FINANCIALS: Nordea Results Preview: Buyback News Like The Key

Nordea (NDAFH: A3 pos/A/AA-) results are due 15-Jul. The issuer has gently underperformed in the last few months on few positive catalysts, in our view and equity investors will be hoping for buyback news. There’s little to indicate anything credit negative on either micro or macro newsflow since last results, we feel.

• 1Q24 results (18-Apr) were broadly credit positive with a beat on loan losses and another on CET1 levels. Revenues were ahead on good deposit hedge performance, too, but the equity performance was crimped as the ECB and Nordic regulators were still in talks over buybacks, meaning no announcement generated some disappointment there.
• Recent news has been mixed; mgmt gave a bullish update at an investor event last month but Danish police have just charged the bank in a money laundering case (though NDA says it’s adequately provisioned).
• Cash credit has lagged the banks index a few basis points since those results (-9bp vs. -13bp) and the equity has basically tracked sideways whilst the banks have drifted 6% higher in aggregate. So minor underperformance on both sides.
• Earnings revisions: revenues were upgraded around 1pp for this year and next after results, pushing EPS up 4% for FY24 and 2% for next year. It appears that lack of buyback is the real limiting factor.

Results due 0530 (London time) with conf call at 0900 at https://nordea.videosync.fi/q2-2024/register