OREANDA-NEWS. November 01, 2012. A growing customer portfolio at the safest Nordic bank

As the safest bank in the Nordic countries, Nordea Estonia, which belongs to the leading European financial group, has expanded its customer base (7.6%) and increased the volume of deposits in year-on-year terms. Nordea’s return has grown to 39 million euros and the company’s total income has increased by 8% i.e. to 62 million euros.

According to Nordea Estonia CEO, Vahur Kraft, the third quarter stable growth and quality portfolio is based on the bank’s credibility. “The debt crisis in Europe is far from over and it is the strong Nordic banks that have maintained and even strengthened their positions and secured the customers’ assets. Customers want secure holdings and long-term loans, which we have been able to offer, based on a balanced strategy and Nordea Group’s high reliability,” said Kraft.

Compared to a year ago, Nordea has achieved almost 14% growth in assets. “On a global scale, banks are reviewing their business models to secure growth in light of stricter capital and liquidity requirements. Nordea has maintained a reasonable growth rate and the lowest yoy cost/income ratio because of a forward looking strategy with a realistic outlook on the economic environment,” added Vahur Kraft.

Nordea Estonia volume of assets was 3.5 billion euros by the end of September. The volume of deposits had grown by approximately 40% i.e. over the billion euro level by the same date.

By the end of September, Nordea Estonia loan portfolio reached almost 3.1 billion euros, with the leasing portfolio making up 555 million euros. Compared to the same period the previous year, Nordea has increased its loan and leasing portfolio by 200 million euros.  “Raising the quality of the portfolio is more important than increasing the volume. The share of so-called bad debts in the Nordea loan portfolio is one of the lowest year-on-year, the share of loan losses out of the total portfolio was 0.04% during the first three quarters,” commented Kraft.

Nordea Estonia corporate loan and leasing portfolio was 1.9 billion euros at the end of September. With this, Nordea has strengthened its second position on the Estonian corporate loan market. The private loan and leasing portfolio grew 6% yoy and exceeded the billion euro level at the end of September.  

“The bank’s quality and strength, especially with the external environment of constant change, is demonstrated by the customers’ satisfaction and loyalty.  We are a bank directed at the customers’ needs and expectations and this path has led to success.  This is also validated by the EPSI Baltic countries’ satisfaction survey, which outlines Nordea as one of the few banks operating in Estonia that has managed to raise customer satisfaction in services and terms over the past year and the only bank in Estonia which has significantly increased the level of customer loyalty,” said Kraft.

Nordea Finance Estonia has continued to grow its customer base, which has gone up by 10% compared to a year ago.  The credit portfolio volume had increased by 20% yoy, to 555 million euros by the end of September. Leasing new sales had grown by 36% i.e. to 234 million euros compared to the first nine months of 2011, which allowed  Nordea to continue  to actively offer leasing and factoring funding to its customers and more generally, to fulfil the role of a leading leasing funder on the leasing market.

At the end of September, Nordea’s pension funds’ assets exceeded 61 million euros, which makes up 4.2% market share of the total volume of pension funds in Estonia. In September, 4 years passed since setting up Nordea pension funds in Estonia. As a result of successful operations, Nordea Pensions Estonia AS earned income grew 1.5 times compared to the same period last year.

Nordea bank has received several international awards this year, for example, the international finance publication Global Finance named Nordea the safest Nordic bank and World Finance ranked Nordea the best banking group in Scandinavia for the second year in a row. In addition, EMEA Finance has awarded Nordea the best bank in Estonia title for the second year running.

CEO Christian Clausen’s comment to the report:

New Normal plan delivers on cost, capital and income

“65,000 new household relationship customers and a further strengthening of relations with corporate customers have led to the highest ever income and operating profit in the first nine months of a year, despite the low interest rates.

We continue to increase efficiency in line with our New Normal plan. Expenses remained flat and the core tier 1 capital ratio increased to 12.2%. We are fully compliant with liquidity requirements and have excellent access to the international funding markets.

Income was lower than last quarter, but has never before been this high in a third quarter. For the first three quarters of the year, income increased by 10% and operating profit by 14%.”

Nordea Group economic results 2012 II quarter vs. 2012 III quarter:

Net interest income growth 10% (decrease 5%);

Operating profit growth 14% (decrease 16%);

Excluding transition rules, core tier 1 capital ratio decreased from 12.2% to 11% (II quarter 11.8%);

Cost/income ratio dropped from 54% to 51% (II quarter from 52% to 54%);

Net loan losses increase from 30 basis points to 27 (II quarter also to 30 basis points from 26 basis points).

ROE – to 11.4% from 10.6%

Full overview of Nordea Group 2012 III quarter economic results:
http://feed.ne.cision.com/wpyfs/00/00/00/00/00/1B/F1/26/wkr0006.pdf