Nordea Bank Abp
Financial Statement Release
4 February 2021 at 7:30 EET
COPENHAGEN, Denmark, Feb. 04, 2021 (GLOBE NEWSWIRE) --
Summary of the quarter:
- Continued strong growth in customer business volumes in all countries. Mortgage loans grew by a record 6%, year on year, with further increases in market shares. SME lending increased by 8%, supported by the acquisition of SG Finans, now Nordea Finance Equipment (NFE). Furthermore, assets under management grew by 9% to a record high of EUR 354bn, supported by an all-time-high quarterly net inflow in retail funds.
- Operating profit up 11%, driven by income growth. Total income increased by 4%, with net interest income increasing by 6%. Net fee and commission income was up 2%, while net fair value result was down 13%. Operating profit increased by 11% compared with the fourth quarter of 2019. Return on equity (RoE) for the quarter was 8.4%, having been negatively affected by Nordea's very high level of capitalisation. Nordea's overall RoE development demonstrates good progress towards the target of above 10% in 2022.
- 2020 costs in line with guidance - new cost outlook for 2021. Total operating costs were in line with Nordea's full-year guidance of below EUR 4.7bn. Operating costs were 3% higher than in the fourth quarter of 2019 after absorbing certain non-recurring items, such as costs from the integration of NFE, non-core IT impairments and provisions related to new Danish holiday pay legislation. Underlying costs were down 3% compared with last year. Work to increase operational efficiency continues and 2021 costs are expected to be below EUR 4.6bn, with continuing efficiency gains partially offset by pay inflation, higher depreciation and amortisation, and higher costs from the integration of NFE.
- Strong credit quality with low loan losses. Net loan losses amounted to EUR 28m or 3bp in the fourth quarter. The management judgement buffer of EUR 650m has been retained in full, as the impact of the pandemic on Nordea's customers remains uncertain.
- Capital position among best in Europe - CET1 ratio 17.1%. After deducting the proposed 2019 and 2020 dividends in full, the Group's CET1 ratio was up 70bp on the previous quarter at 17.1%. This is 6.9 percentage points above the current regulatory requirement. Nordea's capital position is among the strongest in Europe.
- 2020 dividend proposal of EUR 0.39 per share, in line with dividend policy. Nordea's Board has proposed a dividend of EUR 0.39 per share for 2020. In addition, the Board will decide in February to distribute EUR 0.07 per share as the first instalment of the delayed 2019 dividend of EUR 0.40 per share. The Board also proposes that the Annual General Meeting authorise it to pay out the remaining part of the 2019 dividend (EUR 0.33 per share) and the 2020 dividend (EUR 0.39 per share) - a total of EUR 0.72 per share - after September 2021, in line with the European Central Bank recommendation.
- On track to reach 2022 financial targets. Nordea continues to focus on creating great customer experiences, growing income and improving operational efficiency in line with its plan, and is progressing well towards meeting its 2022 financial targets.
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