Nordea Bank Abp
Half year financial report
17 July 2025 at 7.30 EET
Summary of the quarter
Strong profitability; earnings per share EUR 0.35. Nordea remains highly profitable, with a second-quarter return on equity of 16.2% reflecting strong performance and resilience despite continued uncertainty from trade tariffs and increasing geopolitical tensions. The cost-to-income ratio with amortised resolution fees was 46.1% for the quarter. Earnings per share were EUR 0.35.
Total income resilient. As expected, net interest income was down (-6%) following policy rate reductions. Net fee and commission income was stable after being significantly impacted by market volatility at the start of the quarter, which had a dampening effect on confidence and activity levels. Net insurance result and net fair value result were solid. Costs increased by 4%, in line with Nordea's plan, driven by strategic investments, inflation, annual salary increases, and foreign exchange effects. Operating profit was EUR 1.6bn.
Lending volumes up and strong growth in deposits. Nordic mortgage markets remained muted, though there were further signs of a gradual recovery, with demand for new loan promises continuing to increase. Mortgage lending grew by 6% year on year, driven by organic growth in Sweden and the contribution from the recent acquisition in Norway. Corporate lending was strong, up 5%, as Nordic companies started to adjust to the new operating environment. Retail and corporate deposit volumes increased by 8% and 5%, respectively. Assets under management increased by 9%, to EUR 437bn, and Nordic net flows showed continued strong performance (EUR 4.5bn) in the quarter.
Exceptionally strong credit quality, with net loan losses again well below Nordea's long-term expectation. Net loan losses and similar net result amounted to a reversal of EUR 21m. Lower provisioning requirements led to a EUR 60m release from the management judgement buffer, which now stands at EUR 341m. Excluding the release, net loan losses and similar net result amounted to EUR 39m or 4bp.
Continued strong capital generation; new share buy-back programme launched. The CET1 ratio was 15.6% at the end of the quarter, 1.9 percentage points above the regulatory requirement. Nordea's strong capital position and continued robust capital generation enable the Group to support lending growth and continue its share buy-backs. Nordea launched a new EUR 250m share buy-back programme on 16 June, and expects to complete it by 30 September 2025 at the latest.
Outlook for 2025 unchanged: on track to deliver return on equity of above 15%. Nordea has a strong and resilient business model, with a very well-diversified loan portfolio across the Nordic region. This enables the Group to support its customers and deliver high-quality earnings, with high profitability and low volatility, through the economic cycle. It also enables Nordea to continue to generate capital, seek opportunities to deploy it to drive growth, and distribute excess capital to shareholders in the form of share buy-backs.
(For further viewpoints, see the CEO comment on page 2. For definitions, see page 53 in the Q2 2025 report.)
Group quarterly results and key ratios
EURm | Q2 2025 | Q2 2024 | Chg % | Q1 2025 | Chg % | Jan-Jun 2025 | Jan-Jun 2024 | Chg % |
|---|---|---|---|---|---|---|---|---|
Net interest income | 1,798 | 1,904 | -6 | 1,829 | -2 | 3,627 | 3,858 | -6 |
Net fee and commission income | 792 | 795 | 0 | 793 | 0 | 1,585 | 1,558 | 2 |
Net insurance result | 58 | 63 | -8 | 54 | 7 | 112 | 124 | -10 |
Net fair value result | 254 | 247 | 3 | 289 | -12 | 543 | 538 | 1 |
Other income | 9 | 21 | -57 | 9 | 0 | 18 | 37 | -51 |
Total operating income | 2,911 | 3,030 | -4 | 2,974 | -2 | 5,885 | 6,115 | -4 |
Total operating expenses excluding regulatory fees | -1,314 | -1,260 | 4 | -1,300 | 1 | -2,614 | -2,486 | 5 |
Total operating expenses | -1,333 | -1,278 | 4 | -1,354 | -2 | -2,687 | -2,567 | 5 |
Profit before loan losses | 1,578 | 1,752 | -10 | 1,620 | -3 | 3,198 | 3,548 | -10 |
Net loan losses and similar net result | 21 | -68 | -13 | 8 | -101 | |||
Operating profit | 1,599 | 1,684 | -5 | 1,607 | 0 | 3,206 | 3,447 | -7 |
Cost-to-income ratio excluding regulatory fees, % | 45.1 | 41.6 | 43.7 | 44.4 | 40.7 | |||
Cost-to-income ratio with amortised resolution fees, % | 46.1 | 42.6 | 44.6 | 45.4 | 41.6 | |||
Return on equity with amortised resolution fees, % | 16.2 | 17.9 | 15.7 | 15.9 | 18.0 | |||
Diluted earnings per share, EUR | 0.35 | 0.37 | -5 | 0.35 | 0 | 0.70 | 0.75 | -7 |
CEO comment
The second quarter saw the most volatile markets for some time. Concerns over higher trade tariffs and increasing geopolitical tensions resulted in significant financial market turmoil. Despite the external pressures, overall sentiment among Nordic households and businesses remained calm, with customer activity increasing in most areas as the quarter progressed.
Global trade volatility clearly presents risks. However, the Nordic economies are better positioned than many to manage through periods of turmoil. We also expect the lower inflation and interest rates to further support increasing activity levels as confidence returns.
In this environment, Nordea delivered another strong performance. We grew business volumes and achieved high profitability, with a return on equity of 16.2%. The result underlines our position as a resilient, market-leading financial services group. It also keeps us firmly on track to meet our full-year guidance.
Total income in the quarter was EUR 2.9 billion, a year-on-year decrease of 4%. As expected, net interest income was lower in the declining interest rate environment, but was otherwise resilient, supported by higher lending and deposit volumes as well as our deposit hedge contribution. Net fee and commission income growth slowed, impacted by the financial market turmoil early in the quarter.
Mortgage lending increased by 6% year on year, driven by Norway and Sweden. We grew retail deposits by 8%, including the contribution from our acquisition in Norway. Corporate lending and deposits also saw strong growth, with both up 5% year on year.
Costs increased by 4%, in line with our plan. We continued our strategic investments in key areas - including technology, data and AI - that will support future income growth, profitability and overall resilience. We don't plan to increase investment levels this year, and therefore expect year-on-year cost growth to slow significantly after the summer, and full-year costs to grow by no more than 2% to 2.5%, excluding foreign exchange effects. Our cost-to-income ratio for the second quarter was 46.1%. Operating profit was EUR 1.6bn, stable quarter on quarter.
Our credit quality remains exceptionally strong. Net loan losses and similar net result for the quarter amounted to a reversal of EUR 21m. Given the continued strength of our credit portfolio, we released a further EUR 60m from our management judgement buffer, which now stands at EUR 341m.
In Personal Banking we delivered solid growth in lending and deposit volumes. With an exceptionally good performance in June, we further strengthened our position in Sweden, where we also took more share of the mortgage market. App users and mobile logins were up 7% and 6%, respectively, year on year. We also launched new digital features, including a financial health check in the app to help customers improve their financial well-being.
In Business Banking we grew lending volumes by 4%, primarily in Sweden and Norway, with indications of higher activity levels. Deposit growth was strong, 10% year on year, with solid contributions across all Nordic countries. Supporting our ambition to become the leading digital bank for small and medium-sized enterprises, we enhanced our digital services with new tools and piloted our new Business Insights solution to support daily banking.
In Large Corporates & Institutions we drove strong lending growth, with volumes up 4% year on year, or 6% when adjusted for foreign exchange effects, pointing to optimism among Nordic businesses in the uncertain environment. We were active in supporting customers with equity financing and debt issuance, while the overall corporate financing market remained subdued, with volatility and uncertainty postponing deal-making. We also saw an increase in demand for shorter-term liquidity financing as corporates continued to focus on retaining financial flexibility.
In Asset & Wealth Management business momentum remained strong in our Nordic channels. We had net inflows of EUR 2.0bn in Private Banking and EUR 1.2bn in Life & Pension. Net flows from international institutions were lower following two strong quarters with inflows from larger mandates, and wholesale distribution net flows continued to stabilise. Assets under management increased by 9% year on year, to EUR 437bn, while asset management fees were lower in the quarter, impacted by the financial market volatility in April. In Denmark, we were named Commercial Pension Company of the Year by EY and FinansWatch.
Our capital position remains strong, supported by robust capital generation. Our CET1 ratio stood at 15.6% at the end of the second quarter, down slightly on the first quarter after deductions for the latest share buy-back programme.
In summary, this was another solid quarter for Nordea, and we remain on track to deliver a return on equity of above 15%, consistent with the target we set three years ago. Our performance so far this year clearly highlights the strength of our well-diversified business model and structurally improved profitability. It also reflects the advantages of operating in the strong and stable Nordic markets, home to globally competitive businesses and a powerful entrepreneurial spirit.
We look forward to presenting our strategy for 2026 and beyond at our Capital Markets Day in London on 5 November. We will share the concrete steps we are taking to build on our successful foundation, with continued focus on our four home markets. This will enable us to outgrow the market, continue delivering market-leading return on equity, and achieve superior earnings per share growth.
Frank Vang-Jensen
President and Group CEO
Outlook (unchanged)
Financial outlook for 2025
Nordea's financial outlook for 2025 is a return on equity of above 15%.
Capital policy
A management buffer of 150bp above the regulatory CET1 requirement.
Dividend policy
Nordea's dividend policy stipulates a dividend payout ratio of 60-70%, applicable to profit for the financial year. Nordea will continuously assess the opportunity to use share buy-backs as a tool to distribute excess capital.
Income statement
EURm | Q2 2025 | Q2 2024 | Chg % | Q1 2025 | Chg % | Jan-Jun 2025 | Jan-Jun 2024 | Chg % |
|---|---|---|---|---|---|---|---|---|
Net interest income | 1,798 | 1,904 | -6 | 1,829 | -2 | 3,627 | 3,858 | -6 |
Net fee and commission income | 792 | 795 | 0 | 793 | 0 | 1,585 | 1,558 | 2 |
Net insurance result | 58 | 63 | -8 | 54 | 7 | 112 | 124 | -10 |
Net result from items at fair value | 254 | 247 | 3 | 289 | -12 | 543 | 538 | 1 |
Profit from associated undertakings and joint ventures accounted for under the equity method | -1 | 2 | -3 | -4 | 9 | |||
Other operating income | 10 | 19 | -47 | 12 | -17 | 22 | 28 | -21 |
Total operating income | 2,911 | 3,030 | -4 | 2,974 | -2 | 5,885 | 6,115 | -4 |
Staff costs | -809 | -761 | 6 | -792 | 2 | -1,601 | -1,510 | 6 |
Other expenses | -354 | -361 | -2 | -359 | -1 | -713 | -699 | 2 |
Regulatory fees | -19 | -18 | 6 | -54 | -65 | -73 | -81 | -10 |
Depreciation, amortisation and impairment charges of tangible and intangible assets | -151 | -138 | 9 | -149 | 1 | -300 | -277 | 8 |
Total operating expenses | -1,333 | -1,278 | 4 | -1,354 | -2 | -2,687 | -2,567 | 5 |
Profit before loan losses | 1,578 | 1,752 | -10 | 1,620 | -3 | 3,198 | 3,548 | -10 |
Net loan losses and similar net result | 21 | -68 | -13 | 8 | -101 | |||
Operating profit | 1,599 | 1,684 | -5 | 1,607 | 0 | 3,206 | 3,447 | -7 |
Income tax expense | -378 | -381 | -1 | -373 | 1 | -751 | -783 | -4 |
Net profit for the period | 1,221 | 1,303 | -6 | 1,234 | -1 | 2,455 | 2,664 | -8 |
Business volumes, key items1
EURbn | 30 Jun 2025 | 30 Jun 2024 | Chg. % | 31 Mar 2024 | Chg. % |
|---|---|---|---|---|---|
Loans to the public | 368.0 | 346.9 | 6 | 366.8 | 0 |
Loans to the public, excl. repos/securities borrowing | 335.2 | 319.7 | 5 | 335.7 | 0 |
Deposits and borrowings from the public | 237.2 | 223.8 | 6 | 240.0 | -1 |
Deposits from the public, excl. repos/securities lending | 218.5 | 208.1 | 5 | 221.2 | -1 |
Total assets | 636.8 | 606.8 | 5 | 641.4 | -1 |
Assets under management | 437.1 | 400.3 | 9 | 425.2 | 3 |
1. End of period.
Ratios and key figures1
Q2 2025 | Q2 2024 | Chg % | Q1 2025 | Chg % | Jan-Jun 2025 | Jan-Jun 2024 | Chg % | |
|---|---|---|---|---|---|---|---|---|
Diluted earnings per share, EUR | 0.35 | 0.37 | -5 | 0.35 | 0 | 0.70 | 0.75 | -7 |
EPS, rolling 12 months up to period end, EUR | 1.39 | 1.44 | -3 | 1.41 | -1 | 1.39 | 1.44 | -3 |
Share price2, EUR | 12.61 | 11.12 | 13 | 11.77 | 7 | 12.61 | 11.12 | 13 |
Equity per share2, EUR | 8.78 | 8.67 | 1 | 8.55 | 3 | 8.78 | 8.67 | 1 |
Potential shares outstanding2, million | 3,470 | 3,506 | -1 | 3,491 | -1 | 3,470 | 3,506 | -1 |
Weighted average number of diluted shares, million | 3,467 | 3,502 | -1 | 3,483 | 0 | 3,473 | 3,506 | -1 |
Return on equity with amortised resolution fees, % | 16.2 | 17.9 | 15.7 | 15.9 | 18.0 | |||
Return on equity, % | 16.3 | 18.0 | 15.4 | 15.8 | 17.9 | |||
Return on tangible equity, % | 18.8 | 20.8 | 17.6 | 18.2 | 20.6 | |||
Return on risk exposure amount, % | 3.1 | 3.7 | 3.1 | 3.1 | 3.8 | |||
Cost-to-income ratio excluding regulatory fees, % | 45.1 | 41.6 | 43.7 | 44.4 | 40.7 | |||
Cost-to-income ratio with amortised resolution fees, % | 46.1 | 42.6 | 44.6 | 45.4 | 41.6 | |||
Cost-to-income ratio, % | 45.8 | 42.2 | 45.5 | 45.7 | 42.0 | |||
Net loan loss ratio, incl. loans held at fair value, bp | -2 | 8 | 1 | 0 | 6 | |||
Common Equity Tier 1 capital ratio2,3, % | 15.6 | 17.5 | 15.7 | 15.6 | 17.5 | |||
Tier 1 capital ratio2,3, % | 17.5 | 19.8 | 17.6 | 17.5 | 19.8 | |||
Total capital ratio2,3, % | 20.0 | 23.0 | 20.2 | 20.0 | 23.0 | |||
Tier 1 capital2,3, EURbn | 27.7 | 27.6 | 0 | 28.1 | -2 | 27.7 | 27.6 | 0 |
Risk exposure amount2, EURbn | 158.6 | 139.3 | 14 | 159.7 | -1 | 158.6 | 139.3 | 14 |
Net interest margin, % | 1.63 | 1.83 | 1.70 | 1.66 | 1.83 | |||
Number of employees (FTEs)2 | 29,844 | 29,680 | 1 | 30,343 | -2 | 29,844 | 29,680 | 1 |
Equity2, EURbn | 30.4 | 30.4 | 0 | 29.7 | 2 | 30.4 | 30.4 | 0 |
1. For more detailed information regarding ratios and key figures defined as alternative performance measures, see https://www.nordea.com/en/investor-relations/reports-and-presentations/group-interim-reports
2. End of period.
3. Including the result for the period.
This release is a summary of Nordea's Q2 results for 2025. The complete report is attached to this release and can also be found on our website via the link below.
Nordea Group Q2 2025 Report
A webcast will be held on 17 July at 11.00 EET (10.00 CET), during which Frank Vang-Jensen, President and Group CEO, will present the results. This will be followed by a Q&A audio session for investors and analysts with Frank Vang-Jensen, Ian Smith, Group CFO, and Ilkka Ottoila, Head of Investor Relations.
The event will be webcast live and the recording and presentation slides will be posted on www.nordea.com/ir.
For further information:
Frank Vang-Jensen, President and Group CEO, +358 503 821 391
Ian Smith, Group CFO, +455 547 8372
Ilkka Ottoila, Head of Investor Relations, +358 953 007 058
Ulrika Romantschuk, Head of Brand, Communication and Marketing, +358 10 416 8023
The information provided in this stock exchange release was submitted for publication, through the agency of the contacts set out above, at 07.30 EET (06.30 CET) on 17 July 2025.
We are a universal bank with a 200-year history of supporting and growing the Nordic economies - enabling dreams and aspirations for a greater good. Every day, we work to support our customers' financial development, delivering best-in-class omnichannel customer experiences and driving sustainable change. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us at nordea.com.
