Nordea profit decreases as negative rates hurt revenue

Less than three months into the job, the man running Scandinavia's biggest bank says it was wrong to promise shareholders more than the regulatory environment allowed.

Nordea Bank's target of paying shareholders "at least" 75 percent of profits in the form of dividends was abandoned on Wednesday. Instead, the bank said its "ambition" is to ensure that dividends grow each year. And while the previous arrangement would have implied more than 10 percent growth in shareholder payouts through 2018, the bank proposed a 3.2 percent increase for 2015.

"We made a mistake to actually define it as a payout ratio because the reality" for banks is that capital levels "are determined first of all by the regulators and the capital requirements," Casper von Koskull, who took over as chief executive officer in November.

Swedish banks face the prospect of higher requirements as the country's regulator reviews their risk weighting of assets. The agency signaled this month it may also raise the counter-cyclical buffer.

The "utmost, No. 1 objective is to be well-capitalized and fulfill all regulatory requirements, with a management buffer," von Koskull said. Since May, when Nordea set its previous dividend target, the bank has observed a "clear shift in increased capital requirements."