#1Nordea Nordea Bank Finland Covered Bonds Investor presentation Q3 2016#2Nordea Bank Finland plc - a snapshot Q3 2016 2 • 100% owned by Nordea Bank AB • • Loans to the public was EUR 30.6bn per Q3 2016 ⚫ Licensed by Finnish FSA to issue covered bonds according to the Finnish covered bond legislation (Covered Bond Act (688/2010) or CBA) • Issuer rated Aa3/AA-*/AA- • Covered bonds rated Aaa by Moody's *Negative outlook S&P as of the 20th November 2012 Nordea#33 Cover pool key characteristics Q3 2016 Pool notional Cover pool content Geographic distribution Asset distribution Weighted average LTV Average loan size Rate type Substitute assets Pool type Loans originated by EUR 22.7bn Mortgage loans secured by residential or commercial property. Loans guaranteed by public sector. Throughout Finland with concentration in urban areas 99.0% residential, 1.0% public sector 49.8% (indexed, calculated per property). EUR 68,685 (weighted average, covered amount 65.0k) Fixed rate 2%, Floating rate 98% None Dynamic Nordea Bank Finland Nordea#4Cover pool key characteristics - 93.3% single family housing with low LTVs Q3 2016 4 Cover pool balance by loan category Weighted average LTV - Indexed 100% Summer houses ■ Multi-family housing 1 296 5,7% 573 ■Public sector 90% 2,5% 218 1,0% ■Tenant owner units 10 645 46,8% 80% ■Single family 70% houses 10 015 44,0% 60% 50% 40% Cover pool balance by geographical area 30% ☐ Greater Helsinki area 42,4% North/Middle Finland 12,3% 20% West Finland 10% 23,8% South Finland 21,5% 0% Single family houses Tenant owner units Multi-family houses • • Pool mainly includes single family houses and tenant owner units. The main part of real estates are located in greater Helsinki but are otherwise evenly distributed between western, northern and southern part of Finland. . Low WALTVs in the pool Nordea#50,10% 0,08% 0,06% 0,04% 0,02% 0,00% -0,02% 5 Performance of housing loan portfolio - Nordea Bank Finland Q3 2016 • • Low level of loan losses supported by strong household sector Impaired non-performing loans are at low levels Net loan losses % for Nordea Bank Finland's housing loan portfolio 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 EURM 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 Nordea Bank Finland's housing loan stock and level of impaired non-performing loans* 4,00% 3,50% 3,00% 2,50% - 2,00% - 1,50% 1,00% 0,50% 0,00% 2005 2006 2007 2008 Lending (EURm) (LHS) 2009 2010 Non-performing loans (RHS) *The majority of the increase in Q4-2015 is model driven and is related to an improved way of calculating collectively assessed provisions on contract level, implemented in Q4-2015 2011 2012 2013 2014 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 Nordea#6Underwriting criteria - common Nordea policy Q3 2016 6 • Residential mortgage loans Nordea's credit decision is based on the borrower's payment capacity and collateral is always taken. • Collateral must be in the form of mortgages in real estate or in shares in housing companies. Repayment ability of borrowers is calculated using stressed scenarios. · • Credit bureau check is always conducted (Suomen Asiakastieto). • Individual valuation of property based on market value. • Commercial mortgage loans • Borrowers with strong EBITDA/debt and cash flow based on e.g. long-term high quality lease contracts and adequate interest rate hedging. • Individual credit decision based on credit policy and rating. • An evaluation of all property-related commitments is performed in the ordinary annual review against a background of quality issues/risk factors regarding the property itself, the lease, the management, the long-term cash flow and -strength of balance sheet/gearing. The analysis focuses on the repayment capacity. • Individual valuation of property based on market value. Nordea