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Nordea; Results Missed, Bigger Payout Guidance A Minor Credit Negative

FINANCIALS

Nordea (NDA SS) reported 4Q23 results which missed on operating earnings but have given equity holders upgraded 2025 targets and payout to look forward to. That higher payout does appear a marginal credit negative but against a very strong bank, in absolute terms.


  • Revenues were EUR2.92bn (+1% y/y but consensus: 3.03bn), operating costs EUR1.42bn (+17% y/y, cons: 1.34bn) and loan losses of just EUR83m (higher vs. 4Q22 but better than consensus of 94m). Pre-tax profit was EUR1.42bn (-13% y/y and below consensus of 1.57bn).
  • In credit terms, loan losses were just 15bp of loans (up from 7bp in 4Q22 but very low in a European context) and non-performers were EUR2.46bn, 70bp of lending and up from 2.23bn at Sep-23 (63bp). CET1 is 17.0%, up 70bp in the quarter (min. require: 12.1%) with total capital at 22.2%.
  • Mgmt targets are upgraded (RoE of >15% for 2025, from >13%, loan losses of 10bp and 1pp better cost-income than previously) but include an indication the bank will only run with 150bp of CET1 > regulatory requirements, from 150-200bp, implying a tighter base from here. Marginal credit negative but against strong operating earnings.

Conf call is 0900 London time at https://nordea.videosync.fi/q4-2023/register

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