Investor Presentation Q3 2018 Nordea Kredit 15.11.2018
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 and mortgage bonds. Average LTV for Q2 and Q3 2018 has been adjusted since the first issue of this investor presentation. ( See slide 7) If you have any questions, please feel free to contact: Morten Keil , (All data as per 28 September 2018 Nordea, Long Term Funding unless otherwise indicated) +45 3333 1875 Finn Nicolaisen , Nordea, Long Term Funding +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 (Q3 2018) DKK 386.8bn Number of employees (FTEs) (H1 2018) 109 Market share (Q3 2018) 14.1% DKK 873m Portfolio by type of loan: Profit before tax (H1 2018) Cost-income ratio (H1 2018) 11.8% 27% 41% 45% Capital ratio (of which Tier 1) (Q2 2018) 32% (28.9%) 55% 100% owned by Nordea Bank Abp 32% All covered bonds are ECBC labelled IO Amortizing Fixed ARM Floating rate More information at nordeakredit.dk Asset quality Rating of bonds LTV overall average (Q3 2018) 59.4% Moody's Aaa Arrears (Owner occupied dwellings and 0.16% Standard & Poor's AAA holiday homes) 1 1) Arrears as a percentage of the Q2, 2018 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 20.58% 9.61% Required OC/CE for 0 0 10.74% 3.48% 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 3.8bn) Capital Centre 2 (DKK 383.0bn) ▪ 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% 6% 8% 11% Owner occ. dwellings & holiday 21% homes 26% 12% 26% 26% 25% 25% 75% Private rental housing 21% ARM 1-2Y 9% 27% 27% 27% ARM 3-10Y Total 26% 24% Commercial properties 50% 20% DKK 386.8bn Floating Rate 9% Agriculture Fixed Rate 67% 25% 41% 41% 40% 40% 40% 38% Other properties 0% Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q2 2018 Q3 2018 Market share 1 – 14.1% overall Share of interest-only mortgages 55% 20% 53.6% 16.6% 16.4% 15% 11.9% 11.1% 50.8% 10% 50% 6.2% 48.3% 5% 46.6% 0% 45.5% 45.4% Other Private rental Commercial Agriculture Owner occ. properties housing dwellings & 45% holiday homes Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q2 2018 Q3 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% 0.30% 71% 69% 67.9% 0.25% All mortgage banks (including 67% Nordea Kredit) 0.20% (last 0.21%) 65% 0.20% 63.2% 63% 61.8% 61% 60.2% 59.4% 0.15% 58.7% 59% Nordea Kredit 0.16% 57% (last 0.17%) 55% 0.10% Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q2 2018 Q3 2018 Q3 2014 Q3 2015 Q3 2016 Q3 2017 Q3 2018 1) Arrears as a percentage of the Q2, 2018 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% 200 1,000 5 0.2% 100 500 0 0.1% 0 -5 0 0.0% 2012 2013 2014 2015 2016 2017 H1 2018 2012 2013 2014 2015 2016 2017 2018 H1 Mortgage loans at nominal value (lhs) Profit before tax (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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