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
2016 was probably the most eventful year in the history of Nordea Geopolitical events & macro challenges Customer Transformational Media focus change agenda Regulatory uncertainties 3
Q4 2016 financial results highlights Group view
Financial Highlights FY16 vs. FY15* Q4/16 vs. Q4/15* Stable environment and low growth Total revenues - 1% + 5% Net Interest Income - 3% Flat Income Fee and commission + 1% + 6% income Total costs + 5% + 10% Excl. Group Projects +2% +7% Costs 2018 vs. 2016 Flat Continued high activity level in 2017 16bps: +90% Loan loss level 15 bps stem from Oil and Offshore Credit quality Largely Impaired loans are Credit quality unchanged in down 3% the coming Q CET 1 ratio 18.4% (16.5%) Capital and Proposed dividend of EUR 0.64 in proposed dividend EUR 0.65 2015 *In local currencies and excluding non-recurring items 5
Nordea Group Financial result EURm FY16 FY15 Chg Loc. Q4 Chg Loc. FY16/ FY15 curr. 2016 Q416/ Q415 curr. Chg YoY Chg Q416/Q415 Net interest income 4,727 4,963 -5% -3% 1,209 0% 0% Net fee & commission income 3,238 3,230 0% 1% 867 6% 6% 4% 4% 498 18% 20% Net fair value result 1,715 1,645 Total income 9,927 10,140 -2% -1% 2,610 -1% -1% Total income* 9,754 9,964 -2% -1% 2,588 5% 5% Total expenses -4,800 -4,957 -3% -2% -1,233 -16% -16% 4% 5% -1,319 9% 10% Total expenses* -4,886 -4,694 Net loan losses -502 -479 5% 9% -129 -9% -6% Operating profit 4,625 4,704 -2% -1% 1,248 22% 21% -9% -8% 1,140 2% 2% Operating profit* 4,366 4,791 Net profit 3,766 3,662 3% 4% 1,100 30% 29% -80 bps n/a 12.9 +140 bps n/a Return on equity* (%) 11.5 12.3 +190 bps - 18.4 +190 bps - CET1 capital ratio (%) 18.4 16.5 Cost/income ratio* (%) 50 47 +300 bps n/a 51 +200 bps n/a *Excluding non-recurring items 6
Net Interest Margin Severe pressure from negatives rates – continues levelling off 0,30 1.06 0,20 0.97 0.96 0.95 0,10 0.91 0.90 0.89 0.86 0.84 0% 0,00 Int. rate -0,10 -0,20 -0,30 -0,40 -0,50 -0,60 -0,70 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 NIM, % EURIBOR 1W STIBOR 1W CIBOR 1W 7
Net Fee and Commission Income, 4Q rolling Improved trend, driven by savings and investments 3,230 3,238 3,219 3,193 3,192 3,167 3,164 Q215 Q315 Q415 Q116 Q216 Q316 Q416 8
NFV, 7Q overview Solid underlying trend of EUR 300-400m per quarter 600 500 11 127 43 90 19 400 65 44 26 135 129 136 53 56 300 50 43 105 200 289 282 277 260 257 248 243 100 0 -11 -54 -55 -93 -42 -100 -200 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Customer areas WB Other ex FVA GCC and GF FVA 9
Costs Total expenses*, EURm Comments • 1233 Costs in local currencies* 1,213 1,206 1,183 1,178 1,108 54 71 54 52 51 Depreciations • +5%, in line with guidance 49 408 396 386 389 • 475 +2% excluding Group Projects 303 Other expenses • Number of staff: 756 751 740 756 743 687 Staff costs • Number of FTEs up 6% y-o-y, mainly related to IT and compliance Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 • Largely unchanged cost base 2018 vs. 2016 Group projects**, EURm • Continued high activity level in 2017 61 181 • Cost growth of approx. 2-3% in local currencies for 2017/2016 29 62 45 29 FY 15 Q1 Q2 Q3 Q4 FY 16 * Excluding restructuring charge of EUR 263m in Q415 and Excluding a gain of EUR 86m from a changed pension agreement in Norway in Q416 10 ** Simplification, Compliance, Legal Structure and IT remediation
Solid asset quality Total net loan losses, EURm Comments 142 135 129 129 127 • 122 Loan losses at 16 bps for Q4 112 111 103 (unchanged vs. Q3) • > 90% of loan losses come from our Oil and Offshore exposure • Credit quality in these portfolios is still Q4/14Q1/15Q2/15Q3/15Q4/15Q1/16Q2/16Q3/16Q4/16 deteriorating • Successful 10 restructurings Impaired loans, EURm* completed in 2016 in the offshore portfolio. Another 10 more expected to Servicing Non-servicing be completed 6,309 5,733 5,550 • Impaired loans declined 3% 2,526 2,241 2,306 • The full year loan losses are 15 bps 3,783 3,492 3,244 • Expected unchanged credit quality in coming quarters Q2/16 Q3/16 Q4/16 11 *EUR 5935m Q4 and EUR 6122m Q3 when including operations in Baltics, expected finalised Q2 2017
Common Equity Tier 1 ratio development Q416 vs. Q316 18.4% 0.2% 0.1% 0.3% 17.9% 0.3% 0.2% CET1 ratio FX effect Credit quality Volumes incl. Profit net Other CET1 ratio Q3 16 Derivatives dividend Q4 16 12
Proposed dividend per share for 2016 0.65 0.64 0.62 0.43 0.34 0.29 0.26 0.25 2009 2010 2011 2012 2013 2014 2015 2016 13
Progress in the Group Simplification Programme Today 2017 • Proof of concept carried out • Implementing Deposits & Savings in Core Finland and commence work in Denmark Banking • Model bank implemented Platform • Commence lending rollout in Finland, • First live Pilot of a fixed starting with a pilot product term deposit in Finland complete New • New payment infrastructure • Implementation of SEPA Credit Transfer Payment installed solution in Finland Platform • Data warehouses in DK and SE on target to Group • Data warehouses closed in Common be closed NO, FI (materially) • Global Sales Performance Management Data • Platform integration started. system implemented in the Nordics • Customer and Counterparty Customer & • Sourcing in customers and counterparties Counter- Master platform build-up from the Nordic legacy systems into the party Data common platform 14
Q4 2016 financial results highlights Business Areas view
Well mixed revenue generation between different BAs Operating Profit Operating Income Economic Capital GCC GCC GCC WM 3% 7% PeB 10% PeB 10% PeB 26% WM 28% 30% 21% WM 28% 34% WB 17% CBB 23% 19% 25% 20% WB CBB CBB WB • As of Q4 2016, Retail Banking is split into two new Business Areas: • Personal Banking • Commercial & Business Banking • The split allows us to have: • Clearer customer focus • Adjust to rapid changes in customer demands 16
Personal Banking The ambition for Nordea Personal Banking by 2021 remains Customer satisfaction Employee satisfaction Profitability Leading CSI for affluents The most satisfied C/I improved to low 40s*. and home owners, on employees among peers par for other customer groups • *Excluding distribution agreement with Wealth Management
Personal Banking Improved digital relations with customers + 27,2% - 22,9% 2,3 30 28 28 2,0 2,1 25 1,9 1,8 • In Q4 more than 18 24 million of the transactions are contactless transactions Q4- Q1- Q2- Q3- Q4- • # of online meetings Q4- Q1- Q2- Q3- Q4- 15 16 16 16 16 15 16 16 16 16 has increased by 26% Q4 2016 compared to Q4 2015 Mobile transactions (mill.) Branch transactions (mill.) • Never more than one click away from personal service 18
Commercial and Business Banking Leading position in corporate banking in the Nordics • Commercial & Business Banking consists of: • Commercial Banking • Business Banking • Transaction Banking • Servicing more than 600,000 corporate customers • The customers are serviced out of more than 300 physical and online branches across the Nordics • Transforming the business from being product centric to customer centric 19
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