Bank of America Merrill Lynch
Banking & Insurance CEO Conference
London, 30 September 2010




Christian Clausen
Group CEO
Disclaimer


    This presentation contains forward-looking statements that reflect management’s current
    views with re...
A well diversified, fast growing
      and high-quality operation
3
Diversified and fast growing customer operation
     Income well split between corporate and household customer segments
 ...
Diversification inherent strength in Nordea
        56% corporate lending and 44% household
        Only one industry acco...
Profit orientation
                                                                                       and prudence

  ...
Funding operation based on multiple sources

                               Outstanding long-term funding

               ...
Broad funding base and high activity –
        record EUR 25bn issued already this year
                                  ...
9
                                                                                                                        ...
One of the most stable profit development
 among banks in Europe
      Profit before tax development through the financial...
Values


 Customer satisfaction improving versus
 competitors

                CSI index (aggregate) 2007-2009*

         ...
The history of Nordea – 10 years of success

12
Nordea created through a string of mergers


                                        From the start:
                     ...
An outstanding starting point in nine markets

            Nordea home markets
            Nordea home markets   11 millio...
10 years of success…

           Nordea was renamed at an EGM in November 2000
           More than doubling of lending an...
…with strong credit management

          bps                                                                         Loan...
…has created a sizeable European bank
                           Market capitalisation (15 September 2010)
         Santan...
The current trend for Nordea

18
Macroeconomic stabilisation in the Nordic region
      GDP growth, %, y/y
     7.5                                        ...
Result highlights
          EURm                                  H1/10    H1/09    Chg %   H2/09    Chg %
          Net i...
Net interest income held up well in H1 2010,
     despite the low interest rate level
     EURm                           ...
Expenses in line with outlook

     EURm
                                                          Cost management remains...
Credit quality improving during 2010
     EURm
        48                               29
                          27
  ...
The future - Journey to Great Nordea

24
Great Nordea framework
                                Rationale

         Profit orientation &     Through the cycle appr...
Ambitious vision
                                                                                                         ...
Values


     Strong customer-oriented values and culture –
     become part of DNA


                            A Great ...
Prudent growth strategy – Group initiatives and
                      strong business development
28
Growth strategy

     We continue on the journey to Great and to
     deliver on our long-term target
                    ...
Growth strategy

     Clear growth strategy


              Household                         Corporate             New Eu...
Growth strategy

     Household relationship strategy


                                                                5 ...
Growth strategy


     Household strategy delivery: + 7% in H1

      Solid trend accelerated in 2010 – 7%          Number...
Growth strategy

     Corporate relationship strategy


                                                                 7...
Growth strategy


 Corporate strategy delivery: Income + 7% in H1

     Increased business confidence - lending   Corporat...
Growth strategy


     Improved average risk weights following growth
     focused to stronger corporates

               ...
Growth strategy


     Increase in corporate lending margins

         Corporate lending margins, average in the lending b...
Growth strategy

     New European Markets strategy


                                                                High...
Growth strategy


     New European Markets: A growth area for Nordea

       Strong growth over time…                  NE...
Concluding remarks

39
Key messages
     Nordea has a uniquely diversified operation
     Nordea has a proven record of growth and improving effi...
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Bank of America Merill Lynch - Banking & Insurance CEO Conference, Christian Clausen Nordea, London, 30 September 2010

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Bank of America Merill Lynch - Banking & Insurance CEO Conference, Christian Clausen Nordea, London, 30 September 2010

  1. 1. Bank of America Merrill Lynch Banking & Insurance CEO Conference London, 30 September 2010 Christian Clausen Group CEO
  2. 2. 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 can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward- looking statements as a result of various factors. Important factors that may cause such a difference for Nordea include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate, (iii) change in the regulatory environment and other government actions and (iv) change in interest rate and foreign exchange rate levels. This presentation does not imply that Nordea has undertaken to revise these forward- looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided. 2
  3. 3. A well diversified, fast growing and high-quality operation 3
  4. 4. Diversified and fast growing customer operation Income well split between corporate and household customer segments Strong growth trend in all corporate segments and in Gold and Private Banking Income split per customer segment, Q210 Income growth YoY Q210/Q209, % Int’l PB NEM Other CMB 20% ld ho se 10% Gold u e Ho rat Large rpo 0% Co Nordic PB Other Corporate Household -10% Fin inst NEM Shipping ta l r r B ld M M e t B he he in g in s B rg 'l P CM Go NE NE To P Ot Ot La ip p F in In t ic rd Sh 4 No
  5. 5. Diversification inherent strength in Nordea 56% corporate lending and 44% household Only one industry account for more than 10% of total lending 87% of the portfolio in the Nordic countries Credit portfolio by sector Credit portfolio by customer area/ geography Fin inst incl repos Other corporate Shipping NB Denmark Russia Construction Poland Household mortgage Baltics Transport Shipping Retail trade NB Norway Consumer staples Financial inst NB Sweden Consumer Industrial commercial NB Finland services Real estate 5
  6. 6. Profit orientation and prudence Nordea one of few AA rated banks Ratings, September 2010 S&P long-term Moody’s long-term BBVA AA Aa2 Santander AA Aa2 BNP Paribas AA Aa2 Nordea AA- Aa2 Handelsbanken AA- Aa2 Intesa Sanpaolo A+ Aa2 Société Générale A+ Aa2 DnB NOR A+ Aa3 Lloyds A+ Aa3 Danske Bank A Aa3 UniCredit A Aa3 Commerzbank A Aa3 Erste Bank A Aa3 Barclays A+ A1 SEB A A1 RBS A A1 Swedbank A A2 KBC A- A1 AIB A- A1 Bank of Ireland A- A1 6 Source: company information and reports
  7. 7. Funding operation based on multiple sources Outstanding long-term funding Subord., 6% Gov’t gteed, 1% USMTN, 2 % NY US CD, 2% Nordea EMTN, 12% Nordea Hypotek SEK, 20% Nordea Stand alone, 3% Nordea Hypotek EMTN, 7% Nordea MTN plain, 0% Nordea Hypotek Reg CB, 1% Nordea Bank Finland MTN Structured, 6% Nordea Kredit DKK, 33% Eiendomskreditt NOK, 4% Nordea Kredit EUR, 3% 7
  8. 8. Broad funding base and high activity – record EUR 25bn issued already this year Latest transactions in 2010 EUR 1bn 3-year FRN in June – Accumulated long term funding (excl Nordea Kredit)) 3-month Euribor +75 bps €m 30,000 EUR 1.25bn 10-year fixed rate in June – 25,000 midswap +110 bps – the first fixed rate senior deal in two months as Nordea 20,000 reopened the market 15,000 EUR 1.25bn 5-year fixed rate in August – 10,000 midswap +73 bps – the first fixed rate FIG 5,000 benchmark post summer 0 Strong covered bond platform Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Domestic issuance continues as normal in 2008 2009 2010 Danish and Swedish covered bond markets First issuance by Nordea Eiendomskreditt in August in the Norwegian domestic covered bond market Nordea Bank Finland – covered bond platform under establishment 8
  9. 9. 9 % 0 1 2 3 4 5 6 7 8 9 10 Nordea HSBC DnB NOR Dexia SEB Swedbank SHB KBC Santander Barclays Credit Suisse Credit Agricole Société Générale LBBW UniCredit Intesa Sanpaolo Risk-adjusted capital ratios Danske Bank Deutsche Bank BNP Paribas AIB Bayerische LB UBS Strong capital position in a global perspective Source: Swedish Riksbank, Standard & Poor’s Citigroup
  10. 10. One of the most stable profit development among banks in Europe Profit before tax development through the financial crisis (Indexed) Index = 100 140 120 100 Nordea 80 European peers* 60 Nordic peers** 40 20 0 3 4 1 1 3 4 1 2 2 3 4 1 2 -20 Q Q Q Q Q Q Q Q Q Q Q Q Q 07 09 09 10 07 07 07 08 08 08 08 09 09 -40 * Aggregate of a selected number of banks in the European peer group: BBVA, Commerzbank, Erste, Intesa Sanpaolo, KBC, Santander, UniCredit 10 ** Nordic peers: Danske Bank, DnB NOR, SEB, SHB, Swedbank
  11. 11. Values Customer satisfaction improving versus competitors CSI index (aggregate) 2007-2009* 2007 2009 +0.9 Nordea 70.6 71.5 71.2 - 3.6 Peers 67.6 -0.6 3.9 11 *Corporate and high involvement customers, corresponding to Gold and Silver segment customers
  12. 12. The history of Nordea – 10 years of success 12
  13. 13. Nordea created through a string of mergers From the start: - Around 300 banks 1970s: 80 banks 1980s: 30 banks 1990s: 4 banks 2010: Nordea - One operating model - Unique diversification - Proven business model 13
  14. 14. An outstanding starting point in nine markets Nordea home markets Nordea home markets 11 million customers 9 home markets Approx. 10m personal customers 750 000 corporates, incl. Nordic Top 500 Distribution power 1,400 branches and 6 million e-banking customers Financial strength EUR 9bn in Income (2009) EUR 571bn of Assets (2009) EUR 23bn in equity capital AA credit rating EUR 31bn in market cap One of the largest Nordic corporations A top 10 European retail bank 1 of 2 Nordic Forbes 100 companies 14
  15. 15. 10 years of success… Nordea was renamed at an EGM in November 2000 More than doubling of lending and deposit volumes as well as profit before loan losses Considerable cost/income ratio improvement from 64% to 53% 10-year growth, % Cost/income ratio, % (H1/10 annualised compared to Q4/00 annualised ) (H1/10 annualised compared to Q4/00 annualised ) 150% 70% 100% 60% 50% 50% 0% 40% g e s s s 00 10 m in se it se os nd 20 20 co n s p pe lo Le In De n Ex oa b .l it of 15 Pr
  16. 16. …with strong credit management bps Loan loss ratio 20 10 0 -10 Credit risk appetite 25 bps -20 -30 -40 -50 -60 H1 2002 H2 2002 H1 2003 H2 2003 H1 2004 H2 2004 H1 2005 H2 2005 H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 16
  17. 17. …has created a sizeable European bank Market capitalisation (15 September 2010) Santander BNP Paribas Lloyds Barclays Unicredit BBVA RBS Societe Generale Nordea 30.9 Intesa Sanpaolo DnBNOR SHB KBC Danske Bank SEB Swedbank Erste Commerzbank Bank of Ireland EURbn Allied Irish Banks 0 10 20 30 40 50 60 70 80 90 100 17 Source: ThomsonReuters Datastream
  18. 18. The current trend for Nordea 18
  19. 19. Macroeconomic stabilisation in the Nordic region GDP growth, %, y/y 7.5 7.5 % y/y GDP % y/y 5.0 5.0 Growth rates expected to be solid in the 2.5 2.5 Nordic countries 0.0 0.0 -2.5 -2.5 In 2010, all Nordic countries are expected -5.0 Sweden -5.0 -7.5 Denmark -7.5 to have: Norway Finland -10.0 -10.0 Positive growth rates Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 10 Public finances, % of GDP Modest inflation 5.0 % of GDP 5.0 % of GDP Norway +12-18% Relatively strong public finances 2.5 2.5 Sweden 0.0 0.0 Improvements in labour markets Finland -2.5 -2.5 Denmark -5.0 Euro area -5.0 -7.5 -7.5 USA -10.0 -10.0 08 09 10 11 12 19 Source: Nordea Markets
  20. 20. Result highlights EURm H1/10 H1/09 Chg % H2/09 Chg % Net interest income 2,484 2,661 -7 2,620 -5 Net fee and commission income 1,013 793 28 900 13 Net result from items at fair value 887 1,109 -20 837 6 Other income 80 75 7 78 3 Total income 4,464 4,638 -4 4,435 1 Staff costs -1,388 -1,352 3 -1,372 1 Total expenses -2,350 -2,206 7 -2,306 2 Profit before loan losses 2,114 2,432 -13 2,129 -1 Net loan losses -506 -781 -35 -705 -28 Operating profit 1,608 1,651 -3 1,424 13 Net profit 1,182 1,245 -5 1,073 10 Risk-adjusted profit 1,194 1,524 -22 1,262 -5 20
  21. 21. Net interest income held up well in H1 2010, despite the low interest rate level EURm Solid trend in customer operations 1,305 1,321 continues 1,299 1,235 1,249 Lending and deposit volumes up Margins stable Remains subdued by the low interest rate levels Lower contribution from Group Treasury Slight increase in average funding cost when maturing long-term funding was Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 prolonged at higher market rates 21
  22. 22. Expenses in line with outlook EURm Cost management remains firm 1 219 1 186 1 116 1 164 1 087 Increase in H1 2010 related to Group 471 445 initiatives and currency effects 392 438 382 Total expenses up 7% compared to 687 670 702 687 701 last year Up 2% adjusted for currency effects Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Staff costs Other expenses 22
  23. 23. Credit quality improving during 2010 EURm 48 29 27 58 Net loan losses down to 36 bps in 468 425 413 452 H1 2010 (55 bps last year) 358 346 358 261 316 245 30 bps individual (42 bps) -91 -82 -97 -135 -128 6 bps collective (13 bps) Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 140 bps in the Baltic countries (166 bps) Gross loan losses Danish guarantee scheme Reversals Net loan losses Excluding guarantee scheme Loan losses by area Q2 2010 provisions, net loan loss ratio down OTHER, to 32 bps (51 bps) NEM, 17% 2% Decreased loan losses in most SOSI, 6% DK, 42% SE, 0% areas NO, 4% FI, 29% Impaired loans gross down 1% in Q2 52% of impaired loans performing 23
  24. 24. The future - Journey to Great Nordea 24
  25. 25. Great Nordea framework Rationale Profit orientation & Through the cycle approach – careful prudence navigation between risks and opportunities Need to set targets to be able to reach Ambitious vision & the goals targets Motivation to perform extraordinarily Nine countries, and everything Strong customer- different oriented values & culture Common values and platform to form one team Growth to free up resources to Clear growth strategy improve customer satisfaction Growth to create value to our shareholders 25
  26. 26. Ambitious vision & targets Delivery on long-term targets Risk-adjusted profit Total shareholder return rolling 4 quarters development 1 Jan 2007- 16 Aug 2010 2007 – Q2 2010 20 0.0 0 -20 41.4% -40 -60 25.5% -80 Top quartile -100 Allied Irish Banks Bank of Ireland BBVA Danske Bank Nordea Intesa Sanpaolo Societe Generale Unicredit SHB DnBNOR BNP Paribas Barclays Commerzbank Lloyds Swedbank Erste Santander RBS SEB KBC Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q4/ 08 Q1/ 09 Q2/ 09 Q3/ 09 Q4/ 09 Q1/ 10 Q2/ 10 Rolling f our quart ers compared wit h FY 2006 EUR 1,957m Long-t erm t arget f or average yearly growth RoE 2007 – Q2 2010 Nordea has reported one of the highest average return on equity (RoE) of Nordic peers¹, 14.4% 26 ¹Nordic peers: Danske Bank, DnB NOR, SEB, SHB, Swedbank
  27. 27. Values Strong customer-oriented values and culture – become part of DNA A Great European Bank, acknowledged for its people, creating superior value for customers and shareholders Great customer It’s all about people One Nordea team experiences Foundation: Profit orientation and prudent cost, risk and capital management 27
  28. 28. Prudent growth strategy – Group initiatives and strong business development 28
  29. 29. Growth strategy We continue on the journey to Great and to deliver on our long-term target Middle of the Profitable organic growth Prudent growth road Great 07 08 09 10 11 12 Nordea Next level strategy based Organic growth strategy on stronger position Keep income growth momentum Group initiatives Cost, risk and Next generation of launched to support capital take the initiatives launched the strategy lead Enable us to accelerate out of the crisis 29
  30. 30. Growth strategy Clear growth strategy Household Corporate New European Markets New Markets Migrate existing customers to Increase market Continue successful relationship segments share with largest organic growth path Attract new customers customers in Poland to relationship segments Proactive advise on Increase advisory ancillary products to capacity Medium customers Reduce cost by multichannel Efficiency initiatives Efficient value chain delivery to customer segments Upgrade IT infrastructure and processes and back office operations Replacing multiple old stand-alone platforms (cards and payments) with one uniform platform per product area 30
  31. 31. Growth strategy Household relationship strategy 5 x higher income in PB vs. Gold Higher income and 4 x higher income in Gold vs. Silver growth potential 13% income growth in Gold and PB Household segments last 12 months Migrate existing customers to More loyal CSI scores 3-7 points higher in Gold relationship segments and PB segments than in rest of Attract new customers Household to relationship segments Sale of all products through the Gold Increase advisory Efficient to serve dedicated 360° advisory meeting capacity Transactions and daily services Reduce cost by through lower cost to serve channels multichannel Low risk 6 bps in loan losses for household mortgages in H12010 Customer benefits: Relationship-based and prioritized access to named advisor, long-term view on relationship, attractive prices 31
  32. 32. Growth strategy Household strategy delivery: + 7% in H1 Solid trend accelerated in 2010 – 7% Number of Gold customers, ‘000 more customers from one year ago 2,812 2,885 2,690 110,000 new Gold and Private Banking customers in H1 2010 – more than 70% new customers in Nordea Improved market share in all countries Q2 2009 Q1 2010 Q2 2010 Continued strong customer demand in Lending market share increase, % household segment – increased volumes with stable margins 0.3 Total income in household segment up 5% 0.2 0.1 0.1 DK FI NO SE 32
  33. 33. Growth strategy Corporate relationship strategy 75% of Corporate income from CMB Higher income and and Large, < 5% of number of potential Corporate customers Corporate Balanced, diversified product mix: lending, deposits, transactions, risk Increase market share All products management and corporate finance with largest customers Mutual commitment and knowing your Proactive advise on customer, provide help also in difficult new products to times Medium customers Close, partnership based relationships Top ranked in Greenwich Up to 7 points higher CSI scores with CMB and Large segments Prudent risk taking Growth at lower risk than existing portfolio – average risk weights 1%- point down in 2010 Customer benefits: Relationship-based advise, access to Nordea’s products and balance sheet capacity, competitive prices, and a partner for a rainy day 33
  34. 34. Growth strategy Corporate strategy delivery: Income + 7% in H1 Increased business confidence - lending Corporate lending, EURbn volumes up 4% in H1 2010 136 139 144 Continued strong demand for risk management products Improved market share in Corporate Q2 2009 Q1 2010 Q2 2010 Banking - strategy to build house-bank relations proven successful Lending market share increase, % 0.1 0.1 0.1 -0.1 DK FI NO SE 34
  35. 35. Growth strategy Improved average risk weights following growth focused to stronger corporates Rating distribution Increases during 1H 2010 16% Decreases during 1H 2010 14% 12% 10% EAD (%) 8% 6% 4% 2% 0% 6+ 6 6- 5+ 5 5- 4+ 4 4- 3+ 3 3- 2+ 2 2- 1+ 1 1- Rating 06.2010 12.2009 35
  36. 36. Growth strategy Increase in corporate lending margins Corporate lending margins, average in the lending book, % 2.00 1.80 Banking Denmark 1.60 Banking Norway Nordic Banking total 1.40 Banking Finland 1.20 Banking Sweden 1.00 0.80 0.60 0.40 0.20 0.00 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 36
  37. 37. Growth strategy New European Markets strategy High GDP growth (now ~2x Nordic), High potential and growth in penetration of banking products (bringing growth to ~3x) New European Markets 110 + 50 branches opened Proven track record 14x more Gold customers in H12010 Continue vs. H12006 successful organic Operating profit doubled H12010 vs. growth path in H12009 Poland Nordic model Application of Nordic business model and customer concepts with focus on Gold segment Low risk Loan losses of 5 bps in 2009 Customer benefits: Nordic business model and concepts Relationship and advise in focus Prudent banking 37 New European Markets: Russia, Poland and the Baltic countries
  38. 38. Growth strategy New European Markets: A growth area for Nordea Strong growth over time… NEM income, EURm …driven by positive development in Poland and Russia CAGR 63% Costs well under control – C/I-ratio 317 down to 44% in 2009 275 268 255 206 Baltic countries back to profitability in 2Q10 117 151 60 65 Profitable growth – RAROCAR H1 H2 H1 H2 H1 H2 H1 H2 H1 22% in H12010 06 06 07 07 08 08 09 09 10 38
  39. 39. Concluding remarks 39
  40. 40. Key messages Nordea has a uniquely diversified operation Nordea has a proven record of growth and improving efficiency Continued strong trend in customer business Income from corporate customers up 7% and from household customers up 5% in H1 Increased lending, deposits and AuM volumes Solid inflow of new customers – increased market shares in all markets Positive development in corporate finance business – relationship banking approach further strengthened Focus on prudent growth and the execution of the Group initiatives On track in all areas 40
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