According to a Reuters poll, analysts had expected profits of around €626 million.
“I am proud of Nordea’s report. But at the same time humble. The acute phase of the financial crisis is over but many of our customers are experiencing financial problems during the recession,” Nordea CEO Christian Clausen said in a company statement.
The bank, which was exposed to the deep recession in the Baltic countries
of Estonia, Lithuania and Latvia due to its activities there, reported loan losses of €347 million during the quarter, up from €320 in 2008.
“Loan losses could remain at a high level also in 2010, as it is difficult to forecast when loan losses will start to decline.”
Nordea, the biggest Swedish bank ahead of rivals Handelsbanken, SEB and Swedbank, avoided the global subprimes crisis but suffered bad loans because
of its activities in the Baltic countries and Denmark’s real estate crisis.
Net interest income came in at €1.29 billion, down from a high of €1.39 billion in 2008.
Nordea’s revenues amounted to €2.16 billion, in comparison with €2.25 billion last year.
The firm forecast that profits will be lower in 2010 in comparison to 2009 when adjusted for risk, as a result of lower revenues from Group Treasury and Markets divisions.
The quality of credit continues to stabilize, the bank said, although it expects credit losses to remain at high levels during 2010.
Nordea’s board proposed a dividend of €0.25 per share, in comparison with €0.20 in 2008.
The board also announced a series of measures to increase growth and efficiency. The programme covers a significant part of the bank’s operations in Scandinavia and Poland and primarily addresses IT operations.
“The programme will cut production costs and reduce in part the operative risk, and in part the risk that the operation is not being run according to existing laws and regulations,” the bank said in its report statement.
Provisions for the staff profit-sharing programme amounted to €35 million during the period, in comparison with the €29 million set aside last year.