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Nordea's profits down but better than expected

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10:52 CEST+02:00
First quarter results at Sweden's Nordea bank beat expectations despite worries over possible mounting loan defaults amid worsening global economic conditions.

From January to March, the bank posted a net profit of €627 million ($826 million) compared to €687 million in the first quarter of 2008, a fall in profits of almost nine percent.

Analysts surveyed by Dow Jones Newswires had forecast Nordea profits to drop by 30 percent to €484 million and credit defaults to be closer to €363 million.

"The worsening of the macroeconomic trends has however increased uncertainty for loan losses for the remaining part of the year," Nordea's quarterly report said.

Loan losses, a useful indicator of how the economic downturn is impacting on banks and financial institutions, amounted to €356 million.

That compares to €320 million in the previous quarter and €21 million in the first quarter of 2008.

"Higher loan losses are inevitable when the economy is contracting at an unprecedented speed," said Nordea's chief executive Christian Paulsen in a statement.

Nordea said its outlook for 2009 remained unchanged and that its profits for the full year would be "at approximately the same level as in 2008."

The bank posted a €2.67 billion net profit last year.

At 0820 GMT on the Stockholm exchange, the price of Nordea shares were up 5.25 percent to 56.10 kronor in a market up by 1.24 percent.

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