Nordea Q2 profit falls, issues mixed outlook
Published: 21 Jul 2010 15:50 GMT+02:00
Updated: 21 Jul 2010 15:50 GMT+02:00
Nordea Bank announced a second-quarter profit decline on Wednesday and issued a mixed economic outlook, pointing out that the Nordic countries doing well, but the eurozone is still fighting a debt crisis.
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"The effects of the macroeconomic environment for Nordea have been mixed
over the last months," the largest Nordic bank said in its earnings report.
"On the one hand, the sovereign debt crisis in the eurozone has affected the
banking industry with increased risks, stressed funding markets and higher
interbank margins," it added.
"On the other hand, the Nordic economies have stabilised and all countries are expected to have positive growth rates, modest inflation and controlled budget deficits in 2010 and 2011," the bank said.
Net profit from April to June was €537 million (5.08 billion kronor, $687 million), down €616 million for the same period in 2009. Net profit was dragged down by a 4 percent fall in net interest income to €1.25 billion and an 8 percent drop in operating income.
Analysts surveyed by Dow Jones Newswires expected a net profit of €532 million and a net interest income of €1.26 billion.
The bank's provisions for credit losses unexpectedly dropped to €245 million compared to €425 million a year earlier, a sign the economy is improving. Analysts had expected the provisions to drop to €288 million.
CEO Christian Clausen said he expected the provisions to keep decreasing. When asked about the "stress tests" currently being performed on 91
European banks, Clausen said he was sure Nordea would pass them and that most other banks would too.
At 1:30 p.m. GMT, Nordea's shares were up 0.14 percent to 70.20 kronor on a
Stockholm Stock Exchange up 2.26 percent.