OREANDA-NEWS. November 05, 2014. Nordea Estonia, part of a leading European finance group, earned EUR 30.3 million in profits for the first 9 months of the year.

The bank continues to offer strong investment and savings solutions, having generated a 85% y/y growth in its investment product volumes and a 12% growth in deposit volumes.

"We continue to place our focus on increasing the financial literacy and saving power of Estonians. For this year, Nordea's latest economic outlook forecast a near-0% inflation rate, which favours setting aside funds for a longer term. On our part, we will concentrate on creating banking services and solutions that would be in tune with the wider trends and encourage responsible management of one's finances," Petri Nikkila, Head of Nordea Estonia said.

"This year, Nordea has taken several steps to simplify and develop the customers' opportunities for everyday banking and investing. The good outcome has shown that our actions have created value for our customers," Nikkila added.

For example the bank introduced in early summer the private customer transaction package, making everyday banking tasks more convenient. Nordea also offers the best term deposit rates in the market for individuals and SMEs until the end of October. By the end of Q3, Nordea and Danske banks had finalised their joint project for renewal of the ATM network, replacing 20 cash dispensers with new cash deposit and withdrawal machines in all the towns with branch offices.

Keeping in mind the changing needs of customers, Nordea will continue to develop the accessibility of its services through mobile banking. In Q3 this year, the upgraded version of Nordea mobile bank was launched, directing the bank's customers towards the bank's most important online services. In the last year, the number of Nordea's mobile bank users has increased significantly - as at the end of September, the number of active users of the mobile app had almost doubled and the number of mobile logins to the online bank had more than doubled y/y.

Nordea's customers' deposit volumes increased by 12% y/y on Q3 2014, including a 24% growth in private deposit levels. The deposit to loan ratio of Nordea has increased to 44%.

Nordea Estonia's loan portfolio also remains stable as at the end of September, both the private and corporate loan portfolios have increased by 5% y/y.

CEO Christian Clausen’s comments on the results:

“In the third quarter we continued to welcome more new customers and were trusted with more savings, thereby passing the milestone of EUR 250bn in assets under management. Despite continued macro headwind, income is holding up well and we are clearly on track to deliver on our cost targets. Credit quality continues to improve and the loan loss level is below the 10-year average.

Nordea once again was confirmed as one of the safest banks globally, when issuing two Additional Tier 1 instruments, of USD 1.5bn with the lowest coupons among corresponding instruments issued in the USD market. This strengthened the Tier 1 ratio by 75 basis points and our total capital ratio is above 20%.

We are continuously developing our services to meet the changing customer behaviour. To provide even more personalised and convenient solutions we are currently simplifying our processes and will as a next step build new core banking and payment platforms, leading to an average annual increase in our combined IT investments of approximately 30-35% over the coming 4-5 years. As a consequence we will replace some of our current IT systems, leading to an impairment charge of EUR 344m.”

First nine months 2014 vs. First nine months 2013 (Third vs. Second quarter 2014)?:
Total operating income -1%, in local currencies +2% (-3%)
Total expenses -4%, in local currencies -1% (-2%, in local currencies -1%)
Operating profit +7%, in local currencies +9% (-3%)
Common equity tier 1 capital ratio 15.6%, up from 13.4% (up to 15.6% from 15.2%)
Cost/income ratio down to 49% from 51% (unchanged at 49%)
Loan loss ratio of 15 basis points, down from 21 basis points (down to 12 bps from 16 bps)
Return on equity 11.5%, up from 11.2% (down to 11.2% from 12.0%)