OREANDA-NEWS. July 24, 2009. In spite of the recession, Nordea Bank Estonia that belongs to the largest Nordic banking group managed to stay profitable and ended this first half-year with net profits of EEK 107 million, reported the press-centre of Nordea Bank.

Assets of Nordea Estonia grew by 20% to EEK 47,8 billion during the first half-year compared by the same period last year.

The loan and leasing portfolio of Nordea Estonia amounts to EEK 400 billion, which is 18% more than at the same time last year. The corporate loan and leasing portfolio amounts to EEK 25 billion or 17% more than a year ago. The private portfolio grew by 13% to EEK 14 billion. At the end of June, loan losses made up 0,272% of the whole portfolio.

The deposits of Nordea Estonia’s clients exceeded EEK 11 billion by the end of June. Compared to the first half of the last year, the deposits increased by 39%; in a year, coporate deposits increased by 48% and private deposits by 39%.

According to the head of Nordea Bank Estonia Vahur Kraft, the performance of the bank during the first half of the year matched expectations. "I am glad to see to see that people have started saving to weather difficult times. Our increased deposit volumes testify to that. In spite of difficult times, we have stayed firmly on track, the market conditions are triggering an increase in provisions," Kraft said. He added that the aim of Nordea Bank is to offer its clients comprehensive banking service by providing professional advice on how to better manage one’s resources through the difficult spot. „We want to be an honest and reliable partner to our customers."

As at the end of July, Nordea Bank had 103 819 clients, 22 branch offices and 497 employees. By the end of the quarter, the bank had issued 75 634 bank cards, its online bank had 68 688 users.

The whole Nordea Group demonstrated solid performance. Total income was up 4% from the first quarter 2009 and up 18% from the second quarter 2008. Risk-adjusted profit increased 4% from the first quarter 2009 and 40% from the second quarter 2008. Risk-adjusted profit is expected to be higher in 2009 compared to 2008. The recession has increased the risk for a somewhat higher loan loss ratio for the full year compared to the first half year.

Nordea's performance in the second quarter was in line with long-term targets, with continued organic growth, moderate loan loss provisions and high growth in risk-adjusted profit. Weaker loan demand in combination with revived bond market and continued prudent credit risk management have resulted in a somewhat decelerating volume growth. Despite this, profit before loan losses was up 5% from the first quarter and thus reaching a new record level. Net fee and commission income increased 8%, changing the negative trend from early last year, and also continued strong net gains in the Capital Markets and Treasury operations supported an increase in net gains/losses of 15% from the first quarter.

Net loan loss provisions in the second quarter amounted to EUR 425m. High income and profit before loan losses, strong capital base and competitive funding position enables Nordea to absorb its loan losses while continuing to expand business relations with customers.
"In the worst recession in modern times, our staff, close customer relations and our strong capital situation have made it possible for Nordea to reach one of the best ever half-year results. We are developing according to our plans, with a somewhat higher income than anticipated. Our credit situation is solid, with loan losses having developed in line with our expectations", says Christian Clausen, President and Group CEO of Nordea.

Presentation on Nordea Group performance:
http://www.nordea.com/sitemod/upload/root/eu/interim/Q2_2009_UK.pdf