© Reuters. FILE PHOTO: The Nordea financial institution brand is seen on the financial institution’s headquarters in Stockholm, Sweden, Might 7, 2017. REUTERS/Ints Kalnins
By Niklas Pollard
STOCKHOLM (Reuters) – Finnish banking group Nordea posted third-quarter working earnings simply above market expectations on Thursday on rising curiosity earnings, enhancing barely its outlook for prices and earnings for the total 12 months.
Rampant inflation and quickly tightening financial coverage are lifting curiosity earnings for Nordic banks, whereas mounting prices for households and companies and slumping actual property markets have but to translate into larger mortgage losses.
The Nordic area’s greatest financial institution reported an working revenue of 1.30 billion euros ($1.27 billion) within the quarter, up from 1.27 billion a 12 months in the past, beating the imply forecast of 1.26 billion euros in a Refinitiv ballot of analysts.
“We expect these shall be seen as a strong set of numbers albeit one that’s unlikely to shift expectations a lot in a single path or one other right now,” Credit score Suisse analysts stated in a word to shoppers.
Curiosity earnings at Nordea, which has sizeable operations in Norway, Denmark, Finland and Sweden, rose 15% on the 12 months to 1.41 billion euros within the July-September quarter, coming in above the 1.35 billion seen by analysts.
The Nordic area, nevertheless, confronted larger macroeconomic uncertainty, rising inflation and weaker development, it stated.
“The visibility is at present low and we anticipate the difficult setting to proceed in the course of the coming quarters,” CEO Frank Vang-Jensen stated within the earnings report.
“Nonetheless, we’re properly positioned to climate this setting and have a resilient enterprise mannequin.”
Charges and commissions fell 6% from a 12 months in the past to 816 million euros, lagging analysts’ expectation of 822 million. Internet mortgage losses of 58 million euros in comparison with reversals of twenty-two million within the year-ago quarter.
“Our credit score high quality stays robust,” Vang-Jensen stated.
Swedish rival Handelsbanken reported report earnings this week, on a surge in curiosity earnings whereas providing reassurance on credit score high quality forward.
“All in all a robust end result throughout the board, and we anticipate constructive revisions of estimates within the wake of the report,” Denmark’s Jyske Financial institution stated in a analysis word.
Nordea shares, which had been lifted by Handelsbanken’s robust outcomes on Wednesday, had been up 1% by 0727 GMT, outperforming the broader market with main Nordic indexes opening within the crimson.
The Nordea group raised its full-year outlook barely, forecasting a cost-to-income ratio of 48% to 49% from 49% to 50% earlier. It left unchanged steering for a return on 2022 fairness of above 11%.
($1=1.0238 euros)
