Review of the leasing market and prospects for development Where next for leasing industry in Europe Jukka Salonen CEO Nordea Finance 16/05/2013

Agenda Dawn of end or end of dawn? Who are we? Innovation or reinvention? 16/05/2013 2

Leasing is underperforming … Down Drivers Financial crisis Recession Regulation Banking groups’ strategies Unclear position Down Drivers Financial crisis Recession Regulation Banking groups’ strategies Unclear position Source: Leaseurope, Nordea Markets 16/05/2013 3

… potential is out there 16/05/ bn€ Up Drivers to sell 280bn€ not 226bn€ Need for economic growth Low RWAs – low risk Innovation Up Drivers to sell 280bn€ not 226bn€ Need for economic growth Low RWAs – low risk Innovation Source: Leaseurope, Nordea Markets

16/05/ Dawn of the end ? Or end of the dawn?

Agenda Dawn of end or end of dawn? Who are we? Innovation or reinvention? 16/05/2013 6

Who are we? 16/05/ Finance Service Product Industry

Service integrator Integrated branded offering Based on service Basic Business models for different type of players 16/05/ Outstanding profitability Value for manufacturers sales Specialisation Cost efficiencyBank product unit Bank owned multi asset specialist Global captive Independent niche player Business modelKey requirementService elements

Leasing – a product providing finance 16/05/ Suppliers Capital and funding sources IT & consulting Bargaining power of buyers Threat of substitute solutions Bargaining power of suppliers Threat of new entrants Potential entrants Global actors expanding their scope Industry competitors Bank product units Captives, Independent Subsitues Banking loan Cash Buyers - Lessees - Manufacturers, Vendors and Brokers

Change the angle 16/05/ From Finance Delivery of AssetUse of Asset to Services

Leasing – an Industry providing Services 16/05/ Suppliers Capital and funding sources IT & consulting Bargaining power of buyers Threat of substitute solutions Bargaining power of suppliers Threat of new entrants Potential entrants Global actors expanding their scope New players – e.g. Google, Amazon, Apple, Telecom Industry competitors Bank product units Captives, Independent Multi asset specialist Service providers Subsitues Banking loan Cash Peer-to-peer borrowing Service packages User pools Buyers - Lessees - Manufacturers, Vendors and Brokers -Asset users -Service users -Asset and service suppliers -Manufacturers and vendors

Finance Product vs. Service Industry 16/05/ Value proposition: Alternative finance product, usage of collateral Distribution: Own network Customer relationship: Core clients Source of innovation : Cost & productivity Trend: Banks consolidating their leasing companies to be product units, cutting down funding High Relative cost Low Relative buyer benefit Low High Value proposition: Ease of deliver and use Distribution: Digital and global with specialised sales forces Customer relationship: Integrated value chain Source of innovation : Need and value based Trend: Large customer databases used for offering finance. Service demand, e.g. Mobility, Communication High Relative cost Low Relative buyer benefit Low High

Agenda Dawn of end or end of dawn? Who are we? Innovation or reinvention? 16/05/

Innovation – Finance Product 14 Profitability Value creation Access to sustainable position 16/05/2013  Income Revenue models  Cost Operating models  Risk Portfolio management  Products IT-systems  Concepts Operating models  Human Resources Talent management

Reinvention – Service Industry 15 NeedsSolution Profitable Growth 16/05/2013  Delivery of asset Value chains  Use of asset Mobility Communication Daily life  Environment Recycling  Logistics Networks  Digitalisation ICT  Image Branding  Investors Value

10/04/ The Future is out there…

Review of the leasing market and prospects for development Where next for leasing industry in Europe Jukka Salonen CEO Nordea Finance 16/05/2013