Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
The leading Wholesale Bank in
the Nordic countries
Bank of America Merrill Lynch Annual Banking and Insurance CEO Conference
Casper von Koskull, Head of Wholesale Banking
October 2, 2014
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 •
The relationship bank business
model has delivered
14
3
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
4 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Nordea has a unique position in the Nordics…
Note: Illustration excludes, Baltic's (406,700 total customers) and Russia (67,000 total customers)
1: Ranking in Nordic region
Sweden
Norway
Finland
Denmark
Relationships
(m)
Market
position
Superior customer franchise Global capabilities on par with
international peers1
#1-2
Total
Nordea 10.5 #1 #1
Capital Markets
Asset
Management
Life &
Pension
Private Banking
#1
#1
#1
#1
Retail Customers Corporates & Institutions
4.1 #2-3
1.0 #2
3.2 #1-2
1.8 #2
#1-2
#2
#1
Market
position
…with a resiliant relationship bank business model
Nordea is the most
diversified Nordic bank…
…with low-volatility
earnings growth…
…and low funding costs
Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5
Largest market contribution1
Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5
Earnings volatility2 Funding cost3
Nordea Peer 1-18
Notes:
1) Credit portfolio by geographical area
2) Net income volatility 2008-2013. Compared to Nordic peers
3) Five year Senior CDS spread. Compared to European peers
5 •
Headline lower line
Sub-head line
Single medium chart axis
Right content border
Slide bottom border
Left border Right border Left content border
Comment text box top
Content and chart border
Small chart axis
Sub-head line
Small chart top
Small chart axis
Left and right small lower comments top border
Single medium chart toptop
Heading
Primary chart colours
Sub-head
Content lines (Non-Nordea)
Small chart top
76 116 154
166 166 166
64 64 64
163 82
115
239 178 137
119 154 188
175 80 70
233 170
0
217 217 217
Page numbers 166 166 166
Secondary chart/diagram colours (Non-Nordea)
185 205 229
217 217 217
Other chart and ornamental colours
239 241 204
211 157 155
204 102
0
127 127 127
82 82 82
217 217 217
Comments 76 116 154
166 166 166
Q2/14 financial results
EURm Q2/14 Q1/14 Chg % H1/14 H1/13 Chg %
Net interest income 1,368 1,362 0 2,730 2,749 (1) 3
Net fee & commission income 708 704 1 1,412 1,287 10 13
Net fair value result 356 411 (13) 767 860 (11) (10)
Total income* 2,456 2,501 (2) 4,957 4,996 (1) 2
Total expenses** -1,196 -1,237 (3) -2,433 -2,523 (4) (1)
Profit before loan losses 1,070 1,264 (15) 2,334 2,473 (6) (3)
Net loan losses -135 -158 (15) -293 -384 (24) (22)
Operating profit** 1,125 1,106 2 2,231 2,089 7 10
Operating profit 935 1,106 (15) 2,041 2,089 (2) 1
Net profit from continuing
operations 716 840 (15) 1,556 1,583 (2) 1
Return on equity** (%) 12.0 11.4 +60 bps 11.7 11.3 +40 bps -
REA (EURbn) 152 159 -7 bn 152 n.m. - -
CET1 capital ratio (%) 15.2 14.6 +60 bps 15.2 14.0 +120 bps -
Cost/income ratio** (%) 48.7 49.5 -80 bps 49.1 50.5 -140 bps -
* Includes other income
** Excluding restructuring charge of EUR 190m in Q2/14
6 •
Headline lower line
Sub-head line
Single medium chart axis
Right content border
Slide bottom border
Left border Right border Left content border
Comment text box top
Content and chart border
Small chart axis
Sub-head line
Small chart top
Small chart axis
Left and right small lower comments top border
Single medium chart toptop
Heading
Primary chart colours
Sub-head
Content lines (Non-Nordea)
Small chart top
76 116 154
166 166 166
64 64 64
163 82
115
239 178 137
119 154 188
175 80 70
233 170
0
217 217 217
Page numbers 166 166 166
Secondary chart/diagram colours (Non-Nordea)
185 205 229
217 217 217
Other chart and ornamental colours
239 241 204
211 157 155
204 102
0
127 127 127
82 82 82
217 217 217
Comments 76 116 154
166 166 166
Improved return in Business Areas
RETURN DEVELOPMENT YTD, GROUP AND BUSINESS AREAS
GROUP
H1/13 H1/14
14% 15%
-1%
-3%*
INCOME
COSTS
RaRoCaR
RETAIL BANKING
-1%
-4%
INCOME
COSTS
RaRoCaR
WHOLESALE BANKING
-1%
-6%
INCOME
COSTS
RaRoCaR
WEALTH MANAGEMENT
9%
2%
INCOME
COSTS
RaRoCaR
H1/13 H1/14
13% 14%
H1/13 H1/14
14% 15%
H1/13 H1/14
25%
30%
ECONOMIC CAPITAL ECONOMIC CAPITAL ECONOMIC CAPITAL ECONOMIC CAPITAL -1% -6% -2% -4%
7 •
* Excluding restructuring charge in Q2/14
Banking Russia and Finland 14
9 •
Banking Russia operations
COMMENTS
• Limited share of Group operations
• 3% of income
• 2% of credit exposure
• Majority of lending is towards large
Russian corporates
• 600 Nordic customers
• Largest sector exposure
towards materials, real estate,
utilities, energy and
construction
• Largest currency exposure
towards USD (66%)
• RUB exposure funded locally via
deposits, USD and EUR exposure
funded via the Group
• Maturity of USD and EUR
funding has been prolonged
BANKING RUSSIA OPERATIONS
Nordea Bank
Russia Total
% of
Group Total
Lending corporates 5.6 3.0
Lending households 0.5 0.3
Total lending 6.1 1.8
Impaired loans gross 0.023 0.3
Q2 2014, EUR BILLION
Nordea actions regarding sanctions
10 •
• Task force in place since March 2014
• We monitor the development closely
• As of mid July, sanctions were extended from individuals and entities to specific
sectors – adding complexity
• Nordea follows OFAC (US), EU sanctions and Sectoral sanctions in all entities
• For non-sanction entities, business continues with existing customers
• No intention to increase business or market share
• Nordea is fully compliant with all regulatory requirements that apply to our operations
11 •
COMMENTS
• Finnish economy in undergoing the longest
downturn in 150 years
• Central and local government deficits
are large challenges
• Decline in the exports to Russia might
prolong the downturn, as Russia is one of
the largest export partners
(8% of exports)
• There are however some positive trends
which could have a positive impact on
exports
• Pending large structural reforms regarding
social and health services, municipal
reforms and pension reform aiming at
raising the retirement age
Longest downturn in 150 years
Positive trends emerging
Index 2007=100
The Finnish economy is experiencing a slow GDP growth…
12 •
STABLE HOUSEPRICE DEVELOPMENT
Indexed
…but underlying fundamentals are stable
UNEMPLOYMENT SHOW A DECLINE
BANKRUPTCIES SHOW A DECLINE EXPORTS EXCL. RUSSIA ARE ROUGHLY UNCHANGED
Source: Nordea Markets and Macrobond
502
321 293 277
0
100
200
300
400
500
600
1993 1997 2001 2005 2009 2013
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
13 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Finnish large corporates are in good shape
SALES AND EBIT DEVELOPMENT*, EURm
Source: Nordea Markets
*Nordea coverage excluding TeliaSonera and financials.
COMMENTS
• Finnish corporates have
experienced a muted environment
for a number of years
• Negative sales growth since
Q1/13
• Corporates have adjusted
operations and been
successful in maintaining
profitability
• Gearing moderately up, back to
pre-crisis levels
46%
37%
29%
36%
42% 45%
2008 2009 2010 2011 2012 2013
NET GEARING*, %
0
1 000
2 000
3 000
4 000
5 000
30 000
34 000
38 000
42 000
46 000
Q1/2008 Q1/2010 Q1/2012 Q1/2014
Sales, left axis EBIT, right axisSales EBIT
Q2/14 Q2/08 Q2/12 Q2/10
14 •
Finnish credit portfolio remains stable
PD development COMMENTS
Loan losses, Banking Finland, EURm
• 20% of Nordea's total loan portfolio
• Average Corporate PD has gone down
as new lending is increasingly to better
rating classes
• Household average PD has increased
slightly over the last two years
• All in all, loan losses are at moderate
levels
• Loan loss ratio of 16 bps in Retail
Banking Finland, in line with the Group
• Losses mainly relate to corporate
segment
• A handful cases are being addressed
in CIB
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Corporate Household
12 14
10
1
21
14 13
8
14
22
6
20
Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
15 •
Improving fundamentals in Finnish operations
AVERAGE CORPORATE LENDING MARGINS, BPS COMMENTS
• Improved lending margins
• Our large corporate customers
increasingly acquire financing from
capital markets
• Nordea #1 in corporate bond
market
• Nordea is market leader in all wealth’s
business areas
• #1 in Investment Funds
• #1 in Life & Pensions
• #1 in Private Banking
2008 2009 2010 2011 2012 2013 2014
CIB Finland Retail Banking Finland
22
17
8
7
6
5
4
4
4
Nordea Markets
Pohjola
Danske
SEB
RBS
Swedbank
Handelsbanken
Deutsche
UBS
FINNISH CORPORATE BONDS 2013, MARKET SHARE %
The leading Wholesale Bank
in the Nordic countries
14
16
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
17 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
The leading Nordic Wholesale Bank for corporate and
institutional customers
Key 2013 Wholesale Banking facts
#1 or #2 position in each of the Nordic countries
Total income EUR 2,606m
Operating profit EUR 1,455m
Cost/income ratio 34%
RaRoCaR 15.1%
Lending volume EUR 89bn
Approximately 6,000 employees
Operating income split
EUR2.8bn EUR 2.6bn
Net interest
43%
Items at fair
value 35%
Net fee &
comm. 22%
CIBSE 20%
CIBDK 19%
CIBFI 13%
CIBNO 9%
SOO 14%
Russia 10%
Other 14%
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
18 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Nordea Wholesale Banking strategic positioning
Strategic positioning
A leading position built
on local presence and
global scale, resulting in
deep customer
understanding and
competitive solutions
Customer dimension:
Multi-local presence = Intensity
Pro
du
ct
dim
en
sio
n:
Siz
e a
nd
co
mp
ete
nc
ies
= R
ele
va
nc
e
International
competition
Local
competition
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
19 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Nordic Wholesale Banking value creation should deliver
systematic “Alpha” versus industry performance
RaRoCaR*
Income Op. Ex. Funding cost Loan Losses
= Capital
_ _ _
- A profitable customer
mix
- Leading cross-sell
ratio and profitable
product mix
- Pricing
discipline/Business
selection
- Nordic scale
- Cost efficiency
programme
- 1 of 3 banks in
Europe with AA rating
- Geographical and
sector diversification
- A sound and strong
risk culture
- Business selection
and capital efficiency
program
*Risk adjusted Return on Capital at Risk
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
20 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Leading customer franchise and profitable product mix
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
(40) (20) 0 20 40 60 80
Imp
ort
an
t re
lati
on
sh
ips
Greenwich Quality Index - Difference from average*
Nordea
Peer 2 Peer 1
Peer 3
Peer 4
Peer 5
Large corporates evaluation of quality and
relationship*
*Greenwhich Associates survey “Large Corporate Banking – 2013”
CAGR
12%
Leading Nordic Capital Markets Operation
#1 bookrunner in
Nordic corporate
bonds
#1 Nordic bank in
Nordic ECM
#1 bookrunner in
Nordic
syndicated loans
Most Award
Winning Equity
Broker Nordics
Leading Nordic
FX and interest
rate derivatives
franchises
Income, EURm
2013 2012 2011 2010 2009 2008 2007 2006 2005
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
21 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Nordea Wholesale Banking outperforms on cross-sales
74%
57% 55% 53%
45% 42%
Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5
Product Cross-Sell Effectiveness – Nordics* Product Cross-Sell Effectiveness – Sweden*
*Greenwhich Associates survey “Large Corporate Banking – 2013”
69% 64%
55%
45% 45%
34%
Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
22 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Active business selection to maximise net interest margin
CIB lending margin development
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
+17 bps
Some positive pricing effects are expected
— Lending portfolio turnover, i.e. still some refinancing
of 2006/2007 credits
— Capital markets products as new regulation comes
into effect
Comments
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
23 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Cost initiatives to further improve cost efficiency
Wholesale Banking total cost development, EURm
237 221
245 228 229
210
237
213 218
Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
C/I ratio of 34%
Continuous streamlining/simplification of processes
WB cost efficiency programme 2014 - 2015
Comments
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
24 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Increased capital efficiency – lower REA
Wholesale Banking REA development, EURbn
77.9
65.4
59.0 58.0
2011 2012 2013 2014 H1
-25%
Strong Wholesale Banking track record
Customer targeted initiatives
Production environment
Increase RaRoCaR and sustain business
momentum
Comments
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
25 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
39.9 39.0
H1 13 H1 14
15
19
H1 13 H1 14
CIB delivers on income, costs and capital
Income, EURm
REA, EURbn
Expenses, EURm
Lending volumes, EURbn
Loan Losses, EURm
RaRoCar, %
214
211
H1 13 H1 14
336 348
262 299
173 134
H1 13 H1 14
NII
NCI
Fair value
95
80
H1 13 H1 14
36.8
30.9
H1 13 H1 14
A direct consequence of the strategy
Headline lower line
Sub-head line
Single medium chart axis
Right content border
Slide bottom border
Left border Right border Left content border
Comment text box top
Content and chart border
Small chart axis
Sub-head line
Small chart top
Small chart axis
Left and right small lower comments top border
Single medium chart toptop
Heading
Primary chart colours
Sub-head
Content lines (Non-Nordea)
Small chart top
76 116 154
166 166 166
64 64 64
163 82
115
239 178 137
119 154 188
175 80 70
233 170
0
217 217 217
Page numbers 166 166 166
Secondary chart/diagram colours (Non-Nordea)
185 205 229
217 217 217
Other chart and ornamental colours
239 241 204
211 157 155
204 102
0
127 127 127
82 82 82
217 217 217
Comments 76 116 154
166 166 166
26 •
665
665
726
787
1,062
1,086
1,215
1,295
1,561
1,603
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Nordea
243
263
318
373
384
496
593
680
811
1,358
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Nordea
The strengthened Investment Banking
organisation with integrated advisory capabilities
within debt and equity has paid off
Nordea Investment Banking is the leading Nordic
provider in capital markets activities; bonds,
equities and syndicated loans
Nordic ECM Q2 2014, EURm
Nordic Corporate Bonds Q2 2014, EURm
Comments
Nordic Syndicated Loans Q2 2014, EURm
Nordea is benefitting from the capital market trends due to the significant investments done during the last few years
1 136
1 234
1 240
1 618
1 673
1 907
2 667
2 795
3 062
6 179
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Nordea
0
96
161
225
106
3
1
144
163
163
153
111
175
80
70
127
127
127
233
170
0
163
82
115
103
172
206
239
178
137
117
204
208
204
199
178
211
157
155
182
185
186
242
206
134
206
159
182
Primary Colours Extra Colours
27 76
116
154
Chart Colours 166
166
166
191
191
191
127
127
127
204
102
0
0
96
161
119
154
188
Outlook for the coming period
Market Dynamics: Active! – but short visibility
INCOME
Growth picking up
somewhat
Margins – some
downward pressure
likely
Events presently fuelling
fee income / potential NII
growth
Challenging conditions
for FICC
EXPENSES
Delivering on cost
efficiency programme
CAPITAL
Strict business
selection
Focus on “capital light”
products
Continued model
improvements
Credit Quality
Norway – positive
Denmark – positive
Finland – negative/stable
Sweden – consistent
positive
RaRoCaR
Positive market trend
Nordea Wholesale
Banking’s position
Positive impact on
RaRoCaR
?
The leading Wholesale Bank in
the Nordic countries
Bank of America Merrill Lynch Annual Banking and Insurance CEO Conference
Casper von Koskull, Head of Wholesale Banking
October 2, 2014