OREANDA-NEWS. February 11, 2014. 2013 brought Nordea stable growth of revenue base and noteworthy recognition

The income of Nordea Estonia, part of a leading European financial group, grew by 8% in 12 months; the profits increased by 15%. Nordea, the safest Nordic bank, has increased its customer base by 4.7% y/y, while increasing its deposit volumes by 7%.

"We can consider 2013 a successful year for Nordea, despite the slower than expected global recovery and slow corporate demand. Although tough times are not behind us yet, investment volumes should increase in 2014, in tune with increasing exports and recovery of the real estate market. As during the previous three years, Baltic economies will remain among the fastest growing ones in the EU," Andreas Laane, who will become the Head of Nordea Estonia in February and has so far been managing Nordea's corporate and retail banking operations, remains optimistic.

"Nordea's focus on relationship banking has increased customer loyalty in our target segments. We have a reason to be happy: our customer relationship strength indicator 98 (based on the 2012 TRI*M- Measuring, Managing and Monitoring survey) is very high in European context. This reflects the team effort and the customer trust that have impressed also the leading global banking and finance magazine The Banker, part of the Financial Times group, that has named Nordea the Bank of the Year 2013 in Estonia," Laane added.

The volume of savings and investment products has increased 9% y/y, reflecting the bank's efforts in strengthening Nordea's home bank relations with customers. Customer deposit volumes have grown by 7% y/y, whereas the volume of private deposits has gone up by 22%, increasing to EUR 300 million. Deposit to loan ratio has grown from 42% to 44%, balancing the proportion of deposits and loans in the bank’s portfolio, Laane said.

At the end of December, the loan portfolio of Nordea Estonia amounted to more than EUR 3.1 billion, of which leasing portfolio made up EUR 613 million, having grown slightly compared to a year ago. The corporate loan and leasing portfolio amounted to more than EUR 1.0 billion and the private loan leasing portfolio to more than EUR 1 billion. Compared to last year, the private loan and leasing portfolio grew by 2%, the volume of the corporate loan and leasing portfolio did not change significantly. The share of loan losses amounted to 0.06% over the four quarters.
 
Nordea Leasing (Nordea Finance Estonia) had a very successful year in 2013. It became the largest finance provider in the Estonian leasing market with a 29.3% market share; the company increased its customer base by 8% year-on-year. The revenue base and profit grew by a total of 16%; EUR 244 million worth of new leasing credits and EUR 100 million worth of new factoring credits were issued, amounting to EUR 344 million in new sales. The total volume of the company’s credit portfolio grew to EUR 613 million, generating a 9.4% annual growth rate, which twice exceeds the market growth rate. Additionally, corporate customers are now offered the new credit insurance service in cooperation with one of the world’s top insurance companies

Euler-Hermes.

The very good 2013 results of the pension funds managed by Nordea Pensions Estonia AS have generated additional customers and loyalty towards the funds. The volume of pension funds managed by Nordea Pensions Estonia AS increased 38% y/y to EUR 90 million. As at 2013, more than 30 000 people were raising their pension capital with Nordea’s pension funds.

CEO Christian Clausen’s comments on the results:

“2013 was another year of low growth and interest rates declined to record-low levels. In this environment, we delivered a stable income level (in local currencies) and saw a continued inflow of relationship customers. For the 13th consecutive quarter, we have kept costs flat. Loan losses decreased by 17% and the operating profit increased by 3% (both in local currencies). The core tier 1 ratio has improved by 180 basis points to 14.9%, due to modest loan demand, strong capital generation and continued efficiencies. The Board of Directors proposes a dividend of EUR 0.43 per share (EUR 0.34).

We expect that the economic growth and the interest rates levels will stay low for a prolonged period of time. Thus, we expect that the loan demand and customer activity will be at a lower level than we foresaw last year when we announced our plans for the future relationship bank. As a consequence we will accelerate and expand our cost efficiency programme. This will enable us to adjust our capacity to the lower activity level and to maintain our position as a strong bank.”