STOCKHOLM (Reuters) - Nordea, the Nordic region's biggest bank, reported forecast-beating second-quarter earnings on Thursday and said it still aimed to raise its dividend payout ratio for 2014 and 2015 even as banks brace for tougher capital rules.
The Nordic region's banks weathered the financial crisis well relative to European peers and continue to offer investors stability during uncertain times.
Europe's financial sector has seen some volatile weeks with investors in jitters over irregularities discovered at Espirito Santo International - a major shareholder in Portugal's largest listed bank BES - U.S. fines and runs on two major lenders in Bulgaria just last month.
Nordea is the fourth Nordic bank to report second quarter earnings which have been largely upbeat, marked by shrinking loan losses and rising commission income as Nordic firms splash out to list and do deals with recovery underway.
Nordea's operating profit for the period was 1.1 billion euros (87 million pounds) excluding restructuring costs of 190 million euros. That compared with a mean forecast for 963 million seen in a Reuters poll of analysts and a year-ago 1.0 billion.
"We have seen continued strong activity in our savings area and in the corporate advisory business," Chief Executive Christian Clausen said in a statement.
Clausen said, however, that falling interest rates could pressure margins and expressed caution over economic activity, saying he expected a low-growth environment going forward.
Swedish peer Handelsbanken reported a second-quarter operating profit of 5.1 billion Swedish crowns (435 million pounds) earlier on Thursday, beating forecasts thanks to lower loan losses and a boost from dividend payments from its financial holdings.
Nordic banks are some of Europe's most profitable lenders but they could see their high levels of returns come under pressure due to even tougher regulations on capital.
Nordea did not let that stop it from promising shareholders more in the years ahead.
"The board's ambition to increase the payout ratio in 2014 and 2015 is reconfirmed," it said.
While European banking shares are down this year, Nordea's share price is up 11 percent and Handelsbanken shares are 3.4 percent higher.
Swedbank, the last of the major Swedish banks to unveil quarterly earnings, is seen reporting a 15 percent increase in profits according to the average forecast in a Reuters poll of analysts on Friday.
(Reporting by Mia Shanley and Johan Ahlander; Editing by Alistair Scrutton)