Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Nordea — Investor Day (August 2014)
29 slides from Sampo Oyj's investor day presentation, Aug 22, 2014
Slide 1: The leading Wholesale Bank in the Nordic countries
The leading Wholesale Bank in the Nordic countries Johan Näs, Head of Corporate & Institutional Banking Sweden August 22 2014
Slide 2: Disclaimer
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
Slide 3: Topics for today's presentation
Topics for today’s presentation • Q2 2014 financial results highlights • The leading Nordic Wholesale Bank: • A clear strategy and formula to sustainably achieve higher returns than any other regional bank • The Nordea Corporate & Institutional Banking result reflects the chosen strategy and recent
Slide 4: Q2 2014 financial results highlights
Q2 2014 financial results highlights 14
Slide 5: Q2/14 highlights
Q2/14 highlights Nordea delivers solid and strong results Income holding up despite continued low lending demand, interest rates and volatility Activity in corporate advisory business and savings area remains strong Cost programme delivering according to plan Loan losses are down to 16 bps
Slide 6: Q2/14 financial results
Q2/14 financial results EURm Q2/14 Q1/14 Chg % H1/14 H1/13 Chg % Net interest income 1,368 1,362 0 2,730 2,749 (1) 3 Net fee & commission income 708 704 1 1,412 1,287 10 13 Net fair value result 356 411 (13) 767 860 (11) (10) Total income* 2,456 2,501 (2) 4,957 4,996 (1) 2 Staff costs -907 -756 20 -
Slide 7: The leading Wholesale Bank in the Nordic countries
The leading Wholesale Bank 14 in the Nordic countries
Slide 8: The Nordic corporate and institutional market is large and interesting
The Nordic corporate and institutional market is large and interesting from a wholesale banking perspective Favourable business performance and risk level Successful global companies with Nordic base – Example Sweden EBIT (EURm) and EBIT Margin* 40000 37,955 30% 35000 33,245 33,211 25% 30000 26,428
Slide 9: The leading Nordic Wholesale Bank for corporate and institutional customers
The leading Nordic Wholesale Bank for corporate and institutional customers Key 2013 Wholesale Banking facts Corporate income, EURm #1 or #2 position in each of the Nordic countries Cross-sell 67% 70% ratio Total income EUR 2,606m CAGR Operating profit EUR 1,455m 6% 1,350 Cost/income ratio 3
Slide 10: Size and competencies = Relevance
Nordea Wholesale Banking vision and strategic positioning Strategic vision Strategic positioning The leading relationship bank for our Size and competencies = Relevance customers The vision is International to be the The best Nordic provider of Capital Product dimension: competition leading Mark
Slide 11: Nordic Wholesale Banking value creation should deliver systematic Alpha
Nordic Wholesale Banking value creation should deliver systematic “Alpha” versus industry performance - Profitable customer mix - Geographical and - Leading cross-sell sector diversification ratio and more leading to low loan - Nordic scale profitable products losses over time - 1 of 3 banks in - Co
Slide 12: Leading customer franchise
Leading customer franchise Large corporates evaluation of quality and Leading Nordic Capital Markets Operation relationship* Income, EURm 100% Nordea CAGR 90% 12% Important relationships 80% 70% Peer 1 Peer 2 60% Peer 3 50% 40% Peer 4 30% Peer 5 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 10% #
Slide 13: Nordea Wholesale Banking outperforms on cross-sales
Nordea Wholesale Banking outperforms on cross-sales Product Cross-Sell Effectiveness – Nordics* Product Cross-Sell Effectiveness – Sweden* 80% 74% 80% 69% 70% 70% 64% 60% 57% 55% 60% 55% 53% 50% 45% 50% 45% 45% 42% 40% 40% 34% 30% 30% 20% 20% 10% 10% 0% 0% Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 N
Slide 14: Active business selection for further re-pricing, supported by pricing initiatives
Active business selection for further re-pricing, supported by pricing initiatives Key activities CIB lending margin development Active business selection — Systematic review of all new transactions by +11% centralised committees — Regular follow-up on lowest performing customers — Reduction of un
Slide 15: Initiatives to further improve cost efficiency
Initiatives to further improve cost efficiency Comments Wholesale Banking total cost development, EURm C/I ratio of 34% 237 245 237 228 229 Continuous streamlining of processes 221 210 213 218 WB cost efficiency programme Near-shoring (Nordea Operation Center in Poland) and off-shoring of op
Slide 16: One of the lowest funding costs in Europe
100 125 150 -25 0 25 50 75 Santander 89 -3 France Lloyds 65 4 Belgium BNP Paribas 60 40 Peer 1 Nordea BBVA 51 Peer 2 Barclays 45 Peer 3 40 Spread vs €MS (bp) Peer 4 Peer 5 Deutsche Bank 47 47 55 50 52 53 Peer 6 Intesa Peer 7 Unicredit 34 33 33 Peer 8 55 55 56 Peer 9 SocGen Peer 10 Credit Agricole Pe
Slide 17: Positive trend in net loan losses
Positive trend in net loan losses Comments Wholesale Banking Total Net Loan Losses, EURm Strong domestic demand and recovering exports 102 99 Solid credit portfolio and track record 86 68 62 48 Rising activity in Danish economy 36 34 Improving credit quality 13 Q212 Q312 Q412 Q113 Q213 Q313
Slide 18: Increased capital efficiency – lower REA
Increased capital efficiency – lower REA Key activities Wholesale Banking REA development, EURbn Strong Wholesale Banking track record Customer targeted initiatives -25% — REA caps per division 77.9 — Active business selection/de-selection 65.4 — Move customers to capital-light solutions 59.0 58
Slide 19: CIB delivers on income, costs and capital
CIB delivers on income, costs and capital A direct consequence of the strategy Income, EURm Expenses, EURm Loan Losses, EURm 214 95 134 211 Fair value 173 80 NCI 299 262 NII 336 348 H1 13 H1 14 H1 13 H1 14 H1 13 H1 14 REA, EURbn RaRoCar, % Lending volumes, EURbn 36.8 39.9 19 39.0 15 30.9 H1 13 H1 14
Slide 20: Nordea have benefitted from the capital market trends – will the trend continue?
Nordea have benefitted from the capital market trends – will the trend continue? Income, EURm ? 134 Fair value 173 • Strong structural and cyclical trends 299 NCI 262 • Nordea gaining market share – leading Nordic Wholesale Bank • Stability of trends? NII 336 348 H1 13 H1 14 H1 15 20
Slide 21: Structural and cyclical trends fuelling capital markets growth
Structural and cyclical trends fuelling capital markets growth Nordea selected sub market dynamics • IPOs are back Equity • Mega M&As are back also in the Nordics • Strong acceleration in issuance of hybrid instruments (convertible bonds and preference Hybrid shares issuance) • Blue-chip companies f
Slide 22: Bonds an increasingly important source of funding
Bonds an increasingly important source of funding… Funding mix for 25 Nordic blue chip corporates with external debt rating 2006 (pre Lehman) 2009 (Lehman) 2013 (post Lehman) 8% 10% 11% Loans* 5% 3% 3% 29% Bonds** 35% 38% Commercial Paper** Other*** 49% 52% 57% Source: Annual reports, CIB Corporate
Slide 23: Potential for growth within non-rated large corporates
…and potential for growth within non-rated large corporates Funding mix for 25 Nordic non-rated large corporates 2006 (pre Lehman) 2009 (Lehman) 2013 (post Lehman) 2% 1% 5% 6% 5% 7% Loans* 8% 10% Bonds** 19% Commercial Paper Other*** 84% 69% 84% Source: Annual reports, CIB Corporate Research * Total
Slide 24: High yield bond issuance soaring in Sweden
High yield bond issuance soaring in Sweden Nordic HY Bond volume 2010 – YTD 2014, EURm 18 624 Corporate Private Equity Extrapolation 3,610 3,923 1,777 9,250 8,278 8,493 1,361 128 2,854 1,478 2010 2011 2012 2013 2014YTD Source: Dealogic, Bloomberg, Nordea 24 • 22/8/2014
Slide 25: High activity within M&A and IPO
High activity within M&A and IPO Selected “Mega M&A” Nordic IPO and rights issue volume development, EURbn Extrapolation 6.9 acquire bid for 5.3 5.5 Rottapharm Scania 4.0 July 2014 February 2014 3.6 3.6 Deal value Deal value 1.5 1.2 USD 3.1 bn USD 9 bn 0.6 0.1 0.0 2005 2006 2007 2008 2009 2010 2011
Slide 26: Nordea is benefitting from the capital market trends
Nordea is benefitting from the capital market trends due to the significant investments done during the last few years Nordic ECM Q2 2014, EURm Comments Nordea 1,603 The strengthened Investment Banking Peer 1,561 organisation with integrated advisory capabilities Peer 1,295 within debt and equity
Slide 27: Market shares, NasdaqOMX Nordic Cash Equity
Market shares, NasdaqOMX Nordic Cash Equity 27 22/8/2014
Slide 28: Outlook for the coming period
Outlook for the coming period Market Still limited signs of markets cooling off – continue to deliver DCM, ECM and Equities fees – but dynamics visibility short Growth picking up – hence loan portfolio may start to grow (despite continued Income disintermediation) Margins – some downward press
Slide 29: The leading Wholesale Bank in the Nordic countries
The leading Wholesale Bank in the Nordic countries Johan Näs, Head of Corporate & Institutional Banking Sweden August 22 2014