Nordea Commercial & Business Banking Investor presentation Erik Ekman September 13, 2017
Nordea is the largest financial services group in the Nordics Nordea = Nordic ideas 11 million customers • 10 million household customers • 700,000 corporate customers, incl. Nordic Top 500 • Operating in the 10th largest economy in the world Financial strength • EUR 10 bn in full year income (2016) • EUR 643bn of assets (Q2 2017) • EUR 31.4bn in equity capital (Q2 2017) • AA level credit ratings • Common equity tier 1 capital ratio of 19.2% (Q2 2017) EUR ~45bn in market cap • One of the largest Nordic corporations • A top-10 European retail bank 2
Well mixed revenue generation Business Area Contribution in 2016 Operating Income Operating Profit Economic Capital 3% 7% 10% 10% 26% 28% 30% 21% 28% 34% 17% 23% 19% 25% 20% Personal Banking Wealth Management Commercial & Business Banking Group Corporate Center & Other Wholesale Banking 3
Commercial & Business Banking Erik Ekman September 13, 2017
We implemented a needs based service model, Our starting point two years ago addressing cost to serve and return on capital Corporate segments Challenges Return on capital Commercial Banking • The household and corporate organisation was mixed Complexity of customer needs • Low visibility around where we generated profit • Business was managed with focus on income and not profit Business Banking • Customer segmentation model based on inside-out view • No clear corporate value proposition • No common operating model Business Banking Cost to serve Direct 5
Financial development in Commercial & Business Banking since 2016 Operating income and Cost-income RoCar (in Euro Million / percent) (in percent) 469 468 474 445 465 458 9,3 8,9 7,9 7,6 6,4 6,0 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 Cost-income Operating income RoCar 6
Commercial & Business Banking has a solid pan-Nordic platform EUR, FY 2016 NO FI #2 in market #1 in market Income 413m Income 538m Lending 15,7bn Lending 18,7bn Commercial & DK SE #1-2 in market Business Banking has #2-3 in market a superior customer Income 524m franchise and a Income 430m Lending 25,5bn unique position in Lending 20,3bn the Nordics 7
We have the ambition to be #1 in ALL our markets and we want to have… #1 …most satisfied customers in the market segments we chose to compete in Customer satisfaction Future Relationship #1 Bank …best profitability – ahead of peers Profita- Preferred bility employer #1 …most satisfied employees within the industry 8
Strong development since H1 2016… …but still potential for improvement RoCar of Commercial & Business Banking (in per cent) Cross Sales Business optimisation +1.6% Re-pricing 8.9% 7.3% Business selection / Capital management Conversion to House bank Target Operating Model Efficiency H1 2016 H1 2017 Process efficiency Digital efficiency 9
Digital capabilities are vital corner stones in our transformation • New digital channels (Web & Mobile) – Self-service – Contact centers – Remote advisory platforms – Digital sales capabilities – Value added services − Trade Portal & Trade Club − e-markets • Helping us transform the way we service our customers – Online team based advisory – Visual agenda – online tool supporting sales process and tailored customer advice, e.g. liquidity management – Digital leads 10
…and through Transaction Banking • ~2,800 employees offering dedicated services to ~1.4 million customers Already 700+ sign-ups for Open Banking API • ~1,400 mEUR income • Services all Nordea’s customers with payments, credit cards, cash mgmt. solutions, financing, leasing, and trade finance • One of the main innovation hubs in Nordea, e.g. through collaboration with Stockholm Fintech Hub • Creating the future of mobile payments , including Nordea Wallet, Samsung Pay, and Siirto (Finland) • New global platforms launched for Trade Finance and leasing* 11 * Global leasing platform launched in Finland and being rolled out in rest of Nordics
Ambition is to realise the CBB #1 ambition Superior customer franchise Unique market position in the Nordics Solid segment strategy Close gap to realise CBB ambition on #1 Clear value creation potential Develop capabilities for future growth Track record of improvement 12
Thank you! Erik Ekman erik.Ekman@nordea.com
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