Nordea Bank AB (NDA.SK) announced Thursday plans to cut at least 6,000 jobs, as it reported that its net interest income rose slightly in the third quarter of 2017.
The Sweden-based financial services company said the job losses are part of the next phase of its effort to reduce structural costs. Nordea said 2,000 consultant roles will be among those cut, and it will take a charge of between EUR100 million and EUR150 million ($117.4 million to $176.1 million) related to the restructuring in the fourth quarter of 2017.
Continue Reading Below
The bank added that for 2018 it expects its total cost base to amount to EUR4.90 billion, before declining below EUR4.80 billion in 2021. Nordea didn't say over what time frame the job cuts would be made. The 4,000 non-consultant roles represent 13% of Nordea's workforce as at the end of 2016.
Nordea reported net interest income of EUR1.19 billion for the third quarter, up 1% from the year before. However, total operating income came to EUR2.37 billion, down 4%.
Profit before loan losses came to EUR1.17 billion, down 9% from the year before, but up by 5% from the preceding quarter. Net loan losses amounted to EUR79 million, reduced by 41% from the year before.
Nordea Bank made an operating profit for the quarter of EUR1.09 billion, down 5% from the year before. Its return on equity came to 10.5%, compared to 11.6% the preceding year.
At the end of the period, the bank's common equity tier 1 capital ratio stood at 19.2%, unchanged from the prior quarter. Its cost-to-income ratio improved to 51% from 54% over the quarter.
Chief Executive Casper von Koskull said Nordea's margins remain stable, although it has not seen the usual pick-up in demand for corporate advisory services after the summer. Costs and credit quality in the quarter were as planned, the CEO said.
Shares in Nordea Bank are down 6.60 kronor, or 6.1%, at SEK101.10 at 1304 GMT.
Write to Adam Clark at email@example.com; @AdamDowJones
(END) Dow Jones Newswires
October 26, 2017 09:24 ET (13:24 GMT)