Second Quarter Results 2014

17-07-14 7:00 | Press release

CEO Christian Clausen’s comments on the results:
“The second quarter of 2014 was characterised by a continued inflow of customers and strong activity, particularly in our savings area and corporate advisory business. Income is holding up well, despite low lending demand, low interest rates and low volatility,
and we continue to execute on our cost and capital efficiency programmes. Underlying costs are down in local currencies and cost to income ratio is 49%. The Common equity tier 1 capital ratio improved by 60 basis points to 15.2%.

We are proud that still more households and corporates trust us with their banking business and savings. Our sector is transforming, with swiftly changing customer behaviour in the direction of using services and receiving advice online. We continue the work of adapting to the new demands to earn our customers’ trust as a relationship bank also in the future.

(For further viewpoints, see CEO comments, page 2)

First half year 2014 vs. First half year 2013 (Second quarter 2014 vs. First quarter 2014)¹:

  • Total operating income -1%, in local currencies +2% (-2%)
  • Total expenses -4% excluding restructuring costs, in local currencies 0% (-3%)
  • Total expenses +4% including restructuring costs of EUR 190m in the second quarter (+12%)
  • Operating profit +7%¹, in local currencies +10%¹ (+2%¹)
  • Common equity tier 1 capital ratio 15.2%, up from 13.1%² (up to 15.2% from 14.6%)
  • Cost/income ratio down to 49%¹ from 51% (down 0.8 %-point to 49%¹)
  • Loan loss ratio of 17 basis points, down from 23 basis points (down to 16 bps from 18 bps)
  • Return on equity 11.7%¹, up from 11.3% (up to 12.0%¹ from 11.4%)
Summary key figures, continuing operations³, EURmQ2
2014
Q1
2014
ch
%
Q2
2013
ch
%
loc.curr Q2/Q2 %H1
2014
H1
2013
ch
%
loc.curr H1/H1 %
Net interest income1,3681,36201,391-212,7302,749-13
Total operating income2,4562,501-22,490-114,9574,996-12
Profit before loan losses1,0701,264-151,234-13-112,3342,473-6-3
Net loan losses-135-158-15-186-27-26-293-384-24-22
Loan loss ratio (ann.), bps1618221723
Operating profit¹1,1251,10621,0487102,2312,089710
Operating profit9351,106-151,048-11-82,0412,089-21
Risk-adjusted profit¹8768800853361,7561,70736
Diluted EPS (cont. oper.), EUR0.180.210.200.390.39
Diluted EPS (total oper.), EUR0.170.210.190.380.39
Return on equity¹, %12.011.411.511.711.3
Return on equity, % 10.011.411.510.711.3

Exchange rates used for Q2 2014 for income statement items are for DKK 7.46, NOK 8.28 and SEK 8.96, see also Note 1.
Net impact from currency fluctuations between Q2 2014 and Q1 2014 was insignificant.
¹) Excluding restructuring costs in Q2 2014 of EUR 190m.
²) Previously estimated CET1 ratio.
³) Key figures for continuing operations, following the divestment of the Polish banking, financing and life insurance operations.

For further information:
Christian Clausen, President and Group CEO, +46 8 614 7804
Torsten Hagen Jørgensen, Group CFO, +46 8 614 7814
Rodney Alfvén, Head of Investor Relations, +46 72 235 05 15
Claus Christensen, Head of Group Identity & Communications, +45 25248993

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The information provided in this press release is such that Nordea is required to disclose pursuant to the Swedish Financial Instruments Trading Act (1991:980) and/or the Swedish Securities Markets Act (2007:528).