Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — FY2004 Earnings Presentation
158 slides from Nordea Bank Abp's earnings presentation, Feb 23, 2005
Slide 1: Presentation for Investors
Presentation for Investors 23 February 2005
Slide 2: CEO presentation 2004 / Q4
CEO presentation 2004 / Q4 2
Slide 3: Strong result in 2004
Strong result in 2004 z Net profit 2004 up 28% to all-time high EUR 1,914m (EUR 1,490m in 2003) z Operating profit up 26% to EUR 2,284m (EUR 1,812m) z Total income up 1% to EUR 5,720m (EUR 5,639m), up 3% on a comparable basis, despite falling interest rates and competitive market environment z Total
Slide 4: Strong income growth in fourth quarter
Strong income growth in fourth quarter z Operating profit up 16% to EUR 636m (EUR 548m in Q3) – best quarter since Q2 2001 z Total income up 8% to EUR 1,504m (EUR 1,391m in Q3) z Operating profit improved through: – Net interest income up 3% – Net commission income up 8% – commissions from payments
Slide 5: Strict cost management
Strict cost management z Expenses in 2004 down 5% to EUR 3,484m (EUR 3,673m in 2003) – staff costs down 10% – number of FTEs down 6% z Expenses in Q4 up to EUR 925m (EUR 837m in Q3) – restructuring charges – variable salaries – seasonal factors z Expenses lower in Q4 2004 than in Q4 2003 z Cost targ
Slide 6: Income supported by strong volume growth
Income supported by strong volume growth 2004/03 Q4/Q3 z Lending, total +11% +4% – Mortgage lending +15% +3% – Consumer lending +8% +1% – SME lending +8% +3% – CIB lending (excl. Markets) +2% -2% z Deposits, total +9% +7% – Household deposits +4% +-0% – SME deposits +4% +4% – CIB deposits (excl. Mar
Slide 7: Income supported by strong volume growth, cont.
Income supported by strong volume growth, cont. 2004/03 Q4/Q3 z AuM, total +16% +4% – Nordic retail funds +27% +4% – Nordic private banking +16% +6% – Int. wealth mgmt & funds +32% +10% – Institutional clients -5% -3% – Life & Pension +10% +4% 7
Slide 8: Retail Banking: continuously improved performance
Retail Banking: continuously improved performance z Operating profit up 10% to EUR 520m (EUR 473m in Q3) – the seventh consecutive quarter with an increase in operating profit z Lending volumes up 3.4% in Q4 z Deposit volumes up 3.8% in Q4 z Stable lending margins 132bp (132bp) z Increased deposit m
Slide 9: Stable margin development
Stable margin development % Quarterly averages 2.0 QoQ: 1.8 z Overall stable lending 1.6 margins 1.4 z Increasing household 1.2 deposit margins 1.0 – supported by active asset 0.8 and liability mgmt 0.6 0.4 0.2 0.0 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Lending to SME's Hous
Slide 10: CIB: improvements in all segments
CIB: improvements in all segments z Operating profit in CIB up 7% to EUR 137m (EUR 128m in Q3) z Total revenues up 6% to EUR 268m (EUR 252m in Q3) z Improvement across the board; Corporate, Financial Institutions, International & Shipping z Strong recovery for Markets Division – foreign exchange – f
Slide 11: Asset Management & Life: strong fourth quarter
Asset Management & Life: strong fourth quarter z Net commission income up 15% to EUR 142m (EUR 123m in Q3) z AuM at all time high EUR 130.6bn – increase for the seventh consecutive quarter z Continued robust growth in European Fund Distribution z Product result for Life & Pension up 4% in Q4 and 28%
Slide 12: Well positioned to capture growth
Well positioned to capture growth z Increased focus on clients and products – after delivery on cost and capital efficiency – track record on organic market share growth in certain product segments, e.g. mortgages – consumer credits next challenge z Large client base and multi channel distribution n
Slide 13: Well positioned to capture growth, cont.
Well positioned to capture growth, cont. z Uniform customer programmes a tool to reach client satisfaction and economies of scale z Improved client satisfaction within most markets and segments z New organisational structure with fewer management layers to improve speed and time to market z Structur
Slide 14: Outlook 2005
Outlook 2005 z Markets remain competitive in 2005 and the challenging margin trend is expected to continue z Nordea’s performance in 2004 supports the overall increased ambition level communicated at the Capital Markets Day, Nov 30 2004 z The loan loss ratio is expected to continue to be low – howev
Slide 15: CFO presentation Financials
CFO presentation Financials 15
Slide 16: Income statement summary
Income statement summary EURm, 2004 2003 Chg % Total income 5,720 5,639 1 Total expenses -3,484 -3,673 -5 Loan losses, net -27 -363 Equity method 48 57 Profit before inv. earnings and 2,257 1,660 36 insurance Investment earnings, banking 8 170 Operating profit, life insurance 180 149 21 Goodwill amo
Slide 17: Income statement summary
Income statement summary EURm Q4/04 Q3/04 Chg % Total income 1,504 1,391 8 Total expenses -925 -837 11 Loan losses, net 10 2 Equity method 15 15 Profit before inv. earnings and 604 571 6 insurance Investment earnings, banking 33 -26 Operating profit, life insurance 40 42 -5 Goodwill amortisation and
Slide 18: Net interest income
Net interest income YoY: EURm z Up 4% 1000 z Volume growth in all segments – strong growth in mortgage lending 912 868 884 – consumer lending up 8% 800 850 846 – SME volumes up z Pressure on margins 600 – partly off-set by active asset-liability mgmt 400 QoQ: z Up 3% 200 z Increased volumes in all s
Slide 19: Change in net interest income, Q4/04 on Q3/04
Change in net interest income, Q4/04 on Q3/04 EURm Volume driven 16 - Lending volumes 9 - Deposit volumes 7 Margin driven 9 - Lending margins 1 - Deposit margins (incl. Asset-liability mgmt) 8 Other 3 - Reduced fee deposit guarantee, Norway 6 - Other, net -3 Total +28 19
Slide 20: Net commission income
Net commission income EURm YoY: 600 388 397 405 403 434 z Up 10% 500 59 – strong growth in commissions 47 49 60 58 from Asset mgmt and 42 brokerage 35 44 40 35 400 87 z Payment commissions up 5% 88 90 90 93 142 – strong growth in card 300 129 127 124 123 payments 200 QoQ: 200 199 199 210 192 z Up 8%
Slide 21: Trading income
Trading income YoY: EURm 160 z Another strong year for Markets 156 Division 140 135 z Down 15% on high level last 120 125 year 100 – F/X remained on high levels 104 80 – drop in fixed income products 86 – equity and structured products 60 increased 40 QoQ: 20 z Increased by 57% 0 z Strong pick-up in
Slide 22: Total income
Total income YoY: EURm z Up 1% despite margin pressure 6000 5,639 5,720 and competitive environment 5000 5,529 z Up 3% excl. non-recurring gains of EUR 110m in 2003 4000 z Net interest income up 4% 3000 z Commission income up 10% 2000 z Trading income down 15% 1000 0 2003 2004 22
Slide 23: Expenses
Expenses YoY: EURm z Down 5% 1000 973 46 925 z Staff costs decreased by 10% 873 15 416 15 849 837 425 – no. of FTEs down 6% 15 15 800 370 378 359 z Other expenses unchanged 600 QoQ: z Up 11% 511 488 485 400 456 463 – restructuring charges – variable salaries 200 z Underlying expenses up 6% – seasona
Slide 24: Expenses - development
Expenses - development Q4/04 vs. Q3/04 2004 vs. 2003 Reported Underlying Reported Underlying Staff costs 5% 0% -10% -6% Other 18% 15% 0% -4% expenses Total 11% 6% -5% -5% expenses z Underlying expenses are adjusted for: – restructuring expenses – variable salaries – profit sharing – F/X effects 24 –
Slide 25: Number of FTEs
Number of FTEs z No. of FTEs reduced by 1,745 in 32,000 2004 of which 220 by outsourcing 30,674 28,000 29,880 29,289 29,140 28,929 FTEs 2004 Q3/04 2003 24,000 Retail 17,550 17,597 18,407 20,000 CIB 3,261 3,271 3,408 16,000 AM & Life 1,815 1,816 1,796 12,000 GPT 4,754 4,885 5,413 8,000 Other 1,549 1,
Slide 26: Total IT-related expenses
Total IT-related expenses* EURm YoY: 250 z Down 2% on comparable basis in 2004 despite: 200 – higher business volumes 199 182 – structural initiatives 150 165 166 161 QoQ: z Restructuring charges 100 – redundancies within IT z Seasonal effects 50 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 *Refers to IT operati
Slide 27: Cost/income ratio
Cost/income ratio C/I ratio, banking C/I ratio, banking % % 70 70 67 60 63 60 64 63 59 61 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 2002 2003 2004 27
Slide 28: Loan losses
Loan losses EURm YoY: 100 z EUR 27m compared to EUR 90 363m in 2003 80 84 z Loan loss ratio down to 2bp 70 from 25bp annualised 60 z Overall stable credit quality 50 40 QoQ: 42 30 z Reversals exceeded new provisions 20 – 3rd quarter in a row 10 0 -3 -2 -10 -10 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 28
Slide 29: Impaired loans
Impaired loans EURm. End of period Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Impaired loans, gross 2,249 2,420 2,563 2,615 2,649 Reserves -1,706 -1,824 -1,898 -1,929 -1,936 Impaired loans, net 543 596 665 686 713 Provisions/impaired loans, gross (%) 76 75 74 74 73 Impaired loans,net/lending (%) 0.34 0.39 0.43 0
Slide 30: Investment earnings, banking
Investment earnings, banking YoY: EURm 80 z Full year EUR 8m 60 – significantly influenced by new 62 investment risk framework 40 – mixed market conditions during 33 33 the year 20 z Investment return 3.4% in 2004 0 -20 -26 QoQ: -40 z Investment return 4.6% annualised -61 -60 z Favourable positionin
Slide 31: Operating profit, life insurance
Operating profit, life insurance YoY: EURm 60 z Up 21% to EUR 180m z Best result ever 50 51 z Stable result throughout the 47 year reflecting the changed 40 42 40 40 business model 30 z Net written premiums up 10% z Investment return 8.4% 20 10 QoQ: z Stable result 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 z
Slide 32: Net profit
Net profit YoY: EURm 700 z Up 28% to EUR 1,914m 664 – operating profit up 26% 600 – Q2/04: real estate gain of EUR 300m 500 – Q4/03: real estate write-downs of EUR 115 400 418 434 398 – Q3/03: deferred tax asset of EUR 300m 300 z Effective tax rate at 25.8% 200 202 – low rate in 2003 due to deferred
Slide 33: Earnings per share – 12 months rolling
Earnings per share – 12 months rolling EUR 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 00 00 00 00 01 01 01 01 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Excl. Real estate gains/losses and deferred tax asset Reported
Slide 34: RoE, excl. goodwill
RoE, excl. goodwill % 24 22 20 20.2 18 16 16.7 17.4 14 15.0 12 10 8 6 4 2 0 2003 2004 Reported Excl. real estate gains/losses and deferred tax asset 34
Slide 35: Nordea’s capital markets value proposition
Nordea’s capital markets value proposition z Increase return on equity - in stages - to level of top peers z Commit to create sustainable revenue growth and continued cost efficiency z Ensure real economic value creation through continued improvement in economic profit z Exploit economies of scale t
Slide 36: Increased dividend by 12% proposed
Increased dividend by 12% proposed z Per share, EUR 0.28 z Total, EURm 766 z Pay-out ratio 40% z Dividend yield (calculated on share price Dec 30, 2004) 3.8% z Ex dividend date 11 April z Record date 13 April z Payment date 20 April 36
Slide 37: Repurchase of own shares
Repurchase of own shares z Repurchase programme reactivated on 27 Oct 2004 of 139 million shares or 5% of outstanding shares z 48.3 million shares or 1.7% of outstanding shares repurchased by end 2004 – 28.5m shares repurchased in 2005 – a total of 76.8m shares repurchased to date – 62.2m shares, re
Slide 38: Strong capital position
Strong capital position Tier 1 ratio % YoY: 10 9 z Unchanged Tier 1 ratio despite: 8 – business volume growth 7 7.3 7.6 7.3 7.0 – increased dividend 6 6.7 5 – repurchase of own shares 4 3 z Total capital ratio 9.5% 2 z Hybrid capital corresponds to approx. 1 7% of Tier 1 capital 0 Q4/03 Q1/04 Q2/04
Slide 39: Balance sheet - key items
Balance sheet - key items Change, 12 EURbn 2004 2003 2002 months % Lending 161 146 149 11 Deposits 104 96 93 9 Shareholders’ equity 13 12 13 8 Total assets 276 262 261 5 Risk-weighted assets 145 134 135 8 End of period 39
Slide 40: Business trends
x Q O Q 0 Z Business trends 40
Slide 41: Total lending
Total lending EURbn 180 161.1 160 155.5 154.5 147.3 145.7 147.0 147.0 148.7 145.6 148.0 141.9 143.4 140 120 100 80 60 40 20 0 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q Corporate Retail households mortgages Retail consumer loans Public sector 41 E
Slide 42: Households mortgages, volumes and margins
Households mortgages, volumes and margins EURbn % 60 1.5 55 56.3 1.4 54.5 50 52.6 1.3 48.9 50.0 48.2 45 45.7 1.2 43.6 44.3 40 42.0 41.3 42.4 1.1 35 1.0 30 0.9 25 0.8 20 0.7 15 0.6 10 0.5 5 0.4 0 0.3 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q 42
Slide 43: Consumer lending to households, volumes and margins
Consumer lending to households, volumes and margins EURbn % 20 4.4 18 4.3 17.0 17.1 16 16.2 16.9 4.2 15.8 15.4 14 14.3 14.3 14.5 4.1 13.8 13.9 12 4.0 10 3.9 10.0 8 3.8 6 3.7 4 3.6 2 3.5 0 3.4 / 02 / 02 / 02 / 02 / 03 / 03 / 03 / 03 / 04 / 04 / 04 / 04 1 2 3 4 1 2 3 4 1 2 3 4 Q Q Q Q Q Q Q Q Q Q Q Q
Slide 44: Lending to corporates, SME, volumes and margins
Lending to corporates, SME, volumes and margins EURbn % 70 1.8 65 1.7 60 1.6 59.0 55 55.5 55.8 55.7 55.7 56.6 57.2 1.5 55.2 55.2 55.1 54.6 55.3 50 1.4 45 1.3 40 1.2 35 1.1 30 1.0 25 0.9 20 0.8 15 0.7 10 0.6 5 0.5 0 0.4 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q
Slide 45: CIB, lending volumes and margins
CIB*, lending volumes and margins EURbn % 30 1.5 28 1.4 26 1.3 25.6 25.6 24 25.3 25.1 24.2 1.2 22 23.3 23.0 1.1 21.8 20 20.6 1.0 20.0 19.6 19.6 18 0.9 16 0.8 14 0.7 12 0.6 10 0.5 8 0.4 6 0.3 4 0.2 2 0.1 0 0.0 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q
Slide 46: Total deposits
Total deposits EURbn 120 110 104.4 100 95.6 97.7 97.1 92.6 94.2 94.6 91.1 92.9 92.1 88.1 89.7 90 80 70 60 50 40 39.2 39.8 39.4 40.0 41.1 40.5 40.4 41.3 41.9 42.6 30 37.3 38.1 20 10 0 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q Of which household de
Slide 47: Retail deposits, households, volumes and margins
Retail deposits, households, volumes and margins EURbn % 50 2.5 45 2.3 42.6 40 41.1 40.5 40.4 41.3 41.9 2.1 39.2 39.8 39.4 40.0 38.1 35 37.3 1.9 30 1.7 25 1.5 20 1.3 15 1.1 10 0.9 5 0.7 0 0.5 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q 47
Slide 48: Active asset-liability management
Active asset-liability management z Hedge on a rolling long-term basis z Achieved through use of derivatives and on-balance sheet items z Reduces SIIR z Hedged volume until end of Q4/04 approx. EUR 19bn z Yield gain 50-100bp at the end of Q4, depending on currency z Effect materialises as part of de
Slide 49: Structural Interest Income Risk (SIIR)
Structural Interest Income Risk (SIIR) EURm, annualised effect on Nii* Q4/04 Q3/04 Increasing market rates, 100bp 192 245 Decreasing market rates, 100bp -200 -204 z Reduced sensitivity following implementation of ALM strategy z Ambition to gradually decrease interest rate sensitivity *Approx. end of
Slide 50: Retail deposits, SME, volumes and margins
Retail deposits, SME, volumes and margins EURbn % 40 1.6 35 1.4 30 1.2 30.1 28.5 28.1 28.1 28.2 27.7 27.2 25 25.5 26.3 26.5 26.6 26.7 1.0 20 0.8 15 0.6 10 0.4 5 0.2 0 0.0 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q 50
Slide 51: CIB, deposit volumes and margins
CIB*, deposit volumes and margins EURbn % 22 1.1 20 21.0 1.0 18 0.9 17.9 18.0 16 0.8 15.4 15.2 14 14.2 14.4 14.9 0.7 13.0 13.1 13.3 12 12.6 0.6 10 0.5 8 0.4 6 0.3 4 0.2 2 0.1 0 0.0 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q *Excl. Markets, Poland
Slide 52: Assets under management
Assets under management EURbn 140 130.6 z Up 7 quarters in a row 123.3 125.7 121.9 120 113.0 z Leading Nordic position 100 – AuM up 16% last 12 months 80 – up 4% in Q4 60 z Up EUR 4.9bn in Q4 40 – strong value appreciation 20 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Nordic retail funds Nordic private banking
Slide 53: Net inflows
Net inflows EURbn 6 5.7 z Strong Nordic Private 5 Banking inflow 4.2 4 z Continued growth in 3 1.2 1.4 2.1 European Fund Distribution 2 1 z Modest inflow in Retail funds 0 z Institutional mgmt registered -1 net outflow mainly due to one -2 client withdrew mandate Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Nordic
Slide 54: Payment transactions, households
Payment transactions, households Payments transactions, total Card and e-banking payments Mill. Mill. 300 160 140 275 120 250 100 225 80 60 200 40 175 20 150 0 1 1 2 2 3 3 4 4 1 1 2 2 3 3 4 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q
Slide 55: Retail Banking operating profit
Retail Banking operating profit EURm 600 z Growth in income 550 500 z Strong increase in volumes 520 450 473 452 z Stable lending margins 400 423 438 350 z Operating profit increased for the 300 seventh consecutive quarter 250 200 150 100 50 Key ratios Q4/04 Q3/04 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 C/I
Slide 56: CIB operating profit
CIB operating profit EURm 160 z Good income growth 157 140 z High business activity in all 137 120 128 areas 100 z Positive loan losses 103 80 87 60 40 20 Key ratios Q4/04 Q3/04 0 C/I ratio, % 56 57 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 RoE, % 22 20 56
Slide 57: Asset Management, product result
Asset Management, product result EURm 80 z Up 12% in on high client activity 70 z AuM at EUR 130.6bn – new all- time-high 60 64 60 60 58 – net inflow of EUR 1.2bn in Q4 57 50 – asset appreciation EUR 3.7bn 40 30 20 10 Key ratios Q4/04 Q3/04 0 C/I ratio, % 58 57 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 AuM, EUR
Slide 58: Life Insurance, product result
Life Insurance, product result EURm 70 z Strong sales growth 57 60 53 z Net written premiums up 52 49 49 47 50 44 44 z Product result up 4% 41 39 40 30 20 10 7 8 10 9 Key ratios 6 Q4/04 Q3/04 0 -3 -3 -3 -2 -4 Inv return, % 3.6 1.9 -10 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Financial 5.9 4.4 Product result be
Slide 59: Group Treasury operating profit
Group Treasury operating profit EURm 80 z Strong investment return 70 – 4.6% in Q4 annualised 60 62 60 50 – 3.4% in 2004 55 40 z Positive financial markets 30 20 z Income in Group Funding 10 maintained at high level 0 6 – favourable positioning -10 -20 -27 -30 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 59
Slide 60: Group Functions and Eliminations
Group Functions and Eliminations Q4/04 Q3/04 QoQ: z Provisions for future rents on Income -8 -21 vacant premises, EUR 15m Expenses -61 -47 z Equity method: one-off write- down Loan losses -30 -23 General: Equity method -6 6 z Unallocated expenses in Goodwill -33 -30 Group functions z Central loan lo
Slide 61: IFRS
x Q O Q 0 Z IFRS 61
Slide 62: IFRS – Opening balance 2005
IFRS – Opening balance 2005 z Swedish accounting standards have been gradually aligned to IFRS since 2000 – 29 standards implemented by year-end 2004 z Implementation of IFRS from 1 January 2005 will increase equity by EUR 160m (net of tax) z Main standards affecting the opening balance: – IFRS 3 Bu
Slide 63: IFRS – Opening balance 2005
IFRS – Opening balance 2005* EURm Reported Equity 2004 (end of period) 12,549 IFRS 3 Goodwill amortisation +161 IAS 39 Loan loss provisions +70 IAS 39 Financial instruments -40 IAS 36 Impairment of assets -29 IAS 1 Minority interests +13 Other opening balance issues -13 Equity Opening Balance 1 Jan
Slide 64: IFRS – Profit and loss
IFRS – Profit and loss z The implementation of the new standards is expected to have a positive effect on Nordea’s reported earnings in 2005 z IFRS 3 regarding goodwill means that no amortisation of goodwill will be made, but impairment test will, as previously, be performed – net effect on Nordea i
Slide 65: CEO Summary
CEO Summary 65
Slide 66: In summary
In summary z Record result in 2004 – strong performance in all business areas – TSR ranking among top three in European peer group for two consecutive years z Costs down 5% in 2004 z Strong revenue growth in fourth quarter – income supported by strong volume growth z Increased ambition level – Retur
Slide 67: Facts & Figures
Facts & Figures 67
Slide 68: Facts & Figures, content
Facts & Figures, content z Credit quality Page 69 z Economic capital Page 82 z Business areas Page 87 z Balance sheet Page 123 z Market shares Page 126 z Financial appendix Page 135 z Basel II Page 140 z Nordea share Page 144 z Nordea facts Page 150 z Macro statistics Page 154 68
Slide 69: Credit quality
x Q O Q 0 Z Credit quality 69
Slide 70: Loan portfolio by customer category
Loan portfolio by customer category* EURbn 100 87 85 88 85 85 83 82 84 84 82 83 84 80 78 79 80 80 60 53 55 56 48 49 50 44 44 46 39 42 41 42 40 36 37 37 20 14 14 14 14 15 15 16 16 17 17 17 13 12 12 12 10 0 01 01 01 01 02 02 02 02 03 03 03 03 04 04 04 04 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/
Slide 71: Loan portfolio by customer group
Loan portfolio by customer group End 2004, EUR 161.1bn End 2003, EUR 145.6bn Public Public sector sector 2% 2% Household Household customers Companies customers Companies 46% 52% 44% 54% 71
Slide 72: Lending to household customers
Lending to household customers End of 2004 EUR 73.4bn Other loans z Strong growth in mortgage 23% lending z Other loans comprise – consumer credits – investment credits – car financing – overdraft facilities – credit cards Housing loans 77% 72
Slide 73: Lending to companies by industry
Lending to companies by industry End of 2004 EUR 84.0 bn Shipping & Offshore Construction Transport and 5% 3% communication 6% Real estate 28% Agriculture & Fishing 6% Renting, consulting and other services 7% Other companies 8% Manufacturing Commerce and 14% services Finance 10% 13% 73
Slide 74: Loan portfolio in figures
Loan portfolio in figures EURbn Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Household customers 73.4 71.5 69.5 66.3 64.7 Real estate 23.5 22.6 22.4 20.9 21.2 Construction 2.9 2.8 2.8 2.7 2.6 Transport, communication 4.6 4.4 4.3 4.3 4.4 Trade and services 8.6 8.5 9.3 8.8 8.7 Manufacturing 12.0 12.5 12.9 11.9 12.5
Slide 75: Lending by geographical area
Lending by geographical area End of 2004 EUR 161.1bn Latin America USA 0.6% Other non OECD 1.0% 0.6% Nordic countries Other OECD and P&B 0.5% 93.1% Other Asia 6.9% 0.6% Other EU countries Nordic countries and P&B 3.6% z Denmark 42.1 z Finland 34.0 z Norway 24.0 z Sweden 47.8 z P&B 2.3 75
Slide 76: Nordea real estate financing portfolio
Nordea real estate financing portfolio End of 2004 Total exposure approx. EUR 23.5bn Denmark 8.7% Sweden z Largest industry exposure Norway 48.9% 19.4% z Relatively large and financially strong companies z High level of collateral coverage z Dominantly Swedish exposure – out of which more than 50% F
Slide 77: Nordea shipping portfolio
Nordea shipping portfolio Distribution by type of vessel End of 2004 Total exposure approx. EUR 6.3bn Reefers Combined 3% vessels Other dry cargo 1% 4% Pure car carries Bulkers z Outstanding, EUR 5.3bn 15% 4% Ferries z Well diversified portfolio by 6% type of vessel Cruise Crude tankers 6% 13% z Foc
Slide 78: Shipping
Shipping z Consolidation of industry continues z Nordea’s exposure well diversified; high quality portfolio with focus on profitability z Financial rating and flexibility of customers substantially improved during 2004 z Strong market fundamentals combined with a highly liquid banking market have le
Slide 79: Nordea fisheries financing
Nordea fisheries financing End of 2004 Total exposure approx. EUR 1.7 bn Fish processing/ export z Total outstanding EUR 1.5bn 23% Fish z Mainly Norwegian exposure farming 42% z Exposure to Fish farming EUR 0.7bn – represents approx. 0.5% of total loan book Fishing vessels 35% 79
Slide 80: Impaired loans
Impaired loans EURm. End of 2004 Gross Provisons Net Household customers 510 329 181 Real estate 139 113 26 Construction 66 47 19 Transport, communication 184 139 45 Trade and services 242 177 65 Manufacturing 375 316 59 Finance 71 57 14 Renting, Consulting and other services 196 145 51 Other compan
Slide 81: Loan losses
Loan losses EURm YoY: 300 z EUR 27m compared to EUR 229 363m in 2003 200 z Loan loss ratio down to 2bp 128 129 127 131 from 25bp annualised 100 84 z Overall stable credit quality 42 0 QoQ: -3 -2 -10 z Reversals exceeded new provisions -100 -86 – 3rd quarter in a row -132 -129 -145 -141 -200 Q4/03 Q1
Slide 82: Economic capital
Economic capital 82
Slide 83: Economic capital (EC)
Economic capital (EC) z EC is the capital required by Nordea to cover unexpected losses z 5 different risk categories are incorporated z The measurement period is one year z The confidence level is 99.97% z The economic capital may change over time due to: – composition of risk exposures – changes i
Slide 84: Economic capital
Economic capital EURbn 10 9 z Economic capital reduced 8.9 8.7 by EUR 0.5bn in 2004 8 8.4 8.4 8.4 7 z Divestment of real estate portfolio 6 5 z Decreased market risk 4 3 2 1 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 84
Slide 85: Economic capital per business area
Economic capital per business area End of 2004 Treasury Other EC per business area, 2004 5% Asset Mgmt 5% EURbn & Life 11% Retail Banking 4.9 CIB 1.7 Asset Mgmt 0.1 CIB Retail Life 0.8 20% 59% Treasury 0.4 Other 0.5 Total 8.4 85
Slide 86: Distribution of economic capital - by risk category
Distribution of economic capital - by risk category End of 2004 Life risk Operational risk 1% 9% Business risk 11% Market risk 16% Credit risk 63% 86
Slide 87: Retail Banking
x Q O Q 0 Z Retail Banking 87
Slide 88: Retail Banking operating profit by markets
Retail Banking operating profit by markets Retail DK FI NO SE Other EURm Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Net interest income 762 719 214 207 203 192 123 109 214 208 8 3 Non-interest income 373 343 96 92 93 80 42 41 140 127 2 3 Total income 1,135 1,062 310 299 296 272 165 150 354 335 10 6 Total e
Slide 89: Retail Banking lending and deposit volumes
Retail Banking lending and deposit volumes Lending, EURbn Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Denmark 36.8 36.0 35.0 34.4 33.1 32.7 32.1 31.1 Finland 31.0 29.8 28.9 27.7 26.9 26.6 25.8 25.0 Norway 20.9 20.3 20.2 19.3 18.9 19.5 18.9 19.7 Sweden 42.1 40.3 39.5 37.8 38.3 38.4 37.4 37.0 Depo
Slide 90: Retail Banking margins
Retail Banking margins % Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Lending to SME’s 1.13 1.13 1.18 1.21 1.20 1.23 1.19 1.20 Mortgages, households 0.90 0.90 0.94 0.97 0.94 1.07 1.01 1.03 Consumer loans, 3.91 3.91 3.98 4.01 4.00 4.04 3.97 3.89 households Deposits, SME’s 0.91 0.93 0.90 0.96 1.02
Slide 91: Retail Banking breakdown of deposits
Retail Banking breakdown of deposits Denmark, EURbn Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Corporate 6.7 6.6 6.6 6.5 6.1 6.1 6.2 6.2 Households, current 3.3 2.9 2.9 2.5 2.7 2.6 2.6 2.3 accounts Households, savings 6.9 6.9 6.9 6.6 6.6 6.8 6.7 6.6 accounts Finland, EURbn Q4/04 Q3/04 Q2/04 Q1/
Slide 92: Retail Banking breakdown of deposits
Retail Banking breakdown of deposits Norway, EURbn Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Corporate 5.9 5.5 5.5 5.6 5.4 5.6 5.4 5.8 Households, current 1.4 1.4 1.4 1.2 1.2 1.2 1.2 1.1 accounts Households, savings 3.5 3.6 3.6 3.5 3.4 3.6 3.5 3.6 accounts Sweden, EURbn Q4/04 Q3/04 Q2/04 Q1/04
Slide 93: E-banking & transactions
E-banking & transactions 93
Slide 94: E-banking customers, all clients
94 Ja n- 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 0 Mill. Ju 0 ly - 0 Ja 0 n- 0 Ju 1 ly - 0 Ja 1 n- 0 Ju 2 ly - 0 Ja 2 n- 03 Ju l- 0 E-banking customers Ja 3 n- 04 Ju l- 0 4 Ja n- 0 50 100 150 200 250 300 350 400 0 Ju 0 (1,000) ly- 0 E-banking customers, all clients Ja 0 n- 0 Ju 1 ly- 0 Ja 1 n- 0 Ju 2 ly- 0
Slide 95: Payments and log-ons, all clients
Payments and log-ons, all clients E-banking payments E-banking log-ons Mill. Mill. 50 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 Q 0 Q 0 Q 1 Q 1 Q 2 Q 2 Q 3 Q 3 Q 4 04 Q 0 Q 0 Q 1 Q 1 Q 2 Q 2 Q 3 Q 3 Q 4 04 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/
Slide 96: Penetration on the net, all clients
96 Ja n 0 5 10 15 20 25 30 35 % -0 M 1 ay Se -01 pt -0 Ja 1 n- M 02 ay - S e 02 p- 0 Ja 2 n- M 03 ay - Se 03 p- 0 Ja 3 n- M 04 ay - Mutual funds penetration rate Se 04 p- 04 Ja n 0 10 20 30 40 50 60 70 80 % M -00 ay Se -00 pt - Ja 00 n Penetration on the net, all clients M -01 ay Se -01 pt - Ja 01 n
Slide 97: Cards, all clients
Cards, all clients Card payments Issued debit and credit cards Mill. Mill. 160 5.0 140 4.5 4.0 120 3.5 100 3.0 80 2.5 60 2.0 40 1.5 1.0 20 0.5 0 0.0 01 01 02 02 03 03 04 04 Se -01 M 02 M 01 S e 02 Ja 2 Ja 1 M 03 M 04 Se 03 Se 04 Ja 3 04 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ -0 -0 0 Q Q Q Q Q Q Q Q n- n- - n- n- -
Slide 98: Payment transactions, households
Payment transactions, households Payments transactions, households Breakdown of transactions Mill. Mill. 300 150 140 275 130 120 110 250 100 90 225 80 70 60 200 50 40 175 30 20 10 150 0 1 1 2 2 3 3 4 4 01 01 02 02 03 03 04 04 0 0 0 0 0 0 0 0 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ 1/ 3/ Q Q Q Q Q
Slide 99: Payment transactions, households
Payment transactions, households Million 2004 2003 2002 2001 2000 Manual transactions 103.9 112.5 125.3 141.0 163.9 Payterminals 23.6 27.1 31.7 34.3 35.6 Card payments 527.8 459.9 395.5 333.5 263.1 Cash withdrawal 190.4 197.4 204.4 207.2 202.5 ATM Direct debit 98.5 86.1 81.5 78.5 75.3 E-banking paym
Slide 100: Corporate and Institutional Banking (CIB)
Corporate and Institutional Banking (CIB) 100
Slide 101: CIB operating profit by main area
CIB operating profit by main area International Corporate Financial and Poland & CIB Banking Instititutions Other Markets Shipping Baltic Division Division Division EURm Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 Total income 268 252 121 109 59 28 46 47 26 22 16 47 158 113 Total expenses -150 -144 -3
Slide 102: CIB lending and deposit volumes and margins
CIB lending and deposit volumes and margins Lending, EURm Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Corporate Banking Division 12.2 12.6 13.3 11.9 11.9 14.2 15.2 14.9 Financial Institutions Division 1.2 1.4 1.9 1.2 1.7 2.3 2.7 1.9 International and Shipping Division 6.2 6.5 6.6 6.5 6.4 6.4 6.3
Slide 103: Nordea operations in Poland and Baltic
Nordea operations in Poland and Baltic End 2004 Estonia Latvia Lithuania Poland Total Customers 35,600 22,400 10,050 294,850 362,900 Branches/salespoints 10 11 7 36 64 Number of FTEs 197 176 113 846 1,344 Total assets, EURm 764 634 394 1,287 3,079 Lending, EURm 643 506 317 1,242 2,708 Deposits, EURm
Slide 104: Asset Management & Life
Nordea” Asset Management & Life 104
Slide 105: Assets under management - breakdown
Assets under management - breakdown EURbn Q4/04 Q3/04 Net inflow 1.2 2.1 Change in value * 3.7 0.3 Total change +4.9 +2.4 Assets under management start of quarter 125.7 123.3 Assets under management end of quarter 130.6 125.7 Breakdown of AuM: Nordic retail funds** 40.4 38.7 Nordic private banking 2
Slide 106: Asset structure – Investment Management
Asset structure – Investment Management* Q4/04 Q3/04 EUR 81.0bn EUR 79.8bn Int'l. fixed Int'l. fixed income income 13% 12% Nordic Nordic equities equities 14% 14% Nordic Nordic fixed fixed income income 53% 54% Int'l. Int'l. equities equities 20% 20% 106 *Including mgmt of own investment funds
Slide 107: Asset structure – Investment Funds
Asset structure – Investment Funds Q4/04 Q3/04 EUR 50.8bn EUR 48.2bn Balanced Balanced funds funds 10% 10% Fixed income Fixed funds income 44% funds 46% Equity Equity funds funds 46% 44% 107
Slide 108: Investment funds, volumes and margins
Investment funds, volumes and margins Volumes, EURbn Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Denmark 15.9 15.0 14.4 14.5 13.0 12.1 11.6 10.2 Finland 7.7 7.4 6.9 6.2 5.2 5.1 4.8 4.1 Norway 1.9 1.9 1.8 1.6 1.5 1.3 1.2 1.2 Sweden 17.2 16.9 16.8 16.6 16.0 15.3 14.3 13.2 Margins, % Q4/04 Q3/04 Q2
Slide 109: European Fund distribution
European Fund distribution EURm 8000 z Net inflow of EUR 0.6bn in Q4 and EUR 7000 2.1 bn in 2004 6000 z New marketing licenses in Poland and Netherlands 5000 4000 z Now marketed in 10 major European markets 3000 2000 z More than 1000 active distribution agreements 1000 0 00 01 01 02 02 Q 3 Q 3 Q 4 0
Slide 110: Life
Life EURm Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 TRADITIONAL LIFE Premiums written net 586 391 422 491 533 Normalised investment. return 231 235 236 234 244 Benefits paid and change in provision -761 -547 -560 -655 -687 Insurance operating expenses -35 -23 -26 -25 -28 Normalised operating margin 21 56 72 45
Slide 111: Life Q4/04
Life Q4/04 EURm Denmark Finland Norway Sweden Other Total TRADITIONAL LIFE Premiums written net 230 172 111 37 36 586 Normalised investment return 113 64 36 15 3 231 Benefits paid and change in provision -336 -206 -128 -54 -35 -761 Insurance operating expenses -17 -2 -10 -2 -4 -35 Normalised operati
Slide 112: Life - investments
Life - investments EURbn 30 z Equities 26.4 24.8 24.8 25.4 25 23.9 – predominantly listed equities 20 – 1/3 Nordic, 2/3 international z Bonds 15 – ¾ Nordic issuers 10 – primarily govmn’t & mortgage inst. 5 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Equities Bonds Real estate Unit linked 112 End of period
Slide 113: Life - asset allocation
Life - asset allocation Total, EURbn Equities, % Q4/04 Q3/04 Q4/04 Q3/04 Denmark 12.3 11.8 20 19 Finland 7.0 6.8 18 15 Norway 3.5 3.3 12 12 Sweden 2.9 2.9 5 4 Total 25.7 24.8 16 15 113
Slide 114: Life - solvency situation
Life - solvency situation End of 2004 Required Actual Solvency Solvency in % EURm solvency solvency buffer of requirement Denmark 430 514 84 120 Finland 216 552 336 255 Norway 127 214 86 168 Sweden 69 146 77 213 114
Slide 115: Life – solvency sensitivity, end of 2004
Life – solvency sensitivity, end of 2004 Denmark Finland Norway Sweden % Solvency in % of requirement 118 255 168 213 Equities drop 12% 118 220 161 197 Interest rates down 50bp 115 273 168 245 Interest rates up 50bp 119 239 168 180 115
Slide 116: Life – financial buffers
Life – financial buffers* EURm % of total provisions Q4/04 Q3/04 Q4/04 Q3/04 Denmark 847 612 8.2 6.1 Finland 203 158 4.0 3.2 Norway 45 22 1.6 0.8 Sweden 82 64 4.8 3.8 Total 1,177 856 5.9 4.4 116 * Financial buffers are defined in accordance with local regulations and practices.
Slide 117: Life – buffer sensitivity, end of 2004
Life – buffer sensitivity, end of 2004 Denmark Finland Norway Sweden EURm Financial buffers* 847 203 45 82 Equities drop 12% -153 -74 -45 -8 Interest rates down 50bp 103 39 0 22 Interest rates up 50bp -120 -34 -9 -23 * Financial buffers are defined in accordance with local regulations and practices.
Slide 118: Group Treasury
Group Treasury 118
Slide 119: Group Treasury operating profit by main areas
Group Treasury operating profit by main areas Group Investment Group Funding Total Fixed income Equity portfolios portfolios EURm Q4/04 Q3/04 Q4/04 Q3/04 Q4/04 Q3/04 Q4/04 Q3/04 Income 25 -16 12 -6 37 40 Expenses -3 -3 -1 -1 -10 -8 Profit excl. Investment earnings 27 32 27 32 Investment earnings 33
Slide 120: Group Treasury - investments
Group Treasury - investments EURbn 20 z Equities 16.8 16.6 – listed, unlisted & private equity 16.2 16.0 14.8 funds 15 z Bonds 10 – ¾ Nordic issuers – primarily government and mortgage institutions 5 0 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Fixed income Equities End of period 120
Slide 121: Treasury – risk management
Treasury – risk management End of 2004 z Interest rate risk (VaR) – risk related to interest rate positions, calculated as VaR z Equity risk (VaR) – risk related to equities, calculated as VaR, comprise all equities including listed, unlisted and private equity EURm, end of period 2004 Q3/04 2003 In
Slide 122: Investment Risk Framework
Investment Risk Framework z As outlined in the interim reports Q1 and Q2 a new framework for the Group’s investment risk was implemented in the beginning of 2004 z Purpose of the new framework is to strengthen focus on absolute rather than relative return in the portfolio z New framework more direct
Slide 123: Balance sheet
Balance sheet 123
Slide 124: Balance sheet
Balance sheet EURm End of 2004 End of 2003 End of 2002 Loans and advances to credit institutions 20,614 29,037 23,496 Lending 161,148 145,644 145,740 Bonds and other interest-bearing securites 27,185 32,017 28,166 Shares and participations 967 648 596 Shares in associated and group undertakings 353
Slide 125: Capital base
Capital base EURm Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Shareholders’ equity 12,549 12,449 12,041 11,262 12,177 Deductions insurance companies and other -1,004 -817 -657 -769 -886 Shareholders’ equity in the capital base 11,545 11,632 11,384 10,493 11,291 Hybrid capital 757 782 287 285 280 Minority interest
Slide 126: Market shares
Market shares * Statistics as Nov/Dec 2004 126
Slide 127: Market position in Nordic markets
Market position in Nordic markets Market shares Denmark Finland Norway Sweden Personal customers - mortgage lending 14.3% 32.1% 11.1% 16.1% - consumer lending 16.3% 30.9% 11.0% 9.9% - deposits 21.8% 34.6% 8.4% 19.0% Corporate customers - lending 21.6% 40.8% 16.9% 14,2% - deposits 22.5% 38.0% 16.4% 2
Slide 128: Personal customer deposits - market volume & share
128 D ec 01 - - 0 100 200 300 400 500 M 02 0 100 200 300 400 500 ar 02 N ov - -F DKKbn NOKbn Ju 02 02 eb n -m Se -02 p 02 ay -A D - 02 ec 02 ug - -N M 03 03 ov ar - -F Ju 03 03 eb n -M Se -03 03 ay p -A D - 03 03 ug ec Norway Denmark - - M 03 04 N ov ar - - Ju 04 04 Feb n -M Se -04 04 ay p -A D - 04
Slide 129: Corporate deposits - market volume & share
129 D ec N - ov 0 100 200 300 400 M 02 0 50 100 150 200 250 300 350 ar F e - 01 b DKKbn NOKbn Ju -02 M - 02 n ay S -02 A -02 ep ug D - 02 N - 02 ec - ov M 03 F e - 02 ar b Ju -03 M -03 n ay S -03 Au -03 ep D - 03 g N - 03 Norway ec Denmark - ov M 03 F e - 03 ar b Ju -04 M -04 n ay S -04 Au -04 ep D
Slide 130: Personal customer lending - market volume & share
130 D ec N - ov 0 200 400 600 800 1000 M 02 0 50 100 150 200 250 300 350 ar F e - 01 DKKbn b NOKbn Ju -02 M -02 n ay S -02 A -02 ep ug D - 02 ec N - 02 - ov M 03 F e - 02 ar - b J u 03 M -03 n ay S -03 A -03 ep ug D - 03 N - 03 Norway Denmark ec ov M - 03 F e - 03 ar b - M -04 J u 04 n ay S -04 A -0
Slide 131: Morgage lending households - market volume & share
131 D Q ec 1 - 0 200 400 600 800 1000 0 200 400 600 800 M 01 Q / 01 ar 2 DKKbn Q / 01 NOKbn Ju -02 3/ n Q 01 S -02 ep 4 Q / 01 D - 02 1 ec Q / 02 - 2 M 02 Q / 02 ar - 3/ J u 03 Q 02 n 4 S -03 Q / 02 ep 1 D - 03 Q / 03 2 Norway Denmark ec Q / 03 M - 03 ar 3 - Q / 03 J u 04 4/ n Q 03 S -04 1 ep Q / 04
Slide 132: Corporate lending - market volume & share
132 D N ec - ov 0 100 200 300 400 500 0 100 200 300 400 500 M 02 F e - 01 ar b DKKbn NOKbn Ju -02 M -02 n ay Se -02 Au -02 p g D - 02 N - 02 ec - ov M 03 F e - 02 ar b Ju -03 M -03 n ay Se -03 A -03 p ug D - 03 Norway N - 03 Denmark ec - ov M 03 F e - 03 ar b Ju -04 M -04 n ay Se -04 p Au -04 D - 04
Slide 133: Investment funds - market volume & share
Investment funds - market volume & share DKKbn Denmark EURbn Finland 500 32% 35 34% 400 30% 30 32% 28% 25 30% 300 26% 20 28% 200 15 26% 24% 100 10 24% 22% 5 22% 0 20% 0 20% 02 Fe 3 4 3 4 3 4 03 04 S 3 Se 4 3 4 -0 -0 2 D 3 3 D 4 4 -0 -0 -0 -0 0 0 -0 -0 -0 -0 -0 0 -0 - b- b- n- n- ov ov ov ug ug ay ay
Slide 134: Market share, equity dealing - Nordea Markets
Market share, equity dealing - Nordea Markets Equity market turnover EURbn % 12 11.3 2004 2003 Chg 10 Denmark 85.0 59.3 43% 8 8.6 8.9 Finland 181.2 145.6 24% Norway 110.0 72.0 53% 6 6.3 Sweden 385.8 279.6 38% 6.1 4 4.7 4.4 3.6 2 0 ki o m en sl sin ol ag O kh el h oc H en St op C 2003 2004 134
Slide 135: Operational income statement
Operational income statement EURm Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Net interest income 912 884 868 846 850 Net commission income 434 403 405 397 388 Trading income 135 86 104 156 125 Other income 23 18 27 22 36 Total income 1,504 1,391 1,404 1,421 1,399 Personnel expenses -485 -463 -456 -488 -511 Profi
Slide 136: Statutory income statement
Statutory income statement EURm Q4/04 Q4/03 Interest income 2,083 1,906 Interest expenses -1,151 -1,023 Net interest income 932 883 Dividends received 2 1 Net commission income 440 405 Net result from financial operations 151 86 Other income 24 60 Total income 1,549 1,435 General administrative expe
Slide 137: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory accounts Operational Investment Other Statutory EURm 2004 Trading income activities Insurance adjustment 2004 Net interest income 3,510 40 1) -44 6) 37 17) 3,543 Dividend income 11 4) 6 8) 17 Net commission income 1,639 47 2) -3 1,683 Trading income 481 -4
Slide 138: Reconciliation of operational and statutory accounts
Reconciliation of operational and statutory accounts 1. Net interest income from trading transactions in Nordea 10. Amortisation of goodwill related to insurance included in Markets (for example interest related to swaps etc.), one-line consolidation of insurance activities (Operating reclassified a
Slide 139: Non-recurring gains and losses in operating profit
Non-recurring gains and losses in operating profit EURm Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Real estate sales and 300* write downs Real estate sales and -115* write downs OM/HEX shares 27 Inkassosentralen 8 Huoneistokeskus 43 Nordisk Renting 32 Total 0 0 300* 0 -115* 35 75 0 * Not includ
Slide 140: Basel II
Basel II 140
Slide 141: Benefits for Nordea in Basel II
Benefits for Nordea in Basel II z Business case for Basel II can be drawn from the reduction in risk weighted assets and hence capital needed under the chosen implementation plan z Equally important are the indirect benefits; – improved risk management standards – improved efficiency in the credit p
Slide 142: Implementation plan with regards to Basel II
Implementation plan with regards to Basel II z Nordea has the ambition as regards credit risk to move towards IRB approach starting with foundation approach 2007 and moving gradually towards advanced approach z With regards to operational risk Nordea intends to implement a standardised approach, alr
Slide 143: Expected effects on capital requirements
Expected effects on capital requirements z For Nordea, as for most Nordic banks, the new Accord is expected to have a positive effect on minimum required capital z The main reason is the Groups lending portfolio mix; – household lending portfolio, representing 45% of the Groups total lending, where
Slide 144: Total shareholder return (TSR) 2004
Total shareholder return (TSR) 2004 Nordea peer group* KBC 56.0 DnBNOR 38.3 NORDEA 29.8 ALLIED IRISH BANK 25.4 SEB 24.5 DANSKE BANK 23.7 HBOS 22.5 BARCLAYS 21.3 SWEDBANK 20.8 SHB 20.6 BANK OF IRELAND 15.8 LLOYDS TSB 12.8 RBOS 10.0 BNP 9.3 ABN AMRO 9.2 SOCIETE GENERALE 8.8 COMMERZBANK -4.2 HYPOVEREIN
Slide 145: Peer group by market cap, EURbn
Peer group* by market cap, EURbn 30 December 2004 RBOS BARCLAYS BNP HBOS LLOYDS TSB ABN AMRO SOCIETE GENERALE NORDEA KBC DANSKE BANK ALLIED IRISH BANK SHB HYPOVEREINSBANK BANK OF IRELAND SEB DnBNOR SWEDBANK COMMERZBANK 0 10 20 30 40 50 60 70 80 145 *As defined by Nordea
Slide 146: Shareholder structure, end of 2004
Shareholder structure, end of 2004 4.0% 2.4% 5.6% 29.9% 6.2% International institutions Swedish institutions 6.6% Swedish state Finnish institutions Finnish public Danish institutions Danish public 19.8% Swedish public 25.5% Number of shareholders approx. 487,000 146
Slide 147: Largest registered shareholders, end of 2004
Largest registered shareholders, end of 2004 Shareholder Number of shares % Swedish state 542.0 19.8 Nordea Danmark fonden 102.5 3.8 Alecta 74.9 2.7 Robur fonder 70.2 2.6 SBH/SPP fonder 61.7 2.3 Nordea fonder 50.6 1.9 SEB fonder 44.2 1.6 Fjärde AP-fonden 43.2 1.6 Skandia 32.2 1.2 Tredje AP-fonden 28
Slide 148: Number of shares
Number of shares Type of Number of Outstanding Date transaction Subject shares issued shares Jan, 2000 New issue Merita 815,800,287 2,091,067,728 April, 2000 New issue Unidanmark 869,776,488 2,960,844,216 June, 2000 New issue Unidanmark 18,348,501 2,979,192,717 2000-2001 New issue Conversions* 3,473
Slide 149: Data per share
Data per share 2004 2003 2002 2001 2000 EUR EUR EUR EUR SEK Dividend 0.281) 0.25 0.23 0.23 2.00 Shareholders’ equity per share, EUR 4.59 4.28 4.06 4.00 3.74 Earnings per share, EUR 0.69 0.51 0.30 0.53 0.58 Share price, end of period, 67.0 54.0 38.4 55.5 71.5 SEK P/E ratio2) 10.8 11.7 14.0 11.3 14.0
Slide 150: Ratings
Ratings Moody’s S&P Fitch BFSR Short Long Short Long Short Long Individ. Nordea Bank D B** P-1 Aa3 A-1 A+* F1+ AA- B Nordea Bank F B P-1 Aa3 A-1 A+* F1+ AA- B Nordea Bank N B- P-1 Aa3 A-1 A+* F1+ AA- B Nordea Bank AB B P-1 Aa3 A-1 A+* F1+ AA- B Nordea Hypotek P-1 Aa3 A-1 Nordea Kredit Aaa AAA Norges
Slide 151: Group financial targets
Group financial targets Key performance indicator 2003 2004 Target Total shareholder return, % #3 #3 In the top quartile of European peer group RoE, % (IFRS) 12.2* 14.5* > 15% in 2005 and > 17% or in line with level of top Nordic peers from 2007 Costs, EURm 3,673 3,484 Same cost level through 2007 a
Slide 152: Strong distribution network throughout the Nordic and Baltic Sea region
Strong distribution network throughout the Nordic and Baltic Sea region Finland Branch offices 416 Personnel 8,380 Sweden Branch offices 249 Helsinki Personnel 7,141 Stockholm St Petersburg Norway Oslo Tallinn Branch offices 125 Copenhagen Riga Personnel 3,441 Vilnius Moscow Denmark Warzaw Branch of
Slide 153: Large customer base with high penetration in e-banking
Large customer base with high penetration in e-banking Baltic Sea Total DK FI NO SE Region Banking customers (1,000) Personal customers 1,600 2,950 640 4,100 320 9,610 Corporate customers 70 330 70 460 40 970 Life insurance customers (1,000) 618 324 245 517 53 1,757 E-banking customers (1,000) 696 1
Slide 154: Market development – interest rates
Market development – interest rates Change 30-09-04 31-12-04 % Q4/04 Short, EUR (one week) 2.06 2.10 +0.04 Long, EUR (5 years) 3.31 3.02 -0.29 Short, DK 2.18 2.15 -0.03 Long, DK 3.48 3.11 -0.37 Short, NO 1.91 1.75 -0.16 Long, NO 3.51 3.15 -0.36 Short, SE 2.04 2.02 -0.02 Long, SE 3.66 3.29 -0.37 154
Slide 155: Short interest rates - average (one week)
Short interest rates - average (one week) % 4.0 3.5 3.42 3.0 2.86 2.81 2.5 2.52 2.0 2.09 2.07 2.04 2.05 2.09 2.10 2.11 2.16 2.16 2.16 2.07 2.06 1.92 1.75 1.83 1.81 1.5 1.0 0.5 0.0 EUR DKK SEK NOK Q3/03 Q4/03 Q2/04 Q3/04 Q4/04 155
Slide 156: Market development - GDP
Market development - GDP % 4.0 3.8 3.5 3.7 3.5 3.4 3.4 3.4 3.3 3.0 3.0 2.5 2.5 2.4 2.4 2.0 2.1 1.9 1.5 1.5 1.0 0.5 0.7 0.4 0.0 Denmark Finland Norway Sweden 2003 2004(e) 2005(e) 2006(e) Source: Nordea Markets Economic Research Estimates from February 2005. In Norway, forecasts are for mainland GDP 1
Slide 157: Macro data
Macro data % 2004e 2005e 2006e Gross domestic product DK 2.1 2.5 1.9 FI 3.4 3.5 3.3 NO 3.4 3.7 2.4 SE 3.8 3.4 3.0 Inflation DK 1.2 1.7 1.9 FI 0.1 1.5 1.8 NO 0.5 1.4 1.9 SE 0.5 0.6 2.0 Private consumption DK 4.0 2.9 1.6 FI 2.6 2.8 2.6 NO 4.2 4.0 2.3 SE 2.0 0.6 1.4 Unemployment DK 6.4 5.8 5.3 FI 8.8 8
Slide 158: Financial calendar 2005
Financial calendar 2005 z Annual Report and Annual Review will be available in print week 12 z AGM will be held on 8 April 2005 z Q1 report 2005 will be published on 27 April z Q2 report 2005 will be published on 24 August z Q3 report 2005 will be published on 26 October www.nordea.com/ir 158