Goldman Sachs Roadshow 6-7 December Gunn Wærsted Executive Vice President, Head of Wealth Management

Transcription

1 Goldman Sachs Roadshow 6-7 December 2012 Gunn Wærsted Executive Vice President, Head of Wealth Management

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 Key messages New Normal plan delivers on cost, capital and income Unchanged costs through 2012, excluding FX effects Cost/income ratio 51% YTD (54% 9m 2011*) Improved RoE to 11.4% YTD (10.6% 9m 2011*) Core Tier 1 ratio improved to 12.2% Loan losses at 27 bps YTD (20bps 9m 2011) Income in Q3 highest ever in a third quarter Operating profit exceeded EUR 3bn YTD, up 14%* Continued strong business momentum, new relationship customers in 2012 YTD * Adjusted for restructuring charge in Q

4 Key messages Progress in building the future bank business model New Normal plan delivers on cost, capital and income Retail Banking: Advice based distribution model, improved capital efficiency Wholesale Banking: Developed relations, focus on adding high value at right price Wealth Management: Increased efficiency and sharper offerings An area with strong financials, well-adjusted to New Normal Growth achieved through well-diversified asset base Nordea is the largest wealth manager in the Nordics 4

5 Financial highlights, Nordea Group Q Wealth Management Building the future bank business model

6 Financial result Q3/12 EURm Q3/12 Q2/12 Change % Q3 YTD 12 Q3 YTD 11 Change % Net interest income 1,441 1, ,323 4,029 7 Net fee and commission income ,812 1,807 0 Net fair value result ,340 1, Other income Total income 2,469 2, ,606 6, Staff costs ,284-2,399-5 Total expenses -1,293-1, ,859-3,953-2 Profit before loan losses 1,176 1, ,747 2, Net loan losses Operating profit 922 1, ,058 2, Net profit ,284 1, Risk-adjusted profit ,399 1,

7 Net interest income development Margin pressure on deposits due to low interest rates Total net interest income, EURm Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 7

8 Net interest margin under pressure since 2004 Average lending and deposit margin 8

9 Net commission income remains at high levels Total net fee and commission income, EURm Down 1% q-o-q Increased asset management and lending commission Decreased commissions on payments, cards and custody Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 9

10 Assets under Management at all time high Wealth Management AuM, EURbn 0,9 Assets under Management at all-time-high of EUR 210.9bn Inflow of 2.7bn in Q3 Strong inflow in Retail funds and Institutional Clients Strong investment performance gives added value to our customers 80% of all composites outperforms their benchmark in the quarter Generated added value of EUR 0.8bn 10

11 Net fair value Total net result from items at fair value, EURm Continued high demand in customer areas Negative valuation changes in liabilities accounted for at fair value 111 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 11

12 Expenses under solid control Total expenses, EURm Decrease by 2% in local currencies q-o-q Number of FTEs down 1% q-o-q 12

13 Germany Finland Sweden Netherlands Austria France Nordea Belgium Ireland Italy Spain Portugal Strong access to funding Long-term funding, EURbn 27 Nordea covered bonds spreads vs European governments Spread vs MS (bps) Q3/12 YTD 25 EUR 25bn issued in long-term funding Of which 54% senior, 40% covered and 6% Tier two Redemptions for 2012 are EUR 15bn Improved spreads Nordic covered bonds benefiting from being perceived as one of safest jurisdictions in Europe Nordea Aa3/AA-/AA- Source: Goldman Sachs 13

14 Strong capital generation Core Tier 1 capital, EURm Tier 1 capital is up by 86% since 2006 CAGR of 9% after dividend and adjusted for rights issue Q312YTD Dividend payout Anticipated dividend 14

15 Risk-weighted assets under strict control Risk-weighted assets (RWA), EURbn* RWA decreases EUR 2bn due to decreased credit risk and market risk Further improved quality in liquidity buffer RWA optimisation reduces RWA by EUR 0.5bn Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 In total limited effect from rating migration * Basel II excluding transition rules 15

16 Improved Core tier 1 ratio Core tier 1 capital ratio, % (excl. Hybrids)* Improved ratio by 40 bps since Q due to Strong profit generation Decreased RWA Improved CT1 ratio by 220 bps since Q Lending growth of 17% Full dividend to shareholders Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 * Basel II excluding transition rules 16

17 Credit quality Total net loan losses, EURm Broadly in line with long-term risk appetite Low loan losses in Norway, Sweden and Finland Continued elevated levels in Denmark and Shipping Effects from stricter rules in Denmark Lower individual provisions Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Increase in collective provisions 17

18 Net loan losses quarterly by country excluding Shipping Q3/09 Q3/10 Q3/11 Q3/12 Denmark Finland Norway Sweden EUR 145m EUR 46m EUR 8m EUR -17m Still certain overleveraged Danish household and agriculture customers behind the provisions A limited number of individual provisions in the other countries 18

19 Underlying stabilisation in Denmark 110 House prices, index = 2006* Forced sales* Single-family houses Summer houses Flats Single family houses Corp property Forced sales total (seasonally-adj) Number of bankruptcies* Loan losses net, Retail Banking Denmark Collectively assessed Bankruptcies Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Portfolio assessed nonsignificant loans Individually assessed * Source: Danmarks Statistik 19

20 Shipping net loan losses and impaired loans Shipping Net loan losses, EURm Shipping Net impaired loans, EURm EUR 54m EUR 558m Q2/09 Q2/10 Q2/11 Q2/12 Further deterioration of collateral values Gross impaired loans down 4% q-o-q Need for additional loan loss provisions 20

21 Challenges remained within Shipping Ship values Shipping orderbook as % of existing fleet VLCC. 5 year old Cape Bulker. 5 year old Panamax Containership. 5 year old 90% 75% Tanker Bulker Containership % MUSD % 30% 30 15% 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 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 Ship values have continued to fall throughout the year Supply is coming down rapidly Source: Clarkson

22 Financial highlights, Nordea Group Q Wealth Management Building the future bank business model

23 Wealth Management an area with strong financials, well-adjusted to New Normal 2012, Q3 Share of Group total operating income 14% Share of total FTEs 11% Share of Group total operating profit 16% Share of economic capital 16% High margins Capital efficient and funding generating Generating stable income from a feebased model High contribution to economic profit due to low capital consumption (16% of economic capital) Rarocar Q % 23

24 Growth achieved through well-diversified asset base Assets under Management EURbn, end Q Retail funds* Private Banking Institutional sales Life & Pensions** Total 3 year AuM growth Denmark % Finland % Norway % Sweden % International % Total year AuM growth % 32% 70% 36% 42% * All funds targeted at Nordic Retail segment sold through own distribution ** Includes pension pools products 24

25 Good performance, key driver of Assets under Management Wealth Management AuM, EURbn * Assets under Management at all-time-high of EUR 210.9bn Decent net inflow of EUR 2.7bn Strong inflow in Institutional and Retail funds Strong investment performance gives added value to our customers AuM end Q2/12 Net inflow Market appreciation Value added investment performance on assets under discretionary management AuM end Q3/12 * EUR 105bn end of Q3/12 In Q3 80% of composites outperformed their benchmarks, 76% YTD and 72% when measured on a 3 year horizon 25

26 Nordea is the largest wealth manager in the Nordics AuM development (EURbn) Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Change last 4Q Euro Change last 4Q Local currencies 18,5% 12,5% 22,8% 13,3% 13,1% 25,0% 15,9% 1,6% 2,4% 11,8% 13,5% 5,6% 13,8% 8,3% 1,6% Nordic peers: Danske Bank, DNB, Handelsbanken, Pohjola, SEB, Storebrand, Swedbank End of period EUR exchange rates have been used for peers who do not report in EUR Source: Companies Q3 Interim Reports As per September 30 th,

27 45% of our rated funds in Nordics have 4 or 5 stars Denmark Finland Norway Sweden 14 funds 23% 18 funds 15% 5 funds 9% 7 funds 9% 21 funds 34% 38 funds 32% 15 funds 27% 25 funds 31% 24 funds 39% 50 funds 42% 28 funds 51% 34 funds 43% 2 funds 3% 8 funds 7% 4 funds 7% 10 funds 13% 1 funds 2% 4 funds 3% 3 funds 5% 4 funds 5% Average Rating 3.73 Average Rating 3.49 Average Rating 3.27 Average Rating 3.26 Nordic 44 funds 99 funds 136 funds 24 funds 12 funds 14% 31% 43% 8% 4% Average Rating 3.44 Note: In each category 10 pct. of the best performing funds get 5 stars, 22.5 pct. 4 stars, 35 pct. 3 stars, 22.5 pct. 2 stars and 10 pct. 1 star As of September

28 Stable Net inflow and Assets under Management growth Net inflow EURm 4000 AuM EURm Q1/08 Q3/08 Q1/09 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 0 Inflow AuM 28

29 The share of traditional life is reduced over time GWP life & pension products AuM life & pension products EURm % 45% % 40% % 36% 35% % % 25% % 20% % 10% % Sep 2012*) Trad New trad UL Sep 2012 UL and new trad 0% Share of 40% 48% 59% 56% 66% UL+New trad. *) 12 months rolling Trad. Life UL, new trad and pure risk share of AuM 29

30 Life & Pensions strategy going forward Cost efficiency Reduce costs and increase correlation with income Review of business lines (segments) Capital efficiency Migration from traditional products ALM & capital consumption focus Optimise product portfolio Capital efficient new sales Next generation product platform Profitable growth Re-allocate resources to the attractive segments Continue to strengthen bancassurance 30

31 Financial highlights, Nordea Group Q Wealth Management Building the future bank business model

32 Roadmap to Future Bank A convincing equity story and market commitments Future Bank A sustainable business model that delivers a ROE well above cost of capital on a fully loaded balance sheet A strong brand with clear values Roadmap to Future Bank New Normal plan Values and leadership Relationship strategy 32

33 Roadmap to Future Bank A solid and sustainable business model that generates high and stable earnings over time and thereby also strong capital generation The challenge is to continue improving ROE in the following ways: Continued re-pricing of the lending book, to obtain satisfactory profitability on every customer Maintained solid cost control cost development to be flat Maintained strict RWA control capital-efficient solutions for customers 33

34 Key messages New Normal plan delivers on cost, capital and income Unchanged costs through 2012, excluding FX effects Cost/income ratio 51% YTD (54% 9m 2011*) Improved RoE to 11.4% YTD (10.6% 9m 2011*) Core Tier 1 ratio improved to 12.2% Loan losses at 27 bps YTD (20bps 9m 2011) Income in Q3 highest ever in a third quarter Operating profit exceeded EUR 3bn YTD, up 14%* Continued strong business momentum, new relationship customers in 2012 YTD * Adjusted for restructuring charge in Q

35 Key messages Progress in building the future bank business model New Normal plan delivers on cost, capital and income Retail Banking: Advice based distribution model, improved capital efficiency Wholesale Banking: Developed relations, focus on adding high value at right price Wealth Management: Increased efficiency and sharper offerings An area with strong financials, well-adjusted to New Normal Growth achieved through well-diversified asset base Nordea is the largest wealth manager in the Nordics 35

36 Goldman Sachs Roadshow 6-7 December 2012 Gunn Wærsted Executive Vice President, Head of Wealth Management

37 Appendix, Q3 2012

38 Change in net interest income Change, EURm Q-o-Q Y-o-Y Volume-driven NII Lending Deposits 2 26 Spread-driven NII Lending Deposits Spread costs GCC, including Treasury Other Total

39 Lending, volumes and margins Lending volumes EURbn Q3/12 and development q-o-q Margin* development q-o-q Banking Denmark Household Corporate Banking Finland Banking Norway 0% 0% 0% 0% -5% Banking Sweden % Corp & Inst Banking Shipping Banking Denmark Banking Finland Bankning Norway Banking Sweden CIB Shipping Change in local currencies *Excluding full liquidity premia 39

40 Deposits, volumes and margins Deposit volumes EURbn Q3/12 and development q-o-q Margin* development q-o-q 42.8 Banking Denmark Household Corporate Banking Finland Banking Norway % 1% -4% -1% 11% Banking Sweden 4.8 3% Corp & Inst Banking Shipping Banking Denmark Banking Finland Bankning Norway Change in local currencies Banking Sweden CIB Shipping *Excluding full liquidity premia 40

41 Impairment rate gross 1, basis points Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Denmark Shipping Finland Baltics Others Impairment rate gross increased to 181bps. Still Danish household and agriculture customers behind the increases (new impaired volume approx. EUR 410m), to a large extent explained by the clarified and stricter impairment rules introduced by the Danish FSA. A couple of larger Finnish corporates were reported as impaired this quarter (new impaired volume approx. EUR 100m). The development in shipping was slightly positive, as the exposure to already impaired customers decreased. 1 Impairment rate gross: Individually assessed impaired loans before allowances divided by total loans before allowances 41

42 Highest increase of impaired loans in collaterised loan books Change in impaired loans %, Index 100 = Q Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Nordea total, provisioning ratio 41% Shipping, provisioning ratio 35% Agriculture, provisioning ratio 30% Real estate, provisioning ratio 36% Household, provisioning ratio 41% Other industries, provisioning ratio 51% 42

43 The New Normal plan continues to deliver In terms of cost efficiency Group FTE development Total expenses, EUR million Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 One-off restructuring charge 43

44 The New Normal plan continues to deliver In terms of capital efficiency Risk Weighted Assets development, EURbn* Reduced RWA by more than EUR 9bn since beginning of 2011 due to improved efficiency Q4/10 Credit Quality Growth FX & other Basel 2.5 RWA optimization Q3/12 * Basel II excluding transition rules 44