Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Nordea Kredit — Debt Investor Presentation (2021)
25 slides from Nordea Bank Abp's debt investor presentation, 2021
Slide 1: Nordea Kredit Covered Bonds Q2 2021 Debt Investor Presentation
Nordea Kredit Covered Bonds Q2 2021 Debt Investor Presentation
Slide 2: Table of contents
Table of contents 1. Nordea covered bond issuance in brief 3 2. Nordea Kredit in brief 5 3. Cover pool key characteristics 7 4. Asset quality 11 5. Underwriting criteria 14 6. Covered bond framework 16 7. Macro 18 8. Contacts and links 23 2
Slide 3: 1. Nordea covered bond issuance in brief
1. Nordea covered bond issuance in brief 3
Slide 4: Nordea covered bond operations
Nordea covered bond operations Q2 2021 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 mortgages Swedish residential mortgages prim
Slide 5: 2. Nordea Kredit in brief
2. Nordea Kredit in brief Habe foe: tly Nordea
Slide 6: Nordea Kredit – in brief
Nordea Kredit – in brief Q2 2021 • 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 FS
Slide 7: 3. Cover pool key characteristics
3. Cover pool key characteristics 7
Slide 8: Cover pool key characteristics
Cover pool key characteristics Q2 2021 Outstanding covered bonds EUR 59.6bn Mortgage credit loans secured by mainly residential property Cover pool content (total: EUR 64.2bn including substitute assets) Geographic distribution Throughout Denmark with concentration in urban areas Weighted average LT
Slide 9: Loan portfolio
Loan portfolio Loan portfolio by property category Loan portfolio by loan type 2,6% 8,3% 6,2% 5,1% 3,9% 2,6% 2,5% 100% Owner occ. dwellings & holiday homes 26,4% 27,6% 27,7% 27,9% ARM 1-2Y 9,2% 25,2% 26,2% Private rental housing 75% 7,5% 23,2% 21,9% ARM 3-10Y Total Commercial properties 26,1% 27,2%
Slide 10: Loan portfolio by regions – and green bonds
Loan portfolio by regions – and green bonds Loan portfolio by regions Green bonds 3,9% Since November 2019 Nordea Kredit has offered corporate customers green mortgage loans funded 20,9% by designated green covered mortgage bonds. The Capital Region of Denmark 43,3% Region Zealand Green loans can be
Slide 11: 4. Asset quality
4. Asset quality 11
Slide 12: Loan to value (LTV) – loans for residential and commercial properties
Loan to value (LTV) – loans for residential and commercial properties Q2 2021 Loan type Residential loans Commercial loans Weighted average LTV - indexed 56.1% 43.6% LTV buckets Nominal (DKKm) % Loans Nominal (DKKm) % Loans >0 - <=40 % 237,253 70,1% 61,528 75.7% >40 - <=50 % 43,360 12.8% 10,127 12.5
Slide 13: Asset quality
Asset quality Arrears (owner occupied dwellings and holiday homes) * Loan to value (LTV) weighted average (all loans) 0,5% 62% 60,2% 60% 0,4% 58,6% 58,4% All mortgage banks (including Nordea Kredit) 0.15% (last 0.16%) 58% 0,3% 56,8% 56% 55,4% 0,2% 54% 53,2% 0,1% 52% Nordea Kredit 0.09% (last 0.10%)
Slide 14: 5. Underwriting criteria
5. Underwriting criteria Habe foe: tly Nordea
Slide 15: Underwriting criteria
Underwriting criteria Q2 2021 Private households • Behavioural score and individual credit assessment are conducted based on income information, e.g. payslips and tax information • ”Before-after loan” household budgets are made and used in the assessment (based on 30 years annuity and fixed interest
Slide 16: 6. Covered bond framework
6. Covered bond framework Habe foe: tly Nordea
Slide 17: Danish covered bond framework
Danish covered bond framework Q2 2021 • Legal framework • The Financial Business Act • The Mortgage-Credit Loans and Mortgage-Credit Bonds, etc. Act with several detailed executive orders • Registration • An issuing institution is required to maintain a static cover pool • Mortgage deeds are registe
Slide 18: 7. Macro
7. Macro 18
Slide 19: Nordic economies – resilient economies back on track
Nordic economies – resilient economies back on track GDP development Unemployment rate Comments GDP, forecasts from Economic Outlook May 2021 • After the dramatic setback in 2020 due to the coronavirus, the Nordic economies have almost fully recovered Country (%, y/y) 2020 2021E 2022E • Vaccines hav
Slide 20: Nordic rates – Nordics well-equipped to handle long-term consequences of COVID
Nordic rates – Nordics well-equipped to handle long-term consequences of COVID Policy rates Public balance/debt, % of GDP, 2021E Comments • Norges Bank now expects to start hiking rates in September this year, with a second hike likely in December. Policy rates in the euro area, Denmark and Sweden a
Slide 21: Households remain resilient
Households remain resilient Household debt Household savings Comments • Household savings have increased dramatically during the crisis, mainly due to a decline in spending. Despite high debt levels, Nordic households’ strong finances are expected to support economic growth as restrictions are lifte
Slide 22: Nordic housing markets heat up
Nordic housing markets heat up House prices Households’ credit growth Comments • Contrary to expectations, house prices have increased to record-high levels in all the Nordic countries during the crisis. This is not least due to unprecedented expansionary fiscal and monetary policy in support of hou
Slide 23: 8. Contacts & Links
8. Contacts & Links Habe foe tly Nordea
Slide 24: Contacts
Contacts If you have any questions, please feel free to contact: Peter Brag Senior Treasury Manager, Long Term Funding +45 3333 1663 Peter.brag@nordea.com Morten Keil Head of Covered Bonds, Long Term Funding +45 3333 1875 morten.keil@nordea.com 24
Slide 25: Links to more information
Links to more information Nordea Kredit Legislation ▪ Nordea Kredit ECBC harmonised transparency templates. ▪ Danish mortgage financing is supervised by the DFSA (Finanstilsynet). Link: https://www.nordea.com/en/investor-relations/reports-and- Link: https://finanstilsynet.dk/en presentations/bonds/n