Nordea profit up on business boom despite rise in costs

STOCKHOLM: Nordea Bank beat second-quarter profit expectations on Wednesday as a booming mortgage market and higher assets under management offset increased costs at the Nordic region’s biggest lender.

Sweden’s banks have all seen increased demand for wealth management and strong business activity, particularly in real estate and card payments, as the vaccine rollout blunted the coronavirus, paving the way back to normal operations.

“Restrictions are easing, vaccination programmes are progressing well, and a return to more normal activity is under way,” CEO Frank Vang-jensen said in a statement. 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 expected by analysts, Refinitiv Eikon data showed.

The bank reported a positive adjustment of 51 million euros on loans versus losses of 696 million a year earlier and analysts’ expectations for losses of 81 million.

Shares in the lender were up 3 per cent at 1008 GMT, just ahead of the European banking index which was up 2.4 per cent.

Loan loss provisions have became a closely watched figure in the economic slump caused by the pandemic.

Nordea increased its cost guidance for 2021 to around 4.6 billion euros ater 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.