Nordea Bank Abp · OMXHEX:NDA_FI
Nordea Bank Abp — Nordea — Q4 2012 Earnings Presentation
30 slides from Nordea Bank Abp's earnings presentation, Jan 30, 2013
Slide 1: Fourth quarter 2012 results: Shaping the future relationship bank
Fourth quarter 2012 results Shaping the future relationship bank Analyst conference 30 January 2013 Christian Clausen, CEO
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: Agenda
• Q4 2012 financial results highlights • Shaping the future relationship bank • Nordea 2013 capital markets day
Slide 4: Financial results Q4/12
Financial results Q4/12 Risk-adjusted profit increase of 20% in FY2012 EURm Q4/12 Q3/12 Change % FY12 FY11 Change % Net interest income 1,429 1,441 (1) 5,752 5,456 5 Net fee and commission income 692 605 14 2,504 2,395 5 Net fair value result 444 377 18 1,784 1,517 18 Total income1 2,630 2,469 7 10,
Slide 5: Proposed dividend for 2012 of EUR 0.34
Proposed dividend for 2012 of EUR 0.34 Dividend and Payout ratio¹, EURm Comments EURm Dividend proposal of EUR 0.34 per share Payout ratio, % 1 370 — 44% payout ratio New capital policy to maintain a Core Tier 1 ratio 1 168 EUR 0.34 per share above 13% no later than 1 January 2015 1 048 1 006
Slide 6: Stable and consistent operating income
Stable and consistent operating income Total income development, EURm Comments Combined net interest margin nearly unchanged 2 507 2 510 2 558 2 531 2 606 2 630 — Stable volume development 2 469 2 342 494 444 — Business selection strategy 504 506 469 377 544 2 091 356 111 — Lower deposit margins 6
Slide 7: Expenses broadly flat over last nine consecutive quarters
Expenses broadly flat over last nine consecutive quarters Total expenses (excl. FX and variable pay1), EURm Comments 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 In total, nine quarters with a flat cost development (excl. FX and variable pay) in line with flat cost target — Strict cost co
Slide 8: Credit quality stabilisation and lower net loan losses
Credit quality stabilisation and lower net loan losses Reduced total net loan losses in Q4/12 Total net loan losses, EURm Comments 263 254 242 244 Underlying credit quality remains solid, with a 218 217 positive rating migration in institutions and 166 household portfolios 118 112 Stabilisation
Slide 9: Denmark is stabilising and remains under control
Denmark is stabilising and remains under control House price index1 Loan losses net, Retail Banking Denmark 110 200 150 100 100 90 50 0 80 -50 70 -100 2006 2008 2010 2012 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Single-family houses Summer houses Flats Collectively assessed Portfolio assessed
Slide 10: Shipping collateral values seem to be bottoming out
Shipping collateral values seem to be bottoming out Ship values1 Shipping orderbook as % of existing fleet1 180 180 150 150 120 120 USDm 90 90 60 60 30 30 0 0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 J
Slide 11: Capital and RWA efficiency
Capital and RWA efficiency Risk-weighted assets (RWA), EURbn1 Comments 185 182 Increase in Core Tier 1 ratio in Q4/12 of 90bps (YoY 181 179 +190bps) (1) RWA has decreased EUR11.1bn or 6.2% in Q4/12 (YoY (3) 168 EUR -17.3bn or -9%) due to: (3) (4) — Roll-out of the Baltic corporate and institutio
Slide 12: Retail Banking: Key developments
Retail Banking: Key developments Financial performance Strategic direction Very strong growth in operating income in 2012 as a Diversified franchise delivering high and growing income result of continued re-pricing efforts with low volatility Significant efficiency gains during 2012 Closer r
Slide 13: Wholesale Banking: Key developments
Wholesale Banking: Key developments Financial performance Strategic direction Strong growth in income 2012, driven by continued re- Business selection a key strategy to enhance customer pricing and strong capital markets activities profitability Cost increase explained by increased depreciatio
Slide 14: Wealth Management: Key developments
Wealth Management: Key developments Financial performance Strategic direction AuM growth of 4% in Q4/12, full year increase of 16% to Strengthen advisory concepts, products and services EUR 218bn Increase penetration and share of wallet in retail savings Q4/12 net inflow EUR 3.1bn, full year
Slide 15: Wealth Management: Increasing AuM with net inflows and strong performance
Wealth Management: Increasing AuM with net inflows and strong performance Value added compared to benchmark 2012, bps Net inflow by Business Unit, EURbn Net inflow / 1.0% 0.6% 1.1% 1.4% 1.5% 4.9% AuM (BoP) Fixed Income 203 9.1 4,0 3,5 3,1 Local Equities & Fundamentals 166 2,7 3,0 2,5 1,7 2,1 2,0 1,2
Slide 16: Agenda
• Q4 2012 financial results highlights • Shaping the future relationship bank • Nordea 2013 capital markets day
Slide 17: Nordea has delivered on targets throughout the financial crisis
Nordea has delivered on targets and significantly improved its financial performance throughout the financial crisis… 2006-2012 CAGR Key achievements (‘000s) 3,100 2,400 Focus on Increase in number of relationship relationship +4.5% p.a. customers driven by Nordea’s high quality customers franchis
Slide 18: Will continue to deliver attractive total return to shareholders
… and will continue to deliver attractive total return to our shareholders going forward Strong capital generation A and return of excess capital to our shareholders ROE target of 15% at a Attractive CT1 ratio >13% and in a total B normalised interest rate shareholder environment return Delive
Slide 19: Significant capital generation achieved
A Significant capital generation achieved Core Tier 1 capital, EURm Comments Nordea’s Core Tier 1 capital has increased by more than 21 961 20 677 EUR 10bn since 2006 19 103 17 766 12 821 14 313 During 2006-12, the Group has generated close to EUR 11 689 20bn of equity — EUR 12.0bn retained — EU
Slide 20: Core Tier 1 ratio expected to remain above 13%
A Core Tier 1 ratio expected to remain above 13% Core Tier 1 ratio development, % Excess capital The regulatory environment ~1% >13% remains uncertain 13.1% ~1.5% Core Tier 1 ratio expected to remain above 13% ~(1.5)% ~(0.5)% Excess capital over our policy requirement to be returned to shareho
Slide 21: RWAs remain nearly flat as efficiency initiatives offset regulation
A RWAs remain nearly flat as identified efficiency initiatives offset the impact of regulation and allow for lending growth RWA development, EURbn ~20 ~5 ~10 168 ~168 ~168 ~(25) ~(10) 2012 Regulation Growth Efficiency 2013E Growth Efficiency 2015E including including migration migration During 2013
Slide 22: Capital generation guided by ambitious ROE target
B Further capital generation to be guided by our ambitious ROE target Return on equity, % ~200bps >15% ~100bps ~100bps ~100bps 11.6% 2012 Income Cost efficiency Lower loan 2015 ROE Normalised ROE at generation losses forecast interest rates1 normalised interest rates Basel Progression from Basel 2.5
Slide 23: Strong execution on the flat cost plan
B Strong execution on the flat cost plan for nine quarters, costs to remain flat for another eight Total expenses (excl. FX and variable pay1), EURm Continued cost reductions with gross savings of ~EUR 450m more than off-setting cost inflation 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 Un
Slide 24: Nordea's business model has proven resilient
C Nordea’s business model has proven resilient… Largest geographic exposure vs. Nordic peers1, % Net income volatility vs. Nordic peers2, % ~90% 149 ~80% ~70% ~70% ~60% 73% 53 61 27% 23 10 10 Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Total loans to public by
Slide 25: As confirmed by the debt capital markets
C ... as confirmed by the debt capital markets CDS spread vs. European peers, 5 yrs, bps LCR developments 272% 283% 265% 385 374 276 273 181% 263 144% 157% 132% 129% 174 174 127% 161 158 158 141 139 138 128 127 119 100% 96 96 94 93 92 92 87 82 77 76 68 Nordea Q2 2012 Q3 2012 Q4 2012 Nordic peers Eur
Slide 26: Re-cap of Nordea's market commitments
Re-cap of Nordea’s market commitments Nordea market commitments Key initiatives Increased Crossshare of wallet Selling and re-pricing and Re-Pricing Strong capital generation and return of excess capital to our shareholders Continued Reduce cost reductions Operating Expenses ROE target of 15% at a C
Slide 27: Nordea will deliver attractive total shareholder return
Nordea will deliver attractive total shareholder return Capital generation1, EURm Acc. dividend Acc. retained equity Attractive shareholder return 7 679 6 309 5 261 4 093 3 087 12 017 2 568 10 261 8 675 7 180 1 271 5 868 3 715 1 882 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E ¹ Dividends re
Slide 28: Agenda
• Q4 2012 financial results highlights • Shaping the future relationship bank • Nordea 2013 capital markets day
Slide 29: Nordea 2013 capital markets day
Nordea 2013 capital markets day London, 6 March 2013 Presentation Presenter Key topics Shaping the future Nordea’s relationship strategy Christian Clausen relationship bank Plan to ensure attractive total shareholder return Path to achieving ROE target Financial initiatives Torsten Jørgensen
Slide 30: Fourth quarter 2012 results: Shaping the future relationship bank
Fourth quarter 2012 results Shaping the future relationship bank Analyst conference 30 January 2013 Christian Clausen, CEO