Nordea’s Q2 operating profit is up 31% year-on-year to €1.33bn, ahead of market forecasts.
Nordea, the Nordic region’s largest bank by assets, is benefitting from a successful cost-cutting strategy.
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Nordea’s Q2 cost-income ratio fell by 9 percentage points to 45% from the year ago quarter.
Nordea CEO Casper von Koskull’s said: “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.”
Nordea is in the process of moving its corporate headquarters to Finland from Sweden to be based within the eurozone.
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By GlobalDataNordea says that the move, announced last September, is on track.
Nordea Q2 highlights include:
- Total operating income up 6% y-o-y to €2.54bn;
- Total expenses down 11% to €1.54bn;
- Profit before loan losses +24% to €1.39bn;
- Net loan losses down 44% to €59m, and
- Return on equity 13.9%, up from 9.5%
Looking ahead,von Koskull said: “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.”
Nordea Q2: digital, IT investment paying off
Nordea has blazed a trail in the region in respect of digital and IT investment.
Added von Koskull: “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.”
In 2015 Nordea selected a new core banking platform from Temenos, the largest European core banking deal at the time.
And in 2017 Nordea announced an Open Banking pilot.
Gunnar Berger, head of Open Banking at Nordea, told RBI at the time: “We started before the PSD2 discussion arrived.”
