Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Debt Investor Presentation (2022)
45 slides from Nordea Bank Abp's debt investor presentation, 2022
Slide 1: Debt investor presentation Q3 2022
Nordea ot a Debt investor pr Q3 2022 F
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: Table of contents
Table of contents 1. Nordea third-quarter 2022 update 4 2. Credit quality 15 3. Capital 22 4. Funding 25 5, Macroeconomy 33 6. Appendix 38 ° Nordea
Slide 4: 1. Nordea third-quarter 2022 update
1. Nordea third-quarter 2022 update Nordea
Slide 5: Nordea today
Nordea today The largest financial services group in the Nordics Household* Small and medium- Large corporates Asset and wealth sized companies _and institutions management shares in lending, savings and investments Business position - Universal bank with a 200-year history of supporting and growing
Slide 6: Third-quarter highlights 2022
Third-quarter highlights 2022 Executive summary Corporate sector driving continued lending volume growth, despite economic slowdown - Mortgage volumes up 4% y/y and corporate lending up 12% y/y. Assets under management down 4% q/q Increased income and operating profit - Net interest income up 15%, n
Slide 7: Key financials
Key financials Third-quarter results 2022 come statement and key ratios 9322 Q321 93/03 Q222 93/02 Net interest income 1,407 1,226 15% 1,308 8% Net fee and commission income 816 870 -6% 838 -3% Net fair value result 264 224 18% 282 -6% Other income 14 24 16 Total operating income 2,501 2,344 7% 2,44
Slide 8: Net interest income
Net interest income Continued volume growth, deposit margins up Year-over-year bridge, EURm Qo Vee 1,407 73 422660020 Ze —_ Q321 Volumes Margins Other FX Q322 Quarter-over-quarter bridge, EURm 1,407 2mm 14 Woon 84 1308 19 0 aa —_ Q222 Volumes = Margins Other FX Day count Q322 Net interest income up
Slide 9: Net fee and commission income
Net fee and commission income Higher payment and card income partly offsetting lower asset management, brokerage and advisory income Year-over-year bridge, EURm 870 | 48 a a 816 2 5007 4 3 3) 5B Ze —_ Q321 Asset Brok.& Pay.& Lending Other FX Q322 mgmt. advisory cards Quarter-over-quarter bridge, EUR
Slide 10: Net fair value result
Net fair value result Continued high customer activity in volatile markets Net fair value result, EURm Continued high customer activity 295 in volatile markets 247 - Strong interest in FX and rates products. 224 ees + Market making up, driven by FX, rates and equity trading 195 Q321 Q421 Q222 Q322 H
Slide 11: Costs
Costs Cost increases due to higher investments, normalising activity and increased regulatory fees Year-over-year bridge, EURm y a 1,146 — 16 Tm 1098 39 Q321 Underlying costs Regulatory fees FX Q322 Quarter-over-quarter bridge, EURm — 1,146 1— | FX Q322 Costs including regulatory fees up 4% - Costs
Slide 12: 2025 financial target
2025 financial target Return on equity Nordea 2025: The preferred financial partner in the Nordics | Creating the best omnichannel customer experience Supported in 2025 by _ . Cost-to-income ratio | Driving focused and profitable growth : | Increasing operational and capital efficiency F \ \ Loan lo
Slide 13: Sustainability at the core
Sustainability at the core Our long-term sustainability objectives supported by short-term targets 2050 long-term objective: 2030 mid-term objective: “ 40-50% menta lending tion in emi m internal operation: Supported by our 2025 targets?: € EUR>200bn Nordea
Slide 14: Sustainability at the core
Sustainability at the core Actively engaging to drive transition and capture growth opportunities Channelling capital towards sustainable solutions Green and sustainability linked loans Assets under management Total volumes, EURbn 6.1% Share of ESG AuM, % Sustainability inked loans aa a MM Green loa
Slide 15: 2. Credit quality
2. Credit quality Nordea
Slide 16: Credit portfolio
Credit portfolio Well diversified with strong credit quality Portfolio well diversified across countries No major industry sector and segments concentration 0.1% 01% 02% om 07% o7%q 0.8% C 45% 10%] EUR 327bn (eas 15%] 20% 22% 26%0 29% 8% 75% Corporates Consumer Il Mortgages CN | Air transportation M
Slide 17: Net loan losses and similar net result
Net loan losses and similar net result Strong credit quality amid weaker economic conditions Net loan losses and similar net result Q3 2022, EURm 58 Individual Modelled Net loan losses Nordea Kredit Total provisions collective fair value adj. and write-offs provisions Impaired (Stage 3) loans and PD
Slide 18: Impairments and provisioning coverage
Impairments and provisioning coverage Strong and stable portfolio credit quality Stage 2 and 3 loans at amortised cost, EURm * Stage 3 impaired loans further reduced, to 0.88% from 0.96% in Q2 * Stage 2 loans up 4% q/q I Stage 2 MM stage 3 * Coverage ratio for remaining Q321 Q421 Q122 Q322 Stage 3 p
Slide 19: Denmark Norway Finland
• • 6 5 • 4 Denmark Finland Norway Sweden - 3 2 1 0 - 2021 2022 2023 2024 2025 10 • 8 - 6 4 2 Denmark Norway Finland Sweden • 0 - 2021 2022 2023 2024 2025
Slide 20: Real estate management industry (REMI)
Real estate management industry (REMI) Well diversified with high quality Distribution of REMI property types, EUR 30bn* Hotels 3% Industrial Logistics 8% Office Other 19% 10% Retail Residential 20 * Excluding tenant owners’ associations (TOA) Distribution of REMI by probability of default (PD), EUR
Slide 21: Credit quality
Credit quality Portfolio significantly de-risked over past 10 years Significant de-risking (EURbn) Mix change Focus on Nordic markets International and shipping, oil and 313 328 313 328 offshore exposure a a Al 58 67 ~ 929 ~ 999 Public sector 92% 99% HB Household eB 40 Hl Corporate 102 8 Non-_s 24 2
Slide 22: 3. Capital
3. Capital Nordea
Slide 23: Capital buffers and CET1 requirement
• - - • • • - *Decided increases of CCyB buffer rates: Norway from 1.5% to 2.0% in Q4 2022 and 2.5% in Q1 2023, Denmark from 0% to 1.0% in Q3 2022, to 2.0% in Q4 2022 and 2.5% in Q1 2023 and Sweden from 0% to 1.0% in Q3 2022 and to 2.0% in Q2 2023. OSII buffer to increase from 2.0% to 2.5% in Q1 202
Slide 24: Capital excellence
Capital excellence Reducing capital excess — path to normalisation CET1 capital ratio and requirement CET1 ration, CET1 eto a00b ~15% ~12% “15-16% ividends & share buy-backs Pre COVID-19 During Normalised COVID-19 conditions ~2025 Capital generation and uses of capital (bp) 2021 2022-25 700 480 4,00
Slide 25: 4. Funding
4. Funding Nordea
Slide 26: 21.8 • - 13.6 - 5.6 5.8 - 0.6 • - - • -
21.8 • - 13.6 - 5.6 5.8 - 0.6 • - - • -
Slide 27: Funding mix by instrument
Covered Senior preferred** SNP • - - - • - Green covered CD & CP below bonds - 1Y 25 % 1% CD & CP above 1Y - 5% Scandinavian Subordinated debt covered bonds - 3% 45 % SNP 5% Senior preferred bonds Sustainable International 8% bonds*** covered bonds 1% 7% *Excluding capital transactions and DKK cover
Slide 28: Funding by currency
5% 10 % 3% 8% 1% 4 %2% NOK (EUR 14bn eq.) 97 % 93 % DKK SEK (EUR 50bn eq.) (EUR 31bn eq.) 14 6% 30 % 8%5% % 22 % 13% 64 % 7% 74% JPY 21% 20 % 4% 29 % (EUR 1bn eq.) GBP 47% 6% (EUR 4bn eq.) 80 % 32 % 18 % CHF EUR (EUR 1bn eq.) (EUR 31bn) USD (EUR 18bn eq.) 28
Slide 29: Sustainability at the core
Sustainability at the core Enhanced focus on sustainable funding Green bond asset portfolios totalling EUR 8.6bn - EUR 5.4bn from NBAbp - EUR 3.2bn from Nordea Kredit and Nordea Eiendomskreditt Nordea’s green bond asset portfolio Green buildings m Nordea Kredit Mortgages Inaugural green bond from NB
Slide 30: Covered bond issuers
Nordea Eiendomskreditt Nordea Hypotek Nordea Kredit Nordea Mortgage Bank • • 30
Slide 31: Funding transactions
Funding transactions Nordea recent benchmark transactions Issuer Type Currency Amount (m) FRN/ date AR Callable Nordea Bank Senior non-preferred © usp 1,000 Fixed Sep-22 Sep-27 Nordea Bank Senior preferred © usp 1,000 Fixed Sep-22 Sep-25 Nordea Mortgage Bank Covered @ §€uR 1,000 Fixed Sep-22 Sep-32
Slide 32: Resolution and loss-absorbing capital
Point of non viability Resolution • - - • 13 - 3 4 24 CET1 AT1 T2 SNP target Remaining senior Q3 22 Q3 22 Q3 22 unsecured debt
Slide 33: 5. Macroeconomy
5. Macroeconomy Nordea
Slide 34: Nordic economic development
Nordic economic development Nordic outlook dampened by higher inflation and interest rates GDP development Unemployment rate 135 Jindex 2007Q1=100 GDP, level Index 2007Q1=100 138 Mee ‘Unemployment % " 130 =} 130 70 0 oe [ -sweaen a ° > 18] Non = es aaeuwle ) (~~ 120 | —Denmark Wal L420 8 ~\ 8 =Finta
Slide 35: Nordic economies
Nordic economies Interest rates are increasing rapidly throughout the Nordics Policy rates Public balance/debt, % of GDP, 2022E (IMF) 40 40 % % 78 78 _ Policy rates % 35 -~ Norway 2022E 3.0 30 a 5.0 5.0 & Denmark 25 —— 25 Oo 25 25 T= S| S J tretana Netherlands 20 ' 20 «8 . ® 00 q ae 0.0 15 15 2 Port
Slide 36: Households
Households Households facing high inflation and rising interest rates Household debt 300 42% of disposable Household debt % of disposable] 20° 275 income income|. 275 250 250 225 225 200 200 175 7s 150 150 125 125 100 100 75 7s 2 — Finland — Denmark — Norway — Sweden 2 0203 04°05°06 07°08 09°10°11 1
Slide 37: Housing markets
Housing markets Rising interest rates are cooling off hot Nordic housing markets Housing prices Households’ credit growth 0 0 0 o 250 Tex 2007=100 Housing prices index 2007100] * B01 iy Households’ credit growth % vig 1° gas [Jmmeving average 295 125 125 10.0 10.0 200 7S 7S 175 50 Finland 50 150 25
Slide 38: 6. Appendix
6. Appendix Nordea
Slide 39: Personal Banking
Personal Banking Increased mortgage market shares across Nordics and improved deposit margins 922 013 925 906 974 573 556 565 571 636 Q321 Q421 Q122 Q222 Q322 Net interest income Il Net fee and commission income Net fair value result and other Lending*, EURbn + Total income up 6% + Increased mortgag
Slide 40: Business Banking
Business Banking Strong income growth supported by higher interest rates Total income, EURm 635 681 714 709 737 396 AIT 440 ‘444 487 161 Q321 Q421 Qi22 Q222 Q322 Net interest income Il Net fee and commission income Net fair value result and other Lending*, EURbn + Total income up 16% + Lending volum
Slide 41: Large Corporates & Institutions
Large Corporates & Institutions High customer activity and significant lending growth in volatile markets Total income, EURm 530 541 433 454 508 267 263 228 247 = = = =90 87 134 165 =119 Q321 Q421 Q122 Q222 Q322 Net interest income Ill Net fee and commission income Net fair value result and other To
Slide 42: Assets under management
• • • • • • Assets under management, EURbn -2pp 500 1,0 0,8 300 0,6 200 0,4 100 0,2 0 0,0
Slide 43: Sweden Denmark Q423
• - - 4.0 3.0 • 2.0 Sweden Norway - 1.0 Denmark - ~ ~ Finland 0.0 - ~ -1.0 - Q122 Q222 Q322 Q422 Q123 Q223 Q323 Q423
Slide 44: Financial crime prevention
Financial crime prevention Significant investments Financial crime prevention spending, annual Employees EURm 300 1,600 1500 >1,500- >1,500>1,500>1,500 , 250 1,400 1,200 210 200 190 1,000 780 730 190 150 800 Joo ; 600 / — Financial crime prevention staff 400 / — Financial crime prevention spend, ann
Slide 45: Contacts
Contacts Investor Relations Matti Ahokas Head of Investor Relations Mobile: +358 40 575 9178 [email protected] Group Treasury Anders Frank-Leessoe Group Treasurer, Head of Group Treasury Tel: +45 55477672 Mobile: +45 61612157 [email protected] 45 Maria Caneman Head of Debt IR and Rating