Nordea: Third Quarter Results 2014

STOCKHOLM--()--Regulatory News:

CEO Christian Clausen’s comments on the results:

“In the third quarter we continued to welcome more new customers and were trusted with more savings, thereby passing the milestone of EUR 250bn in assets under management. Despite continued macro headwind, income is holding up well and we are clearly on track to deliver on our cost targets. Credit quality continues to improve and the loan loss level is below the 10-year average.

Nordea once again was confirmed as one of the safest banks globally, when issuing two Additional Tier 1 instruments, of USD 1.5bn with the lowest coupons among corresponding instruments issued in the USD market. This strengthened the Tier 1 ratio by 75 basis points and our total capital ratio is above 20%.

We are continuously developing our services to meet the changing customer behaviour. To provide even more personalised and convenient solutions we are currently simplifying our processes and will as a next step build new core banking and payment platforms, leading to an average annual increase in our combined IT investments of approximately 30-35% over the coming 4-5 years. As a consequence we will replace some of our current IT systems, leading to an impairment charge of EUR 344m. ”

(For further viewpoints, see CEO comments, page 2)

First nine months 2014 vs. First nine months 2013 (Third vs. Second quarter 2014)¹:

  • Total operating income -1%¹, in local currencies +2%¹ (-3%¹)
  • Total expenses -4%¹, in local currencies -1%¹ (-2%¹, in local currencies -1%¹)
  • Operating profit +7%¹, in local currencies +9%¹ (-3%¹)
  • Common equity tier 1 capital ratio 15.6%, up from 13.4%² (up to 15.6% from 15.2%)
  • Cost/income ratio down to 49%¹ from 51% (unchanged at 49%¹)
  • Loan loss ratio of 15 basis points, down from 21 basis points (down to 12 bps from 16 bps)
  • Return on equity 11.5%¹, up from 11.2% (down to 11.2%¹ from 12.0%)
                   
Summary key figures, continuing operations³, EURm Q3 2014 Q2 2014 ch% Q3 2013 ch % loc. curr YTD
2014
YTD 2013 ch % loc. curr
Net interest income 1,396 1,368 2 1,386 1 2 4,126 4,135 0 3
Total operating income¹ 2,377 2,456 -3 2,426 -2 0 7,334 7,422 -1 2
Total operating income 2,754 2,456 12 2,426 14 16 7,711 7,422 4 7
Profit before loan losses 1,238 1,070 16 1,192 4 5 3,572 3,665 -3 0
Net loan losses -112 -135 -17 -171 -35 -32 -405 -555 -27 -24
Loan loss ratio (ann.), bps 12 16 20 15 21
Operating profit¹ 1,093 1,125 -3 1,021 7 8 3,324 3,110 7 9
Operating profit 1,126 935 20 1,021 10 12 3,167 3,110 2 4
Diluted EPS (total oper.), EUR 0.23 0.17 0.19 0.61 0.58
Diluted EPS (basis for dividend distribution [4] , total oper.), EUR 0.30 0.17 0.19 0.68 0.58
Return on equity¹, % 11.2 12.0 10.8 11.5 11.2
Return on equity, % 12.8 10.0 10.8 11.4 11.2
 

Exchange rates used for Q3 2014 for income statement items are for DKK 7.46, NOK 8.28 and SEK 9.04, see also Note 1.

Net impact from currency fluctuations between Q3 2014 and Q2 2014 was insignificant.

¹) Excluding non-recurring income and cost items in Q3 2014 of pre-tax EUR +34m net and restructuring costs in Q2 2014 of EUR 190m.
²) Previously estimated Basel III CET1 ratio.
³) Key figures for continuing operations, following the divestment of the Polish banking, financing and life insurance operations.
4) Diluted EPS, basis for dividend distribution, is excluding impairment of intangible assets in Q3 2014.

Go to IR Report pages

The information provided in this press release is such that Nordea is required to disclose pursuant to the Swedish Financial Instruments Trading Act (1991:980) and/or the Swedish Securities Markets Act (2007:528).

Nordea’s vision is to be a Great European bank, acknowledged for its people, creating superior value for customers and shareholders.

We are making it possible for our customers to reach their goals by providing a wide range of products, services and solutions within banking, asset management and insurance.

Nordea has around 11 million customers, approx. 1,400 branch offices and is among the ten largest universal banks in Europe in terms of total market capitalisation. The Nordea share is listed on the NASDAQ OMX Nordic Exchange in Stockholm, Helsinki and Copenhagen.

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Contacts

For further information:
Nordea
Christian Clausen, +46 8 614 7804
President and Group CEO
or
Torsten Hagen Jørgensen, +46 8 614 7814
Group CFO
or
Rodney Alfvén, +46 72 235 05 15
Head of Investor Relations
or
Claus Christensen, +45 25248993
Head of Group Identity & Communications

Contacts

For further information:
Nordea
Christian Clausen, +46 8 614 7804
President and Group CEO
or
Torsten Hagen Jørgensen, +46 8 614 7814
Group CFO
or
Rodney Alfvén, +46 72 235 05 15
Head of Investor Relations
or
Claus Christensen, +45 25248993
Head of Group Identity & Communications