations/reports-and- (Finanstilsynet). presentations/bonds/nordea-kredit-covered-bo
Nordea Kredit — Debt Investor Presentation (February 2024) on 6ix