Nordea Group financial performance in 2011

New Normal demonstrates strong performance

Christian Clausen, Nordea Group CEO, says:

"Our customer relationship strategy and implementation of the New Normal plan have contributed to greater cost effectiveness and improved capital adequacy, liquidity and funding position indicators. At the same time we have sustained remarkable income growth and profit stability.

In the fourth quarter of 2011, as well as throughout the last year, we achieved record-setting performance indicators in terms of customer attraction and total income. Cost growth has declined, and the total expense level in the last quarter of 2011 remained the same as the previous level.

Great customer experience is still the core value underlying our customer relationship strategy and forming the basis of prominent financial performance. Our goal is to minimise the impact of the new regulations and keep developing new products and services."

Fourth Quarter of 2011 vs. third Quarter of 2011 performance (full-year 2011 vs. 2010):

• Total income growth by 22 % (2 % increase)
• Operating profit growth by 40 % (2 % increase)
• Expense / income ratio - 49 % (55 %)
• Net loan losses up from 14 to 33 basis points (down to 23 basis points vs. 31 basis points last year)
• Return on equity (ROE) increased from 8.5 %* in the third quarter to 12.3 % (down to 11.1 % from 11.5 % in 2010)
• The first tier share capital ratio increased from 10.3 % to 11.2 % during the year, excluding transition terms

* Excluding 171 mln. restructuring provisions in the third quarter

 
Nordea Latvian branch financial performance in 2011

Nordea Latvian branch profit before provisions for bad loans has grown by 19 %

• Total income in 2011 - LVL 52.0 million (LVL 46.8 mln. in 2010), 11 % increase
• Total expense - LVL 20.3 million (LVL 20.1 mln.), 1 % increase
• Operating profit before provisions for bad loans - LVL 31.7 million (LVL 26.7 mln.), 19 % increase
• Provisions for bad loans - LVL 20.5 million (LVL 35. 4 mln.), 42 % decrease
• Profit after taxes - LVL 10.4 million (LVL -12.1 mln.)*
• New corporate loans issued in 2011 - LV 168 million (LVL 107.9 mln.), 56 % increase
• New mortgage loans issued in 2011 - LVL 42.1 million (LVL 57.5 mln.), 27 % decrease
• Deposits attracted - LVL 643.9 million (LVL 482.7 million), 33 % increase

*Nordea Bank Finland Latvian branch does not have equity, therefore, the profit after taxes may not be directly comparable to the respective figure of other Latvian commercial banks.

Janis Buks, the head of Nordea Latvian branch, says: "I take pride in Nordea bank being able to continue the strengthening of the relationship with its customers. Nordea has also been successful in managing its key business risks under extremely uncertain market circumstances. This is certified by the persuasive financial performance indicators of the branch - the total (operating) income of the branch has increased by 11 %, and its operating profit has reached 31.7 million Lats representing a 19 % increase compared to the previous year. Furthermore, we have issued new loans to private and corporate customers totalling 210 million lats. A particular source of joy is a substantial increase - up by one third or 33 % - in the amount of deposits attracted. It suggests that during troubled market conditions customers have yet again appreciated the stability and security guarantees offered by Nordea Bank Plc Latvia Branch.