2010-07-21 15:00:00 CEST
2010-07-21 15:01:02 CEST
REGULATED INFORMATION
Nordea Pankki Suomi Oyj - Interim report (Q1 and Q3)
Nordea Bank Finland Plc: Interim Report January-June 2010
Nordea Bank Finland Plc is a wholly owned subsidiary of Nordea Bank AB (publ),
the listed parent company of the whole Nordea Group. This statutory interim
report covers the operations of the legal entity Nordea Bank Finland Plc with
its subsidiaries in Finland and abroad.
The business operations of the Nordea Group have been organised in three
customer areas, all of which operate across national boundaries: Nordic Banking,
Private Banking and Institutional and International Banking. The consolidated
interim report of Nordea Bank AB (publ) embraces all the activities of the
Nordea Group and provides the most complete and fair view. The Finnish Asset
Management & Life operations are included in the interim report of the Nordea
Group.
Nordea Bank Finland Group
Result summary January-June 2010
The first half year of 2010 showed lower income and profit levels compared to
the very strong H1 last year. Net loan losses increased slightly. NBF's total
income decreased by 17% to EUR 1,264m (1,520) and total expenses decreased by
1% to EUR 521m (525). (The comparison figures in brackets refer to the first six
months of 2009.)
NBF's operating profit decreased by 31% compared to the same period last year
and it amounted to EUR 576m (835). Return on equity was 7.7% (11.4) and the
cost/income ratio 41% (35). Loan losses amounted to EUR 167m (160). Net profit
decreased by 33% to EUR 417m (621).
Market development in the first half of 2010
The Finnish economy was subdued in the first months of 2010. It was hampered by
temporary factors, such as the dockworkers' strike. In the spring, signs of the
economy picking up increased. Recovery was indicated by the growth of industrial
production, retail sales and construction, among other things. The rise in
unemployment also stopped. Short-term market rates started to rise slowly in the
spring. Worries about the indebtedness of certain euro countries decreased
long-term market rates in Finland but increased uncertainty about future
economic trends.
Income
Total income decreased by 17% to EUR 1,264m. The decrease is mainly explained by
lower net interest income and lower net result from items at fair value. Margin
pressure in deposits continued as competition in deposits continued and interest
rates stayed on low levels. Net interest income totalled EUR 578m (633). Total
loans to the public increased by 2% year-on-year to EUR 68.7bn. Deposits and
borrowings from the public increased by 2% year-on-year to EUR 46.5bn.
Net fee and commission income increased by 44% to EUR 145m. Asset management
commissions increased whereas custody fees decreased leading to stable savings
related commissions. The increase in card commission income and commission
income from guarantees and documentary payments mainly explains the increase in
fee and commission income. Commission expenses decreased by 12% as a result of
lower other commission expenses.
Net result from items at fair value decreased from the record level in 2009 by
30% to EUR 526m (753). The customer-driven capital markets operations continued
to be strong with higher volumes, but the result was on a lower level.
Profit from companies accounted for under the equity method was stable and
amounted to EUR 1m (1).
Other operating income decreased to EUR 14m (32).
Expenses
Total operating expenses decreased by 1% and amounted to EUR 521m (525).
Staff costs decreased by 11% to EUR 267m (300) explained by lower variable
salaries as well as pension and social expenses. The number of full-time
employees decreased by approximately 129 year-on-year.
Other operating expenses totalled EUR 234m (208), up by 13% compared to last
year. The increase is mainly explained by higher marketing and other expenses
than in the corresponding period last year.
Depreciation of tangible and intangible assets increased to EUR 20m (17).
The cost/income ratio increased to 41% in the first half of 2010.
Throughout this report, "Nordea Bank Finland" and "NBF" refer to the parent
company Nordea Bank Finland Plc, business identity code
1680235-8, with its subsidiaries. The registered office of the company is in
Helsinki. Nordea Bank Finland Plc is a wholly owned subsidiary of Nordea Bank AB
(publ), the listed parent company of the whole Nordea Group. The business
operations of the Nordea Group have been organised in three customer areas, all
of which operate across national boundaries: Nordic Banking, Private Banking and
Institutional & International Banking. The consolidated interim report of Nordea
Bank AB (publ) embraces all the activities of the Nordea Group and provides the
most complete and fair view. This statutory interim report covers the operations
of the legal entity Nordea Bank Finland Plc with its subsidiaries.
Loan losses
Net loan losses in the first half year increased slightly to EUR 167m (160)
corresponding to a loan loss ratio of 51 basis points.
Net loan losses as well as impaired loans continue to stem from a large number
of smaller and medium-sized exposures rather than from a few large exposures.
Taxes
The effective tax rate for the first half of 2010 was approximately 28% compared
to 26% in the first half of 2009.
Net profit
Net profit decreased by 33% to EUR 417m (621) corresponding to a return on
equity of 7.7% compared to 11.4% in the first half of last year.
Other information
Group initiatives 2010
In February 2010 Nordea launched nine group initiatives to support the prudent
growth strategy. Activities related to the initiatives are well on track and
have started in all areas. Growth Plan Finland proceeds according to plans and
more than 100 new advisers and specialists have been recruited this year in high
growth areas to ensure services needed in the coming years. 28 branches will be
relocated or refurbished to better serve our customers during the next 12
months. More information on group initiatives is disclosed in the Nordea Bank
AB's (publ) interim report for Q2.
Balance sheet
(Comparison figures in brackets refer to December 2009 figures)
The total assets of NBF amounted to EUR 269bn (221). The change relates mainly
to higher market values of derivatives.
The growth rate of the housing loan stock was 4% in Finland. Total loans to the
public increased by 5% compared with the end of 2009.
Deposits and borrowings from the public increased from the year-end level and
amounted to EUR 46.5bn (44.3).
Capital position and capital management
At the end of June, NBF's risk-weighted amounts (RWA) were EUR 76.2bn excluding
transition rules, compared to EUR 72.1bn at year-end 2009 and 73.4bn one year
ago.
As transition rules had no effect on RWA, the reported RWA increased by EUR
4.1bn compared with end 2009 figures.
The Tier 1 ratio was 13.3% and the total capital ratio was 13.9%. Profit for the
period has not been included in Tier 1.
Credit portfolio
Total lending was EUR 68.7bn (65.7) at the end of June 2010. The share of
lending to corporate customers was 50%. Lending in the Baltic countries
constitutes 11% of NBF's total lending.
Impaired loans gross decreased slightly to EUR 1,794m at the end of June 2010
compared to EUR 1,801m at the end of December 2009. Individually assessed
impaired loans, net, amounted to EUR 1,290m (1,354) representing 1.01% of total
loans before allowances. At year-end 2009 the ratio was 1.08%.
Total allowances in the Baltic countries amounted to EUR 347m, of which EUR
194m were collective provisions.
Off-balance sheet commitments
The total amount of off-balance sheet commitments increased slightly to EUR
35.6bn (35.5). The volumes of derivatives have continued to grow and they
amounted to EUR 5,231bn (4,526).
Changes in group structure
During the first half of the year two new subsidiaries have been established in
Estonia.
Risks and uncertainties
Nordea's revenue base reflects the Group's business with a large and diversified
customer base, comprising household customers, corporate customers and financial
institutions, representing different geographic areas and industries.
Nordea's main risk exposure is credit risk. The Group also assumes risks such as
market risk, liquidity risk, operational risk and life insurance risk. For
further information on risk composition, see the Annual Report.
The financial crisis and the deteriorating macroeconomic situation have not had
material impact on Nordea's financial position. However, the macroeconomic
development remains highly uncertain as communicated in the outlook statement
below.
None of the above exposures and risks is expected to have any significant
adverse effect on the Group or its financial position in the next six months.
Within the framework of the normal business operations, the Group faces claims
in civil lawsuits and other disputes, most of which involve relatively limited
amounts. None of these disputes are considered likely to have any significant
adverse effect on the Group or its financial position in the next six months.
Changes in the Board of Directors
President Carl-Johan Granvik and the President's deputy Ari Kaperi resigned from
their positions as of 30 June 2010. The Board elected Ari Kaperi President and
Pekka Nuuttila his deputy as from 1 July 2010. Fredrik Rystedt was elected the
Chairman and Ari Kaperi the Deputy Chairman of the Board on 1 July 2010.
Christian Clausen, Carl-Johan Granvik and Peter Schütze resigned from their
positions as members of the Board as of 30 June 2010 and Ari Kaperi and Gunn
Wærsted were elected members of the Board as from 1 July 2010. Michael Rasmussen
continues as member of the Board until 31 August 2010. Casper von Koskull has
been elected a member of the Board as from 1 September 2010.
Outlook 2010
Nordea expects the macroeconomic recovery to continue in 2010. Although the
global development is still fragile and hence uncertainty remains, the outlook
for the Nordic markets has improved during the year.
Excluding currency effects in 2010, Nordea expects cost growth to be broadly in
line with 2009, including the effects from growth and efficiency initiatives.
Nordea expects risk-adjusted profit to be lower in 2010 compared to 2009, due to
lower income in Treasury and Markets.
Net loan losses in 2010 are expected to be lower than in 2009. Credit quality
continues to stabilise, in line with the macroeconomic recovery. Nordea Bank
Finland is expected to contribute to the above-mentioned development.
Stockholm, 21 July 2010
Board of Directors
Key financial figures
Income statement
Jan-Jun Jan-Jun Change| Full year
|
EURm 2010 2009 %| 2009
----------------------------------------------------------------+-----------
Net interest income 578 633 -9| 1,218
|
Net fee and commission income 145 101 44| 225
|
Net result from items at fair value 526 753 -30| 1,325
|
Equity method 1 1 0| 4
|
Other operating income 14 32 -56| 53
----------------------------------------------------------------+-----------
Total operating income 1,264 1,520 -17| 2,825 |
|
|
Staff costs -267 -300 -11| -599
|
Other expenses -234 -208 13| -432
|
Depreciation of tangible and intangible |
assets -20 -17 18| -37
----------------------------------------------------------------+-----------
Total operating expenses -521 -525 -1| -1,068
|
|
|
Profit before loan losses 743 995 -25| 1,757
|
Net loan losses -167 -160 4| -381
|
Impairment of securities held as |
financial non-current assets - 0 | -
----------------------------------------------------------------+-----------
Operating profit 576 835 -31| 1,376
|
Income tax expense -159 -214 -26| -373
----------------------------------------------------------------+-----------
Net profit for the period 417 621 -33| 1,003
----------------------------------------------------------------+-----------
Business volumes, key items
30 Jun 30 Jun Change 31 Dec Change
EURm 2010 2009 % 2009 %
------------------------------------------------------------------------------
Loans to the public 68,687 67,364 2 65,723 5
Deposits and borrowings from the public 46,487 45,663 2 44,256 5
Equity( ) 10,790 10,596 2 10,972 -2
Total assets 268,527 206,838 30 221,165 21
------------------------------------------------------------------------------
Ratios and key figures
Jan-Jun Jan-Jun Full year
2010 2009 2009
------------------------------------------------------------------------------
Return on equity, % 7.7 11.4 9.0
Cost/income ratio, % 41 35 38
Tier 1 capital ratio[1],( )% 13.3 13.3 14.0
Total capital ratio[1], % 13.9 13.8 14.6
Tier 1 capital[1], EURm( ) 10,103 9,784 10,099
Risk-weighted amounts incl. transition
rules, EURm 76,229 73,402 72,092
Loan loss ratio, basis points 51 47 56
Number of employees (full-time equivalents)[1] 9,232 9,361 9,218
------------------------------------------------------------------------------
[1] End of period
Formulas used
Return on equity, %:
100 x (Operating profit after taxes) / (Shareholders' equity (average for
beginning and end of year))
Cost/income ratio, %:
100 x (Total operating expenses/Total operating income)
Loan loss ratio
Net loan losses (annualised) divided by the opening balance of loans to the
public
Income statement
Jan-Jun Jan-Jun|Full year
|
EURm Note 2010 2009| 2009
----------------------------------------------------------------------+---------
Operating income |
|
Interest income 934 1,669| 2,708
|
Interest expense -356 -1,036| -1 490
|
Net interest income 578 633| 1,218
|
Fee and commission income 318 298| 595
|
Fee and commission expense -173 -197| -370
|
Net fee and commission income 145 101| 225
|
Net result from items at fair value 4 526 753| 1,325
|
Profit from companies accounted for under the |
equity method 1 1| 4
|
Other operating income 14 32| 53
----------------------------------------------------------------------+---------
Total operating income 1,264 1,520| 2,825
|
|
|
Operating expenses |
|
General administrative expenses: |
|
Staff costs -267 -300| -599
|
Other expenses -234 -208| -432
|
Depreciation, amortisation and impairment |
charges of tangible and intangible assets -20 -17| -37
----------------------------------------------------------------------+---------
Total operating expenses -521 -525| -1,068
|
|
|
Profit before loan losses 743 995| 1,757
|
|
|
Net loan losses 6 -167 -160| -381
|
Impairment of securities held as financial |
non-current assets - 0| -
----------------------------------------------------------------------+---------
Operating profit 576 835| 1,376
|
Income tax expense -159 -214| -373
----------------------------------------------------------------------+---------
Net profit for the period 417 621| 1,003
----------------------------------------------------------------------+---------
|
|
Attributable to: |
|
Shareholders of Nordea Bank Finland Plc 415 620| 1,001
|
Non-controlling interests 2 1| 2
----------------------------------------------------------------------+---------
Total 417 621| 1,003
----------------------------------------------------------------------+---------
Statement of comprehensive income
Jan-Jun Jan-Jun|Full year
|
EURm 2010 2009| 2009
----------------------------------------------------------------------+---------
Net profit for the period 417 621| 1,003
|
|
|
Currency translation differences during the period 0 0| 0
|
Available-for-sale investments: |
|
Valuation gains/losses during the period - 0| 0
|
Tax on valuation gains/losses during the period - 0| 0
----------------------------------------------------------------------+---------
Other comprehensive income, net of tax 0 0| 0
|
|
----------------------------------------------------------------------+---------
Total comprehensive income 417 621| 1,002
----------------------------------------------------------------------+---------
|
|
Attributable to: |
|
Shareholders of Nordea Bank Finland Plc 415 620| 1,001
|
Non-controlling interests 2 1| 2
----------------------------------------------------------------------+---------
Total 417 621| 1,003
----------------------------------------------------------------------+---------
Balance sheet
30 Jun 31 Dec 30 Jun
EURm Note 2010 2009 2009
--------------------------------------------------------------------------------
Assets
Cash and balances with central
banks 1,016 8,004 2,951
Treasury bills 1,675 1,033 705
Loans to credit institutions 7 57,978 59,037 48,863
Loans to the public 7 68,687 65,723 67,364
Interest-bearing securities 7,581 7,873 3,679
Financial instruments pledged as
collateral 274 1 -
Shares 1,129 1,052 914
Derivatives 10 120,436 74,520 77,157
Fair value changes of the hedged items in
portfolio hedge
of interest rate risk 149 141 170
Investments in associated
undertakings 56 56 52
Intangible assets 77 69 61
Property and equipment 123 143 122
Investment property 37 7 4
Deferred tax assets 18 17 12
Current tax assets 49 0 126
Retirement benefit assets 95 91 85
Other assets 8,695 3,029 4,152
Prepaid expenses and accrued
income 452 369 421
--------------------------------------------------------------------------------
Total assets 268,527 221,165 206,838
Liabilities
Deposits by credit institutions 46,127 44,344 41,307
Deposits and borrowings from the
public 46,487 44,256 45,663
Debt securities in issue 36,932 39,276 26,910
Derivatives 10 118,996 73,237 76,265
Fair value changes of the hedged items in
portfolio hedge
of interest rate risk 5 7 17
Current tax liabilities 1 129 231
Other liabilities 7,922 7,813 4,466
Accrued expenses and prepaid
income 601 571 833
Deferred tax liabilities 45 44 39
Provisions 84 49 33
Retirement benefit obligations 28 30 28
Subordinated liabilities 509 437 450
--------------------------------------------------------------------------------
Total liabilities 257,737 210,193 196,242
Equity
Non-controlling interests 6 6 8
Share capital 2,319 2,319 2,319
Share premium reserve 599 599 599
Other reserves 2,848 2,848 2,941
Retained earnings 5,018 5,200 4,729
--------------------------------------------------------------------------------
Total equity 10,790 10,972 10,596
--------------------------------------------------------------------------------
Total liabilities and equity 268,527 221,165 206,838
Assets pledged as security for own liabilities 18,718 12,674 10,020
Other assets pledged - - -
Contingent liabilities 17,921 17,084 16,975
Credit commitments[1] 16,971 17,836 16,695
Other commitments 701 626 533
--------------------------------------------------------------------------------
[1] Including unutilised portion of approved overdraft facilities of EUR 9,510m
(31 Dec 2009: 10,517m, 30 Jun 2009: 8,473m).
Statement of changes in equity
Attributable to shareholders of Nordea Bank
Finland Plc
--------------------------------------------------
Other reserves:
------------------
Available
-for Re- Non-
Share Share -sale tained control-
capital premium Other invest- earn- ling Total
EURm [1] reserve reserves ments ings Total interests equity
--------------------------------------------------------------------------------
Opening
balance
at 1 Jan 2010 2,319 599 2,848 0 5,200 10,966 6 10,972
Total
comprehensive
income 415 415 2 417
Share-based
payments 2 2 2
Dividend for
2009 -600 -600 -600
Other changes 1 1 -2 -1
--------------------------------------------------------------------------------
Closing
balance
at 30 Jun 2010 2,319 599 2,848 0 5,018 10,784 6 10,790
--------------------------------------------------------------------------------
Attributable to shareholders of Nordea Bank
Finland Plc
--------------------------------------------------
Other reserves:
------------------
Available
-for Re- Non-
Share Share -sale tained control-
capital premium Other invest- earn- ling Total
EURm [1] reserve reserves ments ings Total interests equity
--------------------------------------------------------------------------------
Opening
balance
at 1 Jan 2009 2,319 599 2,941 0 5,409 11,268 7 11,275
Total
comprehensive
income 0 1,001 1,001 2 1,003
Share-based
payments 1 1 1
Dividend for
2008 -1,301 -1,301 -1,301
Other changes -93 90 -3 -3 -6
--------------------------------------------------------------------------------
Closing
balance
at 31 Dec 2009 2,319 599 2,848 0 5,200 10,966 6 10,972
--------------------------------------------------------------------------------
Attributable to shareholders of Nordea Bank
Finland Plc
--------------------------------------------------
Other reserves:
------------------
Available
-for Re- Non-
Share Share -sale tained control-
capital premium Other invest- earn- ling Total
EURm [1] reserve reserves ments ings Total interests equity
--------------------------------------------------------------------------------
Opening
balance
at 1 Jan 2009 2,319 599 2,941 0 5,409 11,268 7 11,275
Total
comprehensive
income 620 620 1 621
Share-based
payments 1 1 1
Dividend for
2008 -1,300 -1,300 -1,300
Other changes -1 -1 -1
--------------------------------------------------------------------------------
Closing
balance
at 30 Jun 2009 2,319 599 2,941 0 4,729 10,588 8 10,596
--------------------------------------------------------------------------------
[1] Total shares registered were 1,030.8 million (31 Dec 2009: 1,030.8 million,
30 Jun 2009: 1,030.8 million)
Cash flow statement
Jan-Jun Jan-Jun Full year
EURm 2010 2009 2009
--------------------------------------------------------------------------------
Operating activities
Operating profit 576 835 1,376
Adjustments for items not included in
cash flow -298 -465 -834
Income taxes paid -335 -315 -450
--------------------------------------------------------------------------------
Cash flow from operating activities
before
changes in operating assets and
liabilities -57 55 92
Changes in operating assets and
liabilities -8,881 82 14,192
--------------------------------------------------------------------------------
Cash flow from operating activities -8,938 137 14,284
Investing activities
Sale/acquisition of business
operations 2 -1 -2
Property and equipment -25 -19 -49
Intangible assets -14 -5 -18
Net investments in debt securities,
held to maturity 125 -599 -3,960
Other financial fixed assets - -1 -5
--------------------------------------------------------------------------------
Cash flow from investing activities 88 -625 -4,034
Financing activities
Issued/amortised subordinated
liabilities 46 -773 -786
Dividend paid -600 -1,300 -1,300
Other changes 0 - -6
--------------------------------------------------------------------------------
Cash flow from financing activities -554 -2,073 -2,092
--------------------------------------------------------------------------------
Cash flow for the period -9,404 -2,561 8,158
Cash and cash equivalents at beginning
of the period 24,558 16,400 16,400
Exchange rate difference 0 0 0
Cash and cash equivalents at end of
the period 15,154 13,839 24,558
--------------------------------------------------------------------------------
Change -9,404 -2,561 8,158
Cash and cash equivalents 30 Jun 30 Jun 31 Dec
The following items are included in cash and cash
equivalents (EURm): 2010 2009 2009
Cash and balances with central banks 1,016 2,951 8,004
Loans to credit institutions, payable on demand 14,138 10,888 16,554
Cash comprises legal tender and bank notes in foreign currencies. Balances with
central banks consist of deposits in accounts
with central banks and postal giro systems under government authority, where the
following conditions are fulfilled:
- the central bank or the postal giro system is domiciled in the country where
the institution is established
- the balance on the account is readily available at any time.
Loans to credit institutions, payable on demand include liquid assets not
represented by bonds or other interest-bearing securities.
Notes to the financial statements
Note 1 Accounting policies
NBF's consolidated financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS) and interpretations of such
standards by the International Financial Reporting Interpretations Committee
(IFRIC), as endorsed by the EU Commission. In addition, certain rules in the
Finnish Accounting Act, the Finnish Credit Institutions Act, the Financial
Supervisory Authority's regulations and guidelines and the Decree of the
Ministry of Finance on the financial statements and consolidated financial
statements of credit institutions, have also been applied.
These statements have been prepared in accordance with IAS 34 "Interim Financial
Reporting". The interim report is unaudited.
Changed accounting policies and presentation
The accounting policies, basis for calculations and presentation are, in all
material aspects, unchanged in comparison with the 2009 Annual Report, except
for the classification of lending commissions in the income statement further
described below.
Classification of lending commissions
The accounting treatment of lending commissions, including the classification in
the income statement, depends on for which purpose the commission is received.
Commissions that are considered to be an integral part of the effective interest
rate of a loan are included in the calculation of effective interest and
classified as "Net interest income" in the income statement, while commissions
considered to be compensation for performed services are classified as "Net fee
and commission income".
Judgment has to be exercised when deciding on whether or not a commission shall
be included, and to what extent, in the calculation of the effective interest of
a loan. During H1 2010 NBF reassessed this judgment, which has lead to a
reclassification of commissions from "Net fee and commission income" to "Net
interest income". The comparable figures have been restated accordingly and the
impact is, together with the impact on 2010, disclosed in the below table.
Jan-Jun 2010 Jan-Jun 2009 Full year 2009
Pre policy
EURm Restated change Restated Reported Restated Reported
-----------------------------------------------------------------------------
Net interest income 578 564 633 630 1,218 1,202
Net commission income 145 159 101 104 225 241
Note 2 Segment
reporting[1]
--------------------------------------------------------------------------------
Operating segments
-------------------------------------------------------------------
New Shipping,
European Financial Oil Services &
Nordic Banking Markets Institutions International
Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun
EURm 2010 2009 2010 2009 2010 2009 2010 2009
--------------------------------------------------------------------------------
Total
operating
income 716 717 91 87 46 61 51 47
Operating
profit 180 256 -3 7 27 32 43 35
Loans to the
public 48,569 46,607 6,913 7,307 246 0 6,886 7,055
Deposits and
borrowings
from the
public 37,264 34,859 1,728 2,029 820 1,077 6,198 4,483
--------------------------------------------------------------------------------
| |
Other Total | |
Operating Operating | | Total
segments segments |Reconciliation | Group
| |
Jan-Jun Jan-Jun Jan-Jun Jan-Jun|Jan-Jun Jan-Jun|Jan-Jun Jan-Jun
| |
EURm 2010 2009 2010 2009| 2010 2009| 2010 2009
------------------------------------------------+---------------+---------------
Total | |
operating | |
income 374 619 1,278 1,531| -14 -11| 1,264 1,520
| |
Operating | |
profit 240 441 487 771| 89 64| 576 835
| |
Loans to the | |
public 6,289 6,724 68,903 67,693| -216 -329| 68,687 67,364
| |
Deposits and | |
borrowings | |
from the | |
public 55 60 46,065 42,508| 422 3,155| 46,487 45,663
------------------------------------------------+---------------+---------------
[1] Historical information has been restated mainly due to organisational
changes.
Reconciliation between total operating segments and financial statements
Deposits and
Operating Loans borrowings
profit to the public from the public
Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun
EURm 2010 2009 2010 2009 2010 2009
--------------------------------------------------------------------------------
Total Operating segments 487 771 68,903 67,693 46,065 42,508
Group functions[2] 89 64 -216 -329 422 3,155
Differences in accounting
policies - - - - - -
--------------------------------------------------------------------------------
Total 576 835 68,687 67,364 46,487 45,663
--------------------------------------------------------------------------------
[2] Consists of Group Management Secretariat, Group Executive Management, Group
Internal Audit, Group Credit and Risk Control, Group Human Resources and Group
Identity and Communications.
Change in basis of segmentation and measurement of segment profit or loss
Compared with the 2009 Annual Report there have been no changes in the basis of
segmentation and measurement of segment profit or loss.
Reportable Operating segments
Nordic Banking conducts a full service banking operation. It is Nordea's largest
customer area and serves household customers and corporate customers in the
Nordic markets. The branches within Nordea's banking activities in the New
European Markets offer full banking services for local and Nordic corporate and
personal customers in Estonia, Latvia and Lithuania. The Financial Institutions
segment is responsible for Nordea's customers within the financial institution
industry. The segment Shipping, Oil Services & International is responsible for
Nordea's customers within the shipping, offshore and oil services industries.
Note 3 Net fee and commission income
--------------------------------------------------------------------
Jan-Jun Jan-Jun Full year
EURm 2010 2009 2009
--------------------------------------------------------------------
Asset Management commissions 24 14 31
Life insurance 4 6 10
Brokerage 13 13 25
Custody 10 19 35
Deposits 2 2 5
--------------------------------------------------------------------
Total savings related commissions 53 54 106
Payments 86 81 165
Cards 37 29 61
--------------------------------------------------------------------
Total payment commissions 123 110 226
Lending 35 39 74
Guarantees and documentary payments 70 56 117
--------------------------------------------------------------------
Total lending related commissions 105 95 191
Other commission income 37 39 72
--------------------------------------------------------------------
Fee and commission income 318 298 595
Payment expenses -36 -35 -72
Other commission expenses -137 -162 -298
--------------------------------------------------------------------
Fee and commission expenses -173 -197 -370
Net fee and commission income 145 101 225
--------------------------------------------------------------------
Note 4 Net result from items at
fair value
--------------------------------------------------------------------------------
Jan-Jun Jan-Jun Full year
EURm 2010 2009 2009
--------------------------------------------------------------------------------
Shares/participations and other share-related
instruments 30 17 22
Interest-bearing securities and other
interest-related instruments 321 534 929
Other financial
instruments 61 59 131
Foreign exchange
gains/losses 115 143 244
Investment properties -1 0 -1
--------------------------------------------------------------------------------
Total 526 753 1,325
--------------------------------------------------------------------------------
Note 5 General administrative expenses
--------------------------------------------------------------------------
Jan-Jun Jan-Jun Full year
EURm 2010 2009 2009
--------------------------------------------------------------------------
Staff( ) -267 -300 -599
Information technology[1] -74 -75 -146
Marketing -14 -11 -25
Postage, telephone and office expenses -23 -21 -41
Rents, premises and real estate expenses -43 -42 -86
Other -80 -59 -133
--------------------------------------------------------------------------
Total -501 -508 -1,030
--------------------------------------------------------------------------
[1] Refers to IT operations, service expenses and consultant fees. Total
IT-related costs including staff etc, were EUR 103m in the first half of 2010
(EUR 97m in the first half of 2009).
Note 6 Net loan losses
--------------------------------------------------------------------------------
Jan-Jun Jan-Jun Full year
EURm 2010 2009 2009
--------------------------------------------------------------------------------
Loan losses divided by class
Loans to credit institutions - -9 -9
Loans to the public -139 -177 -399
- of which provisions -156 -180 -417
- of which write-offs -71 -25 -104
- of which allowances used for covering write-offs 43 18 39
- of which reversals 30 8 52
- of which recoveries 15 2 31
Off-balance sheet items -28 26 27
--------------------------------------------------------------------------------
Total -167 -160 -381
--------------------------------------------------------------------------------
Key ratios
--------------------------------------------------------------------------------
Jan-Jun Jan-Jun Full year
2010 2009 2009
--------------------------------------------------------------------------------
Loan loss ratio, basis
points[1] 51 47 56
- of which individual 42 35 39
- of which collective 9 12 17
--------------------------------------------------------------------------------
[1] Net loan losses (annualised) divided by opening balance of loans to the
public (lending)
Note 7 Loans and their impairment( )
--------------------------------------------------------------------------------
Total
30 Jun 31 Dec 30 Jun
EURm 2010 2009 2009
--------------------------------------------------------------------------------
Loans, not impaired 125,719 123,723 115,193
Impaired loans 1,794 1,801 1,626
- Performing 939 937 870
- Non-performing 855 864 756
--------------------------------------------------------------------------------
Loans before allowances 127,513 125,524 116,819
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allowances for individually assessed impaired loans -504 -447 -353
- Performing -289 -223 -220
- Non-performing -215 -224 -133
Allowances for collectively assessed impaired loans -344 -316 -239
--------------------------------------------------------------------------------
Allowances -848 -763 -592
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Loans, carrying amount 126,665 124,761 116,227
--------------------------------------------------------------------------------
Note 7, continued
--------------------------------------------------------------------------------
Credit institutions The public
30 Jun 31 Dec 30 Jun 30 Jun 31 Dec 30 Jun
EURm 2010 2009 2009 2010 2009 2009
--------------------------------------------------------------------------------
Loans, not impaired 57,978 59,038 48,863 67,741 64,685 66,330
Impaired loans 25 24 25 1,769 1,776 1,601
- Performing - - 25 939 937 845
- Non-performing 25 24 0 830 839 756
--------------------------------------------------------------------------------
Loans before allowances 58,003 59,062 48,888 69,510 66,461 67,931
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allowances for individually
assessed impaired
loans -25 -25 -25 -479 -422 -328
- Performing - - -25 -289 -223 -195
- Non-performing -25 -25 0 -190 -199 -133
Allowances for collectively
assessed impaired
loans 0 0 0 -344 -316 -239
--------------------------------------------------------------------------------
Allowances -25 -25 -25 -823 -738 -567
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Loans, carrying amount 57,978 59,037 48,863 68,687 65,723 67,364
--------------------------------------------------------------------------------
Allowances and provisions
-------------------------------------------------------------------------------
30 Jun 31 Dec 30 Jun
EURm 2010 2009 2009
-------------------------------------------------------------------------------
Allowances for items in the balance sheet -848 -763 -591
Provisions for off balance sheet items -49 -22 -21
-------------------------------------------------------------------------------
Total allowances and provisions -897 -785 -612
-------------------------------------------------------------------------------
Key ratios
-------------------------------------------------------------------------------
30 Jun 31 Dec 30 Jun
2010 2009 2009
-------------------------------------------------------------------------------
Impairment rate, gross[1], basis points 141 143 139
Impairment rate, net[2], basis points 101 108 109
Total allowance rate[3], basis points 67 61 51
Allowances in relation to impaired loans[4], % 28 25 22
Total allowances in relation to impaired loans[5], % 47 42 36
Non-performing, not impaired[6],( )EURm 58 89 12
-------------------------------------------------------------------------------
[1] Individually assessed impaired loans before allowances divided by total
loans before allowances.
[2] Individually assessed impaired loans after allowances divided by total loans
before allowances.
[3] Total allowances divided by total loans before allowances.
[4] Allowances for individually assessed impaired loans( )divided by
individually assessed impaired loans before allowances.
[5] Total allowances divided by total impaired loans before allowances.
[6] Past due loans, not impaired due to future cash flows (included in Loans,
not impaired).
Note 8 Classification of financial instruments
--------------------------------------------------------------------------------
Derivat-
Loans ives Avail-
and Held Held Fair used able
receiv- to for value for for
EURm ables maturity trading option hedging sale Total
--------------------------------------------------------------------------------
Financial assets
Cash and
balances with
central
banks 1,016 1,016
Treasury bills 1,675 1,675
Loans to credit
institutions 54,642 2,455 881 57,978
Loans to the
public 68,687 68,687
Interest-bearing
securities 6,592 989 7,581
Financial
instruments
pledged as
collateral 274 274
Shares 1,103 26 1,129
Derivatives 120,170 266 120,436
Fair value
changes of the
hedged
items in
portfolio hedge
of interest
rate risk 149 149
Other assets 3,223 5,460 8,683
Prepaid expenses
and accrued
income 258 16 274
--------------------------------------------------------------------------------
Total 30 Jun
2010 128,872 6,592 126,666 6,383 266 0 267,882
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 31 Dec
2009 132,460 6,717 78,909 2,459 57 5 220,607
--------------------------------------------------------------------------------
Total 30 Jun
2009 117,191 3,352 80,502 5,090 56 5 206,196
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Held Fair Derivatives Other
for value used for financial
EURm trading option hedging liabilities Total
--------------------------------------------------------------------------------
Financial
liabilities
Deposits by
credit
institutions 279 45,848 46,127
Deposits and
borrowings from
the public 46,487 46,487
Debt securities
in issue 6,371 30,561 36,932
Derivatives 118,714 282 118,996
Fair value
changes
of the hedged
items in
portfolio
hedge of
interest
rate risk 5 5
Other
liabilities 1 3,880 4,032 7,913
Accrued expenses
and prepaid
income 60 174 234
Subordinated
liabilities 509 509
--------------------------------------------------------------------------------
Total 30 Jun
2010 125,365 3,940 282 127,616 257,203
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 31 Dec
2009 79,027 2,130 372 128,027 209,556
--------------------------------------------------------------------------------
Total 30 Jun
2009 81,793 2,105 401 111,194 195,493
--------------------------------------------------------------------------------
Note 9 Financial instruments
--------------------------------------------------------------------------------
Determination of fair value from quoted market prices or valuation techniques
Valuation
Quoted prices in Valuation technique using
active markets for technique using non-observable
same instrument observable data data
EURm (Level 1) (Level 2) (Level 3) Total
--------------------------------------------------------------------------------
Assets 2,697 127,373 3,245 133,315
Loans to credit
institutions 3,336 3,336
Loans to the public
Debt securities[1] 2,453 485 2,938
Shares 118 1,011 1,129
Derivatives 126 118,076 2,234 120,436
Other assets 5,460 5,460
Prepaid expenses and
accrued income 16 16
--------------------------------------------------------------------------------
Liabilities 102 127,345 2,140 129,587
Deposits by credit
institutions 279 279
Deposits and
borrowings from the
public
Debt securities in
issue 6,371 6,371
Derivatives 101 116,755 2,140 118,996
Other liabilities 1 3,880 3,881
Accrued expenses and
prepaid income 60 60
--------------------------------------------------------------------------------
[1] Of which EUR 1,675m Treasury bills and EUR 989m Interest-bearing securities
(the portion held at fair value in Note 8). EUR 274m relates to the balance
sheet item Financial instruments pledged as collateral.
Note 10 Derivatives
--------------------------------------------------------------------------------
Fair value 30 Jun 2010 31 Dec 2009 30 Jun 2009
EURm Assets Liabilities Assets Liabilities Assets Liabilities
--------------------------------------------------------------------------------
Derivatives held for
trading
Interest rate
derivatives 99,534 98,155 60,718 59,357 57,864 57,080
Equity derivatives 874 1,058 859 1,047 839 845
Foreign exchange
derivatives 17,453 17,358 10,701 10,410 14,540 14,170
Credit derivatives 1,386 1,286 1,354 1,294 2,915 2,896
Other derivatives 923 857 831 757 943 873
--------------------------------------------------------------------------------
Total 120,170 118,714 74,463 72,865 77,101 75,864
--------------------------------------------------------------------------------
Derivatives used for
hedging
Interest rate
derivatives 75 176 44 174 50 190
Equity derivatives - - - - - -
Foreign exchange
derivatives 191 106 13 198 6 211
--------------------------------------------------------------------------------
Total 266 282 57 372 56 401
--------------------------------------------------------------------------------
Total fair value
Interest rate
derivatives 99,609 98,331 60,762 59,531 57,914 57,270
Equity derivatives 874 1,058 859 1,047 839 845
Foreign exchange
derivatives 17,644 17,464 10,714 10,608 14,546 14,381
Credit derivatives 1,386 1,286 1,354 1,294 2,915 2,896
Other derivatives 923 857 831 757 943 873
--------------------------------------------------------------------------------
Total 120,436 118,996 74,520 73,237 77,157 76,265
--------------------------------------------------------------------------------
Nominal amount 30 Jun 31 Dec 30 Jun
EURm 2010 2009 2009
----------------------------------------------------------
Derivatives held for trading
Interest rate derivatives 4,212,375 3,652,199 3,425,662
Equity derivatives 17,468 17,823 17,177
Foreign exchange derivatives 902,656 747,053 732,143
Credit derivatives 69,660 83,768 105,821
Other derivatives 14,080 11,194 11,931
----------------------------------------------------------
Total 5,216,239 4,512,037 4,292,734
----------------------------------------------------------
Derivatives used for hedging
Interest rate derivatives 12,684 11,191 10,095
Equity derivatives - - -
Foreign exchange derivatives 1,652 2,338 11,632
----------------------------------------------------------
Total 14,336 13,529 21,727
----------------------------------------------------------
Total nominal amount
Interest rate derivatives 4,225,059 3,663,390 3,435,757
Equity derivatives 17,468 17,823 17,177
Foreign exchange derivatives 904,308 749,391 743,775
Credit derivatives 69,660 83,768 105,821
Other derivatives 14,080 11,194 11,931
----------------------------------------------------------
Total 5,230,575 4,525,566 4,314,461
----------------------------------------------------------
Note 11 Capital adequacy
-----------------------------------------------
Capital Base 30 Jun 31 Dec 30 Jun
EURm 2010[1] 2009 2009[1]
-----------------------------------------------
Tier 1 capital 10,103 10,099 9,784
Total capital base 10,585 10,548 10,140
-----------------------------------------------
[1] Excluding profit
Capital requirement 30 Jun 30 Jun 31 Dec 31 Dec 30 Jun 30 Jun
2010 2010 2009 2009 2009 2009
Capital Capital Capital
EURm requirement RWA requirement RWA requirement RWA
--------------------------------------------------------------------------------
Credit risk 5,354 66,929 5,163 64,540 5,231 65,382
IRB 2,737 34,213 2,590 32,375 2,636 32,947
- of which corporate 1,872 23,401 1,707 21,337 1,848 23,101
- of which
institutions 489 6,111 517 6,460 473 5,915
- of which retail 351 4,386 344 4,301 307 3,840
of which
residential real
estate 171 2,133 174 2,176 137 1,707
of which other 180 2,253 170 2,125 171 2,133
- of which other 25 315 22 277 7 91
Standardised 2,617 32,716 2,573 32,165 2,595 32,435
- of which sovereign 24 300 41 515 15 184
- of which retail 392 4,900 388 4,847 398 4,969
of which
residential real
estate 11 144 11 144 11 143
of which
qaulifying revolving - - - - - -
of which other 380 4,756 377 4,703 386 4,826
- of which other 2,201 27,517 2,144 26,803 2,183 27,282
Market risk 323 4,042 236 2,946 273 3,414
- of which trading
book, VaR 179 2,241 103 1,287 189 2,357
- of which trading
book, non-VaR 144 1,801 133 1,659 85 1,057
- of which FX,
non-VaR 0 0 0 0 0 0
Operational risk 421 5,258 368 4,606 368 4,606
Standardised 421 5,258 368 4,606 368 4,606
--------------------------------------------------------------------------------
Sub total 6,098 76,229 5,767 72,092 5,872 73,402
Adjustment for
transition rules
Additional capital
requirement according
to
transition rules - - - - - -
--------------------------------------------------------------------------------
Total 6,098 76,229 5,767 72,092 5,872 73,402
Capital ratio 30 Jun 31 Dec 30 Jun
2010[1] 2009 2009[1]
--------------------------------------------------------------------------------
Tier I ratio, % 13.3 14.0 13.3
Capital ratio, % 13.9 14.6 13.8
--------------------------------------------------------------------------------
[1] Excluding profit
Analysis of capital requirements
----------------------------------------------------------------------------
Average risk weight Capital requirement
Exposure class, 30 Jun 2010 (%) (EURm)
----------------------------------------------------------------------------
Corporate 59 1,872
Institutions 23 489
Retail IRB 14 351
Retail SA 76 392
Sovereign 2 24
Other 38 2,227
----------------------------------------------------------------------------
Total credit risk 35 5,354
----------------------------------------------------------------------------
[HUG#1433154]
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