Sampo Group

Annual Report 2011
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Nordea

Despite one of Europe’s most dramatic and problematic times in the history of the euro, Nordea’s development during 2011 was once again robust and the solid business momentum was maintained. A continued increase in the number of household and corporate customers, and more business with each customer, led to increased business volumes.

Nordea will continue with a more focused relationship strategy and strive for great customer experiences, to deepen its relationship with each customer. In each phase of the financial crisis, Nordea has proactively adjusted the direction to ensure our ability to reach increasing customer satisfaction, continuous income increase and stable profitability despite the crisis.

The response to the global financial and sovereign debt crises from regulators, the business community and most banks has been to take action to prevent it from happening again. The banks must take on an important role in the future economic structure, with an emphasised role as buffer for future disturbances and bubbles in the economy. New regulatory requirements on capital, liquidity and funding are the key elements in ensuring that role. But they also imply a cost. The impact on the cost of operating banks will grow further, which will be reflected in business models and other changes in the global banking market for years to come.

Nordea’s adaptation to this “new normal” environment progresses according to plan. The capitalisation has been increased, funding been prolonged and liquidity been increased to sustainable levels. The capital efficiency is increased and a largely flat cost development will be ensured. The processes to reduce the number of employees progresses according to plan. In parallel, Nordea continues to develop the relationship and advice concept for both household and corporate customers.

All measures taken in this phase of Nordea’s relationship strategy have only one purpose: to ensure long-term great customer experiences also under the new requirements. By taking swift action to increase efficiency, Nordea aims at ensuring its capacity to continue increase business volumes and income. Nordea has also decided to replace its previous financial targets with one, reflecting our ambition to stay in the top league of European banks: to reach a return on equity of 15% in a normalised macroeconomic environment.

In November, Standard & Poor’s affirmed Nordea’s AA-rating with a stable outlook, stating that the bank has a strong business position with adequate capital and earnings. Few banks in Europe have as high a rating as Nordea, and it reflects that Nordea’s repayment ability is perceived to be very good. Standard & Poor’s also states that the funding and liquidity profile is seen as adequate and that Nordea is less vulnerable to market turbulence than other banks due to its well-diversified business model.

Another proof of the financial markets’ strong confidence in Nordea was the announcement stating that Nordea, as the only Nordic bank, is one of the 29 most important banks for the global economy. The definition was conceived by The Financial Stability Board, a regulatory unit within the G20 group. Hence Nordea became a so-called Global SIB (Systemically Important Bank). This is a further sign of Nordea now being perceived as a truly global player.

Nordea will safeguard a continued high rating and thus strong liquidity and funding position, since it is vital to ensure the right products and services at the right price to each customer.

Nordea’s vision is to be a Great European bank, acknowledged for its people, creating superior value for customers and shareholders. Nordea has around 11 million customers, approx. 1,400 branch offices and is among the largest universal banks in Europe in terms of total market capitalisation. The Nordea share is listed on the NASDAQ OMX Nordic Exchange in Stockholm, Helsinki and Copenhagen.

Nordea Annual Report 2011

P&C Insurance
Life Insurance