Get 40% Off
These stocks are up over 10% post earnings. Did you spot the buying opportunity? Our AI did.Read how

Corporate banking pick-up lifts Nordea first-quarter profits above forecast

Published 29/04/2014, 06:48

STOCKHOLM (Reuters) - Nordea ST:NDA, the Nordic region's biggest bank by market value, posted better-than-expected first-quarter operating profits thanks in part to a pick-up in its corporate advisory business.

Nordea is the third Swedish bank to report quarterly earnings, following SEB's ST:SEBa stronger-than-forecast results last week as it got a boost from stronger corporate business and Swedbank's ST:SWEDa largely in-line earnings. Handelsbanken reports earnings on Wednesday.

Analysts say Nordic banks continue to offer stability during uncertain times though their European peers are starting to catch up as recovery takes hold.

Operating profit for the period was 1.11 billion euros (0.89 billion pounds) compared with a mean forecast for 1.09 billion euros seen in a Reuters poll of analysts and a year-ago 1.04 billion euros.

"The activity level in our corporate advisory operations has picked up in the beginning of 2014 and remains strong in the savings area," CEO Christian Clausen said in a statement.

Nordea, which has been grabbing increasing market share from the region's go-to corporate bank SEB, saw a 13 percent rise in net commission and fees in the quarter - above forecasts - as demand for investment banking services boosted income. Buoyant equity markets and a return of corporate confidence has led to a flurry of listings and deals in recent months and both banks are expected to benefit from a pick-up in activity in the year ahead.

Still, Clausen was cautious about the road ahead.

"Lending demand is subdued and interest rates remain at very low levels. In this environment we continue to execute on our cost and capital efficiency programmes..." he said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

The bank is in the midst of accelerating a cost savings programme to create 900 million euros in savings by 2015.

Nordea shares are up 6 percent so far this year compared with a near 2 percent rise in the wider STOXX Europe 600 Banks index . Another cloud of uncertainty for some Nordic banks is the conflict between Russia and Ukraine, something which both SEB and Swedbank - large players in the Baltic region - have noted. Nordea has a smaller exposure to the region.

Nordea also has a 1.8 percent lending exposure to Russia, mainly with the largest Russian corporates and Nordic customers. It said had seen a limited impact since sanctions were targeted on a limited number of people over tensions in Ukraine.

(Editing by Kim Coghill)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.