Nordea Bank Abp · OMXHEX:NDA_FI

Nordea Bank Abp — Q1 2006 Earnings Presentation

20 slides from Nordea Bank Abp's earnings presentation, Mar 31, 2006

  1. Slide 1: Interim Report First Quarter 2006 - Press Conference

    Interim Report First Quarter 2006 - Press Conference Lars G Nordström President and Group CEO

  2. Slide 2: Keeping the momentum - delivering ahead of financial targets

    Keeping the momentum - delivering ahead of financial targets ƒ Operating profit in Q1 2006 increased by 25% compared to Q1 2005 to EUR 858m ƒ Gap between revenue and cost growth 8 percentage points ƒ Revenues increased by 11% to EUR 1,759m ƒ Costs increased by 3% to EUR 933m ƒ Cost/Income ratio cont

  3. Slide 3: Operating profit – very strong business momentum

    Operating profit – very strong business momentum YoY EURm 1.000 ƒ Up 25% 900 ƒ Strong revenue growth in all business 800 884 858 areas 700 728 748 ƒ Firm cost management 688 600 ƒ Focus on profitable growth 500 ƒ RoE 20% 400 ƒ Net profit up 34% 300 QoQ 200 ƒ Up 15% 100 0 Q1/05 Q2/05 Q3/05 Q4/05 Q1/0

  4. Slide 4: Growth strategy and business model pay off – profitable growth in business volumes

    Growth strategy and business model pay off – profitable growth in business volumes ƒ Strong sales to both corporate and personal customers – lending up 12% ƒ Strategic focus on the savings area increasingly visible – Assets under management up 18% and deposits up 8% ƒ New written premiums in Life up

  5. Slide 5: Continued growth in operating income

    Continued growth in operating income YoY EURm 1.800 ƒ Up 11% 1,759 1.600 1,694 1,696 ƒ Increased focus on top line growth 1,582 1,601 ƒ strong volume growth continues 1.400 1.200 ƒ Increased income from advisory services 1.000 ƒ Long-term savings 800 ƒ Markets-related products 600 ƒ Strong increase

  6. Slide 6: Improved sales focus increases business volumes across business areas

    Improved sales focus increases business volumes across business areas ƒ Strong lending growth adding approx. EUR 60m in revenues (YoY) ƒ lending up 12% to EUR 191bn ƒ driven by mortgages, SME lending, consumer finance, Shipping, Poland & Baltics ƒ Strong growth in long-term savings, adding approx. E

  7. Slide 7: Customer business drives increase in net/gains losses

    Customer business drives increase in net/gains losses YoY EURm 200 ƒ Net gains/losses in BA’s increased by 60% 180 190 210 to EUR 210m 160 ƒ Strong success in selling Markets products 159 140 in Retail and CIB 120 131 134 ƒ Strong growth in customer driven business 100 80 ƒ structured products 80 60

  8. Slide 8: Volume growth more than compensates margin pressure

    Volume growth more than compensates margin pressure YoY QoQ Lending, total 12% 1% – Mortgage lending 14% 2% – Consumer lending* 8% 2% – SME lending 11% 1% – CIB lending 4% -1% Deposits, total 8% -2% – Household deposits 7% 0% – SME deposits 11% -2% – CIB deposits -4% -4% * Retail consumer lending (c

  9. Slide 9: Increased focus on advisory services – higher share of income being non-interest income

    Increased focus on advisory services – higher share of income being non-interest income % 100 ƒ Increasing proportion of non- 90 interest income 80 39 40 43 44 47 ƒ still net interest income up 3% YoY 70 ƒ In line with strategy 60 61 60 50 57 56 ƒ Individual customer focused advice 53 40 and product

  10. Slide 10: Cost management culture firmly established

    Cost management culture firmly established EURm 4.000 3.831 ƒ Costs down 7% 2002-2005 3.655 3.668 3.500 ƒ Nordea accepts a moderate increase in costs in the present 3.000 strong market environment 2.500 ƒ to capture profitable growth opportunities 2.000 ƒ Nordea has flexibility and ability to adjust

  11. Slide 11: Cost/income ratio continues downwards

    Cost/income ratio continues downwards % 70 ƒ Continued down to 53% in Q1 60 ƒ income up 11% 60 56 53 ƒ costs up 3% 50 ƒ Continuous efficiency improvements 40 ƒ Delivery in line with financial targets 30 20 10 0 2004 2005 Q1/06 11

  12. Slide 12: Widened gap between income and cost development

    Widened gap between income and cost development Percentage points 10 ƒ Increased efficiency when delivering top line growth 9 8 ƒ Capture profitable revenue 8 7 7 opportunities 7 ƒ Cost reductions were the main 6 driver for bottom line growth 2003- 5 2004 4 ƒ Top line increasingly contributing 3 ƒ M

  13. Slide 13: Margin pressure continues – in a limited part of the business

    Margin pressure continues – in a limited part of the business ƒ Competition continues to put pressure on margins in certain parts of the business ƒ Mortgage lending – approx. 9% of Nordea’s revenues in Q1 ƒ YoY margins on average down 17bp ƒ margins on new lending below average book margins ƒ QoQ la

  14. Slide 14: Key growth areas

    Key growth areas ƒ Accelerate market position within consumer credits ƒ including cards ƒ Continue to leverage on strong position within long-term savings ƒ Harness Nordea’s leading position in capital markets – leveraging Nordea’s customer base ƒ SME banking provides opportunity ƒ Use the mortgage

  15. Slide 15: Increasing business through customer programmes rewards both customers & Nordea

    Increasing business through customer programmes rewards both customers & Nordea Strong growth in core segment Q1/05 to Q1/06 ƒ Key elements in the programmes offered to the customers: 16.4% ƒ more favourable prices the more business customers 9.2% do - and for the core customers a named personal ban

  16. Slide 16: Continuous increase in earnings per share

    Continuous increase in earnings per share EUR 1,0 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0,0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 16

  17. Slide 17: In summary

    In summary ƒ Growth strategy and business model pay off – profitable growth in business volumes ƒ Business model is delivering ƒ increased cross selling to existing customers – business volumes by core clients up 16% ƒ converting more customers to become core customers – no of core customers increas

  18. Slide 18: Interim Report First Quarter 2006 Press Conference

    Interim Report First Quarter 2006 Press Conference Lars G Nordström President and Group CEO

  19. Slide 19: Income statement summary

    Income statement summary EURm Q1/06 Q1/05 Chg % Net interest income 927 897 3 Net fee and commission income 507 453 12 Net gains/losses on items at fair value 242 115 110 Equity method 25 13 92 Other income 58 104 -44 Total operating income 1,759 1,582 11 Staff costs -543 -515 5 Other expenses -367

  20. Slide 20: Income statement summary

    Income statement summary EURm Q1/06 Q4/05 Chg % Net interest income 927 933 -1 Net fee and commission income 507 529 -4 Net gains/losses on items at fair value 242 147 65 Equity method 25 21 19 Other income 58 66 -12 Total operating income 1,759 1,696 4 Staff costs -543 -532 2 Other expenses -367 -3

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