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Nordea reports fall in profits

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Nordea reports fall in profits
13:52 CEST+02:00
Swedish-Finnish bank Nordea on Tuesday reported a 6 percent drop in net profits for the second quarter 2011, saying that improvements in banking activity had not compensated for a drop off in investments.

In the second quarter, net profit was €700 million ($987 million) from €742 million for the same period last year.

Net income was stable at €1.32 billion.

These results were slightly lower than analysts had expected. On average, they had estimated a net profit figure of 733 million and net income of €1.36 billion, as polled by Dow Jones Newswires.

The price of shares in Nordea edged up 0.7 percent in morning trading to 63.30 kronor in a slightly falling Stockholm market.

"The solid business momentum is maintained," Nordea chief executive Christian Clausen said. "Loan losses are at the lowest level since 2008 and credit quality continues to improve."

He said: "At the same time, the trading result decreased from last quarters high levels due to volatility in the financial markets."

Losses on bad loans fell to €118 million from €242 million at the same time last year, and earnings from financial activities fell to €356 million from €544 million.

Nordea easily passed last week's European Union stress test with an 11.0 percent capital requirement, well above the 5.0 percent needed.

The company said it had no exposure to sovereign debt from troubled eurozone countries such as Greece, Portugal and Ireland.

The company, which employs 34,200 people mainly in Scandanavia and Finland,

said it had taken measures to freeze spending this year.

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