Interim report 3 2010, Media and analyst presentation, Nordea Bank
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Interim report 3 2010, Media and analyst presentation, Nordea Bank

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Interim report 3 2010, Media and analyst presentation, Nordea Bank Interim report 3 2010, Media and analyst presentation, Nordea Bank Presentation Transcript

  • Third Quarter Report 2010 Press and analyst conference 27 October 2010 Christian Clausen President and Group CEO
  • 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 27 October 2010 Third Quarter Report 2010
  • Key messages Strong quarter High customer activity Strong customer inflow Successful execution of Group initiatives 3 27 October 2010 Third Quarter Report 2010 View slide
  • Solid trends in customer business Net interest income Total income Operating profit Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 Number of Gold Lending volumes Net loan losses customers Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 Q3 2009 Q2 2010 Q3 2010 4 27 October 2010 Third Quarter Report 2010 View slide
  • Result highlights EURm Q3/10 Q2/10 Chg % Q3/09 Chg % Net interest income 1,310 1,249 5 1,321 -1 Net fee and commission income 525 538 -2 437 20 Net result from items at fair value 446 339 32 486 -8 Other income 82 35 33 Total income New record level 2,363 2,161 9 2,277 4 Staff costs -721 -701 3 -670 8 Total expenses -1,196 -1,186 1 -1,087 10 Profit before loan losses 1,167 975 20 1,190 -2 Net loan losses -207 -245 -16 -358 -42 Operating profit 960 730 32 832 15 Net profit 711 539 32 626 14 Risk-adjusted profit 707 516 37 729 -3 5 27 October 2010 Third Quarter Report 2010
  • Net interest income up 5% Net interest income, EURm Strong trend in customer operations continues 1,321 1,310 Lending and deposit volumes up 1,249 Increased deposit margins Negative effect from higher average funding cost Q3 2009 Q2 2010 Q3 2010 6 27 October 2010 Third Quarter Report 2010
  • Net fee and commission remains at a high level Net fee and commission, EURm Continued strong performance 538 within asset management 525 High activity within corporate advice 437 Seasonal effects Q3 2009 Q2 2010 Q3 2010 7 27 October 2010 Third Quarter Report 2010
  • Asset under Management at all time high Assets under Management (AuM), EURbn 180 Up 6% or EUR 10.4bn in Q3 157 158 126 Continued net inflows in most areas - EUR 3.3bn or 8% annualised 2007 2008 2009 Q3 2010 Positive trend in the institutional Net flows AuM, EURbn asset management business 3.3 2.9 accelerated in Q3 1.9 Q3 2009 Q2 2010 Q3 2010 Nordic Retail funds European Fund Distribution Nordic Private Banking International Private Banking Institutional customers Life & Pensions 8 27 October 2010 Third Quarter Report 2010
  • Fair value result up 32% Net result from items at fair value, Capital markets business in customer EURm areas¹ continues to perform well Continued strong Life & Pensions results 334 326 283 Higher contribution from Group Treasury and Capital Markets unallocated Q3 2009 Q2 2010 Q3 2010 Customer areas ¹ Other ² ¹ Nordic Banking, SOSI, NEM, FID, Life 9 27 October 2010 Third Quarter Report 2010 ² Group Treasury and Capital Markets unallocated
  • Firm cost management Total operating expenses, EURm Underlying¹ expenses down 2% Cost/income ratio improved to 51% 1,186 1,196 1,087 (55%) Q3 2009 Q2 2010 Q3 2010 10 27 October 2010 Third Quarter Report 2010 ¹Adjusted for Group initiatives and currency effects
  • Credit quality improving Net loan losses, EURm Decreased loan losses in most areas 54bps 50bps Excluding guarantee scheme 331 provisions¹ net loan loss ratio 35bps 29bps down to 22bps 26bps 187 Two-year Danish guarantee 157 22bps scheme expired in September Q3 2009 Q2 2010 Q3 2010 Danish guarantee scheme provisions ¹ 11 27 October 2010 Third Quarter Report 2010 ¹ Q3 2010 EUR 50m, Q2 2010 EUR 58m, Q3 2009 EUR 27m
  • Strong capital position maintained Risk-Weighted Assets (RWA), EURbn RWA up 8% YoY 206 207 Increase due to corporate and retail 192 185 182 volume growth (11%) 169 Core tier 1 ratio 10.4% Largely unchanged YoY Q3 2009 Q2 2010 Q3 2010 Solid profit generation enables high Transition rules Fully implemented Basel II dividend ratio and high customer Core Tier 1 capital ratio (excl. Hybrids) activity 10.7 10.4 9.4 9.0 10.0 9.1 Nordea fully compliant with Basel III RWA effect approx. 10% Q3 2009 Q2 2010 Q3 2010 Transition rules Fully implemented Basel II 12 27 October 2010 Third Quarter Report 2010
  • Prudent liquidity management EURbn AA rating maintained +33 +4 56 High long-term funding issuance 42 38 Increased liquidity buffer 23 Increased average maturity Short-term funding Liquidity buffer End 2007 Q3 2010 Average bond maturities 3.7 years 2.3 years End 2007 Q3 2010 13 27 October 2010 Third Quarter Report 2010
  • Strong funding position Total long-term funding issued, EURbn Very good reception of the Nordea name in all funding markets 31 30.2 Record EUR 30bn long-term funding issued with an average maturity of 22 23 5.6 years Norwegian and Finnish covered bond platforms launched 2007 2008 2009 Jan - Sep 2010 14 27 October 2010 Third Quarter Report 2010
  • Outlook 2010 Nordea expects macroeconomic recovery to continue in 2010 Global development is still fragile and hence uncertainty remains; the outlook for the Nordic markets has improved during the year Excluding currency effects in 2010, Nordea expects cost growth to be broadly in line with 2009, including the effects from growth and efficiency initiatives Net loan losses in 2010 are expected to be lower than in 2009. Credit quality continues to stabilise, in line with the macroeconomic recovery Nordea expects risk-adjusted profit to be lower in 2010 compared to 2009, due to lower income in Treasury and Markets 15 27 October 2010 Third Quarter Report 2010
  • Business development 16 27 October 2010 Third Quarter Report 2010
  • Macroeconomic recovery in the Nordic countries GDP growth, %, y/y 7.5 7.5 % y/y GDP % y/y Solid growth rates 5.0 5.0 2.5 2.5 Modest inflation 0.0 0.0 -2.5 -2.5 Relatively strong public finances -5.0 Sweden -5.0 -7.5 Denmark Norway -7.5 Improvements in labour markets Finland -10.0 -10.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 10 Public finances, % of GDP 5.0 % of GDP 5.0 % of GDP Norway +12-18% 2.5 2.5 Sweden 0.0 0.0 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 17 27 October 2010 Third Quarter Report 2010 Source: Nordea Markets
  • Diversified and fast-growing customer business… Income split per customer segment, Q310 Income well diversified between Corporate Nordic Household customer segments CMB PB segment segment 60% 40% Solid growth trends in relationship Gold Large segments¹ Fin inst Other NEM Shipping NEM Other Int'l PB Income growth YoY Q310/Q309, % 32 28 23 15 Shipping NEM 14 1 10 11 12 CMB Nordic PB 5 Fin inst Other Int'l PB Total Large Gold -4 -7 NEM Other 18 27 October 2010 Third Quarter Report 2010 ¹ Corporate Merchant Banking, Corporate Large, Nordic Private Banking and Gold customers
  • …with a strict focus on relationship banking The 360-degree meeting Pro-active 360-degree meetings to The 3600 meeting Savings and meet customers’ needs investments Strong value proposition attracts Daily Insurance banking customers to premium segments Lending Steady growth of 6% per year or 10,000 new Ensure all services provided by Nordea customers a month Number of Gold customers, 000 Solid trend has accelerated in 2010 2,854 150,000 new Gold and Private Banking CAGR customers of whom 100,000 come from 2,700 6% outside the bank YTD 2,549 2,444 Customer satisfaction improving compared to competitors 2007 2008 2009 Q3 2010 19 27 October 2010 Third Quarter Report 2010
  • Clear growth strategy Household Corporate New European Markets Migrate existing customers to Increase market share with Continue successful organic relationship segments largest customers growth path in Poland Attract new customers to Proactive advice on relationship segments ancillary products to Medium customers Increase advisory capacity 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 20 27 October 2010 Third Quarter Report 2010
  • Household relationship strategy Growth strategy Rationale Group initiative Higher income and Household growth potential Migrate existing Future distribution customers to relationship segments More loyal Attract new customers New customer to relationship segments acquisition Increase advisory Efficient to serve capacity Growth plan Finland Reduce cost by multichannel Low risk Customer benefits: Relationship-based and prioritised access to named adviser, long-term view on relationships, attractive prices 21 27 October 2010 Third Quarter Report 2010
  • Deliveries on household strategy HH volumes increase YoY, EURbn Continued strong customer demand in 139.4 household segment Lending up 14% Improved market position 122.3 76.0 39 Nordic branches operating in new Deposits up 9% format 69.9 34.4 Improved Private Netbank 28.2 Nordic Retail Funds up 22% 100 new advisers and specialists recruited in Finland Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 22 27 October 2010 Third Quarter Report 2010
  • Corporate relationship strategy Growth strategy Rationale Group initiative Higher income and Corporate potential Increase market share with largest customers All products Growth plan CMB Proactive advise on ancillary products to Medium customers Close, partnership- Customer-driven based relationship Markets business Prudent risk-taking Customer benefits: Relationship-based advice, access to Nordea’s products and balance sheet capacity, competitive prices, and a partner for a rainy day 23 27 October 2010 Third Quarter Report 2010
  • Corporate strategy delivery Total income CMB, EURm Strong income growth within CMB 372 378 2% QoQ and 23% YoY 308 Growth plan CMB Sweden proceeds as planned Strong business momentum with several Q3 2009 Q2 2010 Q3 2010 new mandates won Income growth 2007-YTD, CAGR % Strategy to build house-bank relations 38 proven successful Solid income growth – especially in the 20 23 higher segments NEM 15 SOSI Strengthened market position – increased CMB 8 Large Other FID share of wallet -5 24 27 October 2010 Third Quarter Report 2010
  • Focus on stronger corporate customers Rating distribution 18% 16% Increased Decreased 14% 12% EAD (%) 10% 8% 6% 4% 2% 0% 6+ 6 6- 5+ 5 5- 4+ 4 4- 3+ 3 3- 2+ 2 2- 1+ 1 1- Rating 12.2009 09.2010 25 27 October 2010 Third Quarter Report 2010
  • New European Markets strategy Growth strategy Rationale Group initiative High potential New European Markets Continue successful organic growth path in Poland Proven track record Growth plan Poland Nordic model Low risk Customer benefits: Nordic business model and concepts. Relationship and advice in focus. Prudent banking 26 27 October 2010 Third Quarter Report 2010
  • New European Markets – a growth area Total income NEM, EURm Solid income development remains 38% CAGR since 2007 176 163 Firm cost management – C/I down to 39% 141 Focus on low risk segments Growth plan Poland on track – 4 branches opened in Q3 Q3 2009 Q2 2010 Q3 2010 27 27 October 2010 Third Quarter Report 2010
  • Strong foundation for reaching long-term ambition Future distribution Risk-adjusted profit, EURm New customer acquisition 10% CAGR Growth plan Finland required CMB Sweden Customer-driven Markets business Growth plan Poland Top league IT performance Product platforms Infrastructure upgrade 2006 2007 2008 2009 2010 2011 2012 2013 28 27 October 2010 Third Quarter Report 2010
  • Key messages Strong quarter Record income and one of the highest ever operating profits reported High customer activity Customer business continues to grow Increased income within all corporate segments Strong trend in AuM remains – net inflow 8% annualised Strong customer inflow More than 150,000 new Gold and Private Banking customers in 2010 Successful execution of our growth initiatives 29 27 October 2010 Third Quarter Report 2010
  • Third Quarter Report 2010 Press and analyst conference 27 October 2010 Christian Clausen President and Group CEO