OREANDA-NEWS. May 04, 2010. Nordea Bank Estonia, part of a leading European finance group, continues on a stable growth path, earning EEK 38.8 million in Q1 profits. Total income of the company increased by 24% year-on-year, to EEK 247.6 million, reported the press-centre of Nordea.

„Through the last years, Nordea has grown in Estonia from a minor credit bank to a large top-three universal bank. Income has increased in the areas of loans and bank cards, as well as savings and investment products. In one year, the number of bank cards issued has increased by 20% and the number of clients by one third,“ - Nordea Bank Estonia’s head Vahur Kraft gave examples of the growth in both product and client terms.

„Estonian banking market is going through a beneficial change in the way of thinking. Clients are becoming more aware of the importance of financial decisions and that increases the importance of professional and consulting-oriented banking services. This in turn, will bring about a situation where being competent is better valued throughout the sector,” Kraft said.

At the end of March, Nordea Estonia had EEK 47.8 billion worth of assets. At the end of Q1, Nordea’s loan and leasing portfolio amounted to more than EEK 41 billion; in a receding market, the company succeeded in keeping the loan volumes same as the last year. At the end of March, the bank’s loan portfolio was EEK 35 billion with a 5% yearly growth. The volume of the leasing portfolio decreased by 10% to around EEK 6.1 billion due to the fact that, compared to loans, leasing product cycles are shorter.

At the end of March, Nordea Estonia’s corporate loan and leasing portfolio was stable compared to Q1 of last year and made up EEK 24.8 billion. Private loan and leasing portfolio grew by 3% year-on-year, to EEK 14.3 billion, as at the end of March. Loan losses made up 0.27% of the whole portfolio, thus remaining below the Estonian market average.

“Our high capitalisation and credibility allow us to keep responding to the credit demand of our clients. At the same time, Estonian loan market as a whole continued to contract in Q1. The loan market is mainly influenced by the general recession and stagnation of the economic environment; the draft debt protection legislation definitely has its influence on the demand side,” Kraft said.

Volume of deposits of Nordea’s Estonian clients continued its increase, reaching above EEK 12.6 billion by the end of March. Compared to the same time last year, deposits grew by 4%. Q1 can be characterised by a change in the structure of savings and investment demand – more and more of clients’ funds move from deposits into investment products.

“Deposits at Nordea have increased but the decreasing interest rates of deposit products have made people consider different investment products. We have seen an increase in the sales of our structured bonds,” Kraft added.

Nordea’s leasing company (Nordea Finance Estonia) and Nordea Life & Pensions, operating under Nordea’s brand umbrella, ended Q1 in profits.

At the end of March, Nordea had 136 657 clients, 22 branch offices and 517 employees. As at the end of Q1, the bank had issued 86 050 bank cards, its online bank had 85 954 users.

Nordea Group finished Q1 with very good results – in a year, net profits increased by 44% to EUR 643 million. Year-on-year, Group income increased by 7%, to EUR 2.16 billion, assets increased by 4%, to EUR 526.2 billion.

”Nordea’s first quarter result was significantly better than the previous quarter and also better than the strong first quarter last year. Net interest income held up well, due to strong customer-related performance, but is still subdued by the exceptionally low interest rates,“ noted Group CEO Christian Clausen.

The Group’s loan portfolio grew by 4% in a year and had reached EUR 292.5 billion by the end of March. Deposits amounted to EUR 160 billion, a 4% increase compared to the same time last year.

Nordea expects risk-adjusted profit to be lower in 2010 compared to 2009, due to lower income in Treasury and Markets. „However, net loan losses in 2010 are likely to be lower than in 2009. Credit quality continues to stabilise, in line with the macroeconomic recovery. To reach the ambitious targets for 2013, Nordea’s focus is now on the prudent growth strategy and implementing the Group initiatives for growth, efficiency and a strong foundation,“ Clausen said.

Nordea welcomed more than 12,500 new Gold and Private Banking customers each month in the first quarter. „Customer satisfaction increases and we are gaining market shares in corporate and household lending as well as investment funds,“ Clausen remarked.

Nordea Group has more than 10 million clients, nearly 1400 branch offices and a leading online banking position with 6 million internet customers.

A member of a leading European finance group, Nordea is the only universal bank in the Estonian market with the highest AA credit rating, offering services to both private and corporate customers. Nordea brand covers all major banking products: loans, bank cards, savings and investment products (including leasing and pensions), everyday banking transactions. Nordea is creating new opportunities for its clients, so they can manage their finances with the help of personal counselling, helping both private and corporate customers to make good financial decisions.

Overview of Nordea Group’s 2010 Q1 results:
http://hugin.info/1151/R/1409059/361667.pdf

Additional materials on Nordea Group’s 2010 Q1 results:
http://www.nordea.com/Investor+Relations/Financial+reports/Interim+reports/First+quarter+report+2010/1328362.html?lnkid=com-uk/Q110/FP/banner