Nordea will today present its updated business plan, strategic priorities and financial target at its virtual Capital Markets Day. New business area targets and sustainability targets for 2025 will also be introduced during the event.
The live webcast starts at 12.00 EET (11.00 CET).
The Capital Markets Day will feature presentations by President and Group CEO Frank Vang-Jensen, Group CFO Ian Smith and the heads of Nordea’s four business areas.
“This next chapter in Nordea’s development is about delivering best-in-class omnichannel customer experiences, raising the bar on our financial performance and driving further value creation for customers, shareholders and broader society. We will deliver all this in a sustainable way – and develop the bank for the future,” says President and Group CEO Frank Vang-Jensen.
Nordea’s priorities for the strategy period are:
- to create the best omnichannel customer experience
- to drive focused and profitable growth
- to increase operational and capital efficiency.
Nordea will deliver great omnichannel customer experiences, both digitally and in person, with a firm focus on expert advice and customer support. Investments will focus on organic growth and on the bank’s key capabilities in areas such as digitalisation, data and sales and service capabilities. Nordea will continue to optimise its business portfolio and manage its capital base efficiently to pursue capital excellence.
“By delivering on these priorities we aim to fulfil our vision – to be the preferred partner for customers in need of a broad range of financial services. Our direction as a bank is not going to change. We act today to create value for the future – for all our stakeholders,” states Vang-Jensen.
Capital excellence
Nordea’s capital position is among the best in Europe with a CET1 ratio of 17.0%. The bank’s capital generation has also been strong, amounting to 12% annually since 2011. As a result, since 2019 Nordea has been able to pay/propose a total of EUR 8.7bn in dividends to shareholders and announce EUR 3.0bn in share buy-backs.
“Capital returns benefit both our shareholders and society in general, and they give a clear boost to the Nordic economies. Here, our footprint is quite significant. We have more than 500,000 private shareholders across the Nordic countries and many pension fund investors representing even more private individuals,” Vang-Jensen says.
Supported by its improved financial performance and capital excellence, during 2022–25 Nordea plans to maintain its strong capital generation. This will enable growth in business volumes, potential bolt-on acquisitions and significant shareholder distributions.
2025 financial target and key levers
Nordea’s financial target is a return on equity above 13% by the end of 2025. This will be supported by a cost-to-income ratio of 45–47%. For 2022, Nordea expects a return on equity above 11% and a cost-to-income ratio of 49–50%.
“Our financial target for 2025 is clear – and we are committed to delivering. We also have two key levers supporting our strategy across the bank: being a digital leader among our peers and integrating sustainability into the core of our business,” explains Vang-Jensen.
Nordea’s digital engagements have increased by close to 40% over the last two years and this has led to a significant increase in digital business activity.
Vang-Jensen continues: “Now we will invest further in digital leadership. Our 2025 target is to have at least 25%* more digitally active customers. We are creating full self-service functionalities for all daily banking needs and plan to double the number of available products and services by 2025. We are also extending our digital offering for corporate customers.”
2025 sustainability targets
The transition to a climate-neutral economy requires strong commitment and actions throughout society. At Nordea, sustainability is integrated into all aspects of the business, including product offerings, advisory sessions, investment and financing decisions, and risk management.
As announced earlier, Nordea has committed to becoming a bank with net-zero emissions by 2050, and has set a medium-term objective to reduce carbon emissions across its lending and investment portfolios by 40–50% by 2030.
“Sustainability is at the core of our strategy. We have an important responsibility to support our customers and broader society in the transition towards net zero. Sustainability is an integrated part of our value proposition to customers, how we run the bank, organise our internal operations and manage our risks,” Vang-Jensen explains.
The bank’s new 2025 sustainability targets are to:
- facilitate more than EUR 200bn in sustainable financing
- double the share of net-zero-committed assets under management
- ensure that 90% of the exposure to large corporate customers in climate-vulnerable sectors is covered by transition plans
- ensure that 80% of the top 200 emitters in Nordea Asset Management’s portfolios are either aligned with the Paris Agreement or else are subject to active engagement to become aligned
- ensure that each gender has at least 40% representation at the top three leadership levels combined.
“We are taking decisive actions and continuing our step-by-step transition approach. Over the coming years, we will capture sustainable growth opportunities while ensuring that we grow our business in a way that is consistent with our targets,” says Vang-Jensen.
Nordea has also linked sustainability goals to the remuneration of the Group Leadership Team and other senior leaders. The goals are based on targets relating to green financing, sustainability implementation and gender balance.
Key financial information for analysts and investors
At the Capital Markets Day Nordea will present detailed information underpinning the Nordea Group’s 2025 financial target, including:
- ~4% lending volume growth (compound annual growth rate/CAGR 2021–25), with market share gains and a clear focus on profitable growth
- 4–6% savings asset growth (CAGR 2021–25), supported by an enhanced digital offering and market-leading asset management capabilities
- 1–2% total cost increase (CAGR 2021-25), reflecting business growth, cost inflation and investments, partly offset by continual operational efficiency improvements and structural cost reductions
- income growth approximately 2 percentage points higher than cost growth (CAGR 2021-25).
All business areas will contribute towards meeting the Group’s 2025 financial target:
- Personal Banking is targeting a return on capital at risk (ROCAR) of ~18% and a cost-to-income ratio (C/I) of ~45%
- Business Banking a ROCAR of ~16% and a C/I of ~40%
- Large Corporates & Institutions a ROCAR of ~16% and a C/I of ~40%
- Asset & Wealth Management a ROCAR of ~38% and a C/I of ~40%.
Webcast and additional materials
The live Capital Markets Day webcast can be followed at nordea.com/cmd. Presentations will be published on the same site in the course of the day and a recording of the webcast will be available after the event.
More information about the 2025 sustainability targets is available at https://www.nordea.com/en/sustainability/our-sustainability-targets
*Updated figure, previously 20%
For further information:
Ulrika Romantschuk, Head of Group Brand, Communication and Marketing, +358 10 416 8023
Matti Ahokas, Head of Investor Relations, +358 9 5300 8011
Disclaimer and forward-looking statements
Nordea and its businesses are exposed to various risks and uncertainties. This release and the other Capital Markets Day 2022 (CMD22) materials contain certain statements which are not historical facts, including, without limitation, statements communicating expectations regarding, among other things, the results of operations, the bank’s financial condition, liquidity, prospects, growth and strategies; and statements preceded by “believes”, “expects”, “anticipates”, “foresees” or similar expressions. Such statements are forward-looking statements that reflect management’s current views and best assumptions with respect to certain future events and potential financial performance. Although Nordea believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors. Important factors that may cause such a difference for Nordea include but are not limited to: (i) the macroeconomic development, (ii) change in the competitive environment, (iii) change in the regulatory environment and other government actions and (iv) change in interest rate and foreign exchange rate levels. This release and the other CMD22 materials do not imply that Nordea and its directors have undertaken to publicly update or revise these forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that lead to changes compared with the date when these statements were provided.
Nordea is a leading Nordic universal bank. We help our customers realise their dreams and aspirations – and have so for 200 years. We want to make a real difference for our customers and the communities in which we operate – by being a strong and personal financial partner. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us at nordea.com.