- Biggest Nordic bank posted 28% decline in profit last quarter
- Nordea CEO says result is `acceptable' given tough environment
The man running Scandinavia’s biggest bank says he will do “whatever it takes” to restore trust as clients, politicians and shareholders express their dismay over allegations of tax evasion.
Chief Executive Officer Casper von Koskull says Nordea Bank AB is “engaging with” customers to save its reputation after the so-called Panama Papers revealed the bank’s alleged role in helping rich clients hide their wealth. Apart from some “exceptional cases,” Nordea so far hasn’t seen an outflow of clients, Koskull said in an interview on Wednesday.
The bank says it’s prepared for the risk of “sanctions” as the Swedish Financial Supervisory Authority probes the case. Koskull said the results of the probe could come as early as June. Depending on the outcome, he said Nordea may need to adjust its policies or even parts of its operations.
Legal vs Ethical
The bank has maintained it has no evidence that its actions were illegal. But a growing number of stakeholders have voiced their anger at the perceived ethical breach. One Danish minister wrote an opinion piece in local media questioning Nordea’s “moral compass” while Sweden’s minister responsible for bank oversight has suggested tougher laws to prevent a repeat.
“It’s not only about the regulation, law and policy,” Koskull said. “We need to take a normative approach to this as well. Whatever comes out of it, the sector needs to kind of be ahead of the curve rather than behind the curve.”
Nordea is eager to show customers it is cooperating with Sweden’s regulator and that its own investigation is “very credible,” Koskull said. The bank is also using “external, credible advisers and will get the facts and then we draw the conclusions, and I have said this to our customers as well. We’re in the trust business and we need to regain that trust.”
The financial industry “cannot stand for being a platform for tax evasion,” Koskull said.
The Stockholm-based bank is struggling to shake off the allegations as its business suffers from a combination of negative interest rates and volatile markets. Nordea said profit plunged 28 percent last quarter as revenue sank.
Net income was 782 million euros ($884 million), missing the 792 million-euro estimate of analysts surveyed by Bloomberg. Net interest income slipped 7 percent while total operating income declined 16 percent, the bank said on Wednesday. Operating costs declined 1 percent.
“Volatility on financial markets and lower interest rates put pressure on revenues,” Koskull said in the statement. “Given the environment the result is acceptable.”
The bank’s shares traded 0.3 percent higher at 79.75 kronor as of 12:41 p.m. in Stockholm. The stock has lost about 15 percent this year, about the same as the 39-member Bloomberg index of European financial companies.