Nordea 1Q24 Due 18-Apr; Tough Revenue Environment

Nordea 1Q24 results are due 18-Apr, upgraded guidance last time impressed few and the outlook for revenues and profits remains weak, much as this is a low risk business. Any news on margin management or revenue growth from fee business would be a key positive.

• 4Q23 results missed expectations on weaker revenues and higher costs and much of the earnings outlook upgrades (RoE to >15%, from >13%) that mgmt talked about at the time were discounted rapidly by the equity market.
• Since results, the equity is down 3.8% (vs. SXXP +11.8%) but spreads are tighter YTD (average of -21bp but vs. -36bp for EuroIG financials) and have widened a little in the last week.
• Revenue estimates have been trimmed by c.1% for this year and next, since results and EPS estimates are 1-2% lower, too but the bigger issue is that consensus sees revenues and profits barely growing this year and lower in 2025 and rate tailwinds disappear.
• Nordic asset quality tends to be almost peerlessly good so doubt this will be an issue, so it all comes down to fine-tuning in margin management, the ability to grow revenues via fee-based businesses and limit cost growth. So, a relatively low-risk business but in a tight spot in the rate cycle.

Results are due 0530 (London time) with a call at 0900, available at: https://nordea.videosync.fi/q1-2024/register