S&P 500 slips, but losses kept in check as Nvidia climbs ahead of results
Investing.com -- Nordea Bank (HE:NDAFI) on Thursday posted steady fourth-quarter results, with profits and key financial metrics in line with market expectations.
The bank reported a net profit of EUR 1,129 million, closely matching the consensus estimate of EUR 1,128 million. Pre-provision profits came in at EUR 1,521 million, also in line with forecasts.
“A positive was the beat on NII and fees, while trading was lower than expected,” said analysts at Jefferies in a note.
NII was 1% ahead of expectations, supported by higher deposit volumes, which were up 5%, though margins declined.
Fee income was 2% higher than expected, driven by growth in assets under management, which increased by EUR 9.6 billion to EUR 422 billion, as well as better-than-expected brokerage and advisory income.
Meanwhile, trading results were weaker due to lower customer activity and a difficult rate environment.
Expenses were in line with expectations, with a cost-to-income ratio of 49%. Looking ahead, Nordea expects costs to rise by 2–2.5% in 2025 compared to 2024, while current analyst consensus forecasts a 2% increase.
Capital levels remained strong, with a Common Equity Tier 1 ratio of 15.8%, which was 30 basis points higher than expected and stable quarter-over-quarter.
The increase in CET1 capital was mainly due to profit net of dividend, partially offset by the ongoing share buyback program and the impact of Nordea’s Norway acquisition.
The bank remains well-capitalized, with a CET1 buffer of 220 basis points above regulatory requirements, exceeding its internal target of a 150-basis-point buffer (or a 15% CET1 ratio).
On shareholder returns, Nordea proposed a final dividend of EUR 0.94 per share, a modest 2% increase from the previous year, which was in line with market expectations.
The bank’s current share buyback program is set to end in February 2025, and discussions on a new program have already begun.
Nordea’s 2025 target is ROE above 15%, slightly higher than the current 14.7% market consensus.
The bank will maintain its 60-70% dividend payout ratio and a 150 basis point capital buffer above regulatory requirements.