Bachelor's thesis (Turku University of Applied Sciences) Degree Program in Business Management

APPENDIX 2. Graphical Representation of the Research Process 
Definition of the 
research 
problem
 
Review previous 
research findings
 
Review concepts 
and theories
 
Collect 
data 
 
Analyse the 
data in relation 
to presented 
hypotheses
 
Interpret and 
make a final 
summary
 
 F=feed back: helps to compare results 
with objectives
FF=feed forward: provides criteria 
for evaluation
Representation of the research process behind 
current Thesis work
Formulate 
hypotheses
 
Plan the 
research 
methods for the 
practical part of 
the Thesis work
 
F
F
FF
FF
1
3
4
6
2
5
2
7

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Appendix 3 
TURKU UNIVERSITY OF APPLIED SCIENCES THESIS | Artem Vorobyev 
APPENDIX 3. Forces of globalization and their effects on commercial banks 
Forces of Globalisation
Advances in 
technological 
progress
Advances in 
communication
Advances 
intransportation
Integration of 
economies
Infromatisation
Challenges for Banks
Internalisation 
of financial 
markets
Increasing volatility 
of portfolio 
investments, 
interest rate 
fluctuations and 
consequent market 
risk exposure
Increased
instability of 
financial 
environments 
makes it difficult to 
plan investment 
activities and 
analyse potential 
risk exposure

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Appendix 4 
TURKU UNIVERSITY OF APPLIED SCIENCES THESIS | Artem Vorobyev 
APPENDIX 4. Business operations of commercial banks 
Business activities of 
commercial banks
Passive operations 
(attraction of 
funds)
Active operations 
(distribution of 
funds) 
Consulting 
(comission-fee 
activities)
Commercial services to the 
clients
Emission services to the clients
Other sources of funds
Credit and cash-settlement 
operations 
Investment activities
Consulation services and other 
business activities on behalf of 
the customers that are subject 
to comission fees
General 
structure of commercial bank’s operations

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Appendix 5 
TURKU UNIVERSITY OF APPLIED SCIENCES THESIS | Artem Vorobyev 
APPENDIX 5. Overview of BASEL III implementation and transition agreements
 
 

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Appendix 6 
TURKU UNIVERSITY OF APPLIED SCIENCES THESIS | Artem Vorobyev 
APPENDIX 6. Nominal amounts of derivatives instruments held for trading and hedging by the Nordea Group
 
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
Interest rate
derivatives
Equity
derivatives
Foreign
exchange
derivatives
Credit
derivatives
Commodity
derivatives
Other
derivatives
Total
5,62
2,59
8
17,811
910,396
47,052
7,817
2,58
3
6,608,257
5,701,729
17,144
954,193
61,889
16
,547
2,170
6,753,672
Nominal amount of derivatives held for trading by Nordea Group in 
2012 (EURm)
31-Dec-12
21-Dec-11
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Interest rate derivatives
Foreign exchange derivatives
Total
59,858
8,871
68,729
60,103
10,505
70,608
Nominal amount of derivatives held for hedging by Nordea Group 
in 2012 (EURm)
31-Dec-12
21-Dec-11

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Appendix 7 
TURKU UNIVERSITY OF APPLIED SCIENCES THESIS | Artem Vorobyev 
Appendix 7. Sensitivity of investment risks and their effects on shar
eholder’s equity
 
 
 

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Appendix 8 
TURKU UNIVERSITY OF APPLIED SCIENCES THESIS | Artem Vorobyev 
APPENDIX 8. Concluding summary of the empirical research
Investment Risks 
Liedon Säästöpankki
Nordea Bank 
Osuuspankki
Danske Bank 
Handelsbanken 
Commonly used 
investment 
methods 
Corporate mutual bonds with rating BBB- or 
higher 
Money market instruments; short-and 
long-term bonds; fund investments; 
derivative contracts. 
Bonds and bond funds; equity market 
operations; money market 
instruments; fund investments 
Bonds, derivative instruments,
Short-and long-term financial 
securities 
Most crucial 
investment risks 
(listed in order of 
importance) 
Low-interest rate, market and liquidity risks 
Counter-party (and concentration), 
market, liquidity risks
Market, counter-party, liquidity risks
Market, counter-party and liquidity 
risks. 
Counter-party, market (interest 
rate, equity) and liquidity risks 
Market risks 
(interest rate, 
equity price and 
foreign-exhcnage 
risks) 
Hedging with options, futures and SWAPS. 
Protective measures based on VaR, 
IRM and CRM calculations 
Interest-rate derivatives; equity 
derivatives (options, futures); VaR 
calculations 
Core funds, derivatives; interest rate 
SWAPS/forwards; VaR models 
Exposure limits; VaR and yield curve; 
capital buffers; interest rate SWAPS
Counter-party 
credit risk
Is not recognized 
Portfolio diversification, credit 
derivatives, interest rate SWAPS, CVA, 
PFE, RWA
Investing in securities with higher 
credit rating; credit derivatives 
Investing into high credit rating 
securities 
PFE calculations; capital buffers; 
exposure limits; Netting agreements 
Liquidity risk
Prediction of interest-rates, unemployment, 
inflation, customer demand.
Combining short-and long-term 
financial instruments; stress testing; 
LCR calculations 
Management of liquidity buffer and 
short-term investment instruments; 
setting limits to liquidity risk exposure 
LCR liquidity buffer; monitoring 
short-and long-term liquidity risks; 
stress tests 
Stable long-term investment 
orientations 
General investment 
strategy 
Focuses on stability, with profitability being 
on the second place 
Barbell strategy 
Long-term (and, therefore, profit) 
oriented investment strategy 
Long-term oriented investment 
strategy 
Barbell strategy 
Reaction to the 
upcoming 
regulation of the 
banking sector 
____ 
Liquidity buffer construction with the 
LCR model; stable long-term sources of 
funding (NsFR); structural 
reorganizations for risk management 
___ 
Achieving compliance with the basci 
LCR requirements by restructuring 
the liquidity buffer: highly liquid CB 
bonds 
Structural reorganizations for risk 
management; focus on stability in 
long run (NsFR); new pricing 
structure for liquidity buffers