Review of the leasing market and prospects for development

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

2. Agenda • Dawn of end or end of dawn? • Who are we? • Innovation or reinvention?

3. Leasing is underperforming … • Down Drivers • Financial crisis • Recession • Regulation • Bankinggroups’ strategies • Unclear position Source: Leaseurope, Nordea Markets

4. … potential is out there 54bn€ • UpDrivers to sell 280bn€ not 226bn€ • Needfor economicgrowth • LowRWAs – lowrisk • Innovation Source: Leaseurope, Nordea Markets

5. Dawn of the end ? Orend of the dawn?

6. Agenda • Dawn of end or end of dawn? • Who are we? • Innovation or reinvention?

7. Whoarewe? Finance Product Industry Service

8. Business models for different type of players Business model Key requirement Service elements Bank product unit Cost efficiency Basic Bank owned multi asset specialist Outstanding profitability Service integrator Global captive Value for manufacturers sales Integrated branded offering Independent niche player Specialisation Based on service

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

10. Change the angle to Services From Finance Delivery of Asset Use of Asset

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

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

13. Agenda • Dawn of end or end of dawn? • Who are we? • Innovation or reinvention?

14. Innovation – Finance Product • Income • Revenue models • Cost • Operating models • Risk • Portfolio management • Products • IT-systems • Concepts • Operating models • Human Resources • Talent management

15. Reinvention – Service Industry • Delivery of asset • Value chains • Use of asset • Mobility • Communication • Daily life • Environment • Recycling • Logistics • Networks • Digitalisation • ICT • Image • Branding • Investors • Value

16. The Future is out there…

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