OREANDA-NEWS. April 27, 2012. Nordea Estonia, part of the largest Nordic finance group, continues on a stable growth path, having increased the share of deposits and retained the high quality of its loan portfolio. In Q1 Nordea earned EUR 12.9 million in profits, up by 13% year-on-year, and increased its total income to EUR 20.1 million, reported the press-centre of Nordea.

“Although the debt crisis is still putting a cap on European growth, Nordic and Estonian economies have been successful in Q1. An important factor in this has been the active investing by Estonian companies, supported by growing profits and sales. Nordea Bank's Q1 results confirm that companies have continued with investments that are necessary to strengthen competitiveness and develop the economy," Head of Nordea Estonia Vahur Kraft said. “In the first three months of the year, Nordea has seen a stable growth of its loan and leasing portfolio and attracted more than 2000 new customers." At the end of Q1, the loan and leasing portfolio of the bank amounted to EUR 3 billion, which is 8% more than previously.

Head of Nordea added that companies need to look beyond the temporary slowdown in Europe when planning their investments. “For this year, we are forecasting a 2% growth in Estonia. The new revival has to do with the restored demand for exports into Europe. Next year, when the Eurozone recession will be replaced by growth, Estonia could already expect a 4%-growth," Kraft said. “Banks' activities and decisions have played a certain role in reactivating investments. Year-on-year, Nordea has managed to keep its assets growing by a stable 10% and reasonable governance has created a good 34% cost/income ratio."

According to the Head of Nordea Estonia, deposit volumes have undergone significant growth in Q1. “Compared to the same time last year, we have increased our deposit volumes by 44%. This is a positive reflection of our customer-focused strategy and trustworthiness," stated the bank's executive. “Considering our ambitions as a major European bank, it is extremely important for us to hold on to our trustworthiness in the field of finances and the strong capitalisation that was acknowledged by the Standard & Poors international rating agency that awarded Nordea the only AA- rating among banks active in the Baltics at the end of last year.”

“Nordea has also forcefully enshrined itself among the large home banks. In addition to everyday banking, deposits and loan products, customers are expressing ever keener interest in our investment products," Head of Nordea Estonia noted, adding that private savings and investment product volumes have gone up by 42% y/y.

Nordea Pensions Estonia continued on a fast growth track in Q1. Assets of pension funds increased by 16.8% in three months, exceeding EUR 49 million. The bank found 1400 new customers in Q1; as a result, the number of Nordea pension fund investors went up by 6%.

Nordea's corporate loan and leasing portfolio has grown in Q1 as well; according to Vahur Kraft this will strengthen Nordea's second position in the Estonian corporate financing market. At the end of March, Nordea Estonia's corporate loan and leasing portfolio amounted to EUR 1.8 billion, having grown 9% compared to Q1 2011. Private loan and leasing portfolio grew 8% y/y and amounted to EUR 1 billion at the end of March. The bank's loan volume at the end of March was EUR 2.5 billion with a 7% y/y growth. The quality of Nordea's loan portfolio has improved significantly: in Q1 loan losses made up 0.06% of the portfolio.

The leasing portfolio grew by 18% y/y, amounting to EUR 495, securing the second position in the Estonian leasing market. The leasing and factoring portfolio grew by 18% y/y, amounting to EUR 495, securing the second position in the Estonian leasing market. The important growth was a result of lease financing of new investments in transport and logistics sector. All in all, Nordea Leasing issued EUR 71.7 million worth of new leasing credits in Q1, which is 44% more than a year ago.  
 
When commenting on plans and developments for this year, Vahur Kraft underlined the continuing development of service quality. “Quality of customer service is of key importance to our bank. It is part of our business strategy and we continue to increase investments made in this field. In the beginning of the year, we launched our mobile bank for both private and corporate customers that has the widest functionality among the available alternatives and has been very well received. In addition, this year we will be contributing to the joint ATM network project and developing our internet bank; this should make our services even more convenient and accessible for customers," the Head of Nordea Estonia commented.

“Today and in the future, customers will have the central role in our activities. Based on Emor's latest research, these activities have borne fruit. According to the study, Nordea's customers continue to show high loyalty – at the level of 92 points, equal to that of the top 10% of world's best and most trustworthy banks,” Vahur Kraft added.

 “I believe that our highly professional team will be able to maintain this result.”