- Profits increase at Nordea, Swedbank
- DNB reports record results for the third quarter
- Nordea begins share repurchase
- Nordea sees another repurchase program in early 2022
HELSINKI / STOCKHOLM, October 21 (Reuters) – Finnish Nordea (NDAFI.HE) and Swedish Swedbank (SWEDa.ST) reported higher results for the third quarter on Thursday as banks across the region recovered strongly from the effects of the pandemic and changing surpluses. capital to shareholders.
With the help of the roll-out of vaccines, Nordic banks and their counterparts elsewhere in Europe have benefited from increasing business and consumer activity, while a number of mergers and acquisitions (M&A) and IPOs have provided a rich selection for their investment banks.
Following forecast gains from Sweden’s SEB (SEBa.ST) and Handelsbanken (SHBa.ST) this week, the region’s largest lender Nordea saw its quarterly operating profit increase to EUR 1.27 billion (USD 1.48 billion) from EUR 1.09 billion for one year. then, in line with market expectations. Read more
“We have entered a new phase of recovery from the pandemic and as a bank we have done so from a strong position,” said Nordea’s CEO Frank Vang-Jensen in a statement.
At the same time, Swedbank, Sweden’s oldest retail bank, said that its net profit rose to SEK 5.50 billion from SEK 5.26 billion a year earlier, beating analysts’ expectations of SEK 5.10 billion in a Refinitive survey. Read more
“The quarter has been characterized by a gradual return to the new normal,” says Swedbank’s CEO Jens Henriksson to reporters. – We see a strong recovery, not least in Sweden.
As a ceiling on bank revenues, Norway’s largest bank, DNB (DNB.OL), reported its best result for the third quarter ever and said that it would now make a dividend for 2020. Read more
Andreas Håkansson, banking analyst at Danske Bank, said that Nordea’s profit was in line with expectations but slightly lower on important revenue lines such as net interest income and commission income.
“So from that point of view, it’s maybe a little weaker than expected,” he said. “Swedbank beat expectations on some of the important lines and I think the share will be traded on it.”
Concerns about worsening debt due to the pandemic have eased rapidly for banks, while financial regulators have eased temporary restrictions on shareholders’ payments, helping to drive strong gains for equities across the sector.
In addition to a dividend of 0.72 euros paid out in October, Nordea said it would distribute surplus capital to shareholders by starting to buy back its own shares no earlier than 22 October.
Nordea also said it expects to apply for approval from the European Central Bank for another repurchase program in early 2022.
Its Nordic rivals have also increased payments with SEB presenting a new dividend and the start of share repurchases earlier this week.
A lingering uncertainty for some of the region’s banks is still their efforts to keep costs down.
In July, Nordea raised its cost estimate for 2021 to around € 4.6 billion, after previously saying it would be below that figure, due to the acquisition of Nordea Finance Equipment and higher staff payments due to strong developments during the quarter.
The Helsinki-based lender maintained its cost outlook on Thursday, as did Swedbank, which has also been burdened by increased legal expenses arising from money laundering investigations in its Baltic operations in recent years.
($ 1 = 0.8581 euros)
Reporting by Essi Lehto; authored by Niklas Pollard; Edited by Stephen Coates and Edmund Blair
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