Company Announcements

Copenhagen, Helsinki, Oslo, Stockholm, 30 April 2019

First Quarter Results 2019

Nordea Bank Abp - Inside information - Interim report (Q1 and Q3)

CEO Casper von Koskull's comments on the results:

"Through the actions we have taken in recent quarters there are now some encouraging signs of improved business momentum, although lending margins are under continued pressure and market making activities remain challenging.

Compared to the previous quarter, reported revenues were largely unchanged while revenues excluding items affecting comparability increased by 4%. Reported costs increased by 5%, while adjusted for resolution fees in this quarter and excluding items affecting comparability were down 7%.

Our priorities are very clear - to increase business momentum and at the same time reduce the structural cost base; we are executing on both.

This quarter, there has been an intense debate about various anti-money laundering ("AML") issues. It is a very complex and broad issue in society and we take our responsibility very seriously. We have previously stated that we expect to be fined in Denmark for our past weak AML processes and procedures, and we are consequently making a provision of EUR 95m for AML-related matters. Having invested more than EUR 700m in strengthening our risk and compliance activities in 2016-2018, we are confident that our compliance platform is of sounder quality, making us a safe and trusted partner".

First quarter 2019 vs. First quarter 2018 (First quarter 2019 vs. Fourth quarter 2018)

·      Net interest income EUR 1,056m, -5%; -4% in local currencies (-8%, -7% in local currencies)

·      Total operating income EUR 2,115m, -11%; -10% in local currencies (0%, 0% in local currencies)

·      Total operating income, excl. items affecting comparability¹ EUR 2,115m, -6%; -4% in local currencies (4%, 4% in local currencies)

·      Total operating expenses EUR 1,452m, 6%; 7% in local currencies² (5%, 5% in local currencies)

·      Total operating expenses, excl. items affecting comparability EUR 1,357m, -1%; 0% in local currencies (9%, 10% in local currencies)

·      Profit before loan losses EUR 663m, -34%; -33% in local currencies (-10%, -9% in local currencies)

·      Net loan losses EUR 42m, 5%; 5% in local currencies (40%, 40% in local currencies)

·      Operating profit EUR 621m, -36%; -35% in local currencies (-12%, -11% in local currencies)

·      Common Equity Tier 1 capital ratio 14.6% vs.19.8% (14.6% vs. 15.5%) 

·      Cost/income ratio 69% vs. 58% (69% vs. 65%)

·      Cost/income ratio, excl. items affecting comparability² 64% vs. 61% (64% vs. 61%)

·      Loan loss ratio of 7 bps vs. 7 bps (7 bps vs. 5 bps)

·      Return on equity 5.5% vs 9.0% (5.5% vs. 6.3%)

·      Return on equity with perodised resolution fees 7.4% vs 10.5% (7.4% vs. 5.8%)

·      Return on equity, excl. items affecting comparability^1,2 6.7% vs 7.7% (6.7% vs. 7.1%)

·      Diluted EPS EUR 0.10 vs. EUR 0.18 (EUR 0.10 vs. EUR 0.13)

Exchange rates used for Q1 2019 for income statement items are for DKK 7.4636, NOK 9.7459 and SEK 10.4181.

¹ Excl. Items affecting comparability in Q4 2018:  EUR 50m gain from revaluation of Euroclear, EUR 38m after tax, and EUR 36m gain related to sale of Nordea Ejendomme. Q1 2018: EUR 135m gain from valuation model update in Denmark, EUR 105m after tax.

² Excl. Items affecting comparability in Q1 2019: EUR 95m non-deductible expense related to provision for AML-related matters In Q4 2018: EUR 141m loss from impairment of goodwill in Russia.