Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Nordea Kredit — Debt Investor Presentation (2020)
25 slides from Nordea Bank Abp's debt investor presentation, 2020
Slide 1: Nordea Kredit Covered Bonds Q2 2020 Debt Investor Presentation
Slide 2: Table of contents
Table of contents 1. Nordea covered bond issuance in brief 3 2. Nordea Kredit in brief 5 3. Cover pool key characteristics 7 4. Asset quality 11 5. Underwriting criteria 14 6. Covered bond framework 16 7. Macro 18 8. Contacts and links 22 2
Slide 3: 1. Nordea covered bond issuance in brief
1. Nordea covered bond issuance in brief 3
Slide 4: Nordea covered bond operations
Nordea covered bond operations Q2 2020 Nordea Eiendomskreditt Nordea Hypotek Nordea Kredit Nordea Mortgage Bank Four aligned covered bond issuers with complementary roles Legislation Norwegian Swedish Danish Finnish Cover pool assets Norwegian residential mortgages Swedish residential mortgages prim
Slide 5: 2. Nordea Kredit in brief
2. Nordea Kredit in brief Habe foe: tly Nordea
Slide 6: Nordea Kredit – in brief
Nordea Kredit – in brief Q2 2020 • 100% owned subsidiary of Nordea Bank Abp - the largest Nordic financial institution • Operates as a mortgage credit institution with the main purpose of granting mortgage credit loans funded by issuing covered bonds • Founded in 1993 and supervised by the Danish FS
Slide 7: 3. Cover pool key characteristics
3. Cover pool key characteristics 7
Slide 8: Cover pool key characteristics
Cover pool key characteristics Q2 2020 Outstanding covered bonds EUR 55.6bn. Mortgage credit loans secured by mainly residential property Cover pool content (total: EUR 60.3bn.) Geographic distribution Throughout Denmark with concentration in urban areas Weighted average LTV 57.6% Average residentia
Slide 9: Loan portfolio
Loan portfolio Loan portfolio by property category Portfolio by loan type Total DKK 404.5bn Share of interest-only mortgages Market share1 – 14% overall 1) Market share of the Danish mortgage credit market 9
Slide 10: Loan portfolio by regions
Loan portfolio by regions All property categories Total 5.82m 10
Slide 11: 4. Asset quality
4. Asset quality 11
Slide 12: Loan to value (LTV) – loans for residential and commercial properties
Loan to value (LTV) – loans for residential and commercial properties Q2 2020 Loan type Residential loans Commercial loans Weighted average LTV - indexed 60.8% 45.8% LTV buckets Nominal (DKKm) % Loans Nominal (DKKm) % Loans >0 - <=40 % 208,955 64.8% 63,008 73.4% >40 - <=50 % 41,836 13.0% 11,483 13.4
Slide 13: Asset quality
Asset quality Arrears (owner occupied dwellings and holiday homes)1 Loan to value (LTV) weighted average (all loans) 1) Arrears as a percentage of the Q1, 2020 scheduled payments – 3½ months after due date 13
Slide 14: 5. Underwriting criteria
5. Underwriting criteria Habe foe: tly Nordea
Slide 15: Underwriting criteria
Underwriting criteria Q2 2020 Private households • Behavioural score and individual credit assessment based on income information – pay slips and recent tax statement • Always household budget ”before-after” (based on 30 years annuity and fixed interest rate) • In case of adjustable or floating inte
Slide 16: 6. Covered bond framework
6. Covered bond framework Habe foe: tly Nordea
Slide 17: Danish covered bond framework
Danish covered bond framework Q2 2020 • Legal framework • The Financial Business Act • The Mortgage-Credit Loans and Mortgage-Credit Bonds, etc. Act with several detailed executive orders • Registration • An issuing institution is required to maintain a static cover pool • Mortgage deeds are registe
Slide 18: 7. Macro
7. Macro 18
Slide 19: Nordic economies – years before back to normal
Nordic economies – years before back to normal GDP development Unemployment rate Comments GDP, %, baseline scenarios (Nordea Markets) Country 2018 2019E 2020E 2021E • Lockdowns to halt the spread of Covid-19 have had enormous financial costs worldwide, and the Nordic economies are no exception. Denm
Slide 20: Nordic rates – low for very long
Nordic rates – low for very long Policy rates Public balance/debt, %, of GDP, 2021E Comments • Norway has seen three rate cuts totalling 150 bp in two months. Policy rates have been left unchanged in Sweden and the Euro Area while Denmark hiked the interest rate marginally due to technical reasons.
Slide 21: Household debt remains high, but so are private and public savings
Household debt remains high, but so are private and public savings Household debt Household savings Comments • Household debt is likely to level off in the coming year, in line with decelerating activity on the housing market. However, the debt ratio remains at elevated levels in all countries, supp
Slide 22: House price development in the Nordics
House price development in the Nordics House prices Household credit growth Comments • Rising unemployment and high uncertainty will take its toll on the Nordic housing markets. Before the crisis, low interest rates kept the Nordic housing markets afloat and stable price increases were expected in t
Slide 23: 8. Contacts & Links
8. Contacts & Links Habe foe tly Nordea
Slide 24: Contacts
Contacts If you have any questions, please feel free to contact: Peter Brag Senior Treasury Manager, Long Term Funding +45 3333 1663 [email protected] Lau Kingo Chief Treasury Manager, Long Term Funding +45 3333 1751 [email protected] 24
Slide 25: Links to more information
Links to more information Nordea Kredit Legislation ▪ Nordea Kredit ECBC harmonised transparency templates. ▪ Danish mortgage financing is supervised by the DFSA (Finanstilsynet). Link: https://www.nordea.com/en/investor-relations/reports-and- Link: https://finanstilsynet.dk/en presentations/bonds/n