11 May, 2011

Klas WibergHead of Finance NordicGroup Finance

Creation of One integrated Financial Reporting Process

2

Nordea in brief

Nordea is the largest financial service group in the Nordic and Baltic Sea region with a market capitalisation of approx. EUR 33bn, total assets of EUR 581bn and a Tier 1 capital ratio of 9,8%

Nordea has the largest distribution network for customers with approx 1,400 branches of which more than 270 are in five new European markets, Russia, Poland, Lithuania, Latvia and Estonia

Nordea has approx. 11 million customers of which 7.5 million are household customers in customer programmes and 0.7 million are active corporate customers

Nordea’s total shareholder return (TSR) 2010 3,7 %.

Nordea’s long term target is to double the risk-adjusted profit in seven years, with 2006 as the baseline. On average, this requires a 10% annual growth. At year-end 2010 the risk- adjusted profit is up 34,8% compared to baseline 2006 (1,957)

3

From Good to Great

Managing the Change

Agenda

People

Establishment of the “Finance Value Programme”

4

Group Human ResourcesHenrik Priergaard

Christian ClausenPresident and Group

CEO

Group Internal AuditEva-Lotta Rosenqvist

Casper von KoskullCorporate Merchant Banking

& Capital Markets

New European MarketsThomas Neckmar

Ari KaperiGroup Risk Management

Group CRO

Shipping, Offshore& Oil Services

Hans Chr. Kjelsrud

Gunn WærstedShipping, Private Banking &

Savings Products

Group Identity & Communications

Jan Larsson

Financial InstitutionsBirger Gezelius

Peter SchützeNordic Banking

Group Credit ControlHolger Otterheim

Markets FICCMads Jakobsen

Corporate Merchant Banking

Casper von Koskull

Michael RasmussenNew European Markets,

Banking Products & Group Operations

Fredrik RystedtGroup Corporate Centre

Group CFO

Segment Household & Group Marketing

Topi Manner

Segment CorporatePeter Lybecker

Banking FinlandPekka Nuuttila

Banking SwedenHans Jacobson

Banking NorwayJohn Sætre

Banking DenmarkAnders Jensen

Savings Products &Asset Management

Allan Polack

Life & PensionsJohan Sidenmark

International Private Banking & FundsJhon Mortensen

Nordic Private BankingNiklas Ekvall Account Products

Kurt Gustafsson

Group ITTapio Saarelainen

Transaction ProductsOssi Leikola

Group Shared ServicesPer E. Berg

IT Solutions NEM & Group Functions

Tuija Pirttilä-Bäck

IT Solutions Capital Markets, FID and

SavingsPoul Raaholt

Nordea FinanceJukka Salonen

IT Solutions Nordic Banking and CMB

Hans-Henrik Eigtved

Group TreasuryTorsten Hagen

Jørgensen

Group Planning & Control

Johan Ekwall

Group FinanceFrank Søllested

Investor RelationsRodney Alfvén

Group Capital and Risk Modelling

Louise Lindgren

Group Strategy & Corporate Development

Anna Storåkers

Group LegalLena Eriksson

European AffairsLeena Mörttinen

Group CreditJorma Timonen

Group Operational Risk Management

Sigurd Carlsen

Group Market Risk Management Niels N. Kjær

Customer areas

Customer areas

Customer areas Customer areas Service and staff units Service and staff units

Product areasProduct areas

Product areas

Group operations

Group Organisation

Corporate Social Responsibility

Liisa Jauri

International BranchesAnne-Margrethe Firing

Service unit

Markets Investment Banking

Casper von Koskull

CMB&CMChief Operating Officer

Peter Nyegaard

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Supporting the value creation dialogue

Providing consistent and efficient processes

Delivering through people in an optimally organized and integrated finance function

Requirements on Finance

Nordea Strategy

GCC vision

GCC strives to be top European class Corporate Centre enabling the creation of a Great Nordea. We are acknowledged for our competence and our ability as a team to contribute to the Group’s superior performance and shareholder value creation.

GCC will be the engine of the Group by securing a best-in-class strategic and financial frameworks and processes as well as providing professional services and advice within our areas of expertise.

We proactively ensure that GCC develops talent within these areas and maintains a best-in-class organisation.”

– Fredrik Rystedt, Group CFO

Nordea business model– Activities in 18 countries

– Activities across diverse Business Areas (Household, Corporate, Capital Markets Products, Life & Pension etc.)

“The leading Nordic Bank, acknowledged for its people, creating superior value for customers and shareholders”

– Great Customer Experience

– It’s all about people

– One Nordea team

Nordea and GCC strategy set requirements on the Finance Process

6Source: KPMG analysis; business interviews; team analysis

Key findings

KPMG assessment of current situation

KPMG assessment of current situation

Nordea

Entirely internally focused Value driverKey influencer of

stakeholders

Multiple agendas, Local Finance teamsCost centre mentality

Finance vision agreed and aligned with the business

Focus on value management

Business partner of management and

the boardServices

Federal structure Global Finance function

Autonomous Finance Functions, e.g. objective

setting at BU or local CFO

Central guidance local implementation

Local Finance reporting directly into Local Mgmt / dotted

line to Group

Strong alignment with Group Finance

(hard dotted)

Global finance communityOrganisation

FIN

ANC

E O

PER

ATIN

G M

OD

EL

Incompatible systems and data

models

Global data model / systems

Standard tools and applications, on

single occurrence

Multiple data models, tools /

applications and G/Ls

Standard consolidation layer

Standard systems, interface layer and recommended data

models

Standard data models, tools / applications, on multiple occurrencesTechnology

In-country, decentralised

Strategic sourcing / SSCs optimised

Some offshoring for low value, high volume tranxns

Regional SSCs Majority of finance processing in SSCs

All financial processes in

optimum locationsIn-country SSCsLocation

Scorekeeper Business partnerDiligent Caretaking Constructivechallenge

Business acumen and financial knowledge

Reactive ad-hoc analysis

Insightful analysisand commentPeople

Locally specific Standardised and optimised

Disaggregated processes and responsibilities. Multiple G/Ls

Low degree of standardisation and

automation (divisions / geographies)

Standardised processes globally for low value high

volume transactions

Standardised processes globally

for financial management

Recommendation for common

methods, processes and reference data

Process

Benchmark

High quality reporting from investor and board perspective.Need to improve key value drivers in management reporting .Reactive Finance functions - 10% of time spent on analysis.Need to be more proactive - 50% of time to be spent on analysis.

Value creation dialogue

Organization

Processes

Long lead time of 13 banking days for the Group Management ReportSignificant potential for improvementsMultiple data sources and systems for analyses and reporting Cost of finance in relation to revenue ~1.9%European benchmark average 1.2%

No clear ownership of the reporting processNeed to align skills and competence to better support the ambitions

Going from good to “Great” – benchmarking towards best practice

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We will deliver on the requirements and take Finance in Nordea from Good to Great on a 3 year journey

Up until today• From 4 Banking and Finance

organizations to one with– Consistent quality of reporting– Lead times on average compared

to benchmark– Average efficiency of operations

Stepwise improvements and deliveries towards a Great Finance

Great Finance• Focus on value creation through being a

key business partner– Improve basis for decisions– Proactively challenge established truths

and direction setting• Reports supporting the right management

dialogue with capabilities to deliver ad-hoc analysis

• Best-practice reporting lead times and impeccable quality of data

• Best-practice delivery capability and resource usage

2009: Consolidated group

2010: Stepwise improvements and deliveries

2011: Customer value creation

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From Good to Great

Managing the Change

Agenda

People

Establishment of the “Finance Value Programme”

9

Group Finance

The Finance

Value Programme- Working

together towards a common goal

Group Corporate Centre

“One integrated effective finance reporting process throughout Nordea supporting the value creation dialogue”

Business Areas

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As-is finance process To-be finance process

Process I: General ledger

Process II: General Ledger + Excel/ Access used for data reporting + 50 sub- ledgers

1

2

3

4

5

6

7

8

9

10

11

12

13

Management report

Local finance process DK, FI, NO

Number of bank days

One process

General Ledger

Financial data ware- house

Statutory report

Statutory reporting

Management reporting

Consolidation

Group reporting

Nordic finance process

Group reporting

Creating one integrated Statutory and Management Reporting process

High degree of straight through processes, improved control and quality

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Corresponding targetsObjectives What we will do

Improved reporting timeline

Increased quality

Increased analysis time

Cost Reductions

Improved reporting time line by process reengineering

Increased quality by implementation of common data warehouse, rolling out common systems end enforce key controls

Increased analysis time by automation, harmonisation and reduced waste in processes

Cost reduction by closing down IT systems

Reduce reporting time 50%(13 7 days)

Increase quality and transparency of financial data to cater for “one version of the truth”

Increase analysis time from 10% to 50%

Decrease cost by 30%

Key objectives of the Finance Value Programme

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One integrated effective finance reporting process throughout 

Nordea supporting the value creation dialogue

Effective & Efficient Finance Solution Architecture•Common Finance IT Architecture•Close‐down of redundant systems

•Common data governance•Common Finance Process Framework

The solution is based on five pillars

Global Accounting 

Interface

•

Common 

sourcing, 

transformation 

and reconciliation 

concept

•

Multicurrency and 

funding concept

•

Common account 

determination

Financial Data 

Warehouse

•

Common 

repository for 

financial 

information

•

Common data 

model

•

Common data 

definitions

Common Finance 

Reporting Process

•

Group Reporting•

RACE – Reporting 

and Analysis 

controller 

environment

•

Customer 

Profitability 

System

Finance Process 

Transformation

•

Lean 

transformations

•

Smaller 

improvements

•

Process 

descriptions 

•

Reporting 

rationalisation

Accounting Key 

Controls

•

Implement 

group wide 

system of 

accounting key 

controls 

•

Both line 

function and 

implementation 

project

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Governance of the Programme

Implementation Plans

Value Delivery Plans

Benefit Tracking & KPI’s

Programme KPI’s

Programme Value Realisation Structure

Receiving units´ progress

Description of Structure Components

Focus area progress

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The Finance organisation is based on seven design principles ...

Each task should ideally be done in one place only

Accounting principles must be clear and consistently implemented

Common data definition and Master Data

Support and enablers of our business with customers

Design principles for the Group Finance organisation

Processes must be designed to ensure timeliness

Only one version of the truth

Exciting place to work – personally and professionally

One integrated finance function delivering …

… increasing quality with reduced lead time and lower cost

… a well-organized and integrated finance function with high employee satisfaction

… increasing value to partners by improving basis for decisions

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Business Process Re-engineering – supporting our strategy

Overarching Process in Nordea

Main Processes

Sub-processes

Detailed Processes

Defining the Vision - One integrated Finance Process

Setting the structure - Defining overall organisation

Outlining the next level - Defining the sub-units

Controlling - Know your processes

- Continuous Improvements

- Efficiency Gains

16

From Good to Great

Managing the Change

Agenda

People

Establishment of the “Finance Value Programme”

1717

Change management• A structured approach to transitioning individuals, teams and organisations from a current

state to a desired future state• Using processes and individual change management models to continuously improve our

business• Effectively combining hard and soft approaches to change to reap payoffs in profitability

and productivity

It’s all about managing change- Continuously improving our business - going from good to great

Changing mindset & behaviour- Creating a positive attitude towards change through coaching, networking, communication, culture and commitment

Aligning “way of working”- Following Nordea standards, processes, models and governance

Strengthening competence & skills-- Maximizing and retaining talent

1818

”One integrated effective finance reporting process

throughout Nordea supporting the value creation dialogue”

The impact of the Finance Value Programme

Changes in:• Organisation

structure, roles and responsibilities

• How work is performed and what tools are used

• Competence needed to perform work

• Mindset and behaviour

12.000 + usersin 5 + countries

Programme objectives:• Improved reporting timeline• Increased quality• Increased analysis time• Cost reductions

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Analysis, planning & navigationOrganisation Change Impact analysis

Training needs analysis

FVP Change roadmap

Focus Area change management plans

Evaluation of impact of performed activities

Organisational Change Management

The Finance Value Programme has a structured approach to manage the organisational change

Clear Roles & ResponsibilitiesOrganisation Change Management Framework outlining roles and responsibilities, activities and deliverables

Programme level

Focus area level

Business area level

Group Finance level

Country level

Heavy business involvementActive involvement from Group Finance and all Business Areas

Sponsorship for the Programme

Customisation of solutions

Customisation of materials and messages

Ownership of communication delivery

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TRAININGDELIVERY

TOP MANAGE-

MENT COMMUNI-

CATION

TRAININGPREPARATION

COMMUNICATION AND

STAKEHOLDER MANAGEMENT

Organisational Change Management activity overview

ILLUSTRATIVE

Calendar time

Time allocation

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Organisational change management work will be conducted throughout the entire Programme lifecycle with focus on different activities at different times

21

From Good to Great

Managing the Change

Agenda

People

Establishment of the “Finance Value Programme”

22

Values as part of our DNA

74

76

77

2007 2008 2009

Nordea “Living the values*” score development

0

1

2

3

4

5

6

7

8

Bottom 10 Top 10

Strong link between income growth and “Living the values*”; %

4 percentage points difference

Bottom and top performing units on “Living the values” ¹”Living the values” measured twice per year through

the Nordea employee satisfaction survey.

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It’s all about peopleCreating a great work environment

Great Customer ExperiencesContinue to deliver on time & with quality

Nordea Values – the basis for our strategy

One Nordea TeamGood cooperation throughout the Value Chain Great 

customer 

experiences

acknowledged for its people, creating superior value for 

customers and shareholders

Foundation: Profit orientation and prudent cost, risk and capital management

It's all 

about 

people

One Nordea 

team

A great European bank

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Success – It’s all about people, mindset & attitudeInspiring and developing environment

Support and respect for each other

Everyone takes responsibility

Provide and receive constructive feedback

We will find solutions

Positive mindset & Have fun!

It’s all about people

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A Great European bank, acknowledged

for its people, creating superior value for

customers and shareholders