Nordea Bank Abp (NDAFI) Earnings Call Transcript & Summary

Dear Nordea shareholders and everyone joining us today, welcome to Nordea's 2024 Annual General Meeting. My name is Thomas Force, and I will be the moderator of this event. Our meeting here in Helsinki can also be followed online in a live webcast. The meeting will be conducted mainly in Swedish and partially in Finnish and in English. We have simultaneous translation available to all 3 languages. Here in the audience, you can choose your preferred language on your translation receiver. In the webcast, you can do the same from the language menu. During today's Q&A session, the floor will be open for shareholder questions here in Helsinki. In the webcast, you can also post questions by using the chat function. We will take as many questions as possible from the webcast during the Q&A. All questions here in the audience as well as online can be in Finnish, Swedish and in English. Thank you for joining us today. Now I have the pleasure to give the floor to the Chair of the Board, sir Stephen Hester.

Good morning. We're actually nearly good afternoon. Dear shareholders, can I add my welcome to you all to Nordea's Annual General Meeting. And we are, of course, privileged to have shareholders right across Finland and the Nordic countries and further afield with many following today's AGM online. And once again, a warm welcome to all of you in the room and online. This is my second AGM as Chair of Nordea's Board of Directors. And I'm pleased to say that the positive view I held of Nordea and its people the first time around has been reaffirmed over the past 12 months. Last year, 2023 was another year in which Nordea proved itself to be strong, profitable and predictable. Even if the market conditions and economic environment were anything but. Recent years have, of course, as we all know, presented many challenges to our public health, to our economies, our security. And of course, we have all witnessed the distressing situation that has unfolded in the Middle East and not to mention the continuing and immense suffering that Russia has inflicted on the people of Ukraine. And the macroeconomic picture also continues to be one of considerable uncertainty following a period of persistent inflation and a rate hike cycle. Unlike anything in recent years, these have all tested us and our societies. Economic growth has remained weak, largely due to subdued consumer confidence and reduced spending in the face of these pressures. Yet nevertheless, Nordic labor markets have shown strong resilience with the region continuing to experience relatively low unemployment. And as we all know, the Nordic region is home to a reliable and profitable banking sector, 1 which is well equipped to weather downturns and financial market disturbances. And we saw another demonstration of this resilience last spring following the failure of certain banks in the United States and Switzerland. The turbulence turned out to be a little more than a footnote here in the Nordic region. Nordea is well equipped to navigate turbulence. We have a stable, strong and resilient business model and a diversified loan portfolio spread across the Nordic regions. The formula delivered again in 2023 with strong income development and high profitability combined with strong credit quality and capital generation. And with this position, Nordea has continued to invest significantly in future growth, including building one of the best digital offerings in the industry. Crucially, we are also making good progress in our ambition to be a leader in sustainability, working closely with customers to drive sustainable change in the real economy. And in these uncertain times, the risk is that the world loses sight of the critical importance of driving climate action. However, the challenges we face should motivate improvement rather than a retreat from commitments. And that is certainly Nordea's view. And you can expect our group to continue to work hard to deliver on our ambitious sustainability targets. And very important here is our size and scale because with size and scale comes greater impact, be it through our lending, our investments or our internal operations. And for example, last year, Nordea Bank was the Nordic region's largest facilitator of sustainable financing and the largest provider of Nordic corporate sustainable bonds. We are always looking to strengthen our practices and our reporting. And to this end, we continue to have a good dialogue with various shareholders and stakeholders, and we work to ensure that our actions are both in line with regulatory requirements and giving the group the best opportunity to encourage a more impactful transition for customers and society. We appreciate our recent dialogue with academic pension regarding further reporting of climate relating risks and continue to develop our reporting and engagement strategy. And we have also engaged in good dialogue with Greenpeace and other NGOs, who are putting forward a shareholder proposal today in relation to our articles of association, and we welcome them to the room. We share the strong sentiment on climate change and agree with the importance of reducing emissions and mitigating negative climate and nature effects. However, we cannot recommend the adoption of the proposed amendment as among other things, the first curtailing of customer relationships, we believe would negatively impact our ability to serve our customers and Nordic society as a whole and limit our ability to encourage an impactful climate transition for our customers and society. Nordea's financial results last year made us one of the strongest bank performers in Europe. The good progress is positive news, we believe, for all stakeholders. As a strong business, we have a great capacity to support customers, which is our job. We also present an attractive place for our 30,000 employees to grow and to develop. And for shareholders, of course, we are and we'll try to continue to provide attractive returns. Over the last 4 years, Nordea has steadily increased its dividend per share with high payout ratios in line with our policy and the best in the Nordic region. And today, the AGM is asked to authorize the Board to decide on a dividend payment of EUR 0.92 per share, in line with our policy. The dividend underscores Nordea's position as a leading bank for shareholder returns. And of course, behind the strong business performance stand Nordea's employees led by Frank and his exceptional leadership team. And I would like to extend my warm thanks, but those also of the whole Board, and I hope of all shareholders to our Nordea team for their great work and to commend them on the achievements in 2023 and, of course, to encourage even better achievements in the coming years. At Nordea, we are striving to build a financial services group, not only for today, but for the next generation. We're very happy with Nordea's performance and trajectory. But still, we have no intention of slowing down. We believe we have the right strategy, an exceptional leadership team and ambition. We want to be the best in Europe, the best for customers and the best for shareholders and the best for society around us, a goal that is both ambitious and we hope realistic. Dear shareholders, today, we also have 2 members leaving the Board. Baria Stein has served on the Board since 2015, and I would like to thank him for all his contributions over the past decade to our bank. And Hans Christian Rise has served as an employee-elected member on the Board for the past 11 years, and I wish to thank also him for his dedicated work on the Board. The Shareholders' Nomination Board is proposing a new member to the Board, Lars Roder, whom I would like to welcome to the meeting. And he will introduce himself later on, as well as the employee-elected new deputy member of the Board, Jurgen Solundquist. For my part, I'm strongly committed to this bank to serving and fulfilling my duties as Chair, and I'm standing for reelection. Now before handing over to the chair of the meeting, I would like to just present my Board colleagues to you together with the proposed Board member, and they will each bob up and down so you can see who they are as we go through. So first, [indiscernible] Myrtle, known to many of you, I'm sure; Lena Scholar; Barry Stein; Per Strawberry; Eunice Sinagra; Aria Thelma; Chesty Wicklandand; and of course, our proposed new Board member, Lars Roder. And may I also present the employee-elected Board members, Johanna Koskinen, Gerhard Olsen, Hans Christian Reese, Casper Skovgaard Peterson and the new deputy member, Jorgen Sunquest. And of course, on the podium, as hopefully you all know, we have our excellent President and Chief Executive Officer, Frank Vang-Jensen. So once again, welcome to the AGM, now officially declared open. I propose that Logman-Yon-Alto acts as the Chair of the AGM, if that is to everyone's satisfaction. Terrific. Over to you, Johan. Thank you.

Thank you, Stephen. Yes, I would like to thank you for your trust. And I would like to state that Andre Canion will act as the Secretary of this meeting. The company has published an organizational document concerning the procedures followed at Items 1 through 5 of the Annual General Meeting. The document was attached to the Notice of the Meeting and is part of the meeting materials. I will not go through the instructions in the document, but they will be complemented if the relevant information was not available before the meeting. I would like to point out that shareholders have the right to speak in all of these items. Possible voting will be conducted electronically with the help of smartphones through the intros voting site and with voting slips, if necessary. Detailed instructions will be given before voting begins. So we will be following this agenda and complemented, if necessary. Let's move on to item #3, election of persons to scrutinize the minutes and to supervise the counting of votes. I assume it is acceptable that Miomocula will scrutinize the minutes and Robert Gordian BetnoskoHonbar will supervise the counting of votes. Are they present? Yes. That's adopted. Item #4, recording the legality of the meeting. My understanding is that the meeting has been convened according to the requirements of the law and the Articles of Association. So we have quorum and that's been legally convened. But do you have any comments on this? And if not, this will be stated to the minutes. And Item #5, recording the attendance at the meeting and adoption of the list of votes. And we can state that as the meeting started, there were 3,500 shareholders represented at the meeting, and this is 56.4% of all the shares and votes in Nordea. So as I said, 56.4% of all the shares and votes in Nordea. So the list of votes is adopted. That list will be attached to the minutes. So we have approximately 300 people here present at the meeting. And we can also state that all Board members are present, as is the new Board candidate. And we have the Group CEO, the company auditor, top management and other staff, who are also present at the meeting. Shareholders had an opportunity to vote in advance on item 7 to 24 of the agenda. The results of the prevotes, including voting instructions received from shareholders prior to the meeting, will be shown on the screens in the meeting room before making a decision in each agenda item. So we will be showing the prevotes before discussion on the agenda item in question begins. And on the basis of the prevotes and the voting instructions received, a majority required by the Limited Liability Companies Act supports the proposals made to the AGM by the Board and the Shareholders' Nomination Board majority required by the Limited Liability Companies Act has not supported the proposal made by shareholders in agenda item 24. Moving on to Item #6, presentation of the annual accounts, the report of the Board of Directors and the auditors report. And here, I suggest that I will first give the floor to the President and Group CEO, Mr. Frank Vang-Jensen, and then we will go through the auditor's report. And then I will open the floor to questions. And I would also like to point out that only the questions put forth by shareholders or the representatives in this room constitute questions according to Chapter 5, Section 25 of the Finnish Companies Act. We will try to go through as many of the questions sent in advance and through the webcast as we can. Mr. President, over to you.

Dear shareholders, good afternoon. Looking back on 2023, it was a challenging year in many ways. Geopolitical tensions remained high as Russia continue its tragic war in Ukraine. We also witnessed a difficult and very sad situation in Middle East, which further reminds us about the fragile nature of the world around us. The economic environment was tough for many individuals and corporates. Rising prices, forced central banks to raise interest rates to the highest levels in 15 years. Nordic households and businesses consequently became more careful. This led to reduced consumption and investment. However, in general, the region adjusted well in the changing environment and showed considerable resilience. Despite the challenging conditions, Nordea had a strong year with our results making us one of the most profitable banks in Europe. Throughout our 200-year history, we have always aimed to be the safe -- to be a safe and strong bank, supporting our customers in all economic cycles. 2023 was no different. We stay close to our customers, making sure we understand the change in circumstances and needs. Our proactive approach help us to maintain good business momentum and deliver strong financial results. Return on equity was 16.9%, clearly exceeding our outlook of above 15%. Full year operating profit was up 18% at EUR 6.3 billion. Beyond the numbers, I was pleased to see us progress on several fronts. Our customer satisfaction scores improved. Our business volumes grew, and we strengthened our position in our 4 Nordic markets. Our performance shows that our strategy is continuing to work well for us. Even in testing circumstances, we are guided by our key priorities to deliver best-in-class omnichannel experiences for our customers to drive focused and profitable growth and to increase operational and capital efficiency. To support our business plan, we have also made bolt-on acquisitions. When we set out our updated strategy in 2022, we said that we would be open to selective bolt-on acquisitions when they fit our plans even if our primary aim is to grow organically. An example of our approach is the purchase of Danske Bank's Norwegian personal customer and private banking business, which we announced last summer. The transaction is expected to close in the fourth quarter of 2024. We've also continued to make outer important long-term investments into risk management, financial crime prevention into strengthening our technology and digital capabilities. These investments ensure we are well positioned for the future and bolster our ability to be the preferred partner for our customers. Throughout 2023, customer activity was high. This was evident in the record high use of our digital services. Customer logins to our mobile and online banking services increased by 13% year-on-year to 1.4 billion logins a year. We have steadily expanded the range of digital options available to our customers and continue to invest to become the digital leader in the Nordics. As we grow our digital offering, we are constantly finding new ways to be personal, expert and responsible in our interactions with our customers. The human touch of Nordea will never go away no matter how our customers choose to bank with us. During the year, we assisted individual households and businesses in more than 1 million advisory meetings, a year-on-year increase of 9%. Sustainability is a key focus for us and is at the core of our strategy. As a leading financial services group in the Nordics, we have an important role to play in supporting the transition to a low-carbon economy. This includes helping our customers with their own transitions. Over the past years, we have facilitated EUR 135 billion in sustainable financing, including EUR 77 billion in 2023. We are well on track to meet our 2025 target of EUR 200 billion. We're also progressing and reducing our carbon emissions. In 2021, we committed to reduce emissions across our lending and our investment portfolios by 40% to 50% by 2030. This will support our objective to become a net 0 emission bank by 2050. So far, our lending portfolio financed emissions are down 29% compared with 2019 levels. These are ambitious targets. Nordea is currently the only Nordic bank that has committed to such an overarching emission reduction target. We have been steering lending towards customer initiatives that help decarbonize the economy. We have set carbon emission reduction targets for various key industry sectors. Back in 2022, we announced our first set of sector targets with covered shipping, residential real estate, oil, gas and mining. And since October 2023, we have added targets for agriculture, power production and motor vehicles. The sector targets are important tools for helping to reduce carbon emissions in industries that are crucial for net 0 future. Financial service providers continue to facilitate the transition by enabling customers to make sustainable choices and by reducing their own impacts. At Nordea, we continue to do exactly that. Returning to our financial results for 2023, I was pleased to see that all 4 of our business areas grew income faster than cost and delivered solid returns. Group income increased by 14% to EUR 11.7 billion. Despite the slower pace of activity in the Nordic housing market, we kept our strong position. Corporate lending grew by 1% year-on-year, and we increased our share of the corporate lending, particularly in Norway and in Sweden. Our asset under management increased by 5% despite volatility in the financial markets, net flows from internal channels were positive at EUR 6.3 billion. We welcome the net 3,800 new private banking clients, a clear demonstration of the quality of our business franchise. Our risk position and credit quality remains strong, supported by a uniquely well-diversified pan-Nordic credit portfolio. We have a well-managed loan portfolio, which is spread across markets and sectors and supported by prudent credit policies. Capital generation also remained strong. At the end of 2023, our CET1 ratio was 17%, 4.9% above the current regulatory requirements. Dear shareholders, at Nordea, we are proud to do our part to help make the Nordic societies stronger. We'll do this in many ways through our lending and financing activities, through our contributions as a major Nordic taxpayer and through our shareholder distributions. For 2023, our Board of Directors has proposed a dividend of EUR 0.92 per share, a year-on-year increase of 15%. Including our share buybacks during the past year, the total distribution to our shareholders will amount to approximately EUR 1.27 per share. In our region, in the Nordics, our shareholders include more than 570,000 private individuals alongside pension funds, insurance companies and foundations. This means that the capital we return help support economic activity, investments and development across the Nordic region. We are confident in our ability to sustain high profitability. Last month, we updated our financial target. We are now targeting a return on equity of above 15% for 2025, up from above 13% previously. Our confidence is grounded in the progress that we have made in recent years. When we set the new direction for Nordea back in 2019, we promised to focus on improving customer experience and driving profitable growth. Despite the constant changes in the external environment, this is exactly what we have done. The significant structural improvements we have made across the group have led the foundation for consistent high-quality earnings. We have a clear proven strategy that is working for us. Our business franchise is strong and supported by a well-diversified business model, and we have leading positions in all our markets and business areas and a leading position in the Nordics. [Audio Gap] Session now in English. But before we go into questions, let's first take a closer look at how at Nordea [indiscernible] a better tomorrow and drive real change. [Presentation]

And with these words, let's start the Q&A session. First, of course, I'd like to welcome to the stage also Nina Arkilahti, Head of Business Banking; and Sara Mella, Head of Personal Banking. Welcome. We have already received questions from you also before the meeting, and we will start with a few of these. First one is you, Frank. Nordea's strategy has 2 key levers: sustainability and digitalization. How are you progressing on the targets you've set for these areas?

Thank you, Thomas. So let's start with sustainability. We are progressing very well in an extremely important area. It is core for us. And therefore, we put out very ambitious targets already in '21. And as I mentioned previously, we have a net 0 ambition in 2050, a firm target. And we have also put a target by 2030 to be down by 40% to 50% of emissions in both financing and investments. and we are progressing very well. We are down 29% to the start point being end '19 and are progressing according to plan and a little bit better actually. Then, of course, it's also about how much we ensure that we help our clients to transit into sort of like the investments to happen by green lending. We facilitated EUR 135 billion the last 2 years in green and sustainable financing and last year, loan was EUR 77 billion as well. Then we have [indiscernible] targets and now we are covering most of our emissions by 8 targets, sector policy and targets that basically [indiscernible] and following it very closely. And we have firm targets and, of course, work with our clients to ensure that they are meeting our requirements. And then I want to say lately, we always talk a lot about environment, which, of course, is a very, very, very [indiscernible] thing that I think in the -- on the governance part, we have always had a big attention, right, and continue. But on the social part, I think we are all as societies need to step up even first, and we have clearly taken our parts and are doing our part. Continuous learning. Diversity is one. Inclusion is another one. Social responsibility, in many ways, is the third one. Equal treatment or fair treatment of people and so on. and we measure many of these things. [indiscernible] should be at least sort of a percentage of one of the genders in sort of like the 3 highest leadership levels of Nordea. And we actually met that target this year. It was a 25% target. Meaning that we have 40% here, females represented in top 3 levels of Nordea. So that's a good start, isn't it? And then, of course, the journey continues. So conclusion, progressing very well. We are very ambitious here and have a lot to do in front of us.

Could you briefly also cover [indiscernible].

A sort of like a key lever for us. It's helping as, first of all, to meet our clients in an effective, but also nowadays personal way and relevant way. But it's also, of course, about digitizing our processes. So we are doing very well, have invested crucial amounts into -- in the digitalization of the [indiscernible] very well. We have, as I mentioned, in March speed, 1.4 billion log-ins yearly across the Nordics. And the rating of our -- [indiscernible] we are in a good position, ambitious, have a lot that we want to do in front of us, and we are following it very carefully.

Next question goes also to you, Frank. And this is about the updated financial target for 2025. Question is how will the uncertain macroeconomic outlook and expected Central Bank rate cuts impact Nordea's outlook and your targets?

We updated our target this late winter, I would say. We came from a return on equity target of above 13%. We increased it to above 15%, meaning better than 15%. And we are confident in our ability to deliver that one despite the fragile environment and challenging environment we are having in front of us. And the reason for [indiscernible] last number of years. And we have a very well diversified, very balanced business model, which is performing very well. The volatility is low and the profitability is high. So we are quite confident that we will keep on levering .

Thank you, Frank. The third question, just for our Chairman. So Stephen, what can Nordea shareholders expect from your capital and dividend policies going forward?

Always started with a philosophy that our job is to serve shareholders through serving our customers and society well, and that's the basis through which shareholders become rewarded. As Frank has outlined, we believe the business can continue to do that, can continue to support customers in difficult times and grow with them when they have the opportunities to grow and to change. And on the back of that, we think we will make continued good profitability. We will use some of those profits every year to invest in more growth with our customers and in the capabilities of our business, also, as Frank has outlined. And what's left is, of course, available occasionally for bolt-on acquisitions, but then to go back to shareholders. And so we would expect to continue to be the major dividend payer in the Nordic region in our regular annual dividends. And on top of that, when opportunities allow, instead of allowing money to sit doing nothing in our coffers, we will continue share buybacks as a top-up mechanism. So I would say, in general, along with them and then allowing our shareholders to participate in the benefits of that business activity.

Let's continue now with [indiscernible]. Let's start here on the left.

[indiscernible] from both the Chairman and CEO. And I would like to express a special thanks to the Board, management and whole personnel for excellent job done last year. You slightly talked about future profitability, but it sounded a little bit undefined for me. I looked at the structure a little bit. Your increased interest income was EUR 1.8 billion last year. Your operative profit increased EUR 1 billion. So that is a gap of EUR 0.8 billion, roughly speaking. And so first of all, could I get rough understanding about 1% reduction in interest rates. What is the impact on your profitability out of that? And while it is now highly expected that the interest rates ARPU next coming years coming quite clearly down. I did not really catch what are your practical plans to offset the reduced interest income? Or do we have here to expect that Nordea's profitability is going to drop in 2 years to come.

I guess I should take that one. Thank you for the question. And you have done your homework, so that's really nice to see. So what we expect in our assumptions is right or wrong, but that the interest rate level in euro will decline during the coming [indiscernible] interest rate will be above -- around 2%. And when that happens, of course, you have a point that sort of like, on other hand, you will expect to see some growth. Then the question is how much growth. . We will bring some growth at least every growth [indiscernible], the equity markets, you have the savings business, you have the payment business, you have many auto cylinders. And we clearly are working with [indiscernible]. We are confident that we will deliver on our target being profitability, a return on equity of better [indiscernible]. Would it be a walk in the park? Absolutely not. But trust me, last year was not a walk in the park, either. So I think when we post our Q1, we can elaborate a little bit more about sort of like the updated forecast. Thank you.

Thank you.

Voting Slip 644. I would like to ask this question to the group CEO and the Chair of the Board. So share buybacks, when would you do that? I am unclear on that. And I would like to take the floor later when we talk about the dividend. But now in advance at this point, I would like to know why -- what do you mean by share buybacks in a sense that are you going to be canceling these shares? I'm a bit allergic to that idea. So could you please answer that?

Thank you very much for your question. And on the subject of share buybacks, the enough capital to support our customers to meet all of the regulatory relations -- regulated requirements on us. That then we seek to return that capital to shareholders, first, through the ordinary dividend and second as in the market, and of course, we ask each year for shareholder authorization to do that. And it is our expectation when we buy back shares down that are an issue and the value of each share goes up. But as I say, we do that with some caution. So [indiscernible] and support our customers in difficult times.

Yes, Chair. Maybe I'm a bit slow here, but I didn't really get a response to as to are you going to repeat Nokia's mistake that you buy back shares worth of a few hundred million euros and then you cancel those and then the share price actually goes down. So the Chair spoke a bit theoretically, so I didn't really understand. Could you please repeat? So are you going to do share buybacks and then cancel the shares after that? And then that would maybe increase the share price. Hopefully, you understood my question.

Yes. I'm sorry if my answer was not good enough or clear enough. But yes, we I would expect we have no specific plans for share buybacks, but our general philosophy is if we have excess capital after the needs that I have set out that we would do occasional share buybacks and would cancel those shares. It is theoretically possible that our share price goes down after we've done that. [indiscernible] is for the bank to perform well and to become more valuable and for that to be reflected in the stock markets assessment. But we're not -- the act of buying back shares is not trying to gamble on the market price of our share price. It's trying to give an adjustment, more permanent adjustments to the amount of capital that we have versus that, that we need. And so I accept there is, of course, still the risk that share price can go up and down. But we believe that by spreading share buybacks when we do them typically over an entire year for a program that we can get an averaging effect as and when that's available. And [indiscernible] without accepting particularly your -- the example you gave, where they may after the event regret the buyback. And that's why I stressed that we try to be very conservative at keeping a good amount of capital to meet our requirements to meet resilience and safety plus a buffer so that we don't get into a position where we would be embarrassed in respect of any previous shareholder distribution. I hope that's better. Of course, we would be very happy to engage with you outside the meeting if you want some further discussions on it. And I have colleagues who are very expert in the subject also.

Thank you very much.

Did anybody else want to take the floor? My name is [indiscernible] Security and Bank secrecy. A while back for a number of years now in Finland, the tax administration required all the banking and taxation information there and broken the Financial Supervisory Authority required that. So why did they need that information and data? And why was this banking secrecy broken? And then after that, the authorities said that, that was not right and you shouldn't have done that. But what in terms of banking sequences, what is the situation? Can that just be broken at will? Because otherwise, in the EU, we have very strict GDPR rules and so on, and data protection and count and see your banking information. So what was the purpose of that? And how did they manage to do that? That was a very peculiar episode in the Finnish history. .

I can take this question, and I answer in Finnish as well. Bank secrecy is very strong, and we abide by the law always. And the supervisors, we also abide by their requirements and their instructions. Therefore, this individual event, I can't remember it in details or its background, but I can assure you that our operation is always something that protects bank secrecy and is based on legislation and regulations. But in afterthought, we can then look at the details of this event and then respond in more detail if there is a need to do so. .

Thank you. Next speaker?

Chairman, my name is [indiscernible] voting slip 623. I represent carbon-free Finland. We are a climate campaign where we try to reduce carbon emissions of production. And we want to reduce this through different projects, such as infrastructure projects. First of all, I'd like to thank you for sustainability work. It's great that Nordea has reduced 29% of their emissions of their credit portfolio, and they have also sector-based objectives. And they also want to assure that big corporate customers are having a transition plan. One sector produces 7% to 9% of global emissions, and we'll use some 25% of the carbon budget up until 2050 if we continue. And the industry is one of the biggest users of coal. And according to the road map of IEA, the metallurgic coal is sufficient to cover for this. But there are still plans for new mines, metallurgic mines, and they would increase a lot of coal on the globe, and they would endanger the climate aims. Nordea will analyze the steel sector and will have a steel sector objective during 2023. Can you tell us what is the status of plan? And will you then ensure that there will be no expansion of this sector in the economy?

Thank you for the question. And Nina, would you reply, please?

Thank you, Vera. We share the same concern, and we have the same direction. Nordea has in '21 come out with the commitment to be Paris aligned and net 0 emissions bank by 2050. And very, very much on track we are to reach that goal. We have these 8 sector-specific targets. And then on the overarching target, still company customers as well as exclusion if needed. Therefore, for all steel industry companies as well as metallurgical coal, is comprised in the overall target.

Thank you.

Dear Nordea leaders and shareholders, my name is [indiscernible] voting number 658. And I'm asking [indiscernible] a plan by the end of 2024 at the latest to restrict financing. [indiscernible] significance disclosures in 2024 as part of the new requirements of corporate sustainability report and directive. However, the past net 0 targets and disclosures must be complemented with robust cost pool financing restriction policies and the bank missed an opportunity to update its oil and gas policy. Share option is there for calling on Nordea to introduce produce corporate financing restrictions on oil and gas companies with expansion plans. Some of Europe's largest 25 banks are already taking steps to do this. Southbank and La Banque Postale require transition plans from the oil and gas clients, which explicitly state they will not develop new oil and gas fields [indiscernible] place Corporate Financing restriction on pure players. Will Nordea [indiscernible] on expansion. This means oil and gas companies with expansion plans, which according to IEA are incompatible with keeping within 1.5 degree are still eligible to receive financing from the bank. Back track report finds that since July 2010, Nordea Bank provided USD 12.4 billion in financing to foster full companies in case in expansion or with plans to expect. Nordea provided the first largest amount of these sand banks, USD 1.5 billion, a year on record. Action by Europe's largest bank is even more urgent. Will Nordea introduce corporate financing described 2024? This is [indiscernible] any development of new oil and gas fields as well as a commitment's to exclude all oil and gas companies with expansive plans. Thank you.

thank you very much for your question. And what I would I would say is we feel that we have gone exactly as far as you want, maybe even further, but perhaps through a slightly different route. And that is to say that we have committed as a bank. And of course, through our -- and we've done the -- you mentioned another number of other banks, but those banks have not gone as far as us in financial ones of 40% to 50% reduction. We think we've gone further than other banks in that regard. And as mentioned, our progress since 2019 of a 29% reduction we also believe compares very favorably to other banks. So actually, we are proud to be leading the way among banks in the Nordics and internationally in our commitments to support the climate transition. And that goes for the totality of all emissions in our areas, whether it's steel, whether it's agriculture, whether it's oil and gas, when you add them all up, we are committed to those targets of reductions. And we feel that is much more valuable, it's a totality of commitment, and it's going further than other banks then too much specific micro management name by name, sector by sector, although, of course, we do build it up in our sectoral plans. The subject of oil and gas is critical. We accept that. We have achieved very substantial reductions in our portfolio of oil and gas. But in terms of the further step that you're asking, we don't believe that, that is necessary for us to still be the leading bank in the Nordics for climate transition achievements with our customers. And we believe that working with our customers in a cooperative way is the better way to go about it. And I have to say, we saw most recently with all of the disruption post the Ukraine war situation. The world still today relies on an element of fossil fuels, and it can be immensely damaging to economies if the transition is not handled well. So we are determined the transition should happen. We should play an active role in it. But -- and be a leading bank, but I'm afraid we believe that the level of specificity that you're looking for would be both undesirable for the customers that we have to represent and support and is also not necessary for us to achieve the leading goals that we have. Thank you for your question. We greatly value the perspective and, of course, the engagement during the year.

Thank you. Any more request for the floor. Thank you.

Bjarne Winburne, [indiscernible] 560 is the number of my voting slip. Distinguished Chair of the Board and President and CEO, I would like to ask a question having to do with share buybacks. I think it's about destroying the bank. At the moment, you have destroyed EUR 5 billion of our money. And those to benefit through your bonus system, you get even more money and that is dependent on the amount of equity in the company. So with that EUR 5 billion, if we think that now, you're targeting a 16% profit, if you had invested this EUR 5 billion and received that 16% for the bank in profits per year. So I would like to propose that the share buyback program is canceled and is not realized. And this cannot be used in a way to increase the bonuses of Board members. I think Board member bonuses should be calculated according to the old system where the equity was EUR 5 billion bigger.

;Thank you very much for those very thoughtful remarks. And if I might just respond. First of all, can I assure you of 2 things: number one, that all decisions on dividends and share buybacks are made by the Board of Directors. Therefore, there is absolutely no financial incentive on the Board of Directors to make a decision in one direction or another. That's the whole point of the share buybacks do have to be authorized by shareholders on a regular basis who get to vote on it in principle with the Board of Directors then making the tactical. And I speak personally, it's not as necessarily a matter of public policy. I would be delighted if we didn't do share buybacks to support our existing customers. I'd prefer that. It would be terrific. We want to expand this bank safely and profitably in support of our customers. And so there is absolutely no part of the management or the Board that is trying to restrict growth the opposite. It is, however, a fact of life that first with COVID and now with higher interest rates and a more uncertain economic environment that at the moment, most of our customers are not trying to expand. They're trying to protect what they have. And so we are available and willing to lend more money than at the moment, our customers are asking. And as soon as economies strengthen, we very much hope that we can deploy more capital to expanding our SP-17 From time to time, do share buybacks, but please be assured, it is never a substitute for expanding the bank safely, profitably in support of our customers. That is always the first place that we will deploy our capital. Thank you.

Yes, I would like to continue on the second case. So why not pay more in dividends because societies in the Nordic countries, the majority of our societies include -- they are societies where the third sector is actually financing a lot of the operations that the society offers. And this applies to Finland and the other Nordic countries. And these are operators who have not received this money due to share buybacks. Thank you. .

The importance of the matters that you bring up, we do debate these subjects. We will continue to debate them. And of course, we will always listen to you and our other shareholders when we balance these things in the future. And so please take with you the idea that we do not have a closed mind on this subject. What I would say to you, though, is 2 additional things. The great majority of the money that we pay out does go via dividends. Share buybacks have been an occasional top-up of our regular dividend rather than our principal way of distributing money. And I expect that to continue. The reason why we occasionally do share buybacks as a top-up, rather than paying it all this extra dividends is because historically, we have received feedback from our shareholders that they value a level of predictability in their dividend income that they can plan on. Of course, dividends are not certain but it's nice if they are reasonably predictable. And so we try to keep our regular dividend at a level that in most scenarios we can sustain. And that means that, occasionally, there is a more temporary excess. And if we put that into to dividends, it would cause our dividend to be more volatile and sometimes go down as well as up. And generally, our shareholders have told us that they don't want buybacks is wasted. If we look at the shareholder returns over the last several years, their share price has gone up over that period, in addition to shareholders getting a a good dividend return. In fact, the total shareholder return, adding dividends and share price increases has gone up, I think, 170% over the last 5 years one of the best records of any European bank. And so at the moment, I believe the data is showing that shareholder value is being created both through regular dividends and through the movement of the share price and that the buybacks have not damaged that and, if anything, have supported it. But I don't want you to, as a whole, were to give us the message that they don't want stock buyback and they want a more volatile dividend, we would listen to that message and we certainly respect your view on it. So thank you for your views.

The bank produced a 1,000-page report where they had a transition of the green transition and technologies are such where their benefits and carbon footprint is worse than you would imagine. So the technologies is at a very low level, continue to be. Finland, how the batteries in the work and so on. So the carbon print of battery-operated vehicles is quite big even if you compare them to regular cars in our eyes and just guessing what, will happen in the future considering where technology is. Thank you.

By this with a few words. In Nordea, you talked quite a lot about green things. So what is your stance compared to the one at Deutsche Bank because the report was produced by leading universities, and it was a very interesting report. And we are not talking about just any bank here.

So thank you very much for those those thoughtful remarks. And you are ahead of me, at least in having read Deutsche Bank's 1,000 pages, which I'm sorry to say that I haven't myself. But I do recognize the points that you make. And of course, it is true that as the world searches to adapt to the climate threat. It is true that technology is, by far, our most important tool in making that adaptation over the coming years. And it is certainly true that we are still inevitably as a world in a process of experimentation. And some will succeed better than we expect and some will fail. And that has been true and it will continue to be. I think that, that validate States,and the absolute centrality of technology and helping to do that. And so work with our customers. You can find us curious and engage with our customers across a whole range of things. who are driving down the battery route. Nordics are very well represented there. Some, for example, in the aviation field, where we're a separate company. I chair is engaged sustainable aviation One of the Finnish companies is a world leader, and I could cite many, many more examples. So I think you're right that technology will have some failures as well as some successes, and we must keep our eyes open to those challenges, but it cannot stop us from engaging with technology and stimulating the March in order to help us solve the challenge that the world has ahead of it. But thank you very much for your questions and your interest.

Wait for the microphone.

Thank you, Chairman, on responsible steel and the revolution to start in Finland. But dear friends, this is the wrong forum to look at parliament. There are 4,000 to 5,000 new coal plants and in Germany, lignite mine. And they stopped nuclear energy, but they use cold. But I think that our discussion is peanuts in the overall picture, but thanks for the discussion anyway.

Thank you very much. All we can do is our part in it, and we must do that. But and you can have some lively debate after the meeting to your left.

Now I propose that we move on to other questions. There is still one in the meeting room. Go ahead.