Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Q3 2021 Earnings Presentation
22 slides from Nordea Bank Abp's earnings presentation, October 2021
Slide 1: Third-quarter results 2021
Third-quarter results 2021
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: Executive summary
Executive summary • Continued strong growth in customer business volumes across Nordics ➢ Mortgage volumes up 6% y/y, SME lending up 9% y/y and assets under management up 21% y/y to all-time high of EUR 393bn • Strong result, supported by quality income growth and good cost management ➢ Net interest
Slide 4: Group quarterly results Q3 2021
Group quarterly results Q3 2021 Income statement and key ratios Q321 Q320 Q3/Q3 Q221 Q3/Q2 EURm Net interest income 1,226 1,146 7% 1,232 0% Net fee and commission income 870 729 19 % 878 -1 % Net fair value result 224 257 -13 % 278 -19 % Other income 24 23 4% 30 -20 % Total operating income 2,344 2,
Slide 5: Net interest income – continued strong growth in customer business volumes
Net interest income – continued strong growth in customer business volumes Year-over-year bridge, EURm Comments +7% • Net interest income up 7% (up 5% excl. Nordea 1,226 Finance Equipment) 27 0 19 48 • Continued strong growth in business volumes 1,146 40 across Nordics • Mortgage volumes up 6% and l
Slide 6: Net fee and commission income – further significant growth in savings fee income
Net fee and commission income – further significant growth in savings fee income Year-over-year bridge, EURm Comments +19% • Net fee and commission income up 19% 870 8 19 10 9 7 • Strong savings fee income: up 25%, driven by strong net inflows within all channels 106 729 • Continued recovery in card
Slide 7: Net fair value result – continued high levels of activity in customer areas
Net fair value result – continued high levels of activity in customer areas Net fair value result, EURm Comments • Continued high activity in customer areas, supported -13% by FX and equity trading 370 • Lower trading result driven by weaker markets 20 • Treasury supported by strong investment valua
Slide 8: Costs – continued cost discipline
Costs – continued cost discipline Year-over-year bridge, EURm Comments +1% • Underlying costs down, in line with plan 1,098 • Staff costs unchanged, adjusted for inclusion of 10 1,089 Nordea Finance Equipment and exchange rate 12 11 effects • Lower VAT refund than in Q3 2020 Q320 Underlying costs NF
Slide 9: Net loan losses and similar net result – continued strong credit quality
Net loan losses and similar net result – continued strong credit quality Net loan losses and similar net result Q321, EURm Comments • Net loan losses and similar net result amounting to net -18 reversal of EUR 22m (3bp) 22 -26 • Reversals of modelled collective provisions due to 4 improved credit qu
Slide 10: Capital – capital position strong and share buy-back programme initiated
Capital – capital position strong and share buy-back programme initiated CET1 capital ratio development, % Comments 0.7 0.1 0.1 -0.5 -0.1 • CET1 capital ratio 16.9%, 6.7 percentage points -1.3 above regulatory requirement* • CET1 capital down EUR 1.7bn following buy-back 18.0 18.2 16.9 <2.0 approval
Slide 11: Personal Banking – income lifted by strong savings and mortgage performance
Personal Banking – income lifted by strong savings and mortgage performance Total income, EURm Comments +10% • Total income up 10% 929 919 878 837 848 • Continued strong mortgage activity across countries: volumes up 6% 569 573 535 561 543 • Mortgage margin pressure partly offset by improved deposit
Slide 12: Business Banking – strong lending volume development
Business Banking – strong lending volume development Total income, EURm Comments +17% • Strong quarter with continued high business activity 640 647 637 617 543 • Lending volumes up 9% (5% excl. Nordea Finance Equipment) – strong growth in Norway and Sweden 395 407 397 352 384 • Broad-based growth i
Slide 13: Large Corporates & Institutions – stable performance amid lower activity and volatility
Large Corporates & Institutions – stable performance amid lower activity and volatility Total income, EURm Comments -8% • Total income down 8% 620 • Largely stable NII and NCI with high customer activity 505 475 443 238 435 • Lower NFV due to lower activity and volatility 225 226 137 230 226 • #1 po
Slide 14: Asset & Wealth Management – record volumes and significant net inflows via all channels
Asset & Wealth Management – record volumes and significant net inflows via all channels Total income, EURm Comments +28% • Total income up 28% 293 294 318 19 • AuM up 21% to all-time high of EUR 393bn 265 19 19 249 16 17 • Net inflow of EUR 4.1bn (annualised growth 4%), with all channels contributin
Slide 15: Sustainability at the core of Nordea’s strategy
Sustainability at the core of Nordea’s strategy Our targets Since the beginning of 2020 we have reduced our exposure to, and emissions associated with, climate-vulnerable sectors. We are working together with our customers to help drive a CO2 low-carbon economy and channelling investment into more s
Slide 16: We are committed to delivering on our 2022 financial targets
We are committed to delivering on our 2022 financial targets Cost-to-income ratio Capital policy 50% 150-200bp management buffer above regulatory CET1 requirement Return on equity Dividend policy 60-70% payout of distributable >10% profits to shareholders Excess capital intended to be distributed to
Slide 17: Slide 17
Slide 18: Appendix
Nordea Appendix
Slide 19: Loan book – well diversified with strong credit quality
Loan book – well diversified with strong credit quality Portfolio well diversified Five segments with 1% of Updated analysis of COVID-19 across countries and total exposures still impact by segment** segments significantly affected 0.1% Ship building EUR 4bn, 1% Significantly affected 0.1% Air trans
Slide 20: Further decrease in impaired lending
Further decrease in impaired lending Stage 2 and 3 loans at amortised cost, EURm Comments • Low levels of impaired (stage 3) loans further reduced due to economic upturn and active credit risk management 13,576 13,840 14,383 12,843 13,154 • Coverage ratio for impaired loans up to 45% • Stage 2 loans
Slide 21: Coverage ratios – well provisioned for potential losses
Coverage ratios – well provisioned for potential losses Coverage ratios Significantly Partially affected Non-significantly affected segments segments affected segments Avg. 62% Avg. 47% Avg. 37% 96 97 89 89 77 77 66 64 64 63 62 61 60 61 56 52 51 51 52 52 50 47 47 46 47 46 45 46 44 44 45 42 41 40 39
Slide 22: Nordic economic development – resilient economies back on track
Nordic economic development – resilient economies back on track Housing prices Nordics – among best performing countries during COVID-19 • Danish GDP up 2.8% q/q in Q2. Unemployment down to 3.6% in August. House prices up 13.4% y/y and apartment prices up 13.8% y/y in August. • Finnish GDP up 2.1% q