Nordea profit rise fails to meet forecasts
Published: 24 Oct 2012 16:50 GMT+02:00
Updated: 24 Oct 2012 16:50 GMT+02:00
Swedish bank Nordea announced a nearly 70 percent rise in third-quarter profits on Wednesday mainly thanks to higher lending and a tighter control on costs, but nevertheless failed to meet analysts' expectations.
Nordea's third-quarter earnings of €922 million ($1.2 billion) can be compared with the corresponding figure of €566 million for the corresponding quarter last year.
However, analysts polled by Reuters had forecast earnings of €995 million.
"The results are somewhat lower than the second quarter, but it's our best third quarter ever," CEO Christian Clausen told reporters on Wednesday.
Nordic banks have been fairly shielded from the debt crisis in Europe due to their strong capital reserves and a healthy Swedish economy, but according to Nordea they have been dealing with a downturn in the global shipping sector as well as a weaker Danish economy.
Sweden has also seen a slowdown in economic growth since the beginning of the year.
After Nordea beat expectations in the second quarter, there were high hopes among economic forecasters that the bank’s earnings would continue to skyrocket.
Despite not quite meeting the expectations for the third quarter, CEO Clausen said on Wednesday that he was satisfied with the result.
“65,000 new household relationship customers and a further strengthening of relations with corporate customers have led to the highest ever income and operating profit in the first nine months of a year, despite the low interest rates," he said in a statement.
“Income was lower than last quarter, but has never before been this high in a third quarter. For the first three quarters of the year, income increased by 10 percent and operating profit by 14 percent.”
The Nordea report states that the on-going recession continues to dampen consumption and investment, but according to Clausen, lending has increased and costs are under control.
On Monday, Swedish bank Handelsbanken reported third quarter profits of 3.25 billion kronor, down from 3.21 billion a year earlier, beating expectations in what CEO Pär Boman called the bank's "best third quarter ever".
Meanwhile, Swedbank on Tuesday reported a quarterly net profit of 3.51 billion kronor, marginally up from the 3.48 billion the previous year, and ahead of analysts' expectations and bumping its share price up 2 percent on the Stockholm exchange.