Nordea Bank (NDA-SE) Q3 2024 earnings summary

Executive summary

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

• Total income increased 2% year-on-year to EUR 3.0bn, with net fee and commission income up 4% and net interest income down 1%.

• Deposit volumes grew 2% in retail and 9% in corporate; assets under management rose 15% to EUR 412bn.

• Operating profit reached EUR 1.6bn, down 5% year-on-year, mainly due to higher expenses and increased net loan losses.

• Credit quality remained solid, with net loan losses at EUR 51m (6bp), mainly from a few corporate exposures; EUR 30m released from management judgement buffer.

Financial highlights

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

• Total operating income: EUR 3,014m (+2% year-on-year); operating profit: EUR 1,634m (-5% year-on-year); net profit: EUR 1,266m (-6% year-on-year).

• Cost-to-income ratio (excluding US settlement): 43.4%–43.5%, up from 42.4% a year ago.

• CET1 ratio at 15.8%, 2.3 percentage points above requirement, down from 17.5% in Q2 2024.

• Stage 3 loans at 1.05% (up from 0.95% in Q2); coverage ratio for stage 3 portfolio at 38%.

Outlook and guidance

• Full-year 2024 ROE expected above 16%, up from previous guidance of above 15%.

• 2025 target: ROE above 15%, cost-to-income ratio 44–46%, normalised loan losses around 10bp annually.

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

• NII for 2024 expected to be higher than 2023, supported by diversification and deposit hedge.

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