Nordea Bank, headquartered in Helsinki, has announced its third-quarter earnings, which were largely in line with expectations. The bank has shown improvement in net interest margins and witnessed growth in corporate lending.
Financial Results
- Net profit attributable to shareholders amounted to 1.35 billion euros ($1.42 billion), compared to 1 billion euros in the same period last year.
- Net interest income increased by an impressive 36% to reach 1.91 billion euros.
- Analysts had predicted a net profit of 1.3 billion euros and net interest income of 1.88 billion euros.
Current Economic Outlook
Chief Executive Frank Vang-Jensen acknowledged the challenging economic conditions, stating that Nordic societies have managed well thus far. However, he noted that a period of more subdued economic activity lies ahead.
Segment Performance
Despite the softer housing market, mortgage lending remains strong. On the other hand, corporate loans continue to see growth, with a 2% increase year-on-year.
Future Outlook and Targets
Nordea Bank expects a return on equity above 15% for the full year of 2023. The bank also maintains its financial target for 2025, aiming for a return on equity above 13%. This goal will be supported by a cost-to-income ratio of 45%-47% and an annual net loan loss ratio of around 10 basis points.
Capital Position
Nordea's common equity Tier 1 ratio stood at 16.3%, an improvement from the previous year's 15.8%.
