SLIDE 1
The relationship bank business model has delivered
14
1
Shaping the future relationship bank Analyst and investor - - PowerPoint PPT Presentation
Shaping the future relationship bank Analyst and investor - - PowerPoint PPT Presentation
Shaping the future relationship bank Analyst and investor presentation Casper von Koskull, President and Group CEO The relationship bank business 14 model has delivered 1 Strong Nordea track record Strong capital generation and stable
SLIDE 2
SLIDE 3
2
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Strong Nordea track record…
Strong capital generation and stable returns at low risk1
- Acc. dividend, EURbn
- Acc. equity, EURbn
5.92 15.7 CET 1 Ratio, % 34 31 29 26 20 18 15 37 39 12
1) CAGR 2014 vs. 2005, adjusted for EUR 2.5bn rights issue in 2009. Equity columns represents end-of-period equity less dividends for the year. No assumption on reinvestment rate for paid out dividends 2) Calculated as Tier 1 capital excl. hybrid loans
SLIDE 4
… with a low risk profile
1) ROE adjusted for restructuring costs in 2011 and one-off related items in 2014
15.8 16.2 15.0 14.4 13.9 12.0 11.7 8.1 11.3 9.5 12.2 12.8 12.0 11.5 10.6 12.3 11.7 12.5 10.1 12.1 11.1 11.5 10.8 10.5 11.4 12.0 11.2 11.8 14.3 13.1 10.4
2008 2009 2010 2011 2012 2013 2014 2015
No quarter below 8%, every year above 11%
Nordea ROE track record1, %
2008 2009 2010 2011 2012 2013 2014 Q3 2015
SLIDE 5
4
The most stable bank in the Nordics
1) Calculated as quarter on quarter volatility in CET1 ratio, adjusted so that the volatility effect of those instances where the CET1 ratio increases between quarters are excluded
17 25 32 46 83 150 Nordea Peer 4 Peer 3 Peer 1 Peer 5 Peer 2 Quarterly net profit volatility Quarterly CET1 ratio volatility¹ 0.21 0.36 0.50 0.54 0.92 1.08 Peer 2 Peer 3 Nordea Peer 4 Peer 5 Peer 1
0.38
Max quarterly drop
0.72 1.29 1.42 2.15 3.24
Nordea and peers 2006-2015, %
SLIDE 6
Management buffer reflects Nordea’s diversified business
4.5
Pillar 1 min Swe & Nor Mortgage Risk Weight floors
1.0
Combined buffer2
5.9 15.4 0.5-1.5
CET1 level as per Swedish FSA3 Management buffer
2.0
Pillar 2 Systemic Risk Buffer
1) Maximum Distributable Amount, provided for illustrative purposes only. The Swedish FSA does not normally intend to make a formal decision on the capital requirement under Pillar 2. “Insofar that a formal decision has not been made, the capital requirement under Pillar 2 does not affect the level at which the automatic restrictions on distributions linked to the combined buffer requirement come into effect.” Swedish FSA, Sep 2014 2) The combined buffer consists of 3% systemic risk buffer, 2.5% capital conservation buffer and 0.4% countercyclical buffer. In accordance with Swedish FSA Memorandum on Capital Requirement for Swedish banks (Sept. 2, 2015), the calculation of the countercyclical buffer is based on the Swedish and Norwegian buffer rate of 1%. The buffer rates will increase from 1 to 1.5% when the new buffer rates enter into force in Q2 2016. 3) Capital need Q3 2015 in accordance with SREP, communicated by Nordea October 2, 2015
2.0 2.0
Pillar 2 (other) MDA restriction level¹ Approx.~10.4%
CET1 ratio build-up, %
SLIDE 7
Nordea as a dividend stock
0.20 0.25 0.29 0.26 0.34 0.43 0.62
2008 2009 2010 2011 2012 2013 2014
6 •
DIVIDENDS, EUR/SHARE
SLIDE 8
Creating the leading Nordic Wholesale bank
14
SLIDE 9
Towards the leading Wholesale Bank in the Nordic region
8 •
Strategy Structure Operating model Culture
Local competition International competition
Customer dimension:
Intensity
(Multi-local presence) Product dimension:
Relevance
(Size and competencies)
Management
STRATEGIC POSITIONING CHANGE LEVERS
Leveraging scale, competences and closeness
SLIDE 10
9
Wholesale Banking 2011-2014 - performance and value drivers
1) Assuming constant capital requirement (EC/REA) as for 2014 (~15%)
GDP growth
Low
Interest rates
Low
Volatility
Low
Capital markets regulation
High
Lending
- 15%
Income
- 5%
NII
- 7%
Fair Value
- 15%
Pricing
+30 bp
Fee & Comm.
+15%
Cost
±0%
REA
- 30%
Loan losses
- 43%
Market position
Achieved #1 position
Return¹
>+3 pp
Cost/Income
+2 pp
Top line drivers Value drivers Value creation Market characteristics
SLIDE 11
One Nordea
14
10
SLIDE 12
We have earned the right to invest in the Future Relationship Banking model
11 •
Capital hurdle Return hurdle Future business model
SLIDE 13
Direction and priorities – One Nordea through strengthened culture and relentless execution
Common values Common brand
In future In place
Common way of working
In progress
12 •
Common vision Common systems
One
- delivering
the Future Relationship Bank
SLIDE 14
Becoming One Nordea is a continuation of the journey we have already set out…
13 •
Future relationship bank
Universal banking Financial targets 2016-18
P P P
Overall strategic direction and targets remain unchanged
SLIDE 15
Accelerating transformation drivers and the current macro economic environment only adds to this challenge
14 •
Digitalisation continues to accelerate Compliance requirements still increasing Economic environment remains unfavorable No tailwind in support
- f transformation
SLIDE 16
15 •
Execution of four main strategic priorities will be key to delivering the transformation of our business model
Risk & compliance setup Digital strategy Simplification
Prerequisites for creating greater shareholder value
Cost & capital efficiency
SLIDE 17
16
Future operating model of a digital bank – the vision
“DIGITAL FACTORY” One operating model for product and service delivery CUSTOMER FACING
TRUST AGILE RELEVANT RELIABLE WELL STRUCTURED COST EFFECTIVE INNOVATIVE ANYTHING, ANYTIME, ANYWHERE EASY PERSONALISED END-TO-END AUTOMATED COMMON PROCESSES SCALABLE
SLIDE 18
The safe and trusted partner, acknowledged for its people, creating superior shareholder value
17 •
Truly living up to our values will be critical
It’s all about people One Nordea team
The safe and trusted partner, acknowledged for its people, creating superior shareholder value
Great customer experiences
SLIDE 19