Slide 1: Third Quarter Report 2010 Press and analyst conference
Third Quarter Report 2010 Press and analyst conference 27 October 2010 Christian Clausen President and Group CEO
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: Key messages
Key messages 9 Strong quarter 9 High customer activity 9 Strong customer inflow 9 Successful execution of Group initiatives 3 27 October 2010 Third Quarter Report 2010
Slide 4: Solid trends in customer business
Solid trends in customer business Net interest income Total income Operating profit Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 Number of Gold Lending volumes Net loan losses customers Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 4 27 October 20
Slide 5: Result highlights
Result highlights EURm Q3/10 Q2/10 Chg % Q3/09 Chg % Net interest income 1,310 1,249 5 1,321 -1 Net fee and commission income 525 538 -2 437 20 Net result from items at fair value 446 339 32 486 -8 Other income 82 35 33 Total income New record level 2,363 2,161 9 2,277 4 Staff costs -721 -701 3 -670
Slide 6: Net interest income up 5%
Net interest income up 5% Net interest income, EURm Strong trend in customer operations continues 1,321 1,310 Lending and deposit volumes up 1,249 Increased deposit margins Negative effect from higher average funding cost Q3 2009 Q2 2010 Q3 2010 6 27 October 2010 Third Quarter Report 2010
Slide 7: Net fee and commission remains at a high level
Net fee and commission remains at a high level Net fee and commission, EURm Continued strong performance 538 within asset management 525 High activity within corporate advice 437 Seasonal effects Q3 2009 Q2 2010 Q3 2010 7 27 October 2010 Third Quarter Report 2010
Slide 8: Assets under Management at all time high
Asset under Management at all time high Assets under Management (AuM), EURbn 180 Up 6% or EUR 10.4bn in Q3 157 158 126 Continued net inflows in most areas - EUR 3.3bn or 8% annualised 2007 2008 2009 Q3 2010 Positive trend in the institutional Net flows AuM, EURbn asset management business 3.3
Slide 9: Fair value result up 32%
Fair value result up 32% Net result from items at fair value, Capital markets business in customer EURm areas¹ continues to perform well Continued strong Life & Pensions results 334 326 283 Higher contribution from Group Treasury and Capital Markets unallocated Q3 2009 Q2 2010 Q3 2010 Customer
Slide 10: Firm cost management
Firm cost management Total operating expenses, EURm Underlying¹ expenses down 2% Cost/income ratio improved to 51% 1,186 1,196 1,087 (55%) Q3 2009 Q2 2010 Q3 2010 10 27 October 2010 Third Quarter Report 2010 ¹Adjusted for Group initiatives and currency effects
Slide 11: Credit quality improving
Credit quality improving Net loan losses, EURm Decreased loan losses in most areas 54bps Excluding guarantee scheme 50bps 331 provisions¹ net loan loss ratio 35bps 29bps down to 22bps 26bps 187 Two-year Danish guarantee 157 22bps scheme expired in September Q3 2009 Q2 2010 Q3 2010 Danish guara
Slide 12: Strong capital position maintained
Strong capital position maintained Risk-Weighted Assets (RWA), EURbn RWA up 8% YoY 206 207 Increase due to corporate and retail 192 185 182 volume growth (11%) 169 Core tier 1 ratio 10.4% Largely unchanged YoY Q3 2009 Q2 2010 Q3 2010 Solid profit generation enables high Transition rules Fu
Slide 13: Prudent liquidity management
Prudent liquidity management EURbn AA rating maintained +33 +4 56 High long-term funding issuance 42 38 Increased liquidity buffer 23 Increased average maturity Short-term funding Liquidity buffer End 2007 Q3 2010 Average bond maturities 3.7 years 2.3 years End 2007 Q3 2010 13 27 October 201
Slide 14: Strong funding position
Strong funding position Total long-term funding issued, EURbn Very good reception of the Nordea name in all funding markets 31 30.2 Record EUR 30bn long-term funding issued with an average maturity of 22 23 5.6 years Norwegian and Finnish covered bond platforms launched 2007 2008 2009 Jan - Se
Slide 15: Outlook 2010
Outlook 2010 Nordea expects macroeconomic recovery to continue in 2010 Global development is still fragile and hence uncertainty remains; the outlook for the Nordic markets has improved during the year Excluding currency effects in 2010, Nordea expects cost growth to be broadly in line with 20
Slide 16: Business development
Business development 16 27 October 2010 Third Quarter Report 2010
Slide 17: Macroeconomic recovery in the Nordic countries
Macroeconomic recovery in the Nordic countries GDP growth, %, y/y 7.5 7.5 % y/y GDP % y/y Solid growth rates 5.0 5.0 2.5 2.5 Modest inflation 0.0 0.0 -2.5 -2.5 Relatively strong public finances -5.0 Sweden -5.0 -7.5 Denmark Norway -7.5 Improvements in labour markets Finland -10.0 -10.0 Q1 Q2
Slide 18: Diversified and fast-growing customer business
Diversified and fast-growing customer business… Income split per customer segment, Q310 Income well diversified between Corporate Nordic Household customer segments CMB PB segment segment 60% 40% Solid growth trends in relationship Gold Large segments¹ Fin inst Other NEM Shipping NEM Other Int'l
Slide 19: …with a strict focus on relationship banking
…with a strict focus on relationship banking The 360-degree meeting Pro-active 360-degree meetings to The 3600 meeting Savings and meet customers’ needs investments Strong value proposition attracts Daily Insurance banking customers to premium segments Lending Steady growth of 6% per year or 1
Slide 20: Clear growth strategy
Clear growth strategy Household Corporate New European Markets 9 Migrate existing customers to 9 Increase market share with 9 Continue successful organic relationship segments largest customers growth path in Poland 9 Attract new customers to 9 Proactive advice on relationship segments ancillary pro
Slide 21: Household relationship strategy
Household relationship strategy Growth strategy Rationale Group initiative Higher income and Household growth potential 9 Migrate existing Future distribution customers to relationship segments More loyal 9 Attract new customers New customer to relationship segments acquisition 9 Increase advisory E
Slide 22: Deliveries on household strategy
Deliveries on household strategy HH volumes increase YoY, EURbn Continued strong customer demand in 139.4 household segment Lending up 14% Improved market position 122.3 76.0 39 Nordic branches operating in new Deposits up 9% format 69.9 34.4 Improved Private Netbank 28.2 Nordic Retail Funds
Slide 23: Corporate relationship strategy
Corporate relationship strategy Growth strategy Rationale Group initiative Higher income and Corporate potential 9 Increase market share with largest customers All products Growth plan CMB 9 Proactive advise on ancillary products to Medium customers Close, partnership- Customer-driven based relation
Slide 24: Corporate strategy delivery
Corporate strategy delivery Total income CMB, EURm Strong income growth within CMB 372 378 2% QoQ and 23% YoY Growth plan CMB Sweden proceeds 308 as planned Strong business momentum with several Q3 2009 Q2 2010 Q3 2010 new mandates won Income growth 2007-YTD, CAGR % Strategy to build house
Slide 25: Focus on stronger corporate customers
Focus on stronger corporate customers Rating distribution 18% 16% Increased Decreased 14% 12% EAD (%) 10% 8% 6% 4% 2% 0% 6+ 6 6- 5+ 5 5- 4+ 4 4- 3+ 3 3- 2+ 2 2- 1+ 1 1- Rating 12.2009 09.2010 25 27 October 2010 Third Quarter Report 2010
Slide 26: New European Markets strategy
New European Markets strategy Growth strategy Rationale Group initiative High potential New European Markets 9 Continue successful organic growth path in Poland Proven track record Growth plan Poland Nordic model Low risk Customer benefits: Nordic business model and concepts. Relationship and advice
Slide 27: New European Markets – a growth area
New European Markets – a growth area Total income NEM, EURm Solid income development remains 38% CAGR since 2007 176 163 Firm cost management – C/I down to 39% 141 Focus on low risk segments Growth plan Poland on track – 4 branches opened in Q3 Q3 2009 Q2 2010 Q3 2010 27 27 October 2010 Th
Slide 28: Strong foundation for reaching long-term ambition
Strong foundation for reaching long-term ambition Future distribution Risk-adjusted profit, EURm New customer acquisition 10% CAGR Growth plan Finland required CMB Sweden Customer-driven Markets business Growth plan Poland Top league IT performance Product platforms Infrastructure upgrade 2006 2007
Slide 29: Key messages
Key messages Strong quarter Record income and one of the highest ever operating profits reported High customer activity Customer business continues to grow Increased income within all corporate segments Strong trend in AuM remains – net inflow 8% annualised Strong customer inflow Mor
Slide 30: Third Quarter Report 2010 Press and analyst conference
Third Quarter Report 2010 Press and analyst conference 27 October 2010 Christian Clausen President and Group CEO