OREANDA-NEWS. February 08, 2011. Nordea Estonia, part of the leading financial group in the Nordic Countries, ended 2010 with nearly 25 million Euros in profit. Income increased by 24% and operating profit by 26% to 41 million Euros in 2010, which is the all-time-high for Nordea Estonia, reported the press-centre of Nordea Estonia. 

“Nordea Estonia has been prudently growing despite the overall market downfall. Last year's results were all-time-high thanks to raising income, which shows that Nordea’s stable growth strategy delivers both in economic recession and growth,” said Vahur Kraft, Head of Nordea Bank Estonia, adding that one of last year’s crucial developments had been the bank’s second position in the corporate loan market in Q3.

Nordea’s income increased, as more and more customers chose Nordea as their universal bank, growing the volume of products and services. The volume of private investment products has skyrocketed; it grew 160% year-on-year. The numbers of debit card and internet bank agreements are also on the rise. In the shrinking private lending market Nordea managed to grow sales, thereby also increasing its market share to 13%.

Loan losses (only 0.6% of the loan portfolio in December) are still remarkably lower than the market average, thus continuing to serve as a quality indicator for the bank’s loan portfolio. A high-quality loan portfolio is a solid foundation for good profit despite the current economic situation. The loan portfolio was 2.8 billion Euros at the end of December. Its quality has been ensured by counselling-oriented services and a strong credit policy.

Nordea Estonia had 3.1 billion Euros worth of assets at the end of December, making it the third leading bank in the market.

By increasing loan sales in the shrinking market we managed to increase our market share. Year-on-year, both private and corporate loan portfolios increased: corporate banking by 6% and private banking by 4%. An important milestone in last year’s corporate banking was the syndicated loan agreement with Viru Keemia Grupp.

Nordea Estonia’s customer deposits accounted to ca 762 million Euros at the end of December. Due to lower deposit market interest rates customers preferred to place their savings in investment products last year. This year the interest rates are on the rise again.

Nordea Finance Estonia ended last year with a profit of 4.4 million Euros and as the leader of new sales in the leasing market. Nordea Finance Estonia’s portfolio was 405 million Euros at the end of 2010. The portfolio’s market share grew to 21.5% by the end of last year, making Nordea Finance Estonia, for the second year in row, the leading leasing credit provider in Estonia in terms of total new sales.

Nordea Life and Pensions continued on the path of rapid growth. According to the Estonian Financial Supervision Authority, Nordea Life and Pensions was in the second market position in II pillar pension sales and the leader in III pillar pension sales in terms of new customers. The entire customer base grew by over 60%.

This year, important milestones have been a regained corporate confidence and the adoption of the Euro. "Estonia’s economic recovery and joining the Euro Zone have rebuilt enterprisers’ confidence in an optimistic future and in actively contributing to the main export markets with financial instruments," Vahur Kraft commented. “The Euro is like a window of opportunity for growth; both the state and private enterprise should make the best use of this window,” he explained. According to Mr. Kraft, one way to achieve growth is to strengthen economic ties with Finland.

At the end of December, Nordea Bank had 149,768 customers, 21 branch offices and 544 employees. By the end of 2010 the bank had issued 85,959 bank cards and had 93,606 internet bank users.
Like Nordea Estonia, Nordea Group had a successful year, too: operating profit grew by record breaking 18% in 2010.

“Nordea’s growth strategy delivers another strong quarter. Operating profit reached a record level and total income exceeded last quarter’s all-time-high," said Christian Clausen, President and CEO of Nordea Group.

In 2010, Nordea welcomed 200,000 new Gold and Private Banking customers and our customer satisfaction increased to an all-time-high level. Marked progress in our relationship-building with both household and corporate customers has led to increased customer activity in all segments. 2010 was a milestone on the journey towards Great Nordea. In parallel with strong results, we have strengthened our market position and improved our capital, liquidity and funding positions to meet the requirements of the future regulatory framework.“ (For further viewpoints, see CEO comments, page 2)

Fourth quarter (full-year 2010):

Total income up 6% in the fourth quarter (up 3% in full-year 2010)

Number of Gold and Private Banking customers up 47,000 in the fourth quarter (up 200,000 in 2010, a 7% growth rate)

Net loan losses 23 basis points in the fourth quarter (31 basis points in 2010)

Operating profit up 12% in the fourth quarter (up 18% in full-year 2010)

Return on equity 12.8% in the fourth quarter (11.5% in 2010)

Proposed dividend EUR 0.29 per share (last year EUR 0.25)
The full version of Nordea Group’s Fourth Quarter and Year-end Report 2010 is available at:
http://www.nordea.com/sitemod/upload/root/eu/interim/Q4_2010_UK.pdf

Presentation on Nordea Group’s economic statement on 2010:
http://www.nordea.com/sitemod/upload/root/eu/interim/Media_analyst_presentation_Q410.pdf