Nordea 3Q Net Profit Beat Forecasts on Higher Lending, Lower Costs
October 23 2020 - 1:47AM
Dow Jones News
By Dominic Chopping
Nordea Bank Abp on Friday posted a forecast-beating
third-quarter net profit amid higher lending, lower costs and loan
loss reversals.
The Helsinki-based bank swung to a net profit of 837 million
euros ($990.4 million) from a loss of EUR332 million for the same
period a year earlier. Analysts polled by FactSet had expected net
profit of EUR697 million.
Net interest income rose to EUR1.15 billion from EUR1.08
billion. Analysts had expected EUR1.11 billion.
Net loan-loss reversals amounted to EUR2 million in the quarter,
versus losses of EUR72 million expected, but Nordea kept the
longer-term outlook on loan losses largely unchanged because it
expects that some customers will suffer further from the Covid-19
crisis after support measures expire.
The bank still expects 2020 total net loan losses below EUR1
billion.
Nordea reiterated that for 2020, it expects to reach a cost base
of below EUR4.7 billion. Its financial targets for 2022 are a
return on equity above 10% and a cost-to-income ratio of 50%.
Nordea's common equity Tier 1 ratio--a key measure of financial
strength--rose to 16.4% at the end of the quarter from 15.4% a year
earlier.
Nordea reiterated that it intends to pay out a dividend for the
financial year 2019, but it will refrain from deciding on the
payment before Jan. 1. Nordea will review the situation in the
fourth quarter of 2020 in the light of any further European Central
Bank communication.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 23, 2020 01:32 ET (05:32 GMT)
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