Barclays Capital 2010 Global Financial
Services Conference
New York, 13 September 2010




Fredrik Rystedt
Group CFO
Disclaimer


    This presentation contains forward-looking statements that reflect management’s current
    views with re...
Macroeconomic stabilisation in the Nordic region
     GDP growth, %, y/y
    7.5                                          ...
Continued strong customer business
    Income in Corporate            Income in Household            Total income
    segm...
Result highlights
         EURm                                  H1/10    H1/09    Chg %   H2/09    Chg %
         Net int...
NII held up well, despite the low interest rate level

    EURm                                    Solid trend in customer...
Underlying volume trends
                                                              Q210/   Q210/
        % change in u...
Interest rate sensitivity
    - 3 components

                                                      Effect from higher mar...
Strong net fee and commission income

                                    538
    EURm
                                   ...
Strong demand for risk management products
     remains
          Net result from items at fair value,                    ...
Expenses in line with outlook

     EURm
                                                          Cost management remains...
Basel III – broad agreement on
     changes and implementation plan
12
Broad agreement in July 2010 on Basel III
     changes and implementation plan
        Nordea anticipates final details to...
Strong capital position maintained –
     and strong funding despite challenging quarter
     Core tier 1 capital ratio (e...
Journey to Great Nordea

15
Great Nordea framework
                                Rationale

         Profit orientation &     Without this as the fo...
Profit orientation
                                                                                                       ...
Profit orientation
                                                                                                       ...
Ambitious vision
                                                                                                         ...
Values


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


                            A Great ...
Values


     Customer satisfaction improving versus
     competitors

                   CSI index (aggregate) 2007-2009*...
Prudent growth strategy – Group initiatives and
                      strong business development
22
We continue on the journey to Great and to
     deliver on our long-term target
                                          ...
Growth strategy


     Nordea has built the platform

                                                       Quality of   ...
Growth strategy


     Prudent growth strategy supported by next
     generation of Group initiatives
           Increase ...
Household strategy delivery: Value proposition
     attracts customers in premium segments
      Solid trend accelerated i...
Corporate strategy delivery: High activity –
 income up 7% in H1
                                                         ...
Improved average risk weights following growth
     focused to stronger corporates

                                      ...
Increase in corporate lending margins

         Corporate lending margins, average in the lending book, %

          2.00
...
Concluding remarks

30
Key messages
     We are delivering according to our plan
     Credit quality improving – impaired loans decreased in seco...
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Barclays Global Financial Services Conference, Fredrik Rystedt Nordea, New York, 13 September 2010

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Barclays Global Financial Services Conference, Fredrik Rystedt Nordea, New York, 13 September 2010

  1. 1. Barclays Capital 2010 Global Financial Services Conference New York, 13 September 2010 Fredrik Rystedt Group CFO
  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. Macroeconomic stabilisation in the Nordic region GDP growth, %, y/y 7.5 7.5 % y/y GDP % y/y 5.0 5.0 2.5 [GDP H1 to be inserted] 2.5 Growth rates expected to be solid in the 0.0 0.0 Nordic countries – strong growth in H1 10 -2.5 -2.5 -5.0 -5.0 In 2010, all Nordic countries are expected Sweden -7.5 Denmark Norway -7.5 to have: Finland -10.0 -10.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Positive growth rates 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 3 Source: Nordea Markets
  4. 4. Continued strong customer business Income in Corporate Income in Household Total income segment segment Q2 2009 Q1 2010 Q2 2010 Q2 2009 Q1 2010 Q2 2010 Q2 2009 Q1 2010 Q2 2010 Number of Gold Lending volumes Impaired loans customers Q2 2009 Q1 2010 Q2 2010 Q2 2009 Q1 2010 Q2 2010 Q2 2009 Q1 2010 Q2 2010 4
  5. 5. 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 5
  6. 6. NII held up well, 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 6
  7. 7. Underlying volume trends Q210/ Q210/ % change in unchanged currency Q110 Q209 Total lending, excl. reversed repurchase agreements 2 4 – Nordic household mortgages 2 9 – Nordic consumer lending 1 7 – Nordic corporates 2 0 – New European Markets 4 1 – FID and Shipping 3 -3 Total deposits, excl. repurchase agreements -1 -1 – Nordic households 2 3 – Nordic corporates 1 1 – New European Markets -2 -6 – FID and Shipping 4 -19 7
  8. 8. Interest rate sensitivity - 3 components Effect from higher market rates, Structural interest income risk (SIIR) 100 bps Q2/10 Q1/10 EURm Reflecting the effect on NII from re- pricing gaps* Annualised positive impact on 430 450 Net interest income, approx. Dynamic effects on net interest income Changes in deposit margins – mainly Non-recurring negative impact on -230 -100 transaction accounts Net result from items at fair value, approx. Market risk in the interest-bearing investment portfolios Market risk has an immediate effect on the net result from items at fair value * Accumulated mismatch between assets and liabilities with an interest rate duration of less than 12 months, with the assumptions that non-maturity accounts are re- 8 priced immediately following a interest rate change, without effecting margins
  9. 9. Strong net fee and commission income 538 EURm Higher income contribution from 475 437 463 corporate advice 412 Continued strong performance in the savings area High activity in capital markets Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 9
  10. 10. Strong demand for risk management products remains Net result from items at fair value, Capital markets activities in customer EURm 594 areas¹ continues to perform well, 548 515 486 although down 4% from strong first half last year 351 2 325 339 Market volatility increased corporate 198 221 demand for fixed income and FX products Continued strong Life & Pensions results Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Nordic Banking and Institutional & International Banking Lower contribution from Group Total net fair value result Treasury and Capital Markets unallocated ¹ Nordic Banking and Institutional & International Banking 10 ² Including one-off of EUR 50m – Nordito and PBS
  11. 11. Expenses in line with outlook EURm Cost management remains firm 1 219 1 186 1 116 1 164 1 087 Increase in Q2 related to Group 471 445 initiatives and currency effects 392 438 382 Total expenses up 6% compared to 687 670 702 687 701 same quarter last year Up 1% adjusted for currency effects Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Staff costs Other expenses 11
  12. 12. Basel III – broad agreement on changes and implementation plan 12
  13. 13. Broad agreement in July 2010 on Basel III changes and implementation plan Nordea anticipates final details towards the end of the year Uncertainty remains high – questions around NSFR and leverage ratio In good position for regulation and buffers, above leverage ratio threshold Liquidity changes in right direction, but still challenging for the industry Increased cost of capital expected, likely to impact pricing to customers Basel Oversight Basel Committee G20 meeting body, broad meeting Implementation Implementation agreement Basel release of details capital regulation leverage ratio + for 2012 and new + LCR NSFR proposals for 2018 Test/observation phase for leverage ratio + NSFR 2013-2017 July 2010 Oct 2010 Dec 2010 Dec 2012 Jan 2018 13
  14. 14. Strong capital position maintained – and strong funding despite challenging quarter Core tier 1 capital ratio (excl. hybrids), % 10.3 10.1 10.0 Core tier 1 ratio 10.0% 9.2 9.2 9.0 High volume increase, but stabilising rating migration, affect RWA Q2/09 Q1/10 Q2/10 Transition rules Fully implemented Basel II Total long-term funding issued, EURbn EUR 20.9bn of long-term funding 31 issued in H1 2010 23 22 20.9 In June, after several weeks of no market supply, Nordea reopened the senior unsecured market 14 2007 2008 2009 H1 2010
  15. 15. Journey to Great Nordea 15
  16. 16. Great Nordea framework Rationale Profit orientation & Without this as the foundation, prudence there is no bank – through the cycle 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 16
  17. 17. Profit orientation and prudence 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 10 07 07 07 08 08 08 08 09 09 09 -40 * Aggregate of a selected number of banks in the European peer group: BBVA, Commerzbank, Erste, Intesa Sanpaolo, KBC, Santander, UniCredit 17 ** Nordic peers: Danske Bank, DnB NOR, SEB, SHB, Swedbank
  18. 18. Profit orientation and prudence Strongest capital position among a selected group of major international banks % 10 9 Risk-adjusted capital ratios 8 7 6 5 4 3 2 1 0 AIB Danske Bank Intesa Sanpaolo Dexia Nordea Credit Agricole Société Générale UniCredit Bayerische LB UBS SHB DnB NOR HSBC Barclays BNP Paribas Swedbank Deutsche Bank Citigroup Credit Suisse Santander SEB KBC LBBW 18 Source: Swedish Riksbank, Standard & Poor’s
  19. 19. 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 peers*, 14.4% 19 *Nordic peers: Danske Bank, DnB NOR, SEB, SHB, Swedbank
  20. 20. 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 20
  21. 21. 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 21 *Corporate and high involvement customers, corresponding to Gold and Silver segment customers
  22. 22. Prudent growth strategy – Group initiatives and strong business development 22
  23. 23. 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 Organic growth strategy Next level strategy based 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 23
  24. 24. Growth strategy Nordea has built the platform Quality of ~6,000 PBAs, SRMs and people RMs trained in -09 One value chain Proximity Customer base 1,400 branches (160 corporate), contact ~ 8 m household Customer-oriented values customers in programmes, centres and netbank A great European bank, acknowledged for its people, creating superior value for customers and shareholders 0.7 m corporate Great customer experiences It’s all about people One Nordea team Foundation: Profit orientation and prudent cost, risk and capital Capital management Demand-driven position products One customer team One of strongest E.g., top Morningstar capital and funding ratings, No 1 positions in Europe Greenwich rating Trustworthy brand name Nordea brand 24 stronger than ever
  25. 25. Growth strategy Prudent growth strategy supported by next generation of Group initiatives Increase business with Exploit global Supplement Nordic existing Nordic customers and European growth through and attract new customers business lines investments in New European Markets 1. Future distribution 6. Growth plan Poland 2. New customer acquisition 3. Growth plan Finland 4. Growth plan CMB Sweden 5. Customer-driven Markets business 7. Top league IT and operations 8. Product platforms 9. Infrastructure upgrade Take Nordea to the next level of operational efficiency, support sustained growth 25
  26. 26. Household strategy delivery: Value proposition attracts customers in premium segments Solid trend accelerated in 2010 – up Number of Gold customers, ‘000 7.2% 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 Significant increase of number of pro- Lending market share increase, % active customer meetings 0.3 Continued strong customer demand in 0.2 household segment – increased volumes with stable margins 0.1 0.1 Total income in household segment up 5% DK FI NO SE 26
  27. 27. Corporate strategy delivery: High activity – income up 7% in H1 Corporate lending, EURbn Increased business confidence - lending 144 volumes up 4% in H1 2010 136 139 Continued strong demand for risk management products Improved market share in Corporate Q2 2009 Q1 2010 Q2 2010 Banking - strategy to build house-bank Lending market share increase, % relations proven successful 0.1 0.1 0.1 New area established – Corporate Merchant Banking and Capital Markets -0.1 Ensure that all service and product competences of Nordea reach the large corporate customers DK FI NO SE Headed by newly recruited – Casper von Koskull 27
  28. 28. 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 28
  29. 29. 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 29
  30. 30. Concluding remarks 30
  31. 31. Key messages We are delivering according to our plan Credit quality improving – impaired loans decreased in second quarter More clarity with the agreement around Basel III, but some uncertainty remains Continued strong 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 31

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