Nordea Profit Increased 7% in Fourth Quarter as Fee Income Grew

Nordea Bank AB (NDA) said fourth-quarter profit rose 7 percent after Scandinavia’s largest lender booked more in income from fees and commissions to its clients.

Net income rose to 840 million euros ($1.13 billion) from 785 million euros in the same period a year earlier, the Stockholm-based lender said in a statement today. That beat the average 765 million-euro estimate of analysts surveyed by Bloomberg. Net fee and commission income grew 18 percent to 692 million euros, while loan losses declined 7 percent to 244 million euros.

Chief Executive Officer Christian Clausen said in December Nordea has cut about 7 percent of its workforce as part of a plan that envisages reducing staff by one tenth to help meet stricter regulatory requirements. The pan-Nordic bank, which is lagging behind its Swedish rivals Svenska Handelsbanken AB and Swedbank AB in boosting capital buffers, said it managed to increase profit even as demand for banking services was “constrained” by a tough economic climate.

“The sluggish macroeconomic development continued in the euro zone,” the bank said in the statement. “Its impact on the Nordic economies increased in the autumn, with insignificant gross domestic product growth in all economies, except Norway.”

Nordea reported a core Tier 1 capital ratio of 13.1 percent for the end of 2012 of its risk-weighted assets. That’s more than the 10 percent Sweden’s biggest banks will need to meet this year and also exceeds the 12 percent requirement that becomes effective in 2015.

Tougher Rules

Nordea needs to meet higher capital standards in Sweden than those set elsewhere as the government of Prime Minister Fredrik Reinfeldt pledges to protect taxpayers from bank- industry losses. Clausen, who is also the president of the European Banking Federation, has bemoaned the impact he says tougher bank rules are having on growth.

Nordea said two weeks ago it had replaced its Chief Financial Officer Fredrik Rystedt with Torsten Hagen Joergensen, a move that Cheuvreux analyst Mats Anderson in a Jan. 29 note said “raised eyebrows” and “caused concern and anxiety.”

Rystedt left after Nordea said impairments rose in the third quarter.

To contact the reporter on this story: Niklas Magnusson in Stockholm at

To contact the editor responsible for this story: Frank Connelly at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.