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Nordea earnings hit by euro debt crisis

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Nordea earnings hit by euro debt crisis
12:22 CEST+02:00
Nordea, the biggest Nordic bank, announced a €300 million fall in third quarter profit pm Wednesday, blaming market turbulence and the debt crisis for results that fell far short of forecasts.

For the July to September period, the Stockholm-based bank said its net profit had tumbled to €406 million ($561 million), a 42-percent drop from the 700 million euros it posted in the same period last year.

The result was far below the expectations of analysts polled by Dow Jones Newswires, who had anticipated seeing a net profit of €629 million for the quarter.

The bank's operating profit meanwhile ticked in at €2.09 billion for the quarter, down 12 percent year-on-year.

"It has been one of Europe's most dramatic and problematic quarters in the history of the euro," company chief executive Christian Clausen said in the earnings statement.

"The intensified focus on sovereign debt, turbulent markets, lower than expected interest rates and reduced confidence in the future among households and companies affected European banks in the quarter.

"Nordea's results are affected by the turmoil, but are in parallel strongly supported by a solid customer business development with income at high levels."

The bank meanwhile said it had set new higher targets for its return on investments, or ROE, saying it wanted it to rise to 15 percent over the next two years.

Nordea, which has some 34,000 employees, announced at the end of August that it planned to slash 2,000 jobs across the Nordic region by the end of next year to counter the effects of rising costs.

Following its earnings announcement, the bank saw its stock price slip 0.44 percent to 56 kronor a share in late morning trading on a Stockholm stock exchange up 0.36 percent.

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