Nordea profit beats forecast, sees costs rise

Credit: REUTERS/STAFF

Nordea Bank on Wednesday reported a better-than-expected profit for the quarter, as despite increased costs the Nordic region's biggest lender saw a boost from a booming mortgage market and strong growth of assets under management.

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STOCKHOLM, July 21 (Reuters) - Nordea Bank NDAFI.HE on Wednesday reported a better-than-expected profit for the quarter, as despite increased costs the Nordic region's biggest lender saw a boost from a booming mortgage market and strong growth of assets under management.

Second-quarter net profit rose to 1.03 billion euros ($1.21 billion) from 243 million a year ago, beating the mean forecast of 868.5 million seen by analysts according to Refinitiv data.

"Restrictions are easing, vaccination programmes are progressing well, and a return to more normal activity is under way," Nordea CEO Frank Vang-Jensen said in a statement.

The bank did not report any loan losses in the quarter, but instead a positive adjustment of 51 million euros. That compared with loan losses of 696 million a year earlier - when in the tight grip of the initial pandemic - and analysts' expectations for losses of 81 million.

Loan loss provisions have became a closely watched figure in the economic slump due to the pandemic.

Nordea increased its cost guidance for 2021 to around 4.6 billion euros after previously saying it would be below 4.6 billion due to the acquisition of Nordea Finance Equipment and higher staff payouts due to a strong performance in the quarter.

Fee and commission income rose to 878 million euros from 673 million a year ago, beating the 823 million expected by analysts, as assets under management climbed to a record.

Interest income, which includes income from mortgages, increased to 1.2 billion euros from 1.09 billion a year ago, in line with the 1.21 billion seen by analysts, as mortgage lending continued to grow.

Shares in the lender are up 45% since the start of the year.

($1 = 0.8495 euros)

(Reporting by Colm Fulton; editing by Niklas Pollard)

((Colm.Fulton@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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