Nordea profit rise fails to meet forecasts

Swedish bank Nordea announced a nearly 70 percent rise in third-quarter profits on Wednesday mainly thanks to higher lending and a tighter control on costs, but nevertheless failed to meet analysts' expectations.

Nordea profit rise fails to meet forecasts

Nordea’s third-quarter earnings of €922 million ($1.2 billion) can be compared with the corresponding figure of €566 million for the corresponding quarter last year.

However, analysts polled by Reuters had forecast earnings of €995 million.

“The results are somewhat lower than the second quarter, but it’s our best third quarter ever,” CEO Christian Clausen told reporters on Wednesday.

Nordic banks have been fairly shielded from the debt crisis in Europe due to their strong capital reserves and a healthy Swedish economy, but according to Nordea they have been dealing with a downturn in the global shipping sector as well as a weaker Danish economy.

Sweden has also seen a slowdown in economic growth since the beginning of the year.

After Nordea beat expectations in the second quarter, there were high hopes among economic forecasters that the bank’s earnings would continue to skyrocket.

Despite not quite meeting the expectations for the third quarter, CEO Clausen said on Wednesday that he was satisfied with the result.

“65,000 new household relationship customers and a further strengthening of relations with corporate customers have led to the highest ever income and operating profit in the first nine months of a year, despite the low interest rates,” he said in a statement.

“Income was lower than last quarter, but has never before been this high in a third quarter. For the first three quarters of the year, income increased by 10 percent and operating profit by 14 percent.”

The Nordea report states that the on-going recession continues to dampen consumption and investment, but according to Clausen, lending has increased and costs are under control.

The report makes for a mixed week for major Swedish banks after buoyant reports from Handelsbanken and Swedbank earlier in the week.

On Monday, Swedish bank Handelsbanken reported third quarter profits of 3.25 billion kronor, down from 3.21 billion a year earlier, beating expectations in what CEO Pär Boman called the bank’s “best third quarter ever”.

Meanwhile, Swedbank on Tuesday reported a quarterly net profit of 3.51 billion kronor, marginally up from the 3.48 billion the previous year, and ahead of analysts’ expectations and bumping its share price up 2 percent on the Stockholm exchange.

Rebecca Martin

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Swedish bank’s IT fault puts customer accounts in the red

A technical problem at Sweden's Swedbank on Thursday night gave customers a nasty surprise, with their account balances inexplicably going negative, payments impossible, and Swish payments no longer working.

Swedish bank's IT fault puts customer accounts in the red

By 11.30pm, more than 2,000 Swedbank customers had reported the fault to the site Downdetector, and the problem was still not solved by 17.00pm on Friday. 

“We have an ongoing IT disruption where certain customers see an incorrect balance on their accounts,” a message on the bank’s app read. “The reason is a planned update to our internal systems which went wrong. We apologise, of course, for that and are working as quickly as possible to fix the problem.” 

The Swish payment service has also been affected, with the service, which is owned collectively by Swedish banks, reporting on its site that there was a “technical disruption at Swedbank and Sparbank which might affect Swish payments from these banks”. 

Some Swedbank customers posted their negative account balances on Twitter, expressing shock at the incorrect figures. 

The disruption comes at the worst possible time for many Swedes. Many people are paid on the 25th of the month, meaning this Friday marks the start of the payday weekend. Many will have also scheduled their bill payments for this Friday. 

Marko Saric from Malmö saw his account balance drop by 1.2 million kronor, going half a million kronor into the red. 

“It’s just totally crazy,” he told SVT. “We were going to go out and shop for the weekend. It’s lovely weather and the kids want to go out, but we can’t use our card. We’ve got no cash. Everything is in the bank.” 

“You’re just completely blocked. Colleagues need to make emergency food parcels for you. It’s just crazy that something like this should happen.” 

In its statement, the bank assured customers that their money was “secure”, and that the bank still had the correct information on what their account balance should be. 

“Customers who feel that they have suffered economic damage as a result of the disruption should contact the bank,” the message said.