Dear Nordea shareholders and everyone joining us today, welcome to Nordea's 2024 annual general meeting. My name is Thomas Forssell, and I will be the moderator of this event. Our meeting here in Helsinki can also be followed online in a live webcast. The meeting will be conducted mainly in Swedish and partially in Finnish and in English. We have a simultaneous translation available to all three languages. Here in the audience, you can choose your preferred language on your translation receiver. In the webcast, you can do the same from the language menu. During today's Q&A session, the floor will be open for shareholder questions here in Helsinki. In the webcast, you can also post questions by using the chat function. We'll take as many questions as possible from the webcast during the Q&A.
All questions here in the audience, as well as online, can be in Finnish, Swedish, and in English. Thank you for joining us today. Now, I have the pleasure to give the floor to the Chair of the Board, Sir Stephen Hester.
Good morning, or actually, nearly good afternoon. Dear shareholders, can I add my welcome to you all to Nordea's Annual General Meeting. And we are, of course, privileged to have shareholders right across Finland and the Nordic countries and further afield, with many following today's AGM online. And once again, a warm welcome to all of you in the room and online. This is my second AGM as chair of Nordea's Board of Directors, and I'm pleased to say that the positive view I held of Nordea and its people the first time around has been reaffirmed over the past 12 months. Last year, 2023, was another year in which Nordea proved itself to be strong, profitable, and predictable, even if the market conditions and economic environment were anything but.
Recent years have, of course, as we all know, presented many challenges to our public health, to our economies, our security. And of course, we have all witnessed the distressing situation that has unfolded in the Middle East, and not to mention, the continuing and immense suffering that Russia has inflicted on the people of Ukraine. And the macroeconomic picture also continues to be one of considerable uncertainty, following a period of persistent inflation and a rate hike cycle, unlike anything in recent years, these have all tested us and our societies. Economic growth has remained weak, largely due to subdued consumer confidence and reduced spending in the face of these pressures. Yet nevertheless, Nordic labor markets have shown strong resilience, with the region continuing to experience relatively low unemployment.
As we all know, the Nordic region is home to a reliable and profitable banking sector, one which is well-equipped to weather downturns and financial market disturbances. We saw another demonstration of this resilience last spring, following the failure of certain banks in the United States and Switzerland. The turbulence turned out to be little more than a footnote here in the Nordic region. Nordea is well-equipped to navigate turbulence. We have a stable, strong, and resilient business model, and a diversified loan portfolio spread across the Nordic regions. The formula delivered again in 2023, with strong income development and high profitability, combined with strong credit quality and capital generation. With this position, Nordea has continued to invest significantly in future growth, including building one of the best digital offerings in the industry.
Crucially, we are also making good progress in our ambition to be a leader in sustainability, working closely with customers to drive sustainable change in the real economy. And in these uncertain times, the risk is that the world loses sight of the critical importance of driving climate action. However, the challenges we face should motivate improvement rather than a retreat from commitments, and that is certainly Nordea's view. And you can expect our group to continue to work hard to deliver on our ambitious sustainability targets. And very important here is our size and scale, because with size and scale comes greater impact, be it through our lending, our investments, or our internal operations. And for example, last year, Nordea was the Nordic region's largest facilitator of sustainable financing and the largest provider of Nordic corporate sustainable bonds. We are always looking to strengthen our practices and our reporting.
And to this end, we continue to have a good dialogue with various shareholders and stakeholders, and we work to ensure that our actions are both in line with regulatory requirements, and giving the group the best opportunity to encourage a more impactful transition for customers and society. We appreciate our recent dialogue with AkademikerPension regarding further reporting of climate-related risks, and continue to develop our reporting and engagement strategy. We have also engaged in good dialogue with Greenpeace and other NGOs who are putting forward a shareholder proposal today in relation to our Articles of Association, and we welcome them to the room. We share the strong sentiment on climate change, and agree with the importance of reducing emissions and mitigating negative climate and nature effects.
However, we cannot recommend the adoption of the proposed amendment, as among other things, the forced curtailing of customer relationships, we believe, would negatively impact our ability to serve our customers and Nordic society as a whole, and limit our ability to encourage an impactful climate transition for our customers and society. Nordea's financial results last year made us one of the strongest bank performers in Europe. The good progress is positive news, we believe, for all stakeholders. As a strong business, we have a great capacity to support customers, which is our job. We also present an attractive place for our 30,000 employees to grow and to develop, and for shareholders, of course, we are, and will try to continue to provide attractive returns.
Over the last four years, Nordea has steadily increased its dividend per share, with high payout ratios in line with our policy, and the best in the Nordic region. Today, the AGM is asked to authorize the board to decide on a dividend payment of 0.92 EUR per share, in line with our policy. The dividend underscores Nordea's position as a leading bank for shareholder returns. Of course, behind the strong business performance stand Nordea's employees, led by Frank and his exceptional leadership team. I, I would like to extend my warm thanks, but those also of the whole board, and I hope, of all shareholders to our Nordea team for their great work, and to commend them on the achievements in 2023, and of course, to encourage even better achievements in the coming years.
At Nordea, we are striving to build a financial services group, not only for today, but for the next generation. We're very happy with Nordea's performance and trajectory, but still we have no intention of slowing down. We believe we have the right strategy, an exceptional leadership team, and ambition. We want to be the best in Europe, the best for customers, and the best for shareholders, and the best for around us. A goal that is both ambitious, and we hope, realistic. Dear shareholders, today, we also have two members leaving the board. Birger Steen has served on the board since 2015, and I would like to thank him for all his contributions over the past decade to our bank. Hans-Christian Riise has served as an employee elected member on the board for the past 11 years, and I wish to thank also him for his dedication.
Nomination board is proposing a new member to the board, Lars Rohde, whom I would like to welcome to the meeting, and he will introduce himself later on, as well as the employee elected new deputy member of the board, Jørgen Sølving Quist . For my part, I'm strongly committed to this bank, to serving and fulfilling my duties as chair, and I'm standing for re-election. Now, before handing over to the chair of the meeting, I would like to just present my board colleagues to you, together with the proposed board member, and they will each bob up and down, so you can see who they are as we go through. So first, Petra, Risto Murto, known to many of you, I'm sure. Lene Skole, Birger Steen, Per Strömberg, Jonas Synnergren, Arja Talma, Kjersti Wiklund, and of course, our proposed new board member, Lars Rohde.
And may I also present the employee elected board members, Joanna Koskinen, Gerhard Olsson, Hans-Christian Riise, Kasper Skovgaard Pedersen , and the new deputy member, Jørgen Sölving Quist.... And of course, on the podium, as hopefully you all know, we have our excellent President and Chief Executive Officer, Frank Vang-Jensen. So once again, welcome to the AGM, now officially declared open. I propose that Lagman Johan Aalto acts as the chair of the AGM, if that is to everyone's satisfaction. Terrific. Over to you, Johan. Thank you.
Thank you, Sir Stephen. Yeah,
[Foreign language]
I would like to thank you for your trust. I would like to state that Ulrika Nirkkonen will act as the secretary of the meeting. The company has published an organizational document concerning the procedures followed at items one through five of the annual general meeting. The document was attached to the notice of the meeting and is part of the meeting materials. I will not go through the instructions in the document, but they will be complemented if the relevant information was not available before the meeting. I would like to point out that shareholders have the right to speak in all of these items. Possible voting will be conducted electronically with the help of smartphones through the Inderes voting site and with voting slips if necessary.
Detailed instructions will be given before voting begins. So we will be following this agenda and complemented if necessary. Let's move on to item number three, election of persons to scrutinize the minutes and to supervise the counting of votes. I assume it is acceptable that Mia Mokkila will scrutinize the minutes, and Robert Gordin and Bettina Forss-Holmberg will supervise the counting of votes. Are they present? Yes. That's adopted. Item number four, recording the legality of the meeting. My understanding is that the meeting has been convened according to the requirements of the law and the articles of association. So we have quorum and has thus been legally convened. But do you have any comments on this? And if not, this will be stated to the minutes.
Then item number five, recording the attendance at the meeting and adoption of the list of votes, and we can state that... as the meeting started, there were 3,500 shareholders represented at the meeting. This is 56.4% of all the shares and votes in Nordea. So as I said, 56.4% of all the shares and votes in Nordea. So the list of votes is adopted. That list will be attached to the minutes. So we have approximately 300 people here present at the meeting. We can also state that all board members are present, as is the new board candidate. We have the Group CEO, the company auditor, top management, and other staff who are also present at the meeting.
Shareholders had an opportunity to vote in advance on item 7-24 of the agenda. The result of the pre-votes, including voting instructions received from shareholders prior to the meeting, will be shown on the screens in the meeting room before making a decision in each agenda item. So we will be showing the pre-votes before discussion on the agenda item in question begins. And on the basis of the pre-votes and the voting instructions received, a majority required by the Limited Liability Companies Act supports the proposals made to the AGM by the board and the shareholders' nomination board. Majority required by the Limited Liability Companies Act has not supported the proposal made by shareholders in agenda item 24.... Moving on to item number 6, presentation of the annual accounts, the report of the board of directors, and the auditor's report.
Here I suggest that I will first give the floor to the president and group CEO, Mr. Frank Vang-Jensen, and then we will go through the auditor's report, and then I will open the floor to questions. I would also like to point out that only the questions put forth by shareholders or their representatives in this room constitute questions according to Chapter 5, Section 25 of the Finnish Companies Act. We will try to go through as many of the questions sent in advance, and through the webcast, as we can. Mr. President, over to you.
Dear shareholders, good afternoon. Looking back on 2023, it was a challenging year in many ways. Geopolitical tensions remained high as Russia continued its tragic war in Ukraine. We also witnessed a difficult and very sad situation in the Middle East, which further reminds us about the fragile nature of the world around us. The economic environment was tough for many individuals and corporates. Rising prices forced central banks to raise interest rates to the highest levels in 15 years. Nordic households and businesses consequently became more careful. This led to reduced consumption and investment. However, in general, the region adjusted well in the changing environment and showed considerable resilience. Despite the challenging conditions, Nordea had a strong year, with our results making us one of the most profitable banks in Europe.
Throughout our 200-year history, we have always aimed to be a safe and strong bank, supporting our customers in all economic cycles. 2023 was no different. We stayed close to our customers, making sure we understand the changing circumstances and needs. Our proactive approach helped us to maintain good business momentum and deliver strong financial results. Return on equity was 16.9%, clearly exceeding our outlook of above 15%. Full year operating profit was up 18% at EUR 6.3 billion. Beyond the numbers, I was pleased to see us progress on several fronts. Our customer satisfaction scores improved, our business volumes grew, and we strengthened our position in our four Nordic markets. Our performance shows that our strategy is continuing to work well for us, even in testing circumstances.
We are guided by our key priorities to deliver best-in-class omni-channel experiences for our customers, to drive focused and profitable growth, and to increase operational and capital efficiency. To support our business plan, we have also made bold on acquisitions. When we set out our updated strategy in 2022, we said that we would be open to selective bolt-on acquisitions when they fit our plans, even if our primary aim is to grow organically. An example of our approach is the purchase of Danske Bank's Norwegian personal customer and private banking business, which we announced last summer. The transaction is expected to close in the fourth quarter of 2024. We have also continued to make other important long-term investments into risk management, financial crime prevention, and into strengthening our technology and digital capabilities.
These investments ensure we are well positioned for the future and bolster our ability to be the preferred partner for our customers. Throughout 2023, customer activity was high. This was evident in the record high use of our digital services. Customer logins to our mobile and online banking services increased by 13% year-over-year to 1.4 billion logins a year. We have steadily expanded the range of digital options available to our customers and continue to invest to become the digital leader in the Nordics. As we grow our digital offering, we are constantly finding new ways to be personal, expert, and responsible in our interactions with our customers. The human touch of Nordea will never go away, no matter how our customers choose to bank with us.
During the year, we assisted individual households and businesses in more than 1 million advisory meetings, a year-on-year increase of 9%. Sustainability is a key focus for us, and is at the core of our strategy. As a leading financial services group in the Nordics, we have an important role to play in supporting the transition to a low carbon economy. This includes helping our customers with their own transitions. Over the past years, we have facilitated EUR 135 billion in sustainable financing, including EUR 77 billion in 2023. We are well on track to meet our 2025 target of EUR 200 billion. We are also progressing in reducing our carbon emissions. In 2021, we committed to reduce emissions across our lending and our investment portfolios by 40%-50% by 2030.
This will support our objective to become a net zero emission bank by 2050. So far, our lending portfolio financed emissions are down 29% compared with 2019 levels. These are ambitious targets. Nordea is currently the only Nordic bank that has committed to such an overarching emission reduction target. We have been steering lending towards customer initiatives that help decarbonize the economy. We have set carbon emission reduction targets for various key industry sectors. Back in 2022, we announced our first set of sector targets with corporate shipping, residential is, residential real estate, oil, gas, and mining. Since October 2023, we have added targets for agriculture, power production, and motor vehicles. The sector targets are important tools for helping to reduce carbon emissions in industries that are crucial for a net zero future.
Financial service providers continue to facilitate the transition by enabling customers to make sustainable choices, and by reducing their own impacts. At Nordea, we continue to do exactly that. Returning to our financial results for 2023, I was pleased to see that all 4 of our business areas grew income faster than cost and delivered solid returns. Group income increased by 14% to EUR 11.7 billion. Despite the slower pace of activity in the Nordic housing market, we kept our strong position. Corporate lending grew by 1% year-on-year, and we increased our share of the corporate lending, particularly in Norway and in Sweden. Our assets under management increased by 5%. Despite volatility in the financial markets, net flows from internal channels were positive at EUR 6.3 billion.
We welcome the net 3,800 new private banking clients, a clear demonstration of the quality of our business franchise. Our risk position and credit quality remains strong, supported by a uniquely well-diversified pan-Nordic credit portfolio. We have a well-managed loan portfolio, which is spread across markets and sectors, and supported by prudent credit policies. Capital generation also remains strong. At the end of 2023, our CET1 ratio was 17%, 4.9% above the current regulatory requirements. Dear shareholders, at Nordea, we are proud to do our part to help make the Nordic societies stronger. We'll do this in many ways through our lending and financing activities, through our contributions as a major tax, Nordic taxpayer, and through our shareholder distributions.
For 2023, our board of directors has proposed a dividend of EUR 0.92 per share, a year-on-year increase of 15%. Including our share buybacks during the past year, the total distribution to our shareholders will amount to approximately EUR 1.27 per share. In our region, in the Nordics, our shareholders include more than 570,000 private individuals, alongside pension funds, insurance companies, and foundations. This means that the capital we return helps support economic activity, investments, and development across the Nordic region. We are confident in our ability to sustain high profitability. Last month, we updated our financial target. We are now targeting a return on equity of above 15% for 2025, up from above 13% previously. Our confidence is grounded in the progress that we have made in recent years.
When we set the new direction for Nordea back in 2019, we promised to focus on improving customer experience and driving profitable growth. Despite the constant changes in the external environment, this is exactly what we have done. The significant structural improvements we have made across the group have laid the foundation for consistent, high-quality earnings. We have a clear, proven strategy that is working for us. Our business franchise is strong and supported by a well-diversified business model, and we have leading positions in all our markets and business areas, and a leading position in the Nordics as-
Session now in English. Before we go into questions, let's first take a closer look at how we at Nordea, a better tomorrow and drive real change.
Global temperatures are rising, rising around us. Climate change and ecosystem collapses are threatening humans and economies, and intensifying social injustice. Restoring the health of our planet and reversing the trend requires collective action from businesses, governments, communities, and all of us.
Our role as a bank is vital. We channel funds towards sustainable growth to support the green transition and strengthen our societies. As the leading financial services provider in the Nordic region, we have a unique opportunity to drive the change using our size and strength as a force for good.
We focus on empowering all our millions of customers to make sustainable choices, to capture the benefits of responsible savings, investments, and sustainable actions. Those who see the sustainable transition more as an opportunity than a threat. Together, we contribute to building a more sustainable way of life.
Working closely with you and your business, we help accelerate the corporate transition. We will support your company through different stages of transition, as long as you share our commitment and ambition to fight climate change. To drive real change, we believe it's important to invest in companies that take the lead in sustainable development, as well as investing in reducing emissions, and over time, phasing out activities that are harmful.
As a responsible investor, we don't just manage your assets. We actively engage with and influence companies we invest in, so they make environmentally and socially sustainable decisions for their business and the communities in which they operate. By joining forces, we make money work for a better tomorrow, for you, for your business, for our society. We're open, innovative, and collaborative, just like the societies we serve. Our people represent 101 countries and 63 languages. The diversity of our workforce is a catalyst for innovation. With the strength of our 30,000 people, and in collaboration with you, our communities, authorities, and nonprofit organizations, we are actively working to achieve positive change. By preventing financial crime, teaching financial skills, mentoring startups, and helping refugees settle in a new country, we engage to build a strong foundation for our common future.
Over the past 200 years, we have helped build more viable cities and modern infrastructure. We have supported successful entrepreneurs, and we have helped millions of people realize their dreams and aspirations. We know that together with you, we can continue to put money to good use and protect and develop our common future. Join us on the journey, and let's together build a better tomorrow.
With these words, let's start the Q&A session. First, of course, I'd like to welcome to the stage also Nina Arkilahti, Head of Business Banking, and Sara Mella, Head of Personal Banking.
Thank you.
Welcome. We have already received questions from you also before the meeting, and we will start with a few of these. First one is to you, Frank. Nordea's strategy has two key levers: sustainability and digitalization. How are you progressing on the targets you've set for these areas?
Thank you, Tuomas. So, let's start with sustainability. We are progressing very well in an extremely important area. It is core for us, and therefore, we put out very ambitious targets already in 2021. As I mentioned previously, we have a net zero ambition in 2050, a firm target, and we have also put a target by 2030, to be down by 40%-50% of emissions in both financing and investments. And we are progressing very well. We're down 29% to the start point, being end 2019, and are progressing according to plan, and a little bit better actually.
Then, of course, it's also about how much we ensure that we help our clients to transition into sort of like the investments to happen by green lending. We facilitated 135 billion EUR the last two years in green, you know, sustainable financing, and last year alone was 77 billion EUR as well. Then we have in the second targets, and now we are covering most of our emissions by eight targets. Sector policies and targets that basically is and following it very closely. And we have firm targets, and of course, work with our clients to ensure that they are meeting our requirements.
And then I want to say lately, we always talk a lot about environment, which of course is a very, very, very, something that I think in the going on the governance part, governance part, we have always had a big attention, right? And continue. But on the social part, I think we are all as societies need to step up even further, and we have clearly taken our parts and are doing our part. Continuous learning, diversity is one, inclusion is another one, social responsibility in many ways is the third one, equal treatment of, of fair treatment of people. And so when we measure many of these things.
Last thing that should be at least, sort of like representative of, of one of the genders in sort of like, the three highest leadership levels of Nordea. And we actually met that target, this year. It was a 25 target, meaning that we have 40% here, females represented in top three levels of Nordea. So that's a good start, isn't it? And then, of course, the journey continues. So conclusion, progressing very well. We are very ambitious here and, have a lot to do in front of us.
Could you, Frank, briefly also cover...
Sort of like a key lever for us. It's helping us. Us, first of all, to meet our clients in a effective and but also nowadays, personal way and relevant way. But it's also, of course, about digitizing our processes. So we are doing very well, have invested crucial amounts into, in the digitization of the. Digitization very well. We have, as I mentioned in my speech, 1.4 billion logins yearly across the Nordics. And, and the rating of our. We are in a good position, ambitious, have a lot that we want to do in front of us, and we are following it very carefully.
Thank you. Next question goes also to you, Frank. And this is about the updated financial target for 2025. Question is: How will the uncertain macroeconomic outlook and expected central bank rate cuts impact Nordea's outlook and your targets?
Yeah, we updated our target this late winter, I would say. We came from a return on equity target of above 13%. We increased it to above 15%, meaning better than 15%. And we are confident in our ability to deliver on that one, despite the fragile environment and challenging environment we are having in front of us. The reason for that is that we have made a lot of changes, and adjustments, and improvements the last number of years, and we have a very well-diversified, very balanced business model, which is performing very well. The volatility is low, and the profitability is high, so we are quite confident that we will keep on delivering.
Thank you, Frank. The third question, this is for our chairman, Sir Stephen: What can Nordea shareholders expect from your capital and dividend policies going forward?
Thank you for that question. I would say that we always start with a philosophy that our job is to serve shareholders through serving our customers and society well, and that's the basis through which shareholders become rewarded. As Frank has outlined, we believe the business can continue to do that, can continue to support-
customers in difficult times and grow with them when they have the opportunities to grow and to change. And on the back of that, we think we will make continued good profitability. We will use some of those profits every year to invest in more growth with our customers, and in the capabilities of our business, also as Frank has outlined. And what's left, is, of course, available occasionally for bolt-on acquisitions, but then, to go back to shareholders. And so we would expect to continue to be the major dividend payer in the Nordic region, in our regular annual dividends. And on top of that, when opportunities arise, allow, instead of allowing money to sit doing nothing in our coffers, we will continue share buybacks, as a top-up mechanism.
So, I would say, in general, more of the same, prioritizing, first, support of our customers, growing our business along with them, and then, allowing our shareholders to participate in the benefits of that business activity.
Many thanks. Let's continue now with questions from the floor.
Thank you. [Foreign language]
Let's start here on the left.
[Foreign language]
231, one-
From both the chairman and the CEO, and I would like to express special thanks to, to the board, management, and whole personnel for the excellent job done last year. You slightly talked about future profitability, but it sounded a little bit undefined for me. I looked at the structure a little bit. You increased the interest income with EUR 1.8 billion last year. Your operative profit increased with EUR 1 billion, so there is a gap of EUR 0.8 billion, roughly speaking. First of all, could I get a rough understanding about 1% reduction in interest rate? What is the impact on your profitability out of that?
While it is now highly expected that the interest rates are due next coming year, years coming, like, clearly down, I did not really catch what are your practical plans to offset the reduced interest income, or do we have here to expect that Nordea's profitability is gonna drop in two years to come? Thanks.
Thank you.
Thanks, Niels.
I guess I should take that one. Thank you for the question, and you have done your homework, so that's really nice to see. So what we expect in our assumptions is right or wrong, but that the interest rate level in euro will decline during the coming years, and we expect, in our assumptions, 2025, that interest rate will be a little above around 2%. And when that happens, of course, you have a point that sort of like it will impact net interest income negatively. On the other hand, you will expect to see some growth. Then the question is: how much growth? We will bring some growth, at least every growth euro we can find, we will bring.
But then you have also the equity markets, you have the savings business, you have the payment business, you have many other cylinders, and we clearly are working with them every day as well. And when you add it all up, then we are confident that we will deliver on our target, being profitability, a return on equity of better, greater than 15%. And at least there's nothing now that doesn't sort of, like, support that. Would it be a walk in the park? Absolutely not. But trust me, last year was not a walk in the park either.
So, I think I hope that you are satisfied with the sort of like the answer here, and then when we post our Q1, we can elaborate a little bit more about sort of like the updated forecast. Thank you.
Thank you.
[Foreign language]
Voting slip 644. I would like to ask this question to the Group CEO and the Chair of the Board. So share buybacks, when would you do that? I, I am unclear on that, and I would like to take the floor later when we talk about the dividend. But now, in advance, at this point, I would like to know what do you mean by share buybacks, in a sense that are, are you going to be canceling these shares? I'm a bit allergic to that idea, so could you please answer that? Thank you.
Sure. Thank you very much for your question. On the subject of share buybacks, we do share buybacks when we have enough capital to support our customers, to meet all of the regulatory requirements on us, and a buffer to allow for uncertain events. But if we have still more capital than that-
Then we seek to return that capital to shareholders, first, through the ordinary dividend, and second, in, in a more occasional basis, through buying back shares in the market. And, of course, we ask each year for shareholder authorization to do that. And it is our expectation when we buy back shares, that we're buying them back permanently, and the number of shares goes down that are in issue, and the value of each share goes up. But as I say, we do that with some caution, so as not to get into a difficult position, and we are always protecting first the ability of the bank to be strong and resilient, and support our customers in difficult times.
Yes, Chair. Maybe I'm a bit slow here, but I didn't really get a response to, as to are you going to repeat Nokia's mistake, that you buy back shares worth EUR a few hundred million, and then you cancel those, and then the share price actually goes down? So, the Chair spoke a bit theoretically, so I didn't really understand. Could you please repeat? So are you going to do share buybacks and then cancel the shares after that, and then that would maybe increase the share price? Hopefully, you understood my question.
Yeah, I'm sorry if my answer was not good enough or clear enough. But yes, we have no specific plans for share buybacks, but our general philosophy is, if we have excess capital after the needs that I have set out, that we would do occasional share buybacks and would cancel those shares. It is theoretically possible that our share price goes down after we've done that. We don't control the share price. Of course, our intention is for the bank to perform well and to become more valuable, and for that to be reflected in the stock market's assessment. But the act of buying back shares is not trying to gamble on the market price of our share price.
It's trying to give an adjustment, more permanent adjustments, to the amount of capital that we have versus that, that we need. And so I accept there is, of course, still the risk that share price can go up and down. But we believe that by spreading share buybacks, when we do them, typically over an entire year for a program, that we can get an averaging effect as and when that's available. And I think that although, you know, there are some examples of companies, without accepting particularly your the example you gave, where they may, after the event, regret the buyback.
That's why I stressed that we try to be very conservative in keeping a good amount of capital to meet our requirements, to meet resilience and safety, plus a buffer, so that we don't get into a position where we would be embarrassed in respect of any previous shareholder distribution.
Thank you.
I hope that's better. Of course, we would be very happy to engage with you outside the meeting if you want some further discussions on it, and I have colleagues who are very expert in this subject also.
Thank you very much. Did anybody else want to take the floor? Raimo Virtanen. My name is Raimo Virtanen, voting slip 151. My question has to do with data security and bank secrecy. A while back, for a number of years now, in Finland, the tax administration required all the banking and taxation information. That was a very strange episode because the banking secret was cracked there and broken, and the financial supervisory authority required that. So why did they need that information and data, and why was this banking secrecy broken? Then after that, the authorities said that that was not right, and you shouldn't have done that. But what, in terms of banking secrecy, what is the situation? Can that just be broken at will?
Because otherwise, in the EU, we have very strict GDPR rules and so on, and data protection, and identity protection, and so on, but then somebody can just come into your account and see your banking information. So what was the purpose of that, and how did they manage to do that? That was a very peculiar episode in the Finnish history. Thank you.
Yes, please.
I can take this question, and I answer in Finnish as well. Bank secrecy is very strong, and we abide by the law always. And the supervisors, we also abide by their requirements and their instructions. Therefore, this individual event, I can't remember it in details or its background, but I can assure you that our operation is always something that protects bank secrecy and is based on legislation and regulations. But in afterthought, we can then look at the details of this event and then respond in more detail if there is a need to do so. Thank you. Next speaker.
Chairman, my name is Kauppinen, voting slip 623. I represent Carbon Free Finland. We are a climate campaign where we try to reduce carbon emissions of steel production, and we want to reduce this through different projects, such as infrastructure projects.
First of all, I'd like to thank you for sustainability work. It's great that Nordea has reduced 29% of their emissions of credit portfolio, and they have also sector-based objectives, and they also want to assure that big corporate customers are having a transition plan. One sector produces 7%-9% of global emissions and will use some 25% of the carbon budget up until 2050 if we continue, and the industry is one of the biggest users of coal. And according to the roadmap of IEA, the metallurgic coal is sufficient to cover for this. But there are still plans for new mines, metallurgic mines, and they would increase a lot of coal on the globe, and they would endanger the climate aims.
Nordea will analyze the steel sector and will have a steel sector objective during 2023. Can you tell us what is the status of this plan, and will you then ensure that there will be no expansion of this sector in the economy? Thank you.
Thank you for the question, and, Nina, would you reply to it, please?
Thank you, Veera. We share the same concern, and we have the same direction. Nordea has, in 2021, come out with a commitment to be Paris-aligned and net zero emissions bank by 2050, and very, very much on track we are to reach that goal. We have these eight sector-specific targets, and then on the overarching target, steel industry is included. We believe in engagement with our company customers, as well as exclusion if needed. Therefore, all steel industry companies, as well as metallurgical coal, is comprised in the overall targets.
Thank you. She has got a follow-up, I think.
Yeah, Chairman, dear Nordea leaders and shareholders, my name is Kirsi Vuorinen, voting number 658, and I'm asking this question on behalf of ShareAction. I'm asking if Nordea will publish a plan by the end of 2024, at the latest, to restrict financing for new oil and gas. ShareAction welcomes Nordea's publication of its second round of sectoral targets last October, and the bank's commitment to significantly enhance its disclosures in 2024 as part of the new EU requirements of Corporate Sustainability Reporting Directive. However, the bank's net zero targets and disclosures must be complemented with robust fossil fuel financing restriction policies, and the bank missed an opportunity to update its oil and gas policy. ShareAction is therefore calling on Nordea to introduce corporate financing restriction on oil and gas companies with expansion plans.
Some of Europe's largest, 25 banks are already taking steps to do this. Danske Bank and La Banque Postale require transition plans from the oil and gas clients, which explicitly state they will not develop new oil and gas fields. In addition, Crédit Agricole, Crédit Mutuel, and Société Générale have placed corporate financing restriction on pure players. While Nordea requires transition plans from clients, it does not place a red line on expansion. This means oil and gas companies with expansion plans, which according to IEA are, incompatible with keeping within 1.5 degree, are still eligible to receive financing from the bank. The BankTrack report finds that since July 2020, the ten Nordic banks provided $12.4 billion in financing to fossil fuel companies engaged in expansion or with plans to expand.
Nordea provided the third largest amount of these ten banks, $1.5 billion. Given, 2023 was the hottest year on record, action by Europe's largest banks is even more urgent. Will Nordea introduce corporate financing restriction on oil and gas companies with expansion plans by the end of 2024? This could consist of a commitment to require that client transition plans do not include any development of new oil and gas fields, as well as a commitment to exclude all oil and gas companies with expansion plans. Thank you.
You want me to do that?
Yeah.
Thank you very much for your question. What I would say is we feel that we have gone exactly as far as you want, maybe even further, but perhaps through a slightly different route. That is to say that we have committed as a bank, and of course, through our actions with customers to the Paris path and to the net zero objective. We've done. You mentioned a number of other banks, but those banks have not gone as far as us in also committing by 2030 to the interim targets, in our case, very substantial ones, a 40%-50% reduction. We think we've gone further than other banks in that regard.
And, as mentioned, our progress since 2019 of a 29% reduction, we also believe compares very favorably to other banks. So actually, we are proud to be leading the way among banks in the Nordics and internationally in our commitments to support the climate transition. And that goes for the totality of all emissions in our areas, whether it's steel, whether it's agriculture, whether it's oil and gas. When you add them all up, we are committed to those targets of reductions, and we feel that is much more valuable. It's a totality of commitment, and it's going further than other banks than too much specific micromanagement, name by name, sector by sector. Although, of course, we do build it up in our sectoral plans. The subject of oil and gas is critical. We accept that.
We have achieved very substantial reductions in our portfolio of oil and gas. But in terms of the further step that you're asking, we don't believe that that is necessary for us to still be the leading bank in the Nordics for climate transition achievements with our customers. And we believe that working with our customers in a cooperative way is the better way to go about it. And I have to say, we saw most recently with all of the disruption post the Ukraine war situation, the world still today relies on an element of fossil fuels, and it can be immensely damaging to economies if the transition is not handled well. So we are determined the transition should happen.
We should play an active role in it, but and be a leading bank. But I'm afraid we believe that the level of specificity that you're looking for would be both undesirable for the customers that we have to represent and support, and is also not necessary for us to achieve the leading goals that we have. Thank you for your question, though. We greatly value the perspective and, of course, the engagement during the year.
Thank you.
Any more? Request for the floor. Thank you.
Bjarne Winberg,
Joakim Winberg, 560 is the number of my voting slip. Distinguished chair of the board and President and CEO, I would like to ask a question having to do with share buybacks. I think it's about destroying the bank. At the moment, you have destroyed EUR 5 billion of our money, and those who benefit from that are the leaders of the board, because through your bonus system, you get even more money, and that is dependent on the amount of equity in the company. So with that EUR 5 billion, if we think that now you're targeting a 16% profit, if you had invested this EUR 5 billion and received that 16% as profit, that would have meant EUR 800 million for the bank in profits per year.
So I would like to propose that the share buyback program is canceled and is not realized. And this cannot be used in a way to increase the bonuses of board members. I think board member bonuses should be calculated according to the old system, where the equity was EUR 5 billion bigger.
Thank you very much, sir, for those very thoughtful remarks. And, if I might just respond. First of all, can I assure you of two things? Number one, that all decisions on dividends and share buybacks are made by the board of directors, who do not receive bonuses. And therefore, there is absolutely no financial incentive on the board of directors to make a decision in one direction or another. That's the whole point of the independent governance system that is set up. And secondly, of course, share buybacks do have to be authorized by shareholders on a regular basis, who get to vote on it in principle, with the board of directors then making the tactical decisions.
The second thing that I would say to you is, and I speak personally, it's not as necessarily a matter of public policy. I would be delighted if we didn't do share buybacks, in the sense that if we can find profitable ways to deploy the money to support our existing customers, I'd prefer that. It would be terrific. We want to expand this bank safely and profitably in support of our customers. And so there is absolutely no part of the management or the board that is trying to restrict growth. The opposite. It is, however, a fact of life that first with COVID, and now with higher interest rates and a more uncertain economic environment, that at the moment, most of our customers are not trying to expand. They're trying to protect what they have.
And so we are available and willing to lend more money than at the moment our customers are asking. And as soon as economies strengthen, we very much hope that we can deploy more capital to expanding our lending. But rather than, at the moment, keeping the capital doing nothing, we do, from time to time, do share buybacks. But please be assured, it is never a substitute for expanding the bank safely, profitably, in support of our customers. That is always the first place that we will deploy our capital.
Thank you.
Yes, I would like to continue on the same topic, the share buyback program. That is the worst case. So why not pay more in dividends? Because societies in the Nordic countries, the majority of our societies, include. They are societies where the third sector is actually financing a lot of the operations that the society offers, and this applies to Finland and the other Nordic countries. And these are operators who have not received this money due to share buybacks. Thank you.
Again, thank you again, sir, and we recognize the importance of the matters that you bring up. We do debate these subjects. We will continue to debate them, and of course, we will always listen to you and our other shareholders when we balance these things in the future. And so, please take with you the idea that we do not have a closed mind on this subject. What I would say to you, though, is two additional things. The great majority of the money that we pay out does go via dividends. Share buybacks have been an occasional top-up of our regular dividend, rather than our principal way of distributing money, and I expect that to continue.
The reason why we occasionally do share buybacks as a top-up, rather than paying it all as extra dividends, is because historically, we have received feedback from our shareholders that they value a level of predictability in their dividend income that they can plan on. Of course, dividends are not certain, but it's nice if they are reasonably predictable, and so we try to keep our regular dividend at a level that in most scenarios we can sustain. And that means that occasionally there is a more temporary, excess, and if we put that into dividends, it would cause our dividend to be more volatile and sometimes go down, as well as up. And generally, our shareholders have told us that they don't want that. I don't believe the money used for share buybacks is wasted.
If we look at the shareholder returns, over the last several years, Nordea's share price has gone up over that period, in addition to shareholders getting a, a good dividend return. In fact, the total shareholder return, adding dividends and share price increases, has gone up, I think, 170% over the last five years, one of the best records of any European bank. And so at the moment, I believe the data is showing that, shareholder value is being created, both through regular dividends and through the movement of the share price, and that the buybacks have not damaged that, and if anything, have supported it. But I don't want you to feel that we are not listening.
We always listen, and if our shareholders, taken as a whole, were to give us the message that they don't want stock buyback and they want a more volatile dividend, we would listen to that message, and we certainly respect your views on it. So thank you for your views.
Thank you.
Yes, Raimo Virtanen, 151. Deutsche Bank produced a 1,000-page report where they had asked leading universities in the world to draft a report on the green transition. The report basically stated that most of the green transition technologies are such where their benefit and carbon footprint is worse than you would imagine. The technologies is at a very low level at this point, and there are only a few technologies that will continue to benefit us in the future and that we can actually develop. Last winter, for example, was a good example in Finland of how electric cars work in Finland, how the batteries in them work, and so on. The carbon footprint of battery-operated vehicles is quite big, even if you compare them to regular cars. So is this all hype?
Are we just closing our eyes and just guessing what will happen in the future considering where technology is? Thank you.
Well, sir, that is a very,
Yes, I wanted to clarify this with a few words. In Nordea, you talk quite a lot about green things, so what is your stance compared to the one at Deutsche Bank? Because the report was produced by leading universities, and it was a very interesting report. And, we are not talking about just any bank here.
So thank you very much for those thoughtful remarks, and you are ahead of me, at least in having read Deutsche Bank's 1,000 pages, which I'm sorry to say that I haven't myself. But I do recognize the points that you make, and of course, it is true that as the world searches to adapt to the climate threat, it is true that technology is by far our most important tool in making that adaptation over the coming years. And it is certainly true that we are still inevitably, as a world, in a process of experimentation, and many, many different technological advances are being attempted, are being tried, and some will succeed better than we expect, and some will fail.
That has been true for many hundreds of years as technology itself has moved forward. We can all think of examples, and it will continue to be true. And so it is. But, but I don't think that that invalidates the absolute requirement for the world to adjust, to meet the climate threat, and the absolute centrality of technology in helping to do that. And so certainly from our part as a bank, you will find that we are not placing singular bets on one technology or one technique or whatever, as we work with our customers. You can find us curious and engaged with our customers across a whole range of things. And just in my time as chairman, I've met with very major customers, some who are driving down the battery route. Nordics are very well represented there.
Some, for example, in the aviation field, where a separate company I chair is engaged. Sustainable aviation fuel is another technical advancement, which where one of the Finnish companies is a world leader, and I could cite many, many more examples. So I think you're right, that technology will have some failures as well as some successes, and we must, we, we must keep our eyes open to those challenges, but it cannot stop us from engaging with technology and stimulating the march in order to help us solve the challenge that the world has ahead of it. But thank you very much for your question and your, and your interest.
Wait for the microphone. Thank you, Chairman. On responsible steel and the revolution to start in Finland. But dear friends, this is the wrong forum to look at responsible steel. We should talk about this at the Chinese parliament. There are 4-5,000 new coal plants, and in Germany, lignite is mined, and they stopped nuclear energy, but they use coal. But I think that our discussion is peanuts in the overall picture. But thanks for the discussion anyway.
Thank you very much, sir. We, all we can do is our part in it, and we must do that. But thank you, and you can have some lively debates after the meeting to your left.
And now I propose that we move on to other questions. There is still one in the meeting room. Go ahead.
Bengt Holmell .
Bengt Holmell , voting slip 148. 128, excuse me. I'd like to hear a deeper analysis on what is the situation in the bank's economic counterparts. I think we haven't heard on that. We know that inflation is galloping because the interest rates have been rising. We also know that we have more companies going into bankruptcy. This, of course, affects our economic or the bank's economic counterparts as well. What is Nordea's risk analysis? What are you planning to do? Risk limits, I'm sure that will be. They have been reduced by the bank, and I'd like to know about the realized losses, loan losses, especially what have they been and what is the development on that side? Thank you.
Thank you for the question. Yes, a bank is clearly not isolated from rest of the economies. It is about being prepared and being resilient to when a crisis might appear. That is exactly what we have been trained to do every day in Nordea. So where are we now? I can only use sort of like Q4 data as we are sort of like very close to ending a quarter. Starting with this part of the world, so the Nordic region is doing very well. I think we have something that we should be proud of. There are many things that we are sort of like a little bit grumping about, which is of natural reasons. But when it comes to financial and economic resilience, economic resilience, the Nordic countries are doing very well.
Then looking at our clients, what is happening there, I must say that I am very happy to see how our clients, in general, are meeting the changed environment. It has not been an easy ride for our clients, COVID, war, inflation, geopolitical tensions, and so all impacting. But when it comes to private individual and also to businesses, looking at the data points that we have, they are doing very well. The number of bankruptcies are increasing, but we don't see it in our figures. Of course, we do see bankruptcies, but it doesn't carry big credit losses. When it comes to households, they are actually responding, in general, very well.
We do see in some of the countries a little bit more delayed payments, but, very limited credit losses to what you could think about if you, for example, had thought about the '90 crisis and, and previous crisis. So all in all, I strongly believe that we are very well supported by running a bank in the Nordic region. Secondly, we are the clearly the most well-diversified, on the risk-based and business model bank in, yeah, I should say in Europe, almost, and our customers are in a, a strong shape. So, so no big concerns right now. Watching it, following it very carefully. And what we have said is that, we, we do think that a normalized provision level for Nordea is around ten basis points, and, and we are roughly half of that last year.
I think I'll stop there. Thank you.
Thank you. Let's continue in English. It was mainly the financial counterparties I wish to hear about-
Mm.
What level of loan losses or losses in the counterparties you have received during the last years? What's the trend, and what do you see in the future? Because I think you have downgraded a lot of some of the financial counterparties and the limits you have for the activities with the financial counterparties.
Yeah. Thank you.
Let's take it in that way.
Yeah, that's fine. So, of course, we are dependent on our ecosystem. When we transfer money and lots of things, then we are dependent on a receiving bank in some other country. We have to reduce the number of correspondent banks, what is what you are talking about, from a very large number to a much smaller number. And that, the reason for that is, of course, we know we want to know our counterparts pretty well. My ambition here is that we should not expect big credit losses from any counterpart bank.
So credit losses, if they should come, which we hope they will not, more than what we have seen, should come from clients that is pressured out to, or sort of like to a some, certain stage where they go, they are not able to pay their bills. Can we avoid a credit default somewhere if a bank is failing? We can, probably, but, we should try to avoid at least that we get big losses, and that is about what business do you do with such a client? So I'm not concerned about that counterpart or that part of our counterparts, but of course, we are following it very carefully.
Thank you. [Foreign language]
I would like to note that we can end the discussion here in the room, and we can move over then to the webcast questions.
V ery similar topics on share buybacks, for example. I believe we have addressed those questions. Now, if anyone asking about the topic over the webcast would like to know more about it, you are always, of course, welcome to get in touch with our Investor Relations team. Thank you. But now let's take a few more maybe services, customer-focused questions still. Sara, I believe you're able to answer this, was: how do you make sure that the quality of your customer services remains high in all your channels, this including over the phone, online chats, and what actions are you taking?
Making it easy is one of our core customer promises, and that means that the combination of our great digital services, self-service in mobile and Netbank, with the human-assisted service in our contact center, should make it very easy for our customers to handle their daily banking errands. And of course, it's what's important for us is that customers can also choose which way they contact us. It can be chat, it can be phone, it can be secure email, for sure. And we've invested a lot in our digital services, which are ranked the highest in the Nordics. But also what we find very important is that we have the right capacity in our customer service to meet the demand that comes to us, the number of customers reaching out to us.
We are constantly following up the customer feedback, and adjust, and develop our services based on the customer feedback. We are also constantly training our staff to provide very good quality service. Especially in the contact centers, that's very important 'cause we also have quite a lot of new employees. That's a very typical way to start a banking career, to come into our contact service. What I'm very happy to say that we've seen a steady reduction over the last years in complaints. We first of all value complaints. It's a very good way to get feedback and also we see what are the possible pain points that our customers are having, then we can address those.
But we've seen a steady reduction, and it's actually over the last four to five years, it's been 50% reduction in complaints. So, addressing this every day and trying to improve every day, but the customer satisfaction and the quality of our service is very, very much focusing every day.
Thank you, Sara. Frank, I believe I will give this question first to you. What is Nordea's view on artificial intelligence in terms of investments and in general for future development within banking?
I think we are looking... That's a short answer, because it's very-- we can elaborate very much here. So I think we are looking into something that will deliver great benefits and great optionalities to the bank. We are very curious. We are having different pilots running. I think that short term, we probably, most of us, are overestimating the potential positive contribution, but it will come and will come fast. So our approach here it is to be jumping in, leaning in, testing, understanding, and be ready to take a bit- And then over time, we have something here that will be, bring a big change to societies. That's my personal view, but we are clearly embracing it in Nordea, with a careful, sort of like approach.
Thank you, Frank. Then for the last question from our webcast audience, and let's see, I believe most of you can help in answering this. How is Nordea making sure that it's making a positive outcome for people and communities in general? There is much focus on human rights, especially now with the economic downturn affecting many families. Also, how are refugees treated as customers at Nordea?
Well, should I, or do you want to take it, Sara?
Sure, I can,
Yeah, please.
Thank you for the, thank you for the question. First of all, I could say that we fully recognize our role in the society and the responsible role of supporting our customers and supporting the society. One element of changes that are happening is digitization in the society. The question very often comes to us, that how are we supporting elderly? How are we supporting vulnerable customers, in these times?
We are putting a lot of focus on that, securing that customers can, first of all, of course, handle their banking errands, but as bank codes are typically a key to many of the services in the societies in this digitized world, also supported more broadly that everyone can operate in these changes and with the more and more digitizing environment.
Many thanks. Would you still like to elaborate on the refugee question as well, and refugees as customers?
Refugees typically are a good example of, I would say, vulnerable customers. So it, everything that I said applies also to that. And for example, in the times when the Ukraine war happened, we did see many refugees coming also to the Nordic countries. And there we had specific actions to help them, support them, and help them to settle in the society. And of course, our perspective was very much that how can they manage their finances? So providing support and advice to them was one example of that.
Many thanks. As mentioned, this wraps up the questions from the webcast, so we can move on.
Thank you.
I close the discussion. Thank you. Thank you, Nina and Sara. We can state that the financial statements, the review of the financial period, as well as the auditor's report, have been presented to the annual general meeting and will be attached to the minutes of the meeting. We can then move on to item seven, adoption of the annual accounts. As you can see on the screen, the advance votes. According to this, we can adopt the annual accounts. Adopted. Item eight: resolution of the use of the profit shown in the annual accounts and the related authorization of the board of directors. You can see the proposal on the screen and also the support based on the advance votes.
[Foreign language]
[Foreign language]
Thank you, Chair. There aren't that many roaming microphones here. I value highly that our share is so valued, and that you pay out in one batch, because Finland, Sweden, and Denmark, they are dividend countries. When we look at the dividend, it's very good that everyone can choose how they utilize it. Chairman Aalto is a very calm man, and if you allow, I would still like to say something on share buybacks. I won't be long, but clearly the chairman of the board of directors and CEO, we didn't actually meet when speaking, so we weren't speaking about the same thing, actually. Very briefly, because in Finland we have a bad reputation. For example, Nokia, for EUR 20 billion, they have bought back their own shares, canceled them, and their share price has dumped.
Risto Siilasmaa, even in writing, presented how this works in theory, and we understand very well that when shares are canceled, the share price should rise. But think about it, EUR 20 billion was canceled. Nothing happened, so we are very afraid in Finland that if you start buying back shares and canceling them, what will happen? That's why I want to propose: is it possible that you would pay more dividend? I understand that the chairman of the board, he was pretty theoretical, and you have certain responsibilities and requirements. And I understand that internally you have provisions on financing and transactions, but why couldn't we have a supplementary dividend? Maybe Frank could answer.
I think you should say.
Before you answer,
[Foreign language]
Okay, so maybe shareholders should not be asking the same questions over and over, and I think that the company management would not like to repeat themselves time after time, so...
Comment. This was not a question, but a statement from some shareholders.
Thank you, sir. We-
Oh-
We understand your views. Thank you.
Thank you.
Muuta puheenvuoroja?
Are there any other requests for the floor? No. Other proposals? The dividend proposal has been adopted. Item number nine, resolution to discharge the members of the board and the president and group CEO from liability. This covers deputy group CEO as well. Here you can see the result of the pre-vote. Do we have any requests for the floor? If not, I can state that the AGM has decided to grant the discharge from liability. Next, we have items 10 and 11, where the Chair of the Board will now present the board's proposal, and then we will go through them one at a time.
Thank you, Chairman. The remuneration report for 2023 reflects Nordea's commitment to giving shareholders a say on pay, and it describes how our remuneration policy has been implemented in 2023. I want to first highlight the key developments in 2023 communicated through this report. In the report, we have further increased transparency. I believe we are leading in the Nordics in this regard, by introducing various prospective and forward-looking performance indicators from our variable pay plans, both short-term and long-term. We're also, this year, disclosing the so-called CEO pay ratio, and we've taken several other steps to improve the readability and simplicity of the report.
We have further increased the weighting and the focus on ESG matters in remuneration, introducing ESG goals in long-term incentives as well as short-term incentives, and so they are now part of all our variable pay programs, including the staff-wide profit-sharing plan, aligning all of our staff with the bank's ESG priorities. The long-term incentive plan for the next three years now includes goals to be on track to achieve our 2030 target for emission reduction in lending investments and internal operations, which we believe to be a leading and indeed even unique position within the Nordics, and certainly among Nordic banks. A key aspect of our remuneration policy that's also up for renewal today is the concept of pay for performance.
Despite the challenging external environment, Nordea has, again, in the year just gone, demonstrated strong performance, delivering both on ESG and financial goals. Profitability has continued to improve, supported, of course, by the return of positive interest rates. That performance is reflected in what our shareholders have experienced in share price and dividends, and it's reflected in the decisions made by the board for 2023 on the remuneration of the president and Group CEO, and the Deputy Managing Director, as well as, of course, the leadership team who work with them and for them. The outcomes for the Group CEO and Deputy Managing Director are aligned to our financial performance and shareholder returns, and we believe supports the delivery of our key forward-looking targets and priorities.
Therefore, the board proposes to the Annual General Meeting that the remuneration report for the year 2023 is adopted through an advisory resolution. The remuneration policy for governing bodies provides a framework for the remuneration for the members of the board of directors, the president and Group CEO, and the Deputy Managing Director, and it is to be proposed for adoption through an advisory resolution at least every four years. The policy in force was adopted by the AGM in May 2020, and accordingly, we are proposing our updated policy for governing bodies for adoption at the AGM today, four years later. We're proposing no material changes to the updated remuneration policy when compared to that already in force. There are some minor amendments, mainly to cover terminology and minor updates connected to variable pay plans.
The board proposes to the annual general meeting that the updated remuneration policy for governing bodies is adopted through an advisory resolution. Thank you, Chairman.
Thank you.
[Foreign language]
So we are at item 10, advisory resolution on the adoption of the company's remuneration report for governing bodies. Are there any requests for the floor? And if not, we can state that this proposal has been adopted. And then let's move on to item 11, advisory resolution on the adoption of the company's remuneration policy for governing bodies. And here you can see the pre-votes, how much support the proposal received. Are there any requests for the floor? Go ahead.
Joo, Hannu Virtanen edelleen. Tota, meidän neuvoa antava päätös, mutta-
Yes, this is an advisory decision, so I would like to know what exactly are we deciding on. So what is the actual proposal on the table? Yes, the proposal is the one that has been available. The document, that is what we are deciding upon here. So we are confirming. Has it been available online or where has it been? Because when I entered the meeting room, I wanted to see the document. I only had about two minutes to do that, and then it was taken away from me, so I'm just. I'm not opposing, but in terms of how the meeting is organized, I would like to say that it's a bit unusual that we are making a decision on a matter that is unknown to most of the people here.
Yes, well, that the proposal has been available, so if you had taken a look at the material, then you would know what the proposal is. Yes, thank you for that. Thank you. This closes the discussion. That is my decision here. Let's state that this proposal on the advisory resolution is adopted. Then let's move on to items 12, 13, and 14. Here we can state that here you can see the nomination board's proposals, and this proposal has been available online, and the speech by the nomination board chair has also been available online and is still available there. This is the resolution on the remuneration for the members of the board of directors. Are there any requests for the floor? Any other proposals? The proposal is adopted.
Next, item 13, resolution on the number of members of the Board of Directors. Are there any other proposals? If not, this proposal is adopted as well. Then item number 14, election of the members of the Board of Directors and the Chair of the Board. Here you can see the proposal. You can see who the board candidate is, Lars Rohde. I would like him to come to the stage to introduce himself to the AGM.
Thank you so much for this opportunity to present myself here. I would be very brief. A little bit about my professional life and experience. I spent more than 40 years in different positions in and around the financial industry. I'm, by education and by training, I'm a macroeconomist. I was hired 40 years ago, a little bit more than 40 years ago, by the Danish Central Bank, and up to the beginning of 2023, I served as the chairman of the board of governors of the Danish Central Bank for 10 years. Prior to that, I was, for 15 years, the CEO of ATP, one of the largest European pension funds. Nordea is what regulators and central bankers call a G-SIFI. What does that mean?
It means a global systemically important financial institution, highly regulated and under intense scrutiny by ECB and local regulators, central bankers, and so on, because they are of paramount importance for financial stability globally and in the markets and countries where they operate. Today, Nordea is a very strong bank, well-capitalized, and with a sound income stream, as we have heard today, dedicated staff and management. And I have to say it is with great humbleness I'm looking into the work ahead. I hope to make a contribution so Nordea, also in the future, can serve customers, shareholders, and the broader society. Thank you.
Thank you very much.
Are there any questions or requests for the floor on this proposal? Yes. I'm very happy to see a man with such a strong CV entering the board. I think none of the board members can compare here. So this is a very strong CV, so it was maybe it wasn't necessary to talk about how humbled you are to be entering the board. I think we should be grateful to have him. So another thing, I represent the savers organization in Finland, and we have had a proposal where when selecting board members, board members should be elected one at a time and not as a collective. In some associations or companies, we sent a message saying that maybe this should be the practice.
I think it is used somewhere in Europe or elsewhere in the world, where the board is not elected as a collective, but individually, one person at a time. Maybe, maybe the Chair of the meeting or the Board or the President and CEO could, could comment. Are you familiar with this idea?
Näin, näin juuri ollaan toimittu.
Well, this is exactly what we are doing, have been doing and are doing, electing individually. So yes, we are with you here.
Muita puheenvuoroja?
Are there any other requests for the floor? This closes the discussion. Are there any other proposals? If not, we can adopt this proposal in its entirety.
[Foreign language]
15, resolution on the remuneration of the auditor. The board proposes, on recommendation of the board audit committee, that the remuneration of the auditor is paid against the company approved invoice. Can we adopt this proposal? This is adopted. Next, we have item 16, election of the auditor. Here you can see on the screen the results of the advanced voting. Are there any other proposals? Voting slip 128. I would like to hear how many other companies does this auditor in question where he serves as a main responsible auditor with main responsibility, and how big is his role in Nordea's audit? And I would also like to know if the auditor is also active in other companies, how many people are involved in his audit process? Maybe I have some further questions, but these are my first questions.
[Foreign language]
Shareholders, Chairman. Thank you for a very good question, and I'd like to answer in Finnish. So I am the main responsible auditor of Nordea. I have served for four years, and how many other audits do I have? Well, Nordea is my biggest and most significant, so I use most of my working time. I have a limited number of other audits where I'm the main responsible auditor. If we then think about the size of my audit team, we have a very detailed audit plan on how do we respond to all the different requirements for audits to be able to make a good audit according to all the requirements. We have a significant team in many companies, in many countries, so there are hundreds of people participating in this audit. And the last question was? How many other audits do I do?
So how many other audits do I have on an annual basis? Well, we talk about maybe 10 in addition to Nordea, which is the most significant one. So how many others in addition to Nordea? So the total number of people involved... A very good question, thank you. We operate in big teams. PricewaterhouseCoopers is one of the leading audit companies globally and in Finland as well, and we have in our team the leader, project manager, we have other experts involved in the team, and the whole PricewaterhouseCoopers Finnish talent is harnessed to this audit, and then we have international experts as well. But I am responsible for the audit on the whole, and I receive information on all the people involved in this process.
[Foreign language]
Thank you. Any other requests for the floor? Please, over there.
Bjarne Winberg,
Bjarne Winberg, voting slip 560. Mr. Auditor, are you aware that Nordea sends to the tax administration information without purchase prices, so you have to clear out the, the prices. Thank you.
[Foreign language]
So as I said, we have operated according to good practice of audit, and I can steer this question to the company management.
[Foreign language]
This is the auditor's response. Was there another question? Another question?
Joo, Bengt Holmell.
Bengt Holmell, again, the audit committee chairman must have opinions on the auditor having other tasks and companies than Nordea. Nordea should be a big enough piece of work for one authorized public accountant. So I'd like to hear from the audit committee chairman, his opinion on this.
Would probably be the audit committee.
Tilintarkastusvaliokunnan puheenjohtaja, mikrofoni olkaa.
Thank you once again for your question. I'm John Maltby, the,
Olen John Maltby. Olen tilintarkastusvaliokunnan puheenjohtaja. Me teemme-
And with Jukka. We have a very regular contact with him and with his team, and I am, as the Chair of the Audit Committee and the Board Audit Committee, fully satisfied that we have the full attention and full cooperation and full support from Jukka, and that we are the primary focus of his and his team's attention. Just one thing to mention, that in line with good practice, we do regularly look at the performance of the audit firm. We do ask the internal teams in terms of their feedback, and we act upon that, and actually have improvement plans in place with the auditor. What I would say is that we continue to be fully satisfied with their performance.
Thank you.
[Foreign language]
I close the discussion here. Any other proposals? If there are no further, PricewaterhouseCoopers has been elected the auditor. Item 17, resolution on the remuneration of the sustainability reporting assurer. On the screen, you can see the advance vote results. We can state that the proposal has been adopted. Next, we have item 18, election of the sustainability reporting assurer. You can see the proposal on the screen, as well as the result of the advance voting. Are there any other proposals? Since there are none, we can state that the proposal has been adopted. We then move on to items 19 to 23, so that the chairman of the board, Sir Stephen, will go through the main contents, and then we will look at them one by one.
Thank you very much, Chairman. Nordea is required to satisfy certain capital requirements pursuant to EU and Finnish legislation. Within this framework, capital instruments that absorb losses by converting into shares can be used to meet part of the capital requirements. The board is therefore proposing a mandate to decide on the issuance of special rights entitling to either new shares in the company or treasury shares against payment. The purpose of this is to facilitate a flexible and efficient adjustment of the company's capital structure to the capital requirements without first holding an EGM. The maximum number of shares that may be issued on this mandate would be 340 million, which is about 9.7% of the shares in the company on the date of the notice to the AGM.
The authorization will remain in force until the earlier of either the end of next AGM or 18 months from the resolution of this meeting. It's a pretty standard resolution. Similarly, for 20 and 21, in its securities trading business, Nordea, among other things, offers share-related products and acts as a market maker in its own shares on the relevant stock exchanges and in indices in which the company's shares form a significant part. The board is therefore proposing that the company may repurchase and transfer its shares in the form of directed repurchases. As part of the proposal concerning the transfer of shares, we also propose that the AGM resolves to approve all subscriptions that would be made pursuant to it.
Pursuant to the proposed resolution, a maximum of 175 million shares could be repurchased, and the same maximum shares could be transferred. The amount of each corresponds to approximately 5% of the shares in the company on the date of the notice at the AGM. Under item 22, pursuant to our dividend policy, Nordea continually assesses the opportunity to use share buybacks as a tool to distribute excess capital. We've discussed that quite a lot in the meeting, of course. The purpose of the repurchase is to optimize the capital position of the bank and to increase sustainable shareholder return to the benefit of all shareholders once all of the investment needs of the bank and the growth of our customers have been met.
And so in view of this, the board proposes a mandate for the board to decide on the repurchase of the company's own shares on the conditions set out in detail in the meeting notice. In short, no more than 340 million shares may be repurchased to distribute excess capital corresponding to approximately 9.7% of all the shares in the company on the date of the notice to the AGM. Of the mandate, no more than 8 million shares may be repurchased to be used in the company's variable pay plans in accordance with regulatory requirements. This authorization would remain in force for 18 months from the AGM, and if granted, it would not revoke the previous authorization by last year's AGM, which remains in effect until September.
Last, the board proposes a mandate for the board to decide on either the issuance of new shares or the transfer of the company's own shares for use in implementing variable pay plans in accordance with regulatory requirements, or as required for new variable pay plans, or as payment in connection with corporate acquisitions. The maximum number of shares to be issued or transferred under this proposed mandate is 30 million, corresponding to approximately 0.9% of all the shares in the company on the date of the notice to the AGM. Due to the nature of the potential uses of the mandate, the shares could be issued by way of directed issuances, and this mandate would remain in force until the earlier of the end of the ex next AGM or 18 months from today. Thank you, Chairman.
Thank you.
Next, we will decide on these matters one by one. Item 19 first. Resolution on the authorization. You can see the proposal here, as well as the result of the advance voting. Approved. Item 20, resolution on the repurchase of the company's own shares in the securities trading business. Any questions related to this? You can see the proposal on the screen. Should there be none, this has been adopted. Then Item 21, resolution on the transfer of the company's own shares in the securities trading business. Any questions related to this? This has been approved. Then Item 22, resolution on the authorization, the board to decide on the repurchase of the company's own shares. You can see it on the screen. There is no need for discussion. I close the discussion, and we have approved this.
Item 23, resolution on the authorization of the board of directors to decide on the share issuances or transfers of the company's own shares. Proposal on screen. Any questions? Any requests for the floor? I close the discussion. Any other proposals? No, this has been adopted. Now we can move over to item 24, which is the one before the last one, on the amendment of the company's articles of association. Nordea has received a shareholder's proposal according to the Company's Act, Chapter 5, Article 25, from Greenpeace Nordic, Swedish Society for Nature Conservation , ActionAid Denmark, proposing that the articles of association be amended by adding the additional paragraph 4. The proposal is visible on the screen and is available for shareholders on the company website, and is included in the meeting materials.
The Board does not recommend approving the proposal of the amendment, and based on the advance votes, it can be stated that a sufficient qualified majority does not second the proposal, and it has not been it will not be adopted. Veera Kauppinen, Carbon Free Finland, would like to speak on this item. The floor is yours.
... Nordea management and shareholders. I know this has been a long meeting, but bear with me for one moment. My name is Veera Kauppinen from Friends of the Earth Finland, voting number 3,279, and I represent today the Swedish Society for Nature Conservation, the shareholder behind this resolution.... This proposal is backed by a group of civil society organizations, including Greenpeace, Fair Finance Guide, and ActionAid Denmark, that work for a more sustainable banking sector. To begin, I would like to thank Nordea for your constant improvement on sustainability issues. We welcome Nordea's Net Zero and 2030 targets for your portfolio, sectoral targets for high carbon sectors, and the many updates on your fossil fuel policy. We also share Nordea's view that banks can play an important role in their clients' transition.
However, there is a major gap in the bank's current climate strategy, making it misaligned with the Paris Agreement. Nordea's continued financial support to companies that expand fossil fuel extraction and lack Paris-aligned transition plans severely undermines the bank's aspiration to be a leader in sustainability. The International Energy Agency concluded that expansion of fossil fuel extraction beyond 2021 is incompatible with the Paris Agreement. Our report shows that between 2020 and 2022, Nordea provided a total of $3.2 billion in new loans and financing to fossil fuel companies, where a majority are still expanding, and none have solid transition plans. Companies that expand fossil fuel production are not a part of sustainable and just energy transition.
As long as Nordea and other banks keep supporting companies like this, they are continuing to be a part of the problem, despite the progress made on other aspects, such as reducing financed emissions of their oil and gas credit portfolio. We therefore submitted a shareholder proposal to close this gap in Nordea's climate policy. A similar proposal has also been filed at Swedbank and SEB's AGMs. On the other hand, several Nordic competitors, such as Handelsbanken and Danske Bank, have already stopped new loans to expanding fossil fuel companies, and this has been applauded by thousands of bank clients. Unfortunately, the resolution has not managed to get the required level of shareholder support. We hope this is only because the shareholders did not agree amending the articles of association is the right way to proceed.
We urge shareholders to acknowledge the financial litigation and reputational risk that come with providing financial services to expanding fossil fuel companies, and to act accordingly by urging Nordea to close this loophole in their policy. The world is now headed for a warming of more than 2.9 degrees, with devastating consequences such as floods, extreme heat waves, and melting polar ice. Nordea has an opportunity to be a clearer part of the solution instead of the problem. That would be appreciated by many bank clients, both today and in the future.
[Foreign language]
Thank you. WWF Finland, 492 is the number of my voting slip. My name is Raija Ojanen. I'm the legal advisor of WWF, and WWF supports the proposal in item 24, and we had hoped that the AGM had supported this proposal because climate action is urgent, and this clause in the articles of association would have meant that Nordea would have been a part of the solution in tackling the climate challenges and aligned with the Paris Agreement. We have a lot of research showing that Nordea is still financing exploration of fossil fuels and fuel sources. So why is this item here in the AGM, and what is the role of the board?
I think the Nordea board has said that the board is responsible for its sustainability strategy, and it's not a matter for the AGM to decide, and as a lawyer, I would like to disagree. For example, in Finnair's AGM in 2020, the company board amended the articles of association or brought such a proposal on the agenda of the AGM, saying that the proposal or the proposed amendment would support the sustainability strategy of Finnair, and enabling them to take a leading role in using alternative fuels. So this is what we are talking about here as well. This is what we wanted to do with this amendment in the articles of association, and shareholders, if they accept this proposal, could give us a good support in relinquishing financing fossil fuels. And I think financing fossil fuels in the...
In this decade, they are a mistake, and no responsible bank should make those kinds of mistakes. Raimo Virtanen, 151. I recently read a book called Pyrocene, and that went through all the eras of our globe, and it stated that the different eras tend to repeat on Earth when the climate is getting hotter and then colder, and they said that we are heading towards ice age, and that is why we should be burning fossil fuels. So, and this is research by leading universities. You should all read this book to make sure that you know what we are going through. So these eras are repeating themselves, they repeat one after the other, so we can burn fossil fuels.
But if you are supporting the green transition, I'm waiting for the hydrogen economy, because that is a clean, clean alternative that won't run out. So that's my comment.
[Foreign language]
195. So what is the hit that our EPS would take if we were to be really green? What is the cost to shareholders? So how much would our earnings per share decrease, by 5 percentage points, 10? And if you know, you can answer.
[Foreign language]
Thank you very much, all of you, for those comments and those interventions. I think in many respects it's wonderful that we can all demonstrate that we're engaged in this subject and thinking about it and care about it. I hope that you will understand and have heard, both today and in our materials, that Nordea shares a strong ambition that our world successfully transition and minimize the damage from the climate threat that is upon us. We're very grateful to those who've engaged to put the resolution today and for engagement outside the hall, for their continued pressure on the subject.
And as I said before, we believe overwhelmingly that we share the objectives, we share the Paris objectives, we share the desire for our societies and communities to change. And far from being a bank that is not doing its role in this regard, we believe that we are doing the most in all of the Nordics, and probably amongst the most in Europe, amongst banks, in terms of our overall climate emission targets. At the same time, and where we do disagree, is that we do not see our role as the boss of our customers, as their policemen. We see our role as to support our customers, to encourage them, and to work with them. And in particular, obviously, we're mainly talking about Norway in the context of fossil fuel.
We don't believe that the populace of Norway has yet adopted the same position as some people would like it to. And in that context, we don't want to desert our business in any one area, we don't want to desert our customers, we want to work with them to encourage and help them to transition, to change. The oil and gas sector in Norway is changing, is adopting transition plans, is engaging in renewables. And we continue to believe that it is the most responsible thing to do for society, for us to work with them in that effort of change, rather than to cause some abrupt confrontation that is not supported by the societies that they represent.
So in this detailed area of implementation, we respectfully disagree, but we most certainly embrace your goal, and I think the goal of most people, that society should work together to try to have a transition that works as well as possible for the world and for the people who live in the world and live in our societies. Thank you very much for your time.
Thank you. [Foreign language] .
Thank you. This closes the discussion on this item. The proposal by the shareholders is not adopted by the Annual General Meeting. Next item is 25, closing of the meeting. All the items on the agenda have now been discussed. We can hereby declare the meeting closed, and I will give the floor over to Tuomas. The floor is yours.
In Nordea's Annual General Meeting. The decisions made in today's meeting and all other relevant material will be available later at Nordea's website. It's now time to conclude the meeting here in Helsinki and online. Thank you again for joining us, and see you next year.