Financial targets

Total shareholder return, %

To be in the top quartile of Nordea's European peer group.

Risk adjusted profit

Risk-adjusted profit is defined as total income minus total operating expenses, minus Expected losses and standard tax (27 % 2007). In addition, Risk-adjusted profit excludes major non-recurring items. Expected loan losses will be approx. 17bp in 2007.

Return on equity (RoE)

The target is to have a RoE in line with top Nordic peers. This target is relative to competitors. There is no longer any absolute target in percent, since return on equity over time will vary with the business cycle.

The Board of Directors has also decided the following capital structure policy:

Dividend payout ratio, %

> 40% of net profit.

Tier 1 capital ratio, %

> 6.5%.

Outlook 2008

It is clear that the macroeconomic outlook is deteriorating and that uncertainty has increased. Nordea expects to see a gradual slowdown in lending growth for the remainder of this year. On the other hand lending margins are expected to improve.

The uncertainty for financial markets and consequently also for Nordea’s savings-related fees as well as capital markets businesses remain high.

Nordea has previously communicated an expected growth in risk-adjusted profit of approx. 5%, with the development in the financial markets to determine whether the growth would be somewhat above or below 5%. During the first nine months, customer areas have delivered according to plan, however with the extreme development in financial markets negatively affecting the risk-adjusted profit. Excluding the impact from the Nordic state guarantee schemes and excluding the gain from the sale of NCSD, Nordea expects risk-adjusted profit for the full year to be at approx. the same level as last year.

Cost growth for 2008 is expected to be in line with the cost growth for the first nine months.

The overall quality of the credit portfolio remains strong, but following the deteriorating economic outlook, loan losses will gradually increase.