Nordea Posts Earnings Miss Amid Low Market Activity

By FeaturesDow Jones Newswires

Nordea Bank AB (NDA.SK) on Thursday posted a 43% drop in fourth-quarter net profit after earnings were hit by low activity in capital markets and reduced income as the bank moved away from riskier sectors by cutting exposure to shipping, offshore and oil services, and to Russia.

Net profit at the Stockholm-based bank fell to 624 million euros ($770.9 million) in the three months ending Dec. 31, from EUR1.1 billion in the same period a year earlier, missing expectations of EUR709 million, according to a FactSet poll.

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Net interest income slipped to EUR1.11 billion from EUR1.21 billion a year ago.

"We are not satisfied with the development in profit during the latter part of 2017," said Chief Executive Casper von Koskull. "For 2018 we are confident that net profit will grow, and we expect to see slightly higher revenues, lower costs and a stable credit quality."

The bank's move to replace its core banking platform is proceeding in line with budget and will lead to lower operational risks, while costs are being reduced as part of improved efficiency structures throughout the organization, it said.

The bank is based in Stockholm, but is moving its parent company to Finland to make it easier to compete with its peers, since existing Swedish regulatory frameworks don't fully accommodate its operating model and strategy, Nordea has said previously.

The re-domiciliation is planned to be effected during the second half of 2018, with a tentative date of Oct. 1, the bank said Thursday.

The board has proposed a dividend per share of EUR0.68, up from EUR0.65 last year.

Nordea's common equity Tier 1 ratio--a key measure of financial strength--stood at 19.5% at the end of the quarter, up from 18.4% a year ago.

Write to Dominic Chopping at dominic.chopping@wsj.com; @domchopping, @WSJNordics

(END) Dow Jones Newswires

January 25, 2018 02:11 ET (07:11 GMT)

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