Slide 1: First quarter 2013 results: Nordea delivers on its plan
First quarter 2013 results Nordea delivers on its plan Press conference 24 April 2013 Christian Clausen, 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: Highlights
Highlights • We deliver on our plan • Underlying profit up • Flat costs for ten consecutive quarters • Robust credit quality • Flat Risk weighted assets • Increased Core Tier 1 ratio to 13.2% • Continued inflow of new customers and rapid increase of mobile bank customers • Awarded “Best bank 2013 in
Slide 4: Q1 2013 financial results highlights
• Q1 2013 financial results highlights • Delivering on the plan
Slide 5: Financial results Q1/13
Financial results Q1/13 EURm Q1/13 Q4/12 Change % Q1/12 Change % Net interest income 1 400 1 429 -2 1 420 -1 Net fee and commission inc. 632 692 -9 596 6 Net fair value result 444 444 0 469 -5 Total income1 2 558 2 630 -3 2 531 1 Staff costs -769 -764 1 -771 0 Total expenses -1 299 -1 327 -2 -1 276
Slide 6: Net interest income
Net interest income Net interest income development, EURm Comments NII slightly down in quarter 1 462 1 441 1 429 1 427 1 420 1 400 • Two interest days less 1 379 1 324 1 326 • Lower return on liquidity buffer Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 6 •
Slide 7: Stable Net Interest Margin
Stable Net Interest Margin Blended net interest margin, % Comments 107 bps Net margins largely flat, +2 bps to 107 Lower interest rates put pressure on deposit margins Q3/11 Q1/12 Q3/12 Q1/13 Lending margins up somewhat in quarter, adapting to regulatory cost Lending- and deposit volumes, EURb
Slide 8: Net fee and commission income
Net fee and commission income Net fee and commission income, EURm Comments Good trend but down on a 692 seasonally strong Q4 602 623 611 632 582 588 596 605 Higher deposit guarantee fees of EUR 14m Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 8 •
Slide 9: Assets under Management at all time high
Assets under Management at all time high Assets under Management, EURbn Comments Assets under Management at all-time- 223.8 high: EUR 223.8bn 210.9 218.3 197.2 199.8 177.9 187.4 Investment performance EUR 5.9bn • 65% of composites outperformed benchmarks Strong inflow in Private Banking, Nordi
Slide 10: Net fair value at continued high levels
Net fair value at continued high levels Net fair value, EURm Comments Unchanged on previous quarter Customer driven activities up by 14% in the quarter* 311 255 218 134 152 215 102 107 276 270 310 292 233 254 243 251 254 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 -132 Customer area Ot
Slide 11: Flat costs for ten consecutive quarters
Flat costs for ten consecutive quarters Total expenses (excl. FX and variable pay), EURm Comments 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 1 164 Expenses under solid control Number of FTE’s down 4% y-o-y Flat costs for 10 quarters • Costs set to remain flat for an Q4/10 Q1/11 Q2/1
Slide 12: Robust credit quality
Robust credit quality Total net loan losses, EURm Comments 242 263 254 244 218 217 Underlying credit quality remains 199199 robust 118 112 Stabilisation of impaired loans Losses in Denmark and shipping down: Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 • Loan loss ratio in Banking Imp
Slide 13: Denmark is stabilising
Denmark is stabilising House price index1 Loan losses net, Retail Banking Denmark 110 200 150 100 100 90 50 0 80 -50 70 -100 2006 2008 2010 2012 2013 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Single-family houses Flats Collectively assessed Portfolio assessed non-significant loans Indivi
Slide 14: Shipping credit quality is stabilising
Shipping credit quality is stabilising Shipping freight rates Loan losses net, shipping ’000 ClarkSea index 60 000 80 50 50 000 60 40 000 40 30 000 20 25 20 000 0 10 000 -20 00 -40 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 2000 2002 2004 2006 2
Slide 15: Strong underlying performance in Q1
Strong underlying performance in Q1 Adjusted operating profit, EURm +7.5% 30 1 081 1 059 1 060 14 1 006 -23 -53 Q4/12 A Fee recognition Q4/12 Adj Q1/13 A Sale of portfolio Increased State Two interest Q1/13 Adj in Life guarantee fees days less 15 •
Slide 16: Strong access to funding
Strong access to funding Long term senior unsecured funding* Comments Strong diversified funding platform Confirmed AA rating from Moody's and Fitch Liquidity buffer EUR 67bn Italy Spain France Nordea Belgium Peers Peers One of the lowest funding costs of LCR developments any bank in Europe
Slide 17: Capital generation
Capital generation Core Tier 1 capital , EURm Comments 22 208 Continued strong profit generation 20 677 21 961 17 766 19 103 Negatively impacted by revised 14 313 11 689 12 821 IAS 19 2006 2007 2008 2009 2010 2011 2012 Q1/13 Dividend payout Anticipated dividend Capital generation*, EURm Acc. div
Slide 18: Risk weighted assets
Risk weighted assets Risk-weighted assets , EURbn* 183 185 182 182 180 181 179 168 168 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 1 Basel 2.5 excluding transition rules 18 •
Slide 19: Core Tier 1 ratio
Core Tier 1 ratio Core Tier 1 capital ratio, %* Comments 13.1 13.2 Improved ratio 10 bps since Q4/12 12.2 and 160 bps since Q1/12 11.6 11.8 10.7 11.0 11.0 11.2 Capital policy: Core Tier 1 ratio of >13% Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 * Excluding hybrids. Basel II excluding
Slide 20: Retail Banking: Development and deliveries on the plan
Retail Banking: Development and deliveries on the plan RaRoCar, % Execution on financial plan 13.6 Cross-selling activities 13.0 • Particularly positive results 12.7 in the savings area 20,000 new Gold and Premium Q1-12 Q4-12 Q1-13 customers welcomed Cost efficiency initiatives ahead of Key re
Slide 21: Wholesale Banking: Development and deliveries on the plan
Wholesale Banking: Development and deliveries on the plan Relationship quality Comments and execution on plan 100% Continued challenging economic relationships 80% Nordea outlook and strict business selection Important 60% 40% Higher margins did not fully offset 20% lower lending volumes 0% (40)
Slide 22: Wealth Management: Development and deliveries on the plan
Wealth Management: Development and deliveries on the plan Gross Written Premium, EURm Comments and execution on plan 1,869 1,540 1,649 AuM growth of 13% in Q1/13 YoY 1,333 1,213 82% 82% of Gross Written Premium in 69% 80% 75% 75% capital-light products 31% 18% 25% 25% 20% Cost savings in Life
Slide 23: Delivering on the plan
• Q1 2013 financial results highlights • Delivering on the plan
Slide 24: 2015 plan – progress against our published goals
2015 plan – progress against our published goals Nordea market commitments Key initiatives and levers Strong capital generation Capital initiatives to and return of excess capital maintain CT1 ratio >13% to our shareholders Initiatives for ROE target of 15% income generation at a CT1 ratio >13% Flat
Slide 25: Core Tier 1 ratio +10 bps in Q1
Core Tier 1 ratio +10 bps in Q1 Core Tier 1 ratio development, % 0.24% 0.05% 0.15% 13.2% 13.1% 0% 0.02% 0.12% 0.15% 0.09% Core Tier 1 Credit Growth FX effects & Interimistic RWA Profit net Core Tier 1 IAS 19 Core Tier 1 ratio Q4 Quality Other regulatory efficiency dividend deductions impact ratio Q1
Slide 26: Income holding up – challenging environment mitigated
Income holding up – challenging environment mitigated Total income, EURm Comments New customers: over 20,000 new 2 558 2 531 2 606 2 469 2 630 2 558 relationship customers 2 510 2 342 2 091 Ancillary income • Elevation of 8,000 customers to Gold and Premium (RB) • Non-interest income up 5% (RB)
Slide 27: Continued inflow of new customers
Continued inflow of new customers Relationship customers, household, ‘000s Comments Over 20,000 new relationship 3128 3148 3162 3181 3196 3208 3220 customers from outside Nordea 3051 3092 Net increase of 58,000 in one year Increase in each quarter in each Nordic country over the last years 4
Slide 28: Costs in check – ten quarters of flat costs
Costs in check – ten quarters of flat costs Total expenses (excl. FX & variable pay*), EURm 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 1 164 1 164 Underlying costs Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14Avg. '15 *Variable pay i
Slide 29: Cost initiatives progressing according to plan
Cost initiatives progressing according to plan – approx. 40m of gross savings realised in Q1 Streamline physical • Optimisation of distribution mix, reduced cash-handling distribution • Automating transaction and reporting processes Reengineer • Transfer of processes to NOC (Nordea’s near-shoring ce
Slide 30: Loan losses development in Q1 – decreasing in line with plan
Loan losses development in Q1 – decreasing in line with plan Actual loan losses, bps Comments Credit quality remains robust 30 20 Loan losses still concentrated 10 to Denmark and Shipping 0 (10) (16) (20) (30) (40) (50) (60) (70) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 31: RoE YoY - challenging macro environment and increased capital
RoE YoY - challenging macro environment and increased capital offset strong underlying business performance Return on Equity, %, Q1 2012 – Q1 2013 0,3 0,6 0,2 0,3 1,4 1,7 0,2 11,9 1,0 11,3 0,1 Business driven External factors +2.1% -2.6% RoE Q1 Re-pricing NCI excl state NFV Lower Lower loan Lower Hi
Slide 32: Progress in summary
Progress in summary Progress on Nordea financial plan 2013-2015 Core Tier 1 ratio +10 bps in Q1 to 13.2% due to RWA efficiencies and CT1 ratio profit generation RWA development in Q1 approx. flat, as efficiency initiatives mitigate RWA increase due to regulatory changes Income holding up by in
Slide 33: Thank you!
Thank you! First quarter results 2013