Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Debt Investor Presentation (2020)
16 slides from Nordea Bank Abp's debt investor presentation, 2020
Slide 1: Video debt investor presentation Q2 2020
Video debt investor presentation Q2 2020
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 Q2 result 4 2. Credit quality and loan loss provisions 7 3. Capital position 11 4. Funding, liquidity and issuance plans for 2020 13 3
Slide 4: Executive summary
Executive summary • Solid result – continued strong momentum across business areas and countries ➢ High activity level kept revenues largely unchanged ➢ Increasing volumes in lending and deposits, net commission income impacted by the lockdowns ➢ Challenging times have proven the resilience of our b
Slide 5: Revenues – continued volume growth but impact from COVID-19
Revenues – continued volume growth but impact from COVID-19 Net interest income, EURm Comments year over year +2% 1,108 1,109 • Net interest income up 2% 1,071 1,083 1,091 • Strong mortgage growth in all countries • Strong growth in both household and corporate deposits • Slightly improving margins
Slide 6: Costs – continue to deliver on cost plan and building a strong cost culture
Costs – continue to deliver on cost plan and building a strong cost culture Year over year bridge, EURm Comments -6% 1,180 • Delivering on cost plan 1,108 • Staff costs down by 11% 121 20 1,088 49 • New ways of working supporting cost reductions • Slightly lower IT spend in the quarter Q219 Cost Res
Slide 7: Loan book – well-diversified with strong underlying credit quality
Loan book – well-diversified with strong underlying credit quality Well diversified portfolio Five segments with 4% of Updated analysis of COVID-19 across countries and total exposure significantly impact by segment segments affected 0.1% Air transportation EUR 14bn, 4% Significantly affected 0.1% M
Slide 8: Underlying net loan losses – at EUR 310m while overall stable credit quality
Underlying net loan losses – at EUR 310m while overall stable credit quality Drivers of underlying net loan losses, EURm Comments • Total underlying net loan losses in Q2 at EUR 310m 87 • Three drivers of increased losses: 74 310 • Collective provisions based on updated macro scenarios 134 • Additio
Slide 9: Management judgement added – full-year 2020 loan losses already mostly covered
Management judgement added – full-year 2020 loan losses already mostly covered Management judgement developments, EURm Comments • New management judgement of EUR 388m in the quarter 388 • Total management judgement buffer of EUR 650m: 650 • EUR 430m for cyclically driven loan losses 120 • EUR 110m f
Slide 10: Asset quality – stage 3 loans
Asset quality – stage 3 loans Stage 3 impaired loans at amortised cost, EURm Comments • Stage 3 impaired loans decreased 2% • Allowance ratio stage 3 loans at 43% • Total impairment ratio 1.65% 4,678 4,610 4,555 4,493 4,516 4,421 Q119 Q219 Q319 Q419 Q120 Q2 20 Stage 3 allowances, % Coverage ratio 50
Slide 11: Capital – significant buffer to capital requirements
Capital – significant buffer to capital requirements CET1 capital position and requirement Comments +5.6% • Q2 CET1 ratio 15.8% compared to the current requirement of 10.2% • Capital policy of 150-200bps above regulatory requirement +5.6% (MDA level) 14.5% 0.4% • CET1 requirement lowered by ~2.9 %-p
Slide 12: Capital – strong position to support customers while maintaining dividend capacity
Capital – strong position to support customers while maintaining dividend capacity CET1 capital ratio development, % Comments 16.0 0.1 0.1 0.1 0.1 • CET1 capital ratio at 15.8% +5.6% • Risk exposure amount (REA) increased by EUR 2.5bn to EUR 155bn 15.8 • Limited credit REA migration in Q2 10.2 • Cap
Slide 13: Liquidity – solid position and normalising funding markets
Liquidity – solid position and normalising funding markets Liquidity buffer development, EURbn Comments 107 105 104 103 104 102 • Robust liquidity position 100 101 • Liquidity buffer over EUR 100bn 95 • Liquidity coverage ratio (LCR) of 160% • EU net stable funding ratio (NSFR) of 113% • Deposits in
Slide 14: Solid funding operations
Solid funding operations Long-term issuance volumes YTD Q2 2020, EUR 14.4bn Strong funding position further improved EURm AT1 T2 Senior non-preferred Senior preferred Covered 5 000 • EUR 14.4bn long term debt issued in H1 2020 whereof EUR 8.8bn 4 500 during Q2 4 000 • NSFR 113.2% end Q2 2020 (109.7%
Slide 15: Senior non-preferred issuance plan
Senior non-preferred issuance plan Own funds and bail-in-able debt, EURbn Comments • Total estimated SNP need for future MREL requirement remains unchanged at EUR 10bn* by end of 2023 Point of Non Viability Resolution • EUR 2.7bn has been issued • SNP issuance plan to be reviewed during Q3 2020 and
Slide 16: Contacts
Contacts Investor Relations Matti Ahokas Andreas Larsson Maria Caneman Randie Atto Head of Investor Relations Head of Debt Investor Relations Senior Debt IR Officer Debt IR Officer Mobile: +358 405 75 91 78 Mobile: +46 709 70 75 55 Mobile: +46 768 24 92 18 Mobile: +46 738 66 17 24 Tel: +46 10 156 29