Group CEO Frank Vang-Jensen at our AGM 2024

Summary

In 2023, despite geopolitical tensions and economic challenges, NOA achieved strong financial results, becoming one of Europe's most profitable banks. The bank maintained a close relationship with customers, adapted to changing needs, and focused on digital growth, resulting in increased customer satisfaction and business volumes. NOA also prioritized sustainability, facilitating sustainable financing and aiming for a net-zero emission status by 2050. The bank's strategic acquisitions and investments in risk management and technology have positioned it well for the future.

Takeaways

• 🌐 Geopolitical tensions and conflicts, such as the war in Ukraine and situations in the Middle East, highlighted the fragile state of the world in 2023.
• 📉 The economic environment in 2023 was challenging, with rising prices leading to higher interest rates, affecting individuals and corporations globally.
• 💼 Nordic households and businesses responded to the economic climate by reducing consumption and investment, but the region showed resilience.
• 🏦 NOA had a successful year, remaining one of the most profitable banks in Europe and demonstrating adaptability and strength in the face of adversity.
• 📈 NOA's return on equity was 16.9%, surpassing the outlook of above 15%, and the full-year operating profit increased by 18% to 6.3 billion EUR.
• 📈 Customer satisfaction scores improved, business volumes grew, and NOA strengthened its position in the Nordic markets.
• 🎯 NOA's strategy focuses on delivering best-in-class customer experiences, driving profitable growth, and increasing operational and capital efficiency.
• 🔄 NOA pursued selective acquisitions, such as the purchase of Dana Bank's Norwegian personal customer and private banking business, to complement organic growth.
• 💡 Investments were made in risk management, financial crime prevention, and technology to ensure NOA's future readiness and digital leadership.
• 🌱 Sustainability is a core focus for NOA, with 135 billion EUR in sustainable financing facilitated and a commitment to becoming a net-zero emission bank by 2050.
• 📊 All four business areas of NOA grew income faster than costs, and the board proposed a dividend of 92 EUR per share, reflecting confidence in the bank's high profitability.

Q & A

What were some of the challenges faced in 2023 according to the transcript?

The challenges faced in 2023 included high geopolitical tensions due to Russia's continued war in Ukraine, a difficult situation in the Middle East, a tough economic environment with rising prices leading to higher interest rates, and reduced consumption and investment in the Nordic region.

How did NOA perform financially in 2023?

NOA had a strong year in 2023, becoming one of the most profitable banks in Europe. They achieved a return on equity of 16.9%, exceeding their outlook of above 15%, and a full-year operating profit increase of 18% to 6.3 billion EUR.

What is NOA's strategy for supporting customers through different economic cycles?

NOA aims to stay close to its customers, understanding their changing circumstances and needs. They maintain a proactive approach to keep good business momentum and deliver strong financial results, supporting their customers through all economic cycles.

What type of acquisitions has NOA been involved in?

NOA has been involved in selective bolt-on acquisitions that fit their plans, with an example being the purchase of Dana bank's Norwegian personal customer and private banking business, which was announced in the summer and expected to close in the fourth quarter of 2024.

How has NOA invested in risk management and technology?

NOA has made important long-term investments in risk management, financial crime prevention, and strengthening their technology and digital capabilities to ensure they are well positioned for the future and to bolster their ability to be the preferred partner for their customers.

What was the impact of NOA's digital services on customer activity in 2023?

Customer activity was high in 2023, with a record high use of NOA's digital services. Customer logins to mobile and online banking services increased by 133% year on year to 1.4 billion logins.

How does NOA approach sustainability and its role in the transition to a low carbon economy?

Sustainability is a key focus for NOA, and they play an important role in supporting the transition to a low carbon economy by facilitating sustainable financing and helping customers with their own transitions. They have committed to reducing emissions across their lending and investment portfolios by 40 to 50% by 2030 and becoming a net zero emission bank by 2050.

What were NOA's achievements in sustainable financing over the past years?

Over the past years, NOA has facilitated 135 billion EUR in sustainable financing, including 77 billion in 2023, and they are on track to meet their 2025 target of 200 billion euros.

How did NOA perform in terms of business area growth and income in 2023?

All four of NOA's business areas grew income faster than cost and delivered solid returns in 2023. Group income increased by 14% to 11.7 billion EUR, and corporate lending grew by 1% year on year.

What is NOA's credit quality and risk position like?

NOA's risk position and credit quality remain strong, supported by a well-diversified pan-Nordic credit portfolio and prudent credit policies. At the end of 2023, their Common Equity Tier 1 ratio was 17.7%, which is 4.9% above the current regulatory requirements.

What is NOA's dividend proposal for 2023?

For 2023, NOA's board of directors has proposed a dividend of 92 EUR C per share, which represents a year-on-year increase of 15%. The total distribution for shareholders, including share buybacks during the past year, will amount to approximately 27 EUR per share.

What is NOA's long-term financial target?

NOA has updated their financial target, aiming for a return on equity of above 15% for 2025, up from their previous target of above 13%. This confidence is grounded in the progress they have made in recent years, focusing on improving customer experience and driving profitable growth.