Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Q1 2025 Earnings Presentation
39 slides from Nordea Bank Abp's earnings presentation, Apr 16, 2025
Slide 1: Debt investor presentation Q1 2025
Debt investor presentation Q1 2025
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: Table of contents
Table of contents 1. Quarterly update 4 2. Credit quality 15 3. Capital, liquidity and funding 22 4. Macroeconomy 34 3
Slide 4: 1. Quarterly update
1. Quarterly update Nordea
Slide 5: Operating environment: Nordic countries well positioned
Operating environment Nordic countries well positioned to manage through periods of turmoil Strong fiscal positions providing stability and flexibility Nordic economies less reliant on goods exports A Fiscal balance B Debt, % of GDP Total exports of goods as % of GDP 15 100 Fiscal balance, % of GDP
Slide 6: First-quarter highlights 2025: Executive summary
First-quarter highlights 2025 Executive summary Continued growth in fees and commissions; total income resilient - Total income down 4%. Net interest income down 6%, net fee and commission income up 4% and net fair value result down 1% - Operating profit down 9% y/y, to EUR 1.6bn, up 10% q/q Return
Slide 7: Net interest income
Net interest income Higher business volumes, lower deposit margins as expected Year-over-year bridge, EURm • Net interest income down 6% y/y -6% 1,954 70 • Lending and deposits up 327 15 1,829 9 37 21 - Mortgages up 6% (stable excluding 121 Norwegian acquisition) - Corporate lending stable Q124 Volu
Slide 8: Net interest income sensitivity
Net interest income sensitivity Net interest income sensitivity to policy rate changes Sensitivity to +50bp parallel shift in policy Deposit hedge – nominal volume, • NII impact largely driven by policy rates*, EURm EURbn rates and pass-through ~75–125 34 33 31 31 32 - Actual pass-through varying be
Slide 9: Net fee and commission income
Net fee and commission income Continued growth, driven by savings Year-over-year bridge, EURm • Net fee and commission income +4% up 4% y/y 6 2 793 2 4 0 28 • Savings fee income up with higher 763 assets under management - AuM up 9%, to EUR 425bn Q124 Asset Brok. & Pay. & Lending Other FX Q125 - Net
Slide 10: Net fair value result
Net fair value result Higher customer activity and strong market-making Net fair value result, EURm -1% • High customer risk management 289 activity, particularly in FX and 291 284 53 rates products 31 22 247 0 17 35 6 201 • Strong market-making, driven by 7 high activity and positive revaluations f
Slide 11: Costs
Costs Costs stabilising in line with plan Year-over-year bridge, EURm +5% • Total costs up 5% y/y, driven by 4 10 1,354 47 3 investments and inflation 1,289 15 20 - 4pp of increase due to strategic investments in several key areas, including technology, data and AI, digital services and cyber securi
Slide 12: Sustainability at the core
Sustainability at the core Our long-term sustainability objectives supported by short term targets Our sustainability objectives CO2 Become a net-zero emissions bank by 2050 at the latest Gender balance 40-50% 50% reduction in emissions across investment and lending portfolios reduction in emissions
Slide 13: Continued progress on climate targets in our lending portfolio
Sustainability at the core Continued progress on climate targets in our lending portfolio 2024 progress 40-50% reduction in financed emissions in our lending portfolio by 20301 -36% Sector Sub-sector Emissions scope Metric Base year Baseline Target year Target Residential real Households and tenant-
Slide 14: We engage with our customers to drive sustainable growth
Sustainability at the core We engage with our customers to drive sustainable growth Channelling capital towards sustainable solutions • Facilitated EUR 197bn in Green and sustainability-linked loans Nordea Asset Management Total volumes, EURbn Assets under management, EURbn sustainable financing Com
Slide 15: 2. Credit quality
2. Credit quality Nordea
Slide 16: Credit portfolio
Credit portfolio Well diversified pan-Nordic financial service provider Corporate lending 0.6% Accomodation and leisure 0.7% Power production Household lending 0.8% Land transportation 24% 0.8% Consumer durables 32% 0.8% IT services 0.9% Fishing and aquaculture 1.0% Crops, plantations and hunting Le
Slide 17: Strong credit quality
Net loan losses and similar net result Strong credit quality Net loan losses and similar net result, EURm • Low net loan losses and similar net result EUR 13m (1bp) - Stable quarter, with individual provisions 11 at low level -20 -13 - Slight increase in collective provisions, 20 42 -7 13 driven by
Slide 18: Impairments and provisioning coverage
Impairments and provisioning coverage Continued resilience in strong credit portfolio • Stage 2 loans stable at 6% of Stage 2 and 3 loans at amortised cost, EURm total loans Stage 2 Stage 3 • Stage 3 loans stable at 1.04% of total loans 19,469 19,092 18,541 16,366 16,208 • Coverage ratio for stage 3
Slide 19: Credit portfolio – real estate management industry
Credit portfolio – real estate management industry (REMI)* Well-diversified portfolio, high-quality lending Lending volumes stable Diversified across countries • Well-diversified portfolio across 32 32 34 Finland Nordic markets 32 31 7 17% 6 6 6 6 Sweden • 90% of exposure towards low- 38% risk custo
Slide 20: Solid LTVs, resilient interest coverage, high occupancy
Credit portfolio – real estate management industry (REMI)* Solid LTVs, resilient interest coverage, high occupancy Solid LTV levels for all countries Majority of portfolio with low LTV • 87% of exposures with LTV below 60% 67 62 65 62 64 50% - In event of 20% decline in market 54 52 51 44% 49 50 val
Slide 21: Low levels of risk exposure
Credit portfolio – real estate management industry (REMI)* Low levels of risk exposure Strong credit quality, with 93% of IFRS 9 No REA impact even from 3-notch portfolio in stage 1 downgrade due to risk weight floors 50% RW floor • Continued strong credit quality 8% 50% 6% • Only 6% of portfolio in
Slide 22: 3. Capital, liquidity and funding
3. Capital, liquidity and funding 22
Slide 23: Strong capital position
Capital Strong capital position Capital position and requirements (%) • CET1 capital ratio 15.7% 2,3% - 2.0 percentage points above regulatory 20,2% requirement, corresponding to a CET1 2,0% 17,9% buffer of EUR 3.2bn 0,4% 15,7% 2,0% 13,7% 0,3% • CET1 requirements 1,5% 1,7% - As previously guided, ~1
Slide 24: Strong capital position; share buy-backs in progress
Capital Strong capital position; share buy-backs in progress CET1 capital ratio development, % • CET1 capital ratio 15.7% - 2.0 percentage points above regulatory requirement 15.8 0.8 -0.5 15.7 -0.2 -0.1 ~15 - EUR 0.4bn increase in CET1 capital, 1.5 mainly driven by profit net of dividend and FX eff
Slide 25: Strong capital generation supporting returns
Capital excellence Strong capital generation supporting returns Shareholder returns supported by continued strong capital generation EUR ~17-18bn Year Average quarterly capital generation, bp • Capital return commitment reaffirmed Share buy-backs 2025 - Strong capital generation - Unchanged dividend
Slide 26: Strong balance sheet structure
Balance sheet Strong balance sheet structure Q1 2025 Other assets Other liabilities • Total assets EUR 641bn Q1 2025 Derivatives Derivatives - Strong balance sheet with Cash and balances Funding <1 year Short-term funding deposits as primary source of with central banks funding Liquid assets - Long-
Slide 27: Strong liquidity position
Liquidity Strong liquidity position Liquidity buffer composition, EUR 121bn Currency split Asset split • Robust liquidity position - Liquidity coverage ratio (LCR) 166% 6% 19% SEK - Net stable funding ratio (NSFR) 125% 27% Level 1 cash & central bank EUR 29% 41% 11% USD Level 1 excl. covered bonds L
Slide 28: Nordea global issuance and strong ratings
Long term funding Nordea global issuance 8% 2% 3% 5% 4% 2% 4% 2% 2% Strong ratings 80% Nordea Bank Abp NOK 89% • Moody’s Aa3 (positive outlook) (EUR 22bn eq.) • S&P AA- (stable outlook) 96% SEK (EUR 37bn eq.) • Fitch AA- (stable outlook) DKK 8% 15% (EUR 53bn eq.) 8% 20% 20% 18% 31% 7% 25% 33% Nordea
Slide 29: Solid funding operations
IFR Yankee Wholesale funding Bond of the Year - 2024 Solid funding operations Total wholesale funding, EUR 202bn 3% 4% 5% • Long-term issuance* 20% CD & CP above 1Y 7% CD & CP below 1Y - EUR 7.2bn issued during Q1 4% Scandinavian covered bonds - EUR 4.9bn in covered bonds and EUR 2.3bn in senior for
Slide 30: Enhanced focus on sustainable funding
IFR Sustainability at the core Sustainable Issuer of the Enhanced focus on sustainable funding Year - 2023 Nordea’s green bond asset portfolio • EUR 24.2bn assets available for green funding Green buildings - EUR 9.1bn in NBAbp green bond asset portfolio 6% 2% - EUR 15.1bn available assets for green
Slide 31: 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 Data as per Q4 Legislation Norwegian Swedish Danish Finnish Cover pool assets Norwegian residential Swedish residential Dan
Slide 32: Nordea recent benchmark transactions
Funding transactions Nordea recent benchmark transactions Issuer Type Currency Amount (m) FRN / Fixed Issue date Maturity date First call date Nordea Mortgage Bank Covered, Green EUR 750 Fixed Mar-25 Mar-28 Nordea Bank Senior preferred SEK 3,000 FRN/Fixed Mar-25 Mar-28 Nordea Bank Senior preferred U
Slide 33: MREL positions and requirements
Minimum requirements for own funds and eligible liabilities MREL positions and requirements Subordinated MREL – 2.2 pp above requirement % REA Subordinated MREL – Outstanding senior non-preferred (SNP) of +2.2% EUR 14.8bn 29.2% 27.0% Total MREL 9.0% 8.3% – 3.0 pp above requirement % REA +1.0% – Outs
Slide 34: 4. Macroeconomy
4. Macroeconomy Nordea
Slide 35: Nordic economic development: Uncertainty
Nordic economic development Uncertainty GDP Unemployment rate • The economic activity in the Nordics will be positive in GDP, % y/y, Economic Outlook January 2025 both 2025 and 2026, according to Nordea’s forecast, Country 2023 2024 2025E 2026E mainly attributed to lower interest rates Denmark 2.5 3
Slide 36: Nordic economies: On hold
Nordic economies On hold Policy rates Public balance/debt, % of GDP, 2025E (IMF) • The ECB and Danmarks Nationalbank lowered their policy rates by 0.25 percentage points in March, while the Riksbank and Norges Bank stayed on hold • The Riksbank is expected to leave its policy rate unchanged at 2.25%
Slide 37: Households: Increasing purchasing power
Households Increasing purchasing power Household debt Household savings Private consumption • Households’ purchasing power and consumption are expected to improve as real disposable income continues to increase • Consumer confidence has recovered from historical low levels. However, the level is sub
Slide 38: Housing markets: Mixed developments
Housing markets Mixed developments Home prices Households’ credit growth • Home prices have stabilised, but developments have been mixed since the new year. Norwegian home prices have developed better than their Nordic counterparts and rose by 7.0% year-on-year in March 2025 • Monetary policy has be
Slide 39: Contacts
Contacts Investor Relations Ilkka Ottoila Juho-Pekka Jääskeläinen Randie Atto Rhawi Head of Investor Relations Head of Debt IR and Ratings Senior IR Officer Tel: +358 9 53 00 70 58 Tel: +358 9 53 00 64 35 Tel: +46 73 866 17 24 Ilkka.ottoila@nordea.com Mobile: +358 40 550 91 11 randie.atto.rhawi@nord