Nordea Bank (NDA-SE) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered strong profitability with return on equity at 16.7%, extending a streak of eight quarters above 15%; EPS at EUR 0.36.

• Total income grew 2% year-over-year to EUR 3.0bn, with net fee and commission income up 4% and net interest income down 1% due to lower deposit margins.

• Deposit volumes increased by 2% in retail and 9% in corporate year-over-year; assets under management rose 15% to EUR 412bn.

• Cost-to-income ratio (excluding US settlement) at 43.4%; credit quality remained solid, with net loan losses at EUR 51m, mainly from a few SME/corporate exposures.

• CET1 ratio at 15.8%, 2.3 percentage points above requirements; EUR 250m share buy-back to launch in October.

Financial highlights

• Net interest income: EUR 1,882m (-1% year-over-year); net fee and commission income: EUR 774m (+4% year-over-year); net fair value result up 26% to EUR 284m.

• Total operating income: EUR 3,014m (+2% year-over-year); operating profit: EUR 1,634m–1,600m; net profit: EUR 1,266m (-6% year-over-year).

• Cost-to-income ratio (excluding US settlement): 43.4%; with amortised resolution fees: 44.5%.

• Net loan losses: EUR 51m (6bp), mainly from a few SME/corporate cases; management judgement buffer reduced by EUR 30m.

• Asset under management increased by 15% year-over-year to EUR 412bn.

Outlook and guidance

• Full-year 2024 return on equity expected above 16%; above 15% targeted for 2025, with cost-to-income ratio 44–46% and normalised loan losses ~10bp annually.

• Net interest income for 2024 projected to be higher than 2023, with resilience expected despite rate cuts.

• Core cost growth (excluding regulatory fees) anticipated to be significantly lower in 2025 than in Q3 2024.

• CET1 requirement expected to increase by 10bp from Q1 2025 due to regulatory changes.

• Dividend payout policy remains at 60–70% of profit, with ongoing share buy-back assessments.