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Nordea sees massive fall in profts

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Nordea sees massive fall in profts
11:01 CET+01:00
Nordic banking giant Nordea has announced plans for a new 2.5 billion euro ($3.2 billion) share issue after the company reported a 25 percent drop in net profit on Tuesday.

The bank, the Nordic region's biggest lender, also said it would cut the dividend paid to holders of existing shares to 0.20 euros a share from 0.50 euros a year earlier, saving 500 million euros in cash.

"The capital-strengthening measures provide additional flexibility to selectively explore high-credit-quality business opportunities," chief executive Christian Clausen said.

The bank said its three biggest shareholders - the Swedish government, Sampo Oyj and Nordea funds - had together to subscribe to 49 percent of the issue.

JP Morgan and Merrill Lynch International have underwritten the remaining 51 percent.

Fourth-quarter net profit at the bank declined to 637 million euros from 847 million euros a year earlier, as loan losses rose to 320 million euros from 6 million euros.

The profit figure was in line with analyst forecasts according to a poll of 12 analysts conducted by Dow Jones Newswires/Factset.

Analysts had also suggested that Nordea's exposure to the struggling Danish and Norwegian corporate sectors, as well as its presence in the recession-hit Baltic states, would force it to raise fresh capital.

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