MeritaNordbanken. January - June 1999

Transcription

1 MeritaNordbanken January - June 1999

2 January-June 1999 Stable performance sustained Operating profit EUR 769 million (FIM 4.6 billion, SEK 6.9 billion), adjusted for items affecting comparability EUR 655 million ROE 22.3 %; excluding items affecting comparability 19.3 % Continued downward trend in expenses Net loan losses historically low World leader in network banking services 77 Internet banking customers in Finland and Sweden Changes in Group Executive Board Aleksia to be listed

3 A leading banking group in the Nordic and Baltic region Customer base 6.5 million private individuals 4 small and midmarket companies 4 corporates Average market shares Finland 35 % - 55 % Sweden 15 % - 25 % Distribution network 735 branch offices 1 Swedish post offices Telephone bank Internet Lending EUR 66 bn Deposits and customer funds EUR 66 bn Total assets EUR 99 bn Employees 18,1 (within banking operations)

4 The largest banking group in the Nordic region Market capitalisation of selected Nordic banking groups, August 1999 (bneur) MeritaNordbanken Handelsbanken Swedbank SEB Den Danske Bank Unidanmark Den Norske Bank Christiania Kapital Holding

5 Combined ownership structure, June 3, 1999 Finnish government 3 % Swedish institutions 15 % Finnish institutions 9 % Foreign ownership * 32 % Swedish government 26 % * Incl. possible nominee registered Swedish ownership in Merita Plc. Finnish public 11 % Swedish public 3 %

6 Share price development Nov Nov Oct Oct Aug Merita Nordbanken Holding DJ Euro Stoxx Bank

7 Total yield of Nordic banking shares % June 1999 % Merita NB Hold SHB SEB FSB DnB ChrB DDB UNI June Merita NB Hold SHB SEB FSB DnB ChrB DDB UNI % June 1999 % Merita NB Hold SHB SEB FSB DnB ChrB DDB UNI 25 Jan - June Merita NB Hold SHB SEB FSB DnB ChrB DDB UNI KapH (Including dividends paid in cash or in the form of shares of real estate companies. Not reinvested.)

8 Income statement H1/1999 meur Change, % mfim msek Net interest income ,361 8,78 Net commission income ,227 3,356 Net result from financial operations Other operating income ,95 1,649 Total operating income 1, ,245 13,93 Personnel expenses ,332-3,513 Other expenses ,589-3,91 Total expenses ,921-7,414 Profit before loan losses ,324 6,516 Loan losses, net Profit from companies accounted for under the equity method Operating profit ,575 6,893 Taxes ,178-1,775 Minority interest Net profit for the period ,389 5,16

9 Income statement Excluding items affecting comparability H1/1999 meur H1/1999 H1/1998 Change, % mfim msek Net interest income ,361 8,78 Net commission income ,227 3,356 Net result from financial operations Other operating income ,95 1,649 Total operating income 1,441 1, ,57 12,913 Personnel expenses ,332-3,513 Other expenses ,589-3,91 Total expenses ,921-7,414 Profit before loan losses ,649 5,499 Loan losses, net Profit from companies accounted for under the equity method Operating profit ,9 5,876

10 Items affecting comparability meur Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Net interest income Net result from financial operations Other operating income Personnel expenses Other expenses Profit from companies accounted for under the equity method Operating profit Real estate write-downs Refund from the Pension Fund/Foundation Taxes Net profit for the period

11 Income statement, quarterly Excluding items affecting comparability meur Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Net interest income Net commission income Net result from financial operations Other operating income Total operating income Personnel expenses Other expenses Total expenses Profit before loan losses Loan losses, net Profit from companies accounted for under the equity method Operating profit Taxes Minority interest Net profit for the period

12 Net interest and commission income meur Net interest income Net commission income 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q1 Q

13 Net result from financial operations meur Equity-related Currency-related Interest-rate-related -5-1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q1 Q

14 Expenses meur Restructuring expenses Other expenses * Personnel expenses * 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q * Excluding restructuring expenses.

15 Loan losses, net meur Loan loss level, % 1,2 1,,8,6,4,2 Loan losses Provision for Asia Loan loss level, % Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2

16 Non-performing loans, net/lending % Q Q2 Q3 Q4 Q Q2

17 Operating profit by business area, January-June 1999 meur Regional banks Corporate Markets Real Estate Treasury Other

18 Operating profit by business area, quarterly meur Regional banks Corporate Markets Real Estate Treasury Other * Q1/1999 Q2/1999 * Q1/1999 incl. EUR 114 million sales profit.

19 Asset management bneur Assets under management Product earnings meur Q Q2 Q3 Q4 Q Mutual funds (excl. unit-linked) Q2 Portfolio management Administrative expenses Sales and distribution expenses Insurance (excl. unit-linked) Unit-linked life insurance Product earnings

20 Household savings bneur Finland Sweden H * H Share-indexlinked bonds Retail bonds Insurance Mutual funds, excl. unit-linked National public savings Deposits * Excluding the exchange rate effect (EUR/SEK), the volume increased by 8% in 1998.

21 Net savings in mutual funds * Finland Sweden mfim msek Q Q2 Q3 Q4 Q Q2 Q Q2 Q3 Q4 Q Q2 * Including unit-linked.

22 Life insurance, premiums paid mfim Finland Sweden msek Q Q2 Q3 Q4 Q Q2 Q Q2 Q3 Q4 Q Q2 Traditional Unit-linked

23 Market shares, households Finland Sweden Insurance (-,7) Insurance (+3,2) Mutual funds (+1,6) Mutual funds (-,3) Deposits (-1,2) Deposits (-,3) Housing loans (-2,2) Housing loans (+1,1) Total lending (-1,7) % Total lending (+,7) % (± XX) = compared with H1/1998.

24 Market shares, corporate Deposits Finland (+,3) Deposits Sweden (-1,5) Lending Finland (+,9) Lending Sweden (+1,3) % (± XX) = compared with H1/1998.

25 Customer structure of loan portfolio EUR 66.2 bn (June 3, 1999) Public sector 3 % Households 37 % Companies 6 %

26 Lending to companies by industry EUR 39.5 bn (June 3, 1999) Other companies 23 % Real estate management 27 % Renting, consulting and other company services 11 % Financial operations 2 % Manufacturing 15 % Trade & services 9 % Construction 6 % Transport 7 %

27 Lending by customer groups, development * Households Public sector Real estate management Construction Transport Trade & Services Manufacturing Financial operations Renting, consulting and other company services Other companies * Compared with H1/ bneur

28 Real estate divestment strategy in Finland 1 % 5 % Aleksia Hotel properties Specialized companies to be sold 4 % Shopping malls Real estate holdings Real estate shares Other properties e.g. foreign offices warehouses Banking premises Holdings to be sold separately To be retained

29 Real estate divestment process in Finland bnfim Write-down in 1998 FIM 3.7 billion Equity portfolio * Domestic properties Land and development projects Foreign properties Banking premises * Incl. Aleksia, hotels and shopping malls and Aleksia debt.

30 Personnel Thousand Q Q4 Q Q2 Q3 Q4 Q Q2 Employees Positions

31 Profitability Return on equity Return on assets % % H1/1998 H1/1999 H1/1998 H1/1999 Including items affecting comparability Excluding items affecting comparability

32 Cost-to-income ratio * % Excluding items affecting comparability Including items affecting comparability H1/1998 H1/1999 * Before loan losses.

33 Overall interest spread % H1/1998 H1/1999

34 Regional banks June 3, 1999 Northern Sweden Central Sweden Stockholm Western Sweden Southern Sweden Eastern & Northern Finland Central & Western Finland Helsinki & Uusimaa bneur Lending & guarantees Customer savings

35 Number of branches June 3, 1999 Northern Sweden Central Sweden Stockholm Western Sweden Southern Sweden Eastern & Northern Finland Central & Western Finland Helsinki & Uusimaa

36 Regional bank Baltics and Poland - strategy The leading banking group for Nordic corporates in the Baltic region and Poland - same service and products as in home market Important player in the retail banking area - new and modern distribution technology - high accessability at low fixed costs Our ambition is to grow organically, with minor investments Full control over asset quality and the product and service package

37 Regional bank Baltics and Poland ESTONIA Two branches in Tallinn, one leasing company * LATVIA One branch in Riga, one leasing company (two more branches under construction) LITHUANIA Ambition to open one branch by the end of the year, one leasing company POLAND Agreement to acquire 49,9 % of bank Komunalny, situated in northern Poland with 7 branches and a 45 % shareholding in a leasing company * The leasing company is owned to 8 % by MNB, remaining 2 % by IFC.

38 Balance sheet June 3 June 3 June 3, 1999 bneur Change, % bnfim bnsek Loans to the public Loans to financial institutions and central banks Interest-bearing securities Financial current assets Financial fixed assets Other assets Total assets Deposits from the public Due to financial institutions and central banks Debt instruments outstanding Other liabilities Subordinated debt Shareholders equity Total liabilities and shareholders equity

39 Balance sheet bneur Total assets Loans to the public Deposits from the public June 3, 1997 June 3, 1998 June 3, 1999

40 Capital adequacy Tier 1 ratio Total capital ratio % 12 % Nordbanken Nordbanken Merita Bank MNB Group Merita Bank MNB Group June 3, 1999 June 3, 1998

41 Earnings per share EUR Merita SEK Nordbanken Holding Jan-June 1999 Jan-June 1998 Jan-June 1999 Jan-June 1998 Incl. items affecting comparability Excl. items affecting comparability

42 Equity per share Merita Nordbanken Holding EUR SEK Jan-June 1999 Jan-June 1998 Jan-June 1999 Jan-June 1998

43 Merger synergies Plan Income and cost synergies of almost EUR 12 million by the year 2 Implementation Synergies materialize as planned Staff reductions continue net 1,175 since October 1997 incl. expansion in key strategic areas, appr. 3 employees

44 New products every month Solo-concept to be launched throughout the region Medica Life Science Fund Customer concept for retail customers to Finland Internet services to Sweden Private Banking concept to Sweden Joint Euroland Fund Customer concept for large and medium-sized companies Monthly mutual fund savings to Finland Unit-linked insurance products to Sweden Joint Nordic Small Cap Fund Long-term housing loans to Finland East European Fund to Finland One-day payment transmission between Finland, Sweden and Baltic states Free Visa-card withdrawals from ATMs

45 New business generated meur Q Q2 Q3 Q4 Q Q2 Unit-linked insurance products in Sweden New cross-border mutual funds Long-term housing loans in Finland Monthly savings in mutual funds in Finland

46 World leader in network banking services 77 signed up as users of the Groups Internet banking facilities (August 1999) 3 customers in addition to above using the NB Direkt telephone banking service having codes instantly activatable for Internet use 2,1 million log-ins per month in the Group s net bank 2,7 million payment transactions per month 7 on-line merchants currently accept payments for e-commerce Successful Solo electonic service concept to be launched on entire home market - in Sweden during early autumn Higher degree of automation results in further major cost savings and consistent download trend continues Growth potential in earnings from new user contracts and services New services: banking facilities accessible by WAP phones (Nokia), combination of wireless banking services and mobile card payments (Nokia and VISA)

47 Changes in the Group Executive Board as of October 1, 1999 Focus on issues of far-reaching and strategic importance - Executive Committee for day-to-day management Strengthening in Internet and retail banking expertise Members leaving the Sven-Åke Johansson Real Estate on part-time basis Group Excecutive Board: Claes Östberg Head of International Kalevi Kontinen Senior Advisor on part-time basis (as of April 1, 2) New members: Jakob Grinbaum Treasury (immediately) Magnus Falk Retail, Regional Bank Stockholm Kari Jordan Retail, Regional Bank Helsinki Bo Harald Retail, payments and network banking New responsibilities: Carl-Johan Granvik Head of Credits, Risk Control Markku Pohjola Corporate

48 MeritaNordbanken s objectives The task of the MeritaNordbanken Group is to create value for its shareholders through share price and dividend development matching that of the leading listed banks in the Nordic region.

49 MeritaNordbanken s objectives Earnings per share - one of the leading listed financial institutions in the Nordic countries Return on equity - at least equal to the average risk-free interest rate in Finland and Sweden + 8 percentage points Tier 1 capital - a minimum core capital ratio of 6.5 per cent Dividend policy - between 4 and 6 per cent of annual net profit

50 Can be achieved through the following subtargets Income - net commission income to a level equal to half of net interest income Expenses - the cost/income ratio before loan losses, in core operations may not exceed 55 per cent Risk exposure - the moving average of loan losses over a five-year period.4 per cent of the loan portfolio - market risks limited to a 4 percentage point reduction in ROE - administrative, legal and technical risks to be kept within manageable limits at reasonable cost Customers - high level of customer satisfaction by meeting the requirements and expectations of customers Employees - high competence and motivation Disclosure of information - among the leading listed financial institutions in the Nordic region in terms of open, clear and relevant information to shareholders, customers and employees

51 Appendices

52 Group structure Shareholders Shareholders Merita Plc Listed on the Helsinki Stock Exchange Cooperation Agreement Identical Boards Unified Management Nordbanken Holding AB (publ) Listed on the Stockholm Stock Exchange 4 % of capital ordinary shares MeritaNordbanken Plc 4 % of capital ordinary shares 2 % of capital non-voting preference shares 1 % Other operations incl. real estate Merita Bank Plc Nordbanken AB (publ) MeritaNordbanken Group

53 Agency ratings, August 1999 Moody s S&P Fitch IBCA Thomson Bankwatch Short- Long- Short- Long- Short- Long- Short- Longterm term term term term term term term Merita Bank P-1 A1 A-1 A F1 A+ TBW-1 AA- Nordbanken P-1 A1 A-1 A F1 A+ TBW-1 AA- Nordbanken Hypotek Aa3

54 Reporting 1999 Financial reporting: January - September October 26, 1999

55 Contact information MeritaNordbanken Investor Relations SE STOCKHOLM FIN-2 MERITA Telephone: Telefax: investor.relations@nb.se merita.investorrelations@merita.mailnet.fi Investor information on the Internet: