Slide 1: Fourth Quarter Results 2013 Press Conference
Fourth Quarter Results 2013 Press Conference Christian Clausen, Group CEO Fourth Quarter Results 2013 Fourth quarter 2013 results Press Conference XXX Christian Clausen, Group CEO International telephone conference 29 January 2014 Christian Clausen, Group CEO 1•
Slide 2: Highlights
Highlights 1 On track towards the future relationship bank • Stable income and cost level, in a year with low growth and low interest rates • 90,000 new relationship customers welcomed, 7% higher inflow than in 2012 • Loan losses are down by 17% (in local currencies) • Operating profit up 3% (in loc
Slide 3: Q4 2013 financial results highlights
Q4 2013 financial results highlights 2015 plan – an update
Slide 4: Financial results Q4/13
Financial results Q4/13 EURm Q4/13 Q3/13 Chg % 2013 2012 Chg % Net interest income 1 390 1 386 0 3 5 525 5 563 (1) 1 Net fee and commission income 703 652 8 10 2 642 2 468 7 8 Net fair value result 333 346 (4) (3) 1 539 1 774 (13) (14) Total income* 2 469 2 426 2 4 9 891 9 998 (1) 0 Staff costs (739
Slide 5: Net interest income
Net interest income Net interest income development, EURm Comments NII increased by 3 % in local currencies q-o-q Subdued loan demand 1 382 1 391 1 386 1 390 1 358 Largely unchanged margin Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 5•
Slide 6: Net interest margin and volumes
Net interest margin and volumes Blended net interest margin development, % Comments 1.5% Lending margins up 1.2% 107 bps Deposit margins down 0.9% Household lending volumes up 1% (up 3% y-o-y)* 0.6% Corporate lending volumes down 1% (down 3% y-o-y)* 0.3% Deposit volumes up 1% (down 1% y-o-
Slide 7: Net fee and commission income
Net fee and commission income Net fee and commission income development, EURm Comments 703 Continued good trend in savings and investments 682 664 652 623 Increase by 13% q-o-q and 8% y-o-y 180 174 170 172 178 Assets under Management at record high 145 144 143 150 Lending related commissions
Slide 8: Assets under Management
Assets under Management Assets under Management development*, EURbn Comments 223.8 227.8 233.3 All time high level of EUR 233bn 218.3 219.7 Strong net inflow of EUR 2.2bn All businesses contributing with net inflow Return generates EUR 3.3bn vs. Q3/13 75% of composites outperformed its ben
Slide 9: Fund exports and strong savings trend supports AuM-growth
Fund exports and strong savings trend supports AuM-growth Net flow 20131, EURbn Comments Asset manager Net flow, EURbn Growing interest in Nordea funds also outside Nordics BlackRock 26.5 All time high inflow from Global fund distribution JPMorgan 23.1 Franklin Templeton 9.4 Number 4 in Europe
Slide 10: Net fair value
Net fair value Net fair value development, EURm Comments Low customer demand Low volatility 442 444 416 Buy backs of Hypotek bonds in Treasury 132 155 346 333 128 114 72 310 289 288 232 261 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Customer areas Other areas 10 •
Slide 11: Flat costs for thirteen consecutive quarters
Flat costs for thirteen consecutive quarters Total expenses (excl. FX and variable pay)*, EURm Comments Expenses under solid control 1 172 1 131 1 170 1 139 1 158 1 128 1 144 1 140 1 157 1 128 1 120 1 132 1 182 Seasonal increase in Q4/13 Q4/10Q1/11Q2/11Q3/11Q4/11Q1/12Q2/12Q3/12Q4/12Q1/13Q2/13Q3/
Slide 12: Stable credit quality
Stable credit quality Total net loan losses*, EURm Comments 263 Largely unchanged level q-o-q at 21bps 236 241 215 203 198 186 180 Largely unchanged level at 45bps in Denmark 171 Net loan losses in Shipping down to 4 bps (EUR 1m) Somewhat higher levels in Baltic’s due to revaluation of colla
Slide 13: Stable situation in Denmark
Stable situation in Denmark House price index and Consumer confidence* Loan losses net, EURm, Retail Banking Denmark 110 Single-family 200 houses 100 Apartments 150 90 80 100 70 2006 2007 2008 2009 2010 2011 2012 2013 50 10 Consumer 0 5 confidence 0 -5 -50 -10 -15 -100 -20 Q4/11 Q1/12 Q2/12 Q3/12 Q4
Slide 14: Macroeconomic challenges in Finland
Macroeconomic challenges in Finland GDP development, %* Loan losses net, EURm, Retail Banking Finland 30 25 20 15 10 0.8% 5 0 -5 -1.0% -10 2011 2012 2013E 2014E -15 -20 -25 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 *Source: Nordea Economic Outlook Collectively assessed Individually asses
Slide 15: Strong access to funding
Strong access to funding EUR senior issuance mid swap spreads, 5 years, bps Comments 200 Spread vs €MS (bp) Attractive funding spreads compared to peers 175 160165 150 Issuance of EUR 23bn which is more than the 128 125 111113116118 redemptions for 2013 90 100 73 73 78 85 Conservative liquidit
Slide 16: Risk weighted assets
Risk weighted assets Risk-weighted assets , EURbn* Comments Low loan demand 185 182 Approval to use foundation IRB in Russia 181 179 Effect from Advanced IRB for Nordic corporate will impact 168 168 Q1/14 162 160 FX effect 155 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 * Basel 2.5
Slide 17: Core Tier 1 ratio + 180bps following profit generation, efficiencies and low demand
Core Tier 1 ratio + 180bps following profit generation, efficiencies and low demand Core Tier 1 ratio development, % 0.8% 0.6% 0.0% 0.1% 0.3% 14.9% 13.1% Core Tier 1 ratio Credit Quality Volumes FX effects & RWA efficiency Profit net Core Tier 1 ratio Q4 2012 Other dividend Q4 2013 17 •
Slide 18: Proposed dividend of 0.43 EUR/share
Proposed dividend of 0.43 EUR/share Dividends, EUR/share Comments Proposed dividend per share of EUR 0.43 Representing a payout ratio of 56% 0.49 0.50 Proposal reflects low loan demand resulting in lower 0.43 capital need Ambition to increase dividend payout ratio in 2014 and 0.34 2015 0.29
Slide 19: Reinforced capital markets franchise
Reinforced capital markets franchise Market shares Nordic Banks, NasdaqOMX Comments 12.00% Nordic leader on market share for Nordic cash equity on NasdaqOMX 10.00% Nordea Launch of equity sales operations from the London 8.00% branch 6.00% Leading Nordic book runner corporate bonds and syndica
Slide 20: More relationship customers and continued transformation
More relationship customers and continued transformation Acquired Gold, Premium and Private Banking customers Comments +7% 89,648 90,000 new relationship customers in 2013 83,768 7% higher inflow of external customers than in 23,649 2012 22,582 22,582 22,970 21,297 19,993 19,896 20,447 More th
Slide 21: 2015 plan – an update
Q4 2013 financial results highlights 2015 plan – an update
Slide 22: The 2015 plan - an update
The 2015 plan - an update Nordea market commitments Key initiatives and levers Strong capital generation and Capital initiatives to maintain CT1 ratio increased payout ratio in 2014 and 2015 >13%* while maintaining a strong capital base Initiatives for income generation Medium term ROE ambition of 1
Slide 23: CT1 requirements/Capital policy building blocks
CT1 requirements/Capital policy building blocks Basel III Capital Ratio Targets Remaining uncertainties mainly relates to Pillar 2 Steering the bank towards a CT1 level of 14-14.5% in the current environment >17% ~4p.p. CCB SRB >13% >1.5p.p. ~6.8p.p. ~11.3% Potential CcyB SRB & P2 CCB 4.5% Min C
Slide 24: Pro forma CT1 ratio of 15.5-16.0% as of Q4 2013
Pro forma CT1 ratio of 15.5-16.0% as of Q4 2013 Assuming a 56% pay-out ratio 0.7% 0.1% 0.9% 15.5-16.0% 14.9% 14.6% Q4 2013 Advanced IRB* New Norwegian risk CRDIV Q4 2013 CRDIV full Pro forma ** weights loaded * During January, Nordea was approved to use Advanced IRB model for Nordic corporate counte
Slide 25: Strong capability to generate capital
Strong capability to generate capital Core Tier 1 capital , EURm Comments Doubled the capital base in 7 years 23 112 Increased core tier 1 ratio from 6.8% to 14.9% 21 961 20 677 19 103 17 766 14 313 12 821 11 689 2006 2007 2008 2009 2010 2011 2012 2013 Dividend payout Proposed dividend, EUR 1 73
Slide 26: Income holding up
Income holding up Total income (excl. FX), EURm Comments to key income related activities in Q4 Re-pricing Total lending margins +13 bps y/y (RB) CIB/SOO/NBR lending margins up approx. 20 bps y/y (WB) New customers Continued strong inflow of household customers – over 22,000 new (externall
Slide 27: Acceleration of the cost efficiency programme
Acceleration of the cost efficiency programme Background Accelerated cost efficiency programme Existing cost efficiency programme Low economic growth leads to lower delivering better than expected lending demand and customer activity than expected Accelerating and expanding existing cost efficiency
Slide 28: The Accelerated Cost Efficiency Programme builds on existing programmes
The Accelerated Cost Efficiency Programme builds on existing programmes Initiatives Key Elements • Lower marketing related costs Reduction of activity related • Less travelling expenses expenses • Downscaling use of consultants • Optimise multichannel customer relationship model Adjusting the distri
Slide 29: RoE – strong underlying business performance not fully compensating for challenging macro environment
RoE – strong underlying business performance not fully compensating for challenging macro environment and regulation Comments +2.2 -0.2 -2.6 Strong re-pricing of lending margins Volumes 13.6% Increased ancillary business Re-pricing Interest Lower interest rates and higher rates shareholders’ e
Slide 30: Progress in summary
Progress in summary Progress on Nordea financial plan 2013-2015, in 2013 CT1 ratio Core Tier 1 ratio up 180 bps to 14.9% P RWA RWA down EUR 13bn P Income growth Income holding up (P ) Costs Flat costs P Loan losses Loan losses down 17% P RoE RoE 11.0% but on track towards the target (P )
Slide 31: Fourth quarter 2013 results
Fourth Quarter Results 2013 Press Conference Christian Clausen, Group CEO Fourth quarter 2013 results XXX International telephone conference 29 January 2014 Christian Clausen, Group CEO 3