We begin 2021 with high expectations for overcoming COVID-19 and starting the recovery from the pandemic. Nothing is certain, but there are several signs that we are heading towards brighter times.
2020 was an exceptional year for all of us. COVID-19 affected our daily lives and the lockdowns presented us with financial, social and personal challenges.
At Nordea, the pandemic tested – and proved – the resilience of our business model. The remarkable efforts of our employees and our advanced digital capabilities kept the bank fully operational, with high levels of customer activity throughout the year. I’m proud of the extraordinary efforts of our dedicated and highly competent people.
Despite the difficult circumstances, I am very happy to see that we made good progress in 2020. We improved our performance and delivered on our business plan and key priorities.
Our business volumes grew and we gained market shares across the Nordics. We created better customer experiences, improved customer satisfaction, and also reduced costs and increased operational efficiency.
The fourth quarter results reflect the continued growth in business volumes. Mortgage loans grew by a record 6%, year on year, and market shares continued to grow. Assets under management increased by 9% to a record high of 354 billion euro. Operating profit increased by 11% and total income was up 4%. Net interest income was up 6% – the highest growth rate since 2008.
We are on track to reach our 2022 financial targets. We have steadily improved our cost-to-income ratio, from 58% in 2019 to 55% in 2020.
During the pandemic we have been able to support our customers and the societies around us and maintain our financial strength. Our capital position is among the strongest in Europe.
However, we understand the guidance issued by the European Central Bank (ECB) in times like these, and we have followed its recommendations on dividend payments, even though our financial position is very strong.
Our capital and dividend policy is unchanged. Dividends are important to our shareholders and benefit both them and society at large. We consider dividend payment to be a matter of timing only. We expect to pay out dividends for 2019 and 2020 after September 2021, in line with the ECB recommendation.
In the fourth quarter we decided on a new sustainability strategy with progressive targets, further strengthening our leading Nordic position in sustainable banking.
Sustainability is part of Nordea’s long-term business strategy. We want to make a difference for a greater good - not only for ourselves, but also for generations to come.
Our ambition is to become a bank with net zero emissions by 2050 and we target to reduce the carbon emissions from our lending and investment portfolios 40-50% by 2030.
All in all, we are well on track towards meeting our 2022 targets. Our focus will remain on our three key priorities: to create great customer experiences, drive income growth initiatives and optimise operational efficiency.
The recovery from COVID-19 is not going to be easy: societies and businesses will have to find their feet again and we will need to be prepared for setbacks along the way. The ongoing lockdowns and restrictions remind us about the importance of endurance and patience. But almost a year after the outbreak of the pandemic, we see several signs that we will eventually beat the virus.
As a strong and personal financial partner we will continue to take action – to drive sustainable growth and recovery together with our customers.
That is the direction: towards brighter times.
/Frank Vang-Jensen, President and Group CEO
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