Fourth quarter 2012 results Shaping the future relationship bank Analyst conference 30 January 2013 Christian Clausen, CEO
urs 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.
• Q4 2012 financial results highlights • Shaping the future relationship bank • Nordea 2013 capital markets day
urs Financial results Q4/12 Risk-adjusted profit increase of 20% in FY2012 EURm Q4/12 Q3/12 Change % FY12 FY11 Change % Net interest income 1,429 1,441 (1) 5,752 5,456 5 Net fee and commission income 692 605 14 2,504 2,395 5 Net fair value result 444 377 18 1,784 1,517 18 Total income 1 2,630 2,469 7 10,236 9,501 8 2 Staff costs (764) (752) (3,048) (3,113) (2) Total expenses (1,327) (1,293) 3 (5,186) (5,219) (1) (190)bps Cost Income Ratio 50.5% 52.4% 50.7% 54.9% (420)bps Profit before loan losses 1,303 1,176 11 5,050 4,282 18 Net loan losses (244) (254) (4) (933) (735) 27 15 Operating profit 1,059 922 4,117 3,547 16 Net profit 842 688 23 3,126 2,634 19 13 Risk-adjusted profit 846 749 3,245 2,714 20 Return on equity (%) 12.1% 10.1% +200bps 11.6% 10.6% +100bps Dividends per share (EUR) 0.34 0.26 31 +90bps Core Tier 1 capital ratio (%) 13.1% 12.2% 13.1% 11.2% +190bps Risk-weighted assets (EURbn) 168 179 (6) 168 185 (9) 4 • 1 Includes Other income
urs Proposed dividend for 2012 of EUR 0.34 Dividend and Payout ratio¹, EURm Comments Dividend proposal of EUR 0.34 per share EURm Payout ratio, % — 44% payout ratio 1 370 New capital policy to maintain a Core Tier 1 ratio 1 168 EUR 0.34 above 13% no later than 1 January 2015 per share 1 048 Excess capital will be returned to shareholders 1 006 — In order to retain full flexibility, the AGM will be asked for a share buyback mandate 519 44% 44% 43% 40% 19% 2008 2009 2010 2011 2012 ¹ Dividends relating to the calendar year of earnings 5 •
urs Stable and consistent operating income Total income development, EURm Comments Combined net interest margin nearly unchanged — Stable volume development 2 630 2 606 2 558 2 531 2 507 2 510 2 469 2 342 — Business selection strategy 444 494 506 469 504 377 544 2 091 356 — Lower deposit margins 111 611 692 — Increased focus on DCM business 605 588 596 618 582 623 602 All time high net fee and commission income — Strong Asset Management and other savings related commissions 1 462 1 427 1 441 1 429 1 420 1 379 1 365 1 324 1 326 – AuM increased by 16% to EUR 218bn – Inflow in all areas combined with strong market performance Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 — Strong fees on DCM volumes Total Other Net fair value result Net fee and commission income 6 •
urs Expenses broadly flat over last nine consecutive quarters Total expenses (excl. FX and variable pay 1 ), EURm Comments In total, nine quarters with a flat cost 1 210 1 203 1 193 1 196 1 173 1 177 1 168 1 164 1 163 development (excl. FX and variable pay) in line with flat cost target — Strict cost control focus implemented throughout the organisation — New Normal cost reductions executed ahead of plan – number of FTEs down almost 8% Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 since Q2/11 (~2,700 FTEs) Total expenses, EURm Specific cost initiatives launched with targeted gross cost savings of EUR 122m achieved in 1 327 1 290 1 293 1 275 1 276 1 270 1 265 1 266 1 242 2012 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 1. Variable pay including profit sharing is excluded. FX unchanged from Q4/10 7 •
urs Credit quality stabilisation and lower net loan losses Reduced total net loan losses in Q4/12 Total net loan losses, EURm Comments 263 254 244 Underlying credit quality remains solid, with a 242 218 217 positive rating migration in institutions and household portfolios 166 118 Stabilisation in level of impaired loans 112 Credit quality remains solid in Finland, Norway, Sweden, Baltics and Poland Losses in Denmark and Shipping remain at Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 elevated levels Impaired loans, EURm — Loan loss ratio in Banking Denmark decreased from 89bps to 55bps in Q4/12 Non-performing Non-performing 2 882 2 852 — Ship values seem to be bottoming out Non-performing 2 179 Performing Performing Performing 4 004 4 022 2 946 Q4/11 Q3/12 Q4/12 8 •
urs Denmark is stabilising and remains under control House price index 1 Loan losses net, Retail Banking Denmark 110 200 150 100 100 90 50 0 80 -50 70 -100 2006 2008 2010 2012 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Single-family houses Summer houses Flats Collectively assessed Portfolio assessed non-significant loans Individually assessed Comments Comments House prices in Denmark are stabilising Loan losses have peaked and have decreased for the last two quarters Increase in proportion of performing loans 9 • 1 Source: Danmarks Statistik
urs Shipping collateral values seem to be bottoming out Ship values 1 Shipping orderbook as % of existing fleet 1 180 180 150 150 120 120 USDm 90 90 60 60 30 30 0 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 Jan-13 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 Jan-13 Comments Comments Ship values have continued to fall throughout the year Supply is coming down rapidly to a sustainable level but seem to be bottoming out 10 • 1 Source: Clarkson
urs Capital and RWA efficiency Risk-weighted assets (RWA), EURbn 1 Comments Increase in Core Tier 1 ratio in Q4/12 of 90bps (YoY 185 182 181 +190bps) 179 RWA has decreased EUR11.1bn or 6.2% in Q4/12 (YoY (1) (3) EUR -17.3bn or -9%) due to: 168 (3) — Roll-out of the Baltic corporate and institutions (4) portfolio Q4/11 Q1/12 Q2/12 Q3/12 quality exposures FX effects & efficiency Q4/12 Credit Reduced RWA — RWA efficiency activities other — Improved credit quality in the institutions and retail customers portfolios — Reduced corporate exposures Average Risk Weights vs. Nordic peers, % 2 Core Tier 1 capital ratio, % (excl. hybrids) 13,1 12,2 11,8 11,6 46 11,2 11,0 11,0 10,7 10,3 35 30 30 27 21 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Peer 1 Peer 2 Peer 3 Peer 4 Nordea Peer 5 1 Basel 2.5 excluding transition rules 2 Based on Q3/12 Risk Weighted Assets (excl. transitional rules) / Total Assets (excl. Derivatives and Insurance Assets) 11 •
urs Retail Banking: Key developments Financial performance Strategic direction Very strong growth in operating income in 2012 as a Diversified franchise delivering high and growing income result of continued re-pricing efforts with low volatility Significant efficiency gains during 2012 Closer relationships and increased share of wallet coupled with re-pricing initiatives to further drive Loan losses increased by 10% during the year but revenues decreased 31% vs. last quarter Distribution optimisation Number of relationship customers drives Key results, EURm FY12 FY11 Change (%) income, EURm and ‘000 3 000 Total operating income 5,553 5,272 5% 3,5 2 500 Total operating expenses (3,109) (3,170) (2)% 3,0 2 000 2,5 Net loan losses (610) (556) 10% 2,0 1 500 Operating profit 1,834 1,546 19% 1,5 1 000 1,0 Group operating income (LHS) 500 0,5 Relationship customers (RHS) 0 0,0 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q1/12 12 • 12 •
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