IBOS member Nordea reports its third quarter 2018 financial earnings

Nordea’s Q3 2018 financial earnings is highlighted as a “historic quarter” for the Bank, as Nordea finalised its re-domiciliation into the Banking Union and Finland.

Net interest income in local currencies was broadly unchanged from Q2 2018. The volume trend for corporates shows positive signs, whilst household remains subdued. Nordea highlights its volume growth in Personal Banking and Commercial & Business Banking. Resolution fees increased due to a YTD correction and a refund booked in the previous quarter.

Net interest income for Personal Banking was down 3% in local currencies from Q2 2018, mainly due to lower lending margins, and deposit margins are slightly positive overall.

Although the third quarter was challenging, net interest income was stable, whilst fees and commission and specifically net fair value were weak. This is mainly due to difficult market conditions and lower corporate activity.

Nordea’s customer satisfaction continues to improve, for the third consecutive quarter, especially in Sweden. The Bank’s CEO, Casper von Koskull, also noted that “lending volumes are growing, and we see a more promising deal flow pipeline going into the fourth quarter.”

Below are Nordea’s Q3 2018 financial highlights, in comparison to Q3 2017:

  • Net interest income EUR 1,072m, -10%; -8% in local currencies
  • Total operating income EUR 2,046m, -14%; -12% in local currencies
  • Total expenses EUR 1,136m, -6%; -3% in local currencies
  • Profit before loan losses EUR 910m, -22%; -21% in local currencies
  • Net loan losses EUR 44m, -44%; -44% in local currencies
  • Operating profit EUR 866m, -21%; -19% in local currencies
  • Common Equity Tier 1 capital ratio 20.3% vs.19.3%
  • Cost/income ratio 56% vs. 51%
  • Loan loss ratio of 8 bps vs. 10 bps
  • Return on equity 8.7% vs 10.5%
  • Diluted EPS EUR 0.17 vs. EUR 0.21

 

Read the full financial Q3 2018 report via Nordea here.