CEO Casper von Koskull’s comments on the results:
“This quarter we have started to see our efforts to increase customer satisfaction bearing fruit and we see signs of improving momentum across our various businesses among both corporate and household customers. We are delivering on cost, compliance, capital and credit quality, which is the foundation for continuing to be the stable, safe and trusted banking partner of our customers today and tomorrow.
In recent years, Nordea has simplified and focused its business on its core Nordic markets and customers. The planned acquisition of Gjensidige Bank is a further step on that journey. It is a profitable, growing, digital bank, and together with our strategic partnership with Gjensidige, we are creating opportunities to strengthen our position in one of our core Nordic franchises and take part of a profitable growth.
We have achieved another major milestone in our transformation journey with the European Central Bank granting a banking licence to Nordea Bank Abp, our new parent company upon re-domiciliation. The licence is essential for Nordea to be able to operate within the Banking Union in order to achieve stability, predictability and a level playing field.
This quarter we have seen signs that business momentum is improving in some of our core markets, lending volumes have stabilised and are picking up in certain sectors and we have a good momentum in our capital markets and advisory businesses, whilst the savings related fees and commissions remain challenged and household lending margins continue to be under pressure. Although we expect some modest growth for the remainder of the year, given the slower first half of 2018, it is unlikely that the repeating revenues in 2018 will reach the 2017 level* but we still expect to report higher net profit in 2018 versus 2017. We are on track to meet our cost guidance of EUR4.9bn for 2018 and loan losses in the coming quarters are expected to be lower than the long-term average.”
*2017 revenues adjusted for the deconsolidation of the Baltic operations and Nordea Life and Pension in Denmark.
Second quarter 2018 vs. Second quarter 2017 (Second quarter 2018 vs. First quarter 2018)
- Net interest income EUR 1,073m, -9%; -7% in local currencies (+2%, +2% in local currencies)
- Total operating income EUR 2,541m, +6%; +8% in local currencies (+10%, +10% in local currencies)
- Total expenses EUR 1,154m, -11%; -8% in local currencies (-4%, -3% in local currencies)
- Profit before loan losses EUR 1,387m, +24%; +27% in local currencies (+25%, +25% in local currencies)
- Net loan losses EUR 59m, -44%; -41% in local currencies (+48%, +53% in local currencies)
- Operating profit EUR 1,328m, +31%; +34% in local currencies (+24%, +24% in local currencies)
- Common Equity Tier 1 capital ratio 19.9%, up from 19.2% (up from 19.8%)
- Cost/income ratio 45% down from 54% (down 7%-points from 52%)
- Loan loss ratio of 10 bps, down from 13 bps (up 3 bps from 7 bps)
- Return on equity 13.9%, up from 9.5% (up 3.9%-points from 10.0%)
- Diluted EPS EUR 0.27 vs. EUR 0.18 (EUR 0.27 vs. EUR 0.20)
Exchange rates used for Q2 2018 for income statement items are for DKK 7.4477, NOK 9.5953 and SEK 10.1553.
For further information:
Casper von Koskull, President and Group CEO, +46 10 157 1020
Rodney Alfvén, Head of Investor Relations, +46 72 235 05 15
Christopher Rees, Group CFO, +45 5547 2377
Sara Helweg-Larsen, Head of Group Communications, +45 2214 0000
The information in this press release is such, which Nordea Bank AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 07.00 CET on 19 July 2018.