OREANDA-NEWS.  July 25, 2012. Nordea Estonia, part of a leading European finance group, continues on a strong growth path, having earned EUR 26 million in profits in HY 1. Total income went up by 8% y/y, to EUR 40.6 million, reported the press-centre of Nordea. 

“2012 Q2 results were record high for both Nordea Estonia and the whole Nordea Group. Reaching so good results in the new normal environment demonstrates the strength of Nordea Group and its preparedness for the historical decisions that the banking sector is about to face within the coming years. With this, we are confirming to our customers that we are, indeed, the strongest Nordic finance group – stable, trustworthy and able to perform throughout good times as well as bad,” the Head of Nordea Estonia, Vahur Kraft said. “One of the characteristics of Nordea Estonia's 1st half-year results is a rise in operational efficiency, attested by the historically lowest cost/income ratio (34%) for the second quarter in a row.”

According to Nordea's economic forecast, Estonia will be able to maintain 2% GDP growth this year, based on internal demand and consumer and business confidence above Eurozone average, supported by an increase in business activity. “In the 1st half-year, the number of SME credit agreements with Nordea has increased considerably. We are glad to see that Nordea is a personalised high-quality home bank also for all corporate customers, holding the 2nd position in the corporate loans market in Estonia. This is confirmed by the results of Nordea's customer satisfaction survey – in the eyes of corporate customers, Nordea's competitiveness has increased by 20% in the first 5 months of 2012 compared to last year's average,” Kraft added.

The executive added that changes in customer habits also have an influence on the banking sector. “I am happy to see that people are more informed and rational in financial matters, which is reflected by the growing deposit volumes in the 1st half-year. Compared to the same period last year, deposit volumes of Nordea’s private and corporate customers have increased by 60%,” Kraft specified.

Another general banking trend has to do with the constant growth of e-channels, as a reaction to which, Nordea launched its mobile banking application in the beginning of the year. The app has been warmly received by the customers and according to Vahur Kraft, Head of Nordea Estonia, Nordea is a personalised home bank that will continue further development of this type of channels.
 
At the end of June, Nordea Estonia had EUR 3.6 billion worth of assets. Nordea Estonia's total loan portfolio amounted to EUR 3 billion, meaning 5.7% y/y growth of the loan and leasing portfolio. The leasing portfolio grew by 17.6% y/y, amounting to EUR 525 million.

Private loan and leasing portfolio grew by 7.1% y/y and amounted to EUR 1 billion at the end of June. In the 1st half-year, loan losses represented 0.06% of the portfolio.
 
At the end of June, Nordea Estonia's corporate loan and leasing portfolio amounted to EUR 1.9 billion, having grown 6.1% compared to HY1 2012.

Nordea's performance has been highly recognised through a number of international awards. For the second year in a row, EMEA Finance has named Nordea the best bank in Estonia. In addition, Nordea was considered the best investment bank. World Finance has selected Nordea Group as the best Nordic banking group for the second consecutive year.

CEO Christian Clausen’s comment to Nordea Group’s 1st HY 2012 results:

“We maintained good business momentum and increased return on equity despite continued pressure on interest rates, financial turmoil and the slowdown in European economic activity.
We have continued to make progress in building the future bank. The execution of our New Normal plan has led to more business and growing income, while costs have remained stable and efficiency in capital, liquidity and funding has increased.

By taking early action, Nordea has maintained a strong rating and thus been able to continue to support customers in developing their family finances or corporate businesses. This is our most important contribution to growth and development in the societies where we operate.”

Nordea Group, first half-year 2012 vs first half-year 2011 (second quarter 2012 vs first quarter 2012):

Net interest income up 9% (up 3%)

Operating profit up 9% (up 6%)

Core tier 1 capital ratio increased to 11.8% excluding transition rules from 11.0% (up from 11.6% in the first quarter)

Cost / income ratio down to 50% (unchanged at 50%)

Net loan losses up to 26 basis points from 23 basis points (unchanged at 26 basis points)

Full overview of Nordea Group's 1st HY 2012. results:
http://feed.ne.cision.com/wpyfs/00/00/00/00/00/1A/8A/2E/wkr0006.pdf