Fourth Quarter Report 2010 Press and analyst conference 2 February 2011 Christian Clausen President and Group CEO
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 can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward- looking statements as a result of various factors. Important factors that may cause such a difference for Nordea include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate, (iii) change in the regulatory environment and other government actions and (iv) change in interest rate and foreign exchange rate levels. This presentation does not imply that Nordea has undertaken to revise these forward- looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided. 2 2 February 2011 Fourth Quarter Report 2010
Key messages � 2010 - important milestone on the journey towards Great Nordea � Record level income, operating profit and customer satisfaction � Strengthened position – significant customer inflow � Increased customer activity in all segments 3 2 February 2011 Fourth Quarter Report 2010
Solid trends in customer business Net interest income Total income Net loan losses Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Number of Gold Risk-adjusted profit Operating profit customers Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 4 2 February 2011 Fourth Quarter Report 2010
Result highlights EURm Q4/10 Q3/10 Chg % Q4/09 Chg % FY 10 FY 09 Chg % Net interest income 1,365 1,310 4 1,299 5 5,159 5,281 -2 Net fee and commission income 618 525 18 463 33 2,156 1,693 27 Net result items at fair value 504 446 13 351 44 1,837 1,946 -6 Other income 20 82 45 182 153 Total income 2,507 2,363 6 2,158 16 9,334 9,073 3 Staff costs -675 -721 -6 -702 -4 -2,784 -2,724 2 -1,270 -1,196 6 -1,219 4 -4,816 -4,512 7 Total expenses Profit before loan losses 1,237 1,167 6 939 32 4,518 4,561 -1 Net loan losses -166 -207 -20 -347 -52 -879 -1,486 -41 Operating profit 1,071 960 12 592 81 3,639 3,075 18 Net profit 770 711 8 447 72 2,663 2,318 15 Risk-adjusted profit 721 707 2 533 35 2,622 2,786 -6 5 2 February 2011 Fourth Quarter Report 2010
Total income at record level - solid income growth in customer business � Prudent growth strategy delivers Total income, EURm 9,334 � Strong contribution from group 9,073 initiatives 8,697 � Decrease in extraordinarily high 7,933 +10% income from Markets and Group Treasury offset by high customer activity 2009 2010 Customer areas* Other areas 6 2 February 2011 Fourth Quarter Report 2010 *Nordic Banking, NEM, SOSI, FID, Life and Int’l PB
Net interest income up 4% � Solid trend in customer areas Net interest income, EURm remains 1,365 1,356 1,321 1,305 1,310 1,299 � Deposit volumes and margins 1,249 1,235 continue to increase � Higher average funding costs Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 7 2 February 2011 Fourth Quarter Report 2010
Net fee and commission up 18% Net fee and commission income, EURm � Strong asset management commissions 618 � Increased AuM volumes 538 525 475 463 � Higher lending and brokerage fees 437 412 381 � Danish guarantee scheme expired � Positive seasonal effects from performance fees Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 8 2 February 2011 Fourth Quarter Report 2010
Strong growth in AuM continues – proves customer satisfaction Asset under Management (AuM), EURbn � Net inflow of EUR 9.5bn in 2010 +21% � Positive inflow in all main segments 191 180 � 2010 – 78% of all investment 170 169 158 composites outperformed 149 137 benchmarks 125 � 74% with a 3-year horizon � Close to 15% average absolute return to customers in 2010 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 9 2 February 2011 Fourth Quarter Report 2010
Fair value result up 13% Net result from items at fair value, EURm � Strong income in customer areas � Record level in Nordic Banking � Continued strong Life & Pensions results 408 339 331 302 301 296 291 283 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Customer areas Other areas ¹ Nordic Banking, SOSI, NEM, FID, Life and Int’l PB ² Group Treasury and Capital Markets unallocated 10 2 February 2011 Fourth Quarter Report 2010
Expenses well in line with outlook Total expenses, EURm � Total expenses 2010 up 7% � Excluding FX effects cost 4,816 growth 3.1% +3.1% 4,512 � Including investment costs from strategic initiatives � Negative seasonal effects in Q4 2009 2010 Group initiatives FX effect 11 2 February 2011 Fourth Quarter Report 2010
Net loan losses continues down � No provisions related to the Net loan losses, EURm expired Danish guarantee 425 scheme 356 358 347 � 23bps – in line with expected losses over a business cycle 261 245 � Baltic improvements – 26bps 23bps 207 166 (88bps) Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 12 2 February 2011 Fourth Quarter Report 2010
Improved credit quality Rating distribution 20% Increased Decreased 15% 10% 5% 0% 6+ 6 6- 5+ 5 5- 4+ 4 4- 3+ 3 3- 2+ 2 2- 1+ 1 1- Q4 2009 Q4 2010 13 2 February 2011 Fourth Quarter Report 2010
The regulatory framework is becoming gradually more concrete Industry challenges Capital requirements Revised business Short-term liquidity Pressure on return on equity models Long-term funding 14 2 February 2011 Fourth Quarter Report 2010
Unchanged Core Tier 1 ratio Core Tier 1 capital ratio (excl. Hybrids ), % � High net profit support: � Increased volumes – lending up 11% � Dividend payout ratio 44% 10.3 10.3 End 2009 End 2010 Fully implemented Basel II 15 2 February 2011 Fourth Quarter Report 2010
Strong capital position – compliant with proposed regulations Nordea # 3 among European peers in Standard&Poor’s Risk-adjusted capital (RAC) analysis 9.1 Commerzbank Generale DnBNOR Danske Bank KBC Erste Bank Lloyds Agricole BBVA Sanpaolo BNP Paribas Barclays Swedbank SHB RBS SEB Santander. UniCredit Nordea Dexia Societe Credit Intesa 16 2 February 2011 Fourth Quarter Report 2010
Prudent liquidity risk management Liquidity buffer, EURbn � Increased liquidity buffer, EUR 61bn +38 � High quality assets with 61 characteristics similar to Basel III 56 liquid assets +18 38 23 Short-term funding Liquidity buffer End 2007 End 2010 17 2 February 2011 Fourth Quarter Report 2010
Well matched average behavioural maturities Average behavioural maturity, years � Prudent match fund of behavioural maturities 2.7 � Same liquidity risk as NSFR 2.3 intends to address � Secures a sustainable lending/deposit mix Assets Liabilities 18 18 2 February 2011 Fourth Quarter Report 2010
Further development of business model Return on Equity (RoE) � Mitigate the effects on capital, liquidity and funding 12.8 12.2 � Objective to increase return on equity from today’s levels 8.1 Q4 2009 Q3 2010 Q4 2010 19 19 2 February 2011 Fourth Quarter Report 2010
Ambitious long-term targets remain - no outlook for 2011 Risk-adjusted profit, 2007-2010 Total shareholder return, 2007 - 2011 Ytd 40 48.6% 10.1 20 34.0% 0 -20 -40 Top quartile -60 -80 -100 Allied Irish Banks Bank of Ireland BBVA RBS Commerzbank Lloyds Unicredit Societe Generale Barclays Intesa Sanpaolo Swedbank SEB Danske Bank Erste Bank BNP Paribas Santander DnBNOR Nordea SHB KBC 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Rolling four quarter compared with FY 2006 EUR 1 ,957m Long-term target for average yearly growth Best in class RoE¹ 2007-2010 Nordea has reported the highest average return on equity (RoE) of Nordic peers², 14.1% ¹ Adjusted for one-offs 20 2 February 2011 Fourth Quarter Report 2010 ² Nordic peers as per Q3: Danske Bank, DnB NOR, SEB, SHB, Swedbank
The history of Nordea – 10 years of progress Fourth Quarter Report 2010 2 February 2011 21
Nordea created through a string of mergers Start: 300 1970: 80 banks 1980: 30 banks 1990: 4 banks 2010: Nordea One operating model Unique diversification Proven business model 22 2 February 2011 Fourth Quarter Report 2010
10 years of progress building a Great Nordea… Profitable organic growth 2007- +183% Stability and profitability 2002-06 Total shareholder return (TSR) The complex point of departure 2000-01 23 2 February 2011 Fourth Quarter Report 2010
…with significant growth… Profit before loan losses, Cost/Income ratio, % Total assets, EURm EURm 581 4,518 58 52 6pp +159% +127% 1,988 224 2000 2010 2000 2010 2000 2010 10-year growth 24 2 February 2011 Fourth Quarter Report 2010
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