Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Q4 2020 Earnings Presentation
22 slides from Nordea Bank Abp's earnings presentation, February 2021
Slide 1: Fourth quarter and full-year results 2020
Fourth quarter and full-year results 2020 Frank Vang-Jensen, President, Group CEO
Slide 2: Executive summary
Executive summary • Continued strong growth in customer business volumes in all countries Mortgage lending volumes up 6% y/y and assets under management up 9% y/y to record high of EUR 354bn SME lending up 8% y/y, supported by acquisition of SG Finans, now Nordea Finance Equipment (NFE) • Operat
Slide 3: Group quarterly results Q4 2020
Group quarterly results Q4 2020 Income statement and key ratios Q420 Q419 Q4/Q4 Q320 Q4/Q3 EURm, excluding items affecting comparability* Net interest income 1,169 1,108 6% 1,146 2% Net fee and commission income 792 775 2% 729 9% Net fair value result 217 250 -13% 257 -16% Other income 41 7 23 78% T
Slide 4: Group full-year results 2020
Group full-year results 2020 Income statement and key ratios FY20 FY19 FY/FY EURm, excluding items affecting comparability* Net interest income 4,515 4,318 5% Net fee and commission income 2,959 3,011 -2% Net fair value result 900 1,012 -11% Other income 92 144 -36% Total operating income 8,466 8,48
Slide 5: Net interest income – increase driven by growth in mortgage and SME lending
Net interest income – increase driven by growth in mortgage and SME lending Year-over-year bridge, EURm Comments +6% • Net interest income up 6%, highest growth rate 21 1,179 since 2008 54 10 1,169 • Volume growth and higher market shares in mortgages in all countries. Positive SME lending 39 1,108
Slide 6: Net fee and commission income – good customer activity and asset management inflows
Net fee and commission income – good customer activity and asset management inflows Year-over-year bridge, EURm Comments +2% • Net fee and commission income up 2%, mainly 10 driven by higher advisory income 30 4 7 792 792 0 • Savings income up 8% due to higher asset 775 8 management fee income and h
Slide 7: Net fair value result – underlying positive development in Markets
Net fair value result – underlying positive development in Markets Net fair value result, EURm Comments • Net fair value result down 13% -13% • Net fair value result excluding valuation adjustments 316 14 0 up 4%, driven by strong income from market-making 250 91 257 217 operations 110 10 23 36 26 9
Slide 8: Costs – underlying costs down according to plan; additional items in Q4
Costs – underlying costs down according to plan; additional items in Q4 Year-over-year bridge, EURm Comments +3% • Costs up 3% y/y; underlying costs down 3%, 1,218 29 1 excluding FX 1,179 35 39 1,140 15 • Costs higher in quarter due to integration of Nordea Finance Equipment (NFE), one-off IT impair
Slide 9: Net loan losses and similar net result – full-year losses in line with guidance
Net loan losses and similar net result – full-year losses in line with guidance Net loan losses and similar net result Q420, EURm Comments • Net loan losses and similar net result EUR 28m* -35 58 -30 • Total net losses for 2020 in line with guidance of 0 below EUR 1bn 93 28 • Projected impact of COV
Slide 10: Capital – very strong capital position to support customers and pay dividends
Capital – very strong capital position to support customers and pay dividends CET1 capital ratio development, % Comments 0.2 -0.1 0.2 0.1 -0.3 0.8 1.9 • CET1 capital ratio 17.1%, 6.9 percentage points 6.9* above regulatory requirement* 16.4 17.1 • Risk exposure amount up EUR 5bn to EUR 155bn, 10.2 d
Slide 11: Personal Banking – strong momentum in mortgages in all countries
Personal Banking – strong momentum in mortgages in all countries Total income, EURm Comments -1% • Strong mortgage volume growth: up 6%* or EUR 8bn 857 825 831 849 814 • Increase in market shares across countries 523 • Total income down 1% due to reduced payments activity 517 501 540 533 • Net inter
Slide 12: Business Banking – increased lending volumes and higher levels of business activity
Business Banking – increased lending volumes and higher levels of business activity Total income, EURm Comments +8% • Total income up 8% due to increased business activity and 621 576 575 545 547 equity capital market transactions • Total income up 2% excluding impact of Nordea Finance 346 346 381 E
Slide 13: Large Corporates & Institutions – strong business activity, lower capital consumption
Large Corporates & Institutions – strong business activity, lower capital consumption Total income, EURm Comments +8% • Total income up 8%, with improvements across all income 465 476 444 lines 413 405 • Increased lending margins and high levels of customer activity 211 224 225 218 217 • Strong resu
Slide 14: Asset & Wealth Management – record volumes and strong net inflow via all channels
Asset & Wealth Management – record volumes and strong net inflow via all channels Total income, EURm Comments -6% • Assets under management (AuM) up 9% to all-time high of 268 258 252 EUR 354bn 13 246 18 226 16 17 16 • Highest quarterly net inflow (EUR 8.2bn) since Q3 2016 and second highest ever 21
Slide 15: Next step in our sustainability journey: elevated ambition level and enhanced customer support
Next step in our sustainability journey: elevated ambition level and enhanced customer support Our purpose is the starting point As a leading bank we are well positioned to drive change Together, we lead the way, enabling dreams and everyday aspirations for a greater good Sustainability integrated i
Slide 16: Nordea is committed to delivering on its financial targets
Nordea is committed to delivering on its financial targets Cost-to-income ratio in FY22 Return on equity in FY22 50% >10% Capital policy Dividend policy 60-70% payout of distributable 150-200bp profits to shareholders management buffer Excess capital intended to be distributed above regulatory CET1
Slide 17: Nordea
Nordea
Slide 18: Appendix
Nordea Appendix
Slide 19: Loan book – well diversified with strong credit quality during 2020
Loan book – well diversified with strong credit quality during 2020 Portfolio well diversified Five segments with 4% of Updated analysis of COVID-19 across countries and total exposures significantly impact by segment segments affected 0.1% Air transportation EUR 12bn, 4% Significantly affected 0.1%
Slide 20: Strong and stable credit quality – continued reduction in impaired loans
Strong and stable credit quality – continued reduction in impaired loans Stage 2 and 3 loans at amortised cost, EURm Comments • Decrease in impaired loans ratio, from 1.69% to 1.51% q/q, due to write-offs of non-performing loans 10,748 11,181 12,512 13,576 13,840 • Stage 2 loans up 2% q/q due to COV
Slide 21: Coverage ratios – well provisioned for potential losses
Coverage ratios – well provisioned for potential losses Coverage ratios Significantly Partially affected Non-significantly affected segments segments affected segments 73 70 Avg. 46% Avg. 48% Avg. 34% 67 67 66 62 60 56 53 51 50 51 50 49 48 47 47 44 44 43 42 42 41 40 38 39 38 38 38 36 36 37 33 30 10
Slide 22: Nordic economic development – resilient economies rebounding
Nordic economic development – resilient economies rebounding House prices Nordics – among best performing countries during COVID-19 • Danish GDP up 5.2% q/q in Q3. Unemployment down to 4.5% in November and house prices up 5% y/y in the third quarter • Finnish GDP up 3.3% q/q in Q3. Unemployment up t