OREANDA-NEWS. July 30, 2014. Nordea Estonia, part of a leading European financial group, earned EUR 19.1 million in net profits during HY1 2014.

The bank continues to strengthen its position in savings and investment products, showing a 35% y/y growth in investment product volumes. Nordea pension funds, which have stood out as excellent performers, have increased their managed assets by 45% y/y to more than EUR 108 million. The international finance magazine Euromoney has once again ranked Nordea the best bank in the Nordic and Baltic countries.

„Customers are increasingly realising the value of having the big picture of one’s finances, be it about everyday banking, investments or loans. Good decisions can be made on the basis of the big picture. That is why we are increasing the focus on educating our advisors and developing counselling centres,“ Andreas Laane, Head of Nordea Estonia said.

„One of the most important developments for Nordea this year is taking over the management of ERGO pension funds. Through this deal, we will increase Nordea’s share in the pension fund market, our customer numbers as well as the managed asset volumes even further,“ Laane added.
During the 1st half of 2014, Nordea Estonia was also highly recognised on an international level. Based on its annual survey, the international finance magazine Global Finance named Nordea the Bank of the Year in Estonia. The international finance magazine Euromoney once again acknowledged Nordea as the best bank in the Nordic and Baltic countries, in addition to naming it the best investment bank in the Nordic and Baltic countries for the second year in a row and the best private banking service provider for the sixth year in a row. The readers of the magazine also voted Nordea the best trade finance bank in the Baltic and Nordic countries.

Nordea Estonia’s customers’ deposit volumes as at the end of HY1, 2014, grew by 5% compared to the same time last year, including a 24% increase in household deposits to more than EUR 360 million. Nordea’s deposit to loan ratio has remained stable at 41%.

At the end of June 2014, Nordea Estonia’s loan portfolio exceeded EUR 3.2 billion, of which the leasing portfolio comprises EUR 653 million. The household loan and leasing portfolio has increased by 4% y/y, the corporate loan and leasing portfolio by 3%.

The number of customers has increased by 4.6% y/y. The growth is mainly due to everyday banking customers, however, the numbers of leasing and pension fund customers have increased as well.

Nordea Leasing (Nordea Finance Estonia) issued EUR 153 million worth of new leasing and factoring credits. The factoring segment was the most active with a nearly 100% growth in financing volumes compared to the last year. The number of Nordea’s leasing customers kept growing at a 7% annual rate, reaching 20 385 active customers. In Q2, the credit portfolio of the leasing company increased by EUR 24 million to EUR 653 million. In a year, Nordea Leasing’s credit portfolio has grown by 9%. Compared to the last year, the company has enhanced its internal productivity as well as the quality of its portfolio, bringing about an 11% growth in revenues and 9% in profits.
 
At the end of Q2, the volume of the pension funds managed by Nordea Pensions Estonia AS, exceeded EUR 108 million. Compared to Q1, Nordea’s pension funds grew by 10.7%, while the whole pension market demonstrated a 7.0% growth rate. The robust growth was fuelled both by new customers joining and continuously positive yields in Q2. Nordea’s share in the pension fund market will continue to expand in HY2, 2014, as Nordea will take over the management of the ERGO pension funds from September 1, 2014. The merger has been approved by the Estonian financial supervisor. In Q2, Nordea Pensions Estonia AS earned a profit of EUR 150 000.

Comments of Nordea Group CEO Christian Clausen on Nordea Group financial results:

“The second quarter of 2014 was characterised by a continued inflow of customers and strong activity, particularly in our savings area and corporate advisory business. Income is holding up well, despite low lending demand, low interest rates and low volatility, and we continue to execute on our cost and capital efficiency programmes. Underlying costs are down in local currencies and cost to income ratio is 49%. The Common equity tier 1 capital ratio improved by 60 basis points to 15.2%.

We are proud that still more households and corporates trust us with their banking business and savings. Our sector is transforming, with swiftly changing customer behaviour in the direction of using services and receiving advice online. We continue the work of adapting to the new demands to earn our customers’ trust as a relationship bank also in the future.”

First half year 2014 vs. First half year 2013 (Second quarter 2014 vs. First quarter 2014)?:

Total operating income -1%, in local currencies +2% (-2%)
Total expenses -4% excluding restructuring costs, in local currencies 0% (-3%)
Total expenses +4% including restructuring costs of EUR 190m in the second quarter (+12%)
Operating profit +7%?, in local currencies +10%? (+2%?)
Common equity tier 1 capital ratio 15.2%, up from 13.1%? (up to 15.2% from 14.6%)
Cost/income ratio down to 49%? from 51% (down 0.8 %-point to 49%?)
Loan loss ratio of 17 basis points, down from 23 basis points (down to 16 bps from 18 bps)
Return on equity 11.7%?, up from 11.3% (up to 12.0%? from 11.4%)