Nordic Baltic Holding January – June 2 0 0 0
The leading financial services group in the Nordic and Baltic Sea region Helsinki Bergen Stockholm St. Petersburg Oslo Tartu Tallinn Gdynia Riga Copenhagen Moscow Vilnius Ham burg Gdansk Berlin Warsaw Luxem burg Frankfurt National network Branch office or subsidiary Branch office of an associated bank
Strong earnings growth � Operating profit up 29% , to EUR 1,359m (SEK 11,4bn) � Earnings per share January-June EUR 0.33, up by 14% � Total income up 16% , expenses up 4% (both excluding acquired business) � Return on equity 18.6% � Strong growth in interest and commission income � Improved ratings
Strong performance in growth areas � Strong Retail earnings � E-banking leadership: – e-customers more than 1.6 million, up 0.6 million since the year end – strong growth in customers using online equity trading � Significant growth in Asset Management – EUR 104 bn under management
Decisive steps for Nordic leadership • Merger process: Business integration continues according to plan • Continued expansion in the Baltic Sea region • New bid for Christiania Bank og Kreditkasse, NOK 44 per share • The leading financial services group in the Nordic and Baltic region – Market capitalisation EUR 24 bn
Merger process proceeds according to plan � The overall structure of business organisation in place � Integration of foreign units proceeds globally � Common trading floors for foreign exchange and fixed income trading established � Product and service concept integration in progress in all business areas � Key principles for credit risk and market risk evaluation and control implemented � Common financial control principles and reporting established
Continued expansion in the Baltic Sea region � New branches � Tartu in Estonia � Vilnius in Lithuania � Warsaw (Bank Komùnalný) in Poland � New services � Internet services in Estonia � Life insurance operations in Poland expected to begin in the second half of the year
New cash offer for Christiania Bank og Kreditkasse � Parliamentary decision in Norway to sell the state held shares � A new offer to acquire all shares in Christiania Bank og Kreditkasse at NOK 44 per share � Increased price - greater potential of Christiania Bank og Kreditkasse in the new Group � The offer values Christiania Bank og Kreditkasse at NOK 24.3bn (EUR 3 bn) � The offer period ends on August 31, 2000 � The Group has reserved the right to prolong the offer
The leading financial services group in the Nordic and Baltic Sea region Custom er base 9 million private customers 600.000 corporate customers 500 large corporate and many institutional clients Distribution netw ork 1 100 branch offices 125 insurance service centres Leading Internet services Comprehensive telephone services
The leading financial services group in the Nordic and Baltic Sea region Market shares Finland Denm ark Sw eden Norw ay Retail Banking Private custom ers 35% 23% 20% - Corporate custom ers 46% 25% 16% - Life insurance and pensions 30% 9% 6% 5% Non-Life insurance - 22% - 19%
The largest financial services group in the Nordic region Market capitalisation of Nordic banking groups, August 15, 2000 NBH Handelsbanken FöreningsSparbanken SEB Den Danske Bank Den norske Bank Christiania Bank RealDanmark 0 5 10 15 20 25 bnEUR
Increased profit Jan-June Jan-June Change 2000 1999 Operating profit, m EUR 1,359 1,054 + 29% Return on equity, % 18.6 19.9 Return on equity before goodw ill depreciation, % 19.2 - Cost/ incom e ratio ( before loan losses) , banking 52 57
Key figures – result % % Return on equity Cost/ income ratio * 60 25 20 55 15 10 50 5 0 45 Jan-Jun Jan-Jun Jan-Jun Jan-Jun 2000 1999 2000 1999 * Before loan losses.
Income statement Jan - June Jan - June Change m EUR 2000 1999 % Net interest income 1,502 1,386 8 Net com m ission incom e 761 536 42 Operating incom e from insurance 321 255 26 Net result from financial operations 236 140 69 Other income 212 204 4 Total incom e 3 ,0 3 2 2 ,5 2 1 2 0 Personnel expenses -913 -812 12 Other expenses -706 -663 6 Total expenses - 1 ,6 1 9 - 1 ,4 7 5 1 0 Profit before loan losses 1 ,4 1 3 1 ,0 4 6 3 5
Income statement Jan - June Jan - June Change 2000 1999 % Profit before loan losses 1 ,4 1 3 1 ,0 4 6 3 5 Loan losses, net -37 -55 -33 Profit from com panies accounted for under the equity method 32 81 -60 Op. profit bef. goodw ill depreciation 1 ,4 0 8 1 ,0 7 2 3 1 Goodwill depreciation -49 -18 172 Operating profit 1 ,3 5 9 1 ,0 5 4 2 9 Loss on disp. of real estate holdings -40 - - Refund of surplus in Pension found. 17 - - Taxes -360 -180 100 Minority interest -2 0 - Net profit 9 7 4 8 7 4 1 1
Net interest and commission income mEUR 3000 Net interest income 2500 Net 2000 comission income 1500 1000 500 0 Q2 Q1 Jan- Jan- Full 2000 2000 June June year 2000 1999 1999
I ncome from insurance and financial operations mEUR 700 Operating income from 600 insurance 500 400 Net result from 300 financial operations 200 100 0 Q2 Q1 Jan- Jan- Full 2000 2000 June June year 2000 1999 1999
Expenses mEUR 3000 Other expenses 2500 2000 Personnel expenses 1500 1000 500 0 Q2 Q1 Jan- Jan- Full 2000 2000 June June year 2000 1999 1999
Continued stringent cost control Factors explaining the expense increase � Acquisition of Vesta and other new business – accounts for more than 50 % of the expense increase � Provisions for bonus payments and other variable salaries related to increased earnings
Profit by business area Jan-June 2000 mEUR 800 Product 700 result 600 Operating 500 profit 400 300 200 100 0 Retail Corporate & Investment Asset Life Non-life Instutional Banking Management Insurance & Insurance Pensions
Retail banking Jan-June 2000 � Improved C/ I ratio � Continued high sales of e-banking products � Net interest income showed a positive trend � Continued strong growth in commission income � Operating profit EUR 746m � Return on equity 26 %
Group net banking services customers Million 1,6 Denmark 1,4 Sweden 1,2 Finland 1,0 0,8 0,6 0,4 0,2 0,0 Dec Jun Dec Jun Dec Jun Dec Jun 1996 1997 1997 1988 1998 1999 1999 2000
Log-ons by net banking customers Seasonally adjusted Million per month 4,5 Denmark 4,0 3,5 Sweden 3,0 Finland 2,5 2,0 1,5 1,0 0,5 0,0 Dec Jun Dec Jun Dec Jun Dec Jun 1996 1997 1997 1998 1998 1999 1999 2000
Bill payments in the net Seasonally adjusted Million per month 5,0 Denmark 4,5 4,0 Sweden 3,5 Finland 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Dec Jun Dec Jun Dec Jun Dec Jun 1996 1997 1997 1998 1998 1999 1999 2000
Internet banking targets G Targets for 2000/ 2001 – 6 million log-ons in December 2000 – 6 million bill payments per month – 2 million Internet/ PC banking customers by the beginning of 2001 G Impact on result Internet expansion estimated to create possibilities – for increased earnings of 350 - 400 million Euro annually in a three-year perspective
Corporate and Institutional Banking Jan-June 2000 � Strong activity in the corporate banking market � Increased demand for foreign exchange products � Operating profit EUR 226m � Return on equity 15 %
I nvestment Banking Jan-June 2000 � High ranking in Europe for ArosMaizels Corporate Finance � Strong market position in the Nordic region for ArosMaizels Equities � Operating profit EUR 43m � Product result, equity trading EUR 75m
Asset management Jan-June 2000 � Strong growth in assets under management � Top rating for Investment management - one of the leading organisations in Europe � Strong growth and increased profitability in Mutual funds � Largest Nordic private banking operation in Luxemburg � Operating profit, customer responsible units EUR 72m � Product result EUR 163m � Assets under management EUR 104bn
Assets under management bnEUR bnEUR 120 120 100 100 80 80 Private Danmark banking Finland 60 60 Institutional Sweden 40 40 20 20 0 0 Q2 Q1 Q4 Q2 Q1 Q4 2000 2000 1999 2000 2000 1999
Life Insurance and Pensions Jan-June 2000 � Strong growth in premiums and life insurance provisions - especially in Finland � High investment return � Focus on unit-linked and corporate pension schemes � Return on equity 14 % � Product result EUR 61m
Life insurance, gross p remiums mEUR mEUR mEUR Denmark Sweden Finland 500 500 500 400 400 400 300 300 300 200 200 200 100 100 100 0 0 0 Q2 Q1 Q4 Q2 Q1 Q4 Q2 Q1 Q4 2000 2000 1999 2000 2000 1999 2000 2000 1999 Unit-linked Vesta (traditional) Traditional
Non-Life Insurance Jan-June 2000 � Improved technical result except for a run-off loss from December 1999 hurricane in Denmark (EUR 63m) � Reduced cost base � Operating profit EUR 31m � Return on equity 11 % (33 % excl. the impact of the hurricane)
Balance sheet bnEUR 200 150 100 50 0 Total assets Loans Deposits June 2000 End 1999
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