Nordea earnings hit by euro debt crisis

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.

Nordea earnings hit by euro debt crisis

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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Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
Barclays and Coutts have also started contacting customers. 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said.