Fourth Quarter Report 2010 Press and analyst conference 2 February - - PowerPoint PPT Presentation

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Fourth Quarter Report 2010 Press and analyst conference 2 February - - PowerPoint PPT Presentation

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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 managements current views with respect to

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Fourth Quarter Report 2010 Press and analyst conference

2 February 2011

Christian Clausen

President and Group CEO

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2 February 2011 Fourth Quarter Report 2010 2

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.

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2 February 2011 Fourth Quarter Report 2010 3

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

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2 February 2011 Fourth Quarter Report 2010 4

Solid trends in customer business

Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010

Net loan losses Net interest income Operating profit

Q4 2009 Q3 2010 Q4 2010

Number of Gold customers

Q4 2009 Q3 2010 Q4 2010

Risk-adjusted profit

Q4 2009 Q3 2010 Q4 2010

Total income

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2 February 2011 Fourth Quarter Report 2010 5

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 Total expenses

  • 1,270
  • 1,196

6

  • 1,219

4

  • 4,816
  • 4,512

7 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
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2 February 2011 Fourth Quarter Report 2010 6

Total income at record level

  • solid income growth in customer business

7,933 8,697 2009 2010 Customer areas* Other areas

+10% Prudent growth strategy delivers Strong contribution from group

initiatives

Decrease in extraordinarily high

income from Markets and Group Treasury offset by high customer activity

*Nordic Banking, NEM, SOSI, FID, Life and Int’l PB

9,334 9,073

Total income, EURm

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2 February 2011 Fourth Quarter Report 2010 7

1,299 1,235 1,249 1,310 1,365 1,305 1,321 1,356 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10

Net interest income up 4%

Solid trend in customer areas

remains

Deposit volumes and margins

continue to increase

Higher average funding costs

Net interest income, EURm

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2 February 2011 Fourth Quarter Report 2010 8

Net fee and commission up 18%

Strong asset management

commissions

Increased AuM volumes

Higher lending and brokerage fees Danish guarantee scheme expired Positive seasonal effects from

performance fees

463 475 538 525 618 381 437 412 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10

Net fee and commission income, EURm

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2 February 2011 Fourth Quarter Report 2010 9

Strong growth in AuM continues

– proves customer satisfaction

Net inflow of EUR 9.5bn in 2010

Positive inflow in all main segments

2010 – 78% of all investment

composites outperformed benchmarks

74% with a 3-year horizon

Close to 15% average absolute

return to customers in 2010

158 169 170 180 191 137 149 125

Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10

+21% Asset under Management (AuM), EURbn

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2 February 2011 Fourth Quarter Report 2010 10

Fair value result up 13%

Strong income in customer areas

Record level in Nordic Banking Continued strong Life & Pensions results

¹ Nordic Banking, SOSI, NEM, FID, Life and Int’l PB ² Group Treasury and Capital Markets unallocated 302 301 339 331 408 283 291 296 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10

Customer areas Other areas

Net result from items at fair value, EURm

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2 February 2011 Fourth Quarter Report 2010 11

Expenses well in line with outlook

Total expenses 2010 up 7% Excluding FX effects cost

growth 3.1%

Including investment costs from

strategic initiatives Negative seasonal effects in

Q4

2009 2010 Group initiatives FX effect

+3.1% 4,512 4,816 Total expenses, EURm

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2 February 2011 Fourth Quarter Report 2010 12

Net loan losses continues down

No provisions related to the

expired Danish guarantee scheme

23bps – in line with expected

losses over a business cycle

Baltic improvements – 26bps

(88bps)

347 261 245 207 166 425 358 356 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10

23bps Net loan losses, EURm

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2 February 2011 Fourth Quarter Report 2010 13

0% 5% 10% 15% 20%

6+ 6 6- 5+ 5 5- 4+ 4 4- 3+ 3 3- 2+ 2 2- 1+ 1 1-

Q4 2009 Q4 2010

Improved credit quality

Rating distribution Increased Decreased

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2 February 2011 Fourth Quarter Report 2010 14

The regulatory framework is becoming gradually more concrete

Revised business models

Capital requirements Pressure on return on equity

Industry challenges

Short-term liquidity Long-term funding

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2 February 2011 Fourth Quarter Report 2010 15

Unchanged Core Tier 1 ratio

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

Core Tier 1 capital ratio (excl. Hybrids), %

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2 February 2011 Fourth Quarter Report 2010 16

Nordea # 3 among European peers in Standard&Poor’s Risk-adjusted capital (RAC) analysis

9.1

Commerzbank Danske Bank KBC Erste Bank Lloyds Credit Agricole Societe Generale BBVA Intesa Sanpaolo BNP Paribas Barclays Swedbank SHB RBS SEB Santander. UniCredit Nordea DnBNOR Dexia

Strong capital position

– compliant with proposed regulations

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2 February 2011 Fourth Quarter Report 2010 17

Prudent liquidity risk management

38 23 56 61

Short-term funding Liquidity buffer End 2007 End 2010

+18 +38

Liquidity buffer, EURbn

Increased liquidity buffer, EUR 61bn High quality assets with

characteristics similar to Basel III liquid assets

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2 February 2011 Fourth Quarter Report 2010 18 18

Well matched average behavioural maturities

Average behavioural maturity, years

2.7 2.3

Assets Liabilities

Prudent match fund of behavioural

maturities

Same liquidity risk as NSFR

intends to address

Secures a sustainable

lending/deposit mix

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2 February 2011 Fourth Quarter Report 2010 19 19

Further development of business model

Return on Equity (RoE)

Mitigate the effects on capital,

liquidity and funding

Objective to increase return on

equity from today’s levels

8.1 12.2 12.8 Q4 2009 Q3 2010 Q4 2010

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2 February 2011 Fourth Quarter Report 2010 20

10.1

  • 100
  • 80
  • 60
  • 40
  • 20

20 40

Allied Irish Banks Bank of Ireland RBS Commerzbank Lloyds KBC Unicredit Societe Generale Barclays Intesa Sanpaolo Swedbank SEB BBVA Danske Bank Erste Bank BNP Paribas Santander DnBNOR Nordea SHB

Ambitious long-term targets remain

  • no outlook for 2011

Q1 7 Q2 7 Q3 7 Q4 7 Q1 8 Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Rolling four quarter compared with FY 2006 EUR 1 ,957m Long-term target for average yearly growth

Top quartile Risk-adjusted profit, 2007-2010

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 ² Nordic peers as per Q3: Danske Bank, DnB NOR, SEB, SHB, Swedbank

48.6% 34.0%

Total shareholder return, 2007 - 2011 Ytd

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2 February 2011 Fourth Quarter Report 2010 21

The history of Nordea – 10 years of progress

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2 February 2011 Fourth Quarter Report 2010 22

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

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2 February 2011 Fourth Quarter Report 2010 23

2002-06 2000-01 The complex point of departure Stability and profitability Profitable organic growth

10 years of progress building a Great Nordea…

2007- Total shareholder return (TSR) +183%

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2 February 2011 Fourth Quarter Report 2010 24

Profit before loan losses, EURm 4,518 1,988 2000 2010 Cost/Income ratio, % 52 58 2000 2010

…with significant growth…

Total assets, EURm 581 224 2000 2010

10-year growth

+127% 6pp +159%

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2 February 2011 Fourth Quarter Report 2010 25

…and strong credit management

  • 60
  • 50
  • 40
  • 30
  • 20
  • 10

10 20 H1 2002 H2 2002 H1 2003 H2 2003 H1 2004 H2 2004 H1 2005 H2 2005 H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010

Credit risk appetite 25bps

Loan loss ratio

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2 February 2011 Fourth Quarter Report 2010 26 26

Solid position in nine home markets

Nordea’s nine home markets

11 million customers 1,400 branches and 6 million

e-banking customers

AA credit rating A top 10 European retail bank

and 1 of 2 Nordic companies

  • n Forbes 100
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2 February 2011 Fourth Quarter Report 2010 27

Strong customer business momentum

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2 February 2011 Fourth Quarter Report 2010 28

Nordic economies show strength

Solid growth rates Modest inflation Strong public finances Improvements in labour markets

GDP growth, %, y/y

Source: Nordea Markets

Public finances, % of GDP

Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 0 7 0 8 0 9 1 0 1 1 1 2

  • 1 0 . 0
  • 7 . 5
  • 5 . 0
  • 2 . 5

0 . 0 2 . 5 5 . 0 7 . 5

  • 1 0 . 0
  • 7 . 5
  • 5 . 0
  • 2 . 5

0 . 0 2 . 5 5 . 0 7 . 5 D e n m a r k N o r w a y Fin la n d S w e d e n 0 8 0 9 1 0 1 1 1 2

  • 1 0 . 0
  • 7 . 5
  • 5 . 0
  • 2 . 5

0 . 0 2 . 5 5 . 0

  • 1 0 . 0
  • 7 . 5
  • 5 . 0
  • 2 . 5

0 . 0 2 . 5 5 . 0 Pu b lic fin a n ce s, % o f G D P U SA Eu r o a r e a D e n m a r k Fin la n d Sw e d e n

Norway 13-16% surplus

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2 February 2011 Fourth Quarter Report 2010 29

2,444 2,549 2,700 2,900 2007 2008 2009 2010

Award-winning value proposition

continue to attracts customers in all segments

Customer acquisition trend

accelerated in 2010 – especially in relationship segments

Nordea Asset Management is

  • utgrowing peers both relatively

and in absolute numbers

Strengthened market position…

Number of Gold customers¹, 000

21 17 14 12 12 10 9 4 12 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7

Q3/09 – Q3/10 Nordic market AuM development, %

¹Nordic Banking and New European Markets

CAGR 6%

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2 February 2011 Fourth Quarter Report 2010 30

Despite economic recession Strong focus on relationship

banking

…with an all-time-high customer satisfaction level

70.6 71.7 71.5 71.8 2007 2008 2009 2010

Customer Satisfaction Index¹ (CSI), aggregate

¹ Equal weight from the four Nordic countries

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2 February 2011 Fourth Quarter Report 2010 31

…increases business activity in all segments

Solid growth trends

in relationship segments¹

Customer business

gaining momentum

¹ Corporate Merchant Banking, Corporate Large, Nordic Private Banking and Gold customers

Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Rolling 3 months Rolling 12 months Rolling 24 months

Total income monthly average

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2 February 2011 Fourth Quarter Report 2010 32

Group initiatives are on track in all areas

Household relationship strategy New European Markets Efficiency initiatives Corporate relationship strategy

  • 1. Future distribution
  • 2. New customer

acquisition

  • 3. Growth plan Finland
  • 4. Growth plan CMB
  • 5. Customer-driven

Markets business

  • 6. Growth plan Poland
  • 7. Top-league IT and
  • perations
  • 8. Product platforms
  • 9. Infrastructure

upgrade

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2 February 2011 Fourth Quarter Report 2010 33

Increased customer satisfaction,

sales and lower cost to serve

82 branches operating in new

formats

Significant increase in number of

proactive customer meetings

Up 48% compared to Q4 2009

Further improved Private Netbank

Specialising and focusing our branches

Future distribution

Lending Insurance Savings and investments Daily banking Ensure all services provided by Nordea The 3600 meeting

Focused branches supports the 360- degree meeting

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2 February 2011 Fourth Quarter Report 2010 34

119.5 136.7

Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 68.3 74.5 36.4 30.7

Record inflow of new customers

200,000 Gold and Private Banking of

which 65% new customers to Nordea Improved service level in Finnish

high growth areas

170 new advisers and specialists

recruited

Relocation and refurbishment of

branches

Continued strong demand in household segment

Household¹ volumes increase 2010, EURbn

Lending up 14% Deposits up 7% Nordic Retail Funds up 19% Growth plan Finland New customer acquisition

¹Nordic Banking volumes

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2 February 2011 Fourth Quarter Report 2010 35

Growth plan CMB Sweden proceeds

as planned

Total income up 19% Improved customer relations – several new

mandates won Strategy to build house-bank relations

proven successful

Solid income growth in all segments

Strong income growth within CMB

Income growth 2007-2010, CAGR %

Large NEM SOSI FID Other CMB

21 34 8 21 15

  • 3

307 378 436

Q4 2009 Q3 2010 Q4 2010

Total income CMB, EURm

Growth plan CMB

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2 February 2011 Fourth Quarter Report 2010 36

High ranking in equity and bond markets

Markets business

Nordic Primary Equity Market league table 2010 Nordic Primary Equity Market league table 2010

  • Pos. Bank name

Deal value EURm No. 1 Goldman Sachs 6,433 6 2 SEB 5,475 23 3 JPMorgan 4,218 4 4 Morgan Stanley 3,880 4 5 Nordea Markets 3,112 11 6 DnB NOR Bank ASA 3,112 11 7 Bank of America Merrill Lynch 2,005 2 8 ABG Sundal Collier 1,932 16 9 Citi 1,910 2 10 Deutsche Bank 1,819 2

Bookrunner

Note: The full deal value for a transaction is included in the figures for every bank involved in the deal. The table includes all Nordic primary transactions, including FIs. Source: Dialogic Nordic Corporate Eurobond benchmark league table 2009 – 2010

  • Pos. Bank name

Deal value EURm No. % share 1 Deutsche Bank 3,792 19 16% 2 BNP Paribas 3,371 18 14% 3 Nordea Markets 2,667 16 11% 4 RBS 2,004 11 8% 5 Barclays Capital 1,900 11 8% 6 Citi 1,879 10 8% 7 Soc Gen 1,875 8 8% 8 JPMorgan 1,600 10 7% 9 Calyon 900 5 4% 10 Danske Bank 850 6 4%

Bookrunner

Note: The table includes Nordic IG syndicated corporate non-financial

  • issues. Tranche value >= EUR 300mn, maturity >1yr, active bookrunners.

Source: Dialogic

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2 February 2011 Fourth Quarter Report 2010 37

New European Markets – a growth area

265 492 553 664

2007 2008 2009 2010

Total income NEM, EURm

Solid income growth continues

Increased lending and deposit volumes Improved credit quality

25,000 new Gold customers welcomed 45 new branches in Poland opened

2010

Strengthened position in both Household and

Corporate segments

Number of branches Poland

45 85 144 158 203

2006 2007 2008 2009 2010

CAGR 36%

Growth plan Poland

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2 February 2011 Fourth Quarter Report 2010 38

Strong efficiency improvements in customer areas

* Excl. Roskilde & Fionia

Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010

# customers per FTE

Nordic Banking

Q4 2009 Q3 2010 Q4 2010

# 360 meetings/PBA

Nordic Banking

# gold customers in NEM

Q4 2009 Q3 2010 Q4 2010

New customer acquisition from outside Nordea*

Nordic Banking

+2% +27% +14% +7%

Income per FTE

Nordic Banking

Business volumes per FTE

Nordic Banking

Q4 2009 Q3 2010 Q4 2010 Q4 2009 Q3 2010 Q4 2010

+13% +4%

Based on FTEs in Branches

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2 February 2011 Fourth Quarter Report 2010 39

Solid productivity improvements

+2%

IT production costs

1 /

production volumes

2008 2009 2010

#contracts/loans/cards/ invoices / FTE

Nordea Finance

2008 2009 2010

  • 19%

+25%

2 In multiuser buildings

AM costs / portfolio

2008 2009 2010

  • 13%

Square meters / workplace

2

2008 2009 2010

  • 5%

1 Nordic Processor

2008 2009 2010

# manual transactions in branch network

Household customers

  • 23%

Corporate payment transactions / FTEs

Transaction Products

2008 2009 2010

+28%

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2 February 2011 Fourth Quarter Report 2010 40

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

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Fourth Quarter Report 2010 Press and analyst conference

2 February 2011

Christian Clausen

President and Group CEO