Investor Presentation Q1 2018 Nordea Kredit 04.05.2018
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation Introduction and contact information This Investor Presentation has been Content: compiled by Nordea Kredit for information ▪ Nordea Kredit – in brief purposes only. ▪ Ratings and OC The presentation offers data on Nordea ▪ Loan portfolio Kredit and the mortgage collateral ▪ Asset quality supporting outstanding covered mortgage ▪ Legislation bonds (SDRO) and mortgage bonds (RO). (All data as per 28 March 2018 unless otherwise indicated) If you have any questions, please feel free to contact: Morten Keil , Head of STF & IB, Copenhagen & Oslo +45 3333 1875 Finn Nicolaisen , First Vice President, STF & IB, Copenhagen & Oslo +45 3333 1625 Nordea Kredit Realkreditaktieselskab, Business registration number 15134275 2
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation In brief Profile Portfolio Founded 1993 Mortgage loans, nom. value (Q1 2018) DKK 384.7bn Number of employees (FTEs) (Q4 2017) 111 Market share (Q1 2018) 14.2% DKK 2,242m Portfolio by type of loan: Profit before tax (2017) Cost-income ratio (2017) 11.7% 27% 41% 45% Capital ratio (of which Tier 1) (Q4 2017) 32.9% (29.7%) 55% Supervised by the DFSA (Finanstilsynet) 32% All SDRO and RO bonds are ECBC labelled IO Amortizing Fixed ARM Floating rate More information at nordeakredit.dk Asset quality Rating of bonds LTV overall average (Q1 2018) 60.2% Moody's Aaa Arrears (Owner occupied dwellings and 0.16% Standard & Poor's AAA holiday homes) 1 1) Arrears as a percentage of the Q4, 2017 scheduled payments – 3½ months after due date 3
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation Ratings and over-collateralisation Moody’s S&P OC CC1 CC2 CC1 CC2 CC1 CC2 Rating of issued bonds Aaa Aaa AAA AAA 25.2% 9.9% Required OC/CE for 0 0 4.03% 2.50% Aaa and AAA rating TPI leeway / 7 6 4 4 Unused uplift OC and CE requirements as set by Moody ´ s and S&P, respectively. TPI leeway and unused uplift as defined by Moody ´ s and S&P, respectively. Capital Centre 1 (DKK 4.3bn) Capital Centre 2 (DKK 380.4bn) ▪ Mortgage Bonds ▪ Covered Mortgage Bonds (Særligt (Realkreditobligationer , ”RO”) dækkede realkreditobligationer ”SDRO”) ▪ No series are open for issuance 1% ▪ All bonds are covered according and all are grandfathered covered CC1 99% CC2 bonds to UCITS/CRD 4
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation Loan portfolio and market share Loan portfolio by property category Portfolio by loan type 3% 100% 6% 6% 8% 11% Owner occ. dwellings & holiday 21% 28% homes 26% 26% 12% 25% 25% 75% Private rental housing 21% ARM 1-2Y 19% 9% 27% ARM 3-10Y 26% 27% Total 24% Commercial properties 50% 20% DKK 384.7bn 15% Floating Rate 9% Agriculture Fixed Rate 67% 25% 40% 40% 40% 41% 38% 38% Other properties 0% Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q1 2018 Market share 1 – 14.2% overall Share of interest-only mortgages 57% 20% 16,7% 16,6% 54,7% 55% 15% 53,6% 11,6% 11,2% 53% 10% 50,8% 6,0% 51% 5% 48,3% 49% 46,6% 0% 47% Other Private rental Commercial Agriculture Owner occ. 45,4% properties housing dwellings & 45% holiday homes Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q1 2018 1) Market share of all Danish mortgage bank loans 5
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation Loan portfolio by regions All property categories 4% Danish population by regions 22% Greater Copenhagen 10% including Bornholm 40% 32% Remaining Zealand 23% Total Southern Jutland & Funen 5.78m Central Jutland 14% 21% Northern Jutland 16% 18% 6
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation Asset quality Arrears (Owner occupied dwellings and holiday homes) 1 Loan-to-value (LTV) overall average 73% 0,5% 71% 69,3% 69% 0,4% 67,9% 67% All mortgage banks (including Nordea Kredit) 0.20% (last 0.19%) 0,3% 65% 63,2% 63% 0,2% 61,8% 61% 60,2% 60,2% 0,1% 59% Nordea Kredit 0.16% (last 0.16%) 57% 0,0% 55% Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q1 2018 1) Arrears as a percentage of the Q4, 2017 scheduled payments – 3½ months after due date 7
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation Profit and losses Profit and net new lending Net losses in per cent of mortgage loans DKKm DKKbn DKKbn 2.500 20 400 0,5% 2.000 15 0,4% 300 1.500 10 0,3% 1.000 200 5 0,2% 500 100 0 0,1% 0 -500 -5 0 0,0% 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 Profit before tax (lhs) Mortgage loans at nominal value (lhs) Net loss for the year in per cent of mortgage loans at nominal value (rhs) Net new lending (rhs) 8
Introduction In brief Ratings and OC Loan portfolio Asset quality Legislation Links to more information Nordea Kredit Legislation ▪ Nordea Kredit ECBC harmonised transparency ▪ Danish mortgage financing is supervised by the DFSA templates. (Finanstilsynet). Link: https://www.nordea.com/en/investor-relations/reports-and- Link: https://finanstilsynet.dk/en presentations/bonds/nordea-kredit-covered-bonds/ ▪ Relevant legislation can be found in English at the ▪ Nordea Kredit financial reports. DFSA’s English website. Link: https://www.nordea.com/en/investor-relations/reports-and- Link: https://finanstilsynet.dk/en/Lovgivning presentations/subsidiary-reports/nordeas-danish-subsidiary- reports/ ▪ All mortgage bank legislation can be found in Danish at the DFSA’s Danish website. Link: http://finanstilsynet.dk/da/Lovgivning/Lovsamling 9
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