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MarketScreener Homepage  >  Equities  >  NASDAQ OMX STOCKHOLM  >  Svenska Handelsbanken AB    SHB A   SE0007100599

SVENSKA HANDELSBANKEN AB

(SHB A)
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Nordea Bank shrugs off pandemic as profits rise

10/23/2020 | 12:57am EST

* Q3 operating profit 1.09 billion euros

* Expenses down around 50% compared to Q3 2019

* Share up almost 5%

* Bank hopes to pay 2019 dividend when authorities allow

HELSINKI, Oct 23 (Reuters) - Nordea Bank, the Nordic region's biggest lender, reported a better-than-expected rise in third-quarter operating profit on Friday due to higher lending and the resilience of its loan portfolio in the coronavirus crisis.

Nordea joins Swedish rivals Handelsbanken and Swedbank in reporting low loan losses, bucking the trend of soured debt throughout the pandemic-hit global economy.

"Despite the COVID-19 pandemic, we have continuously moved in the right direction," Nordea Chief Executive Frank Vang-Jensen told reporters, referring to progress made since the bank unveiled a turnaround plan in October last year.

Third-quarter operating profit rose to 1.09 billion euros ($1.29 billion) from a loss of 421 million a year ago, beating analysts' mean forecast for a 966 million profit, according to Refinitiv data.

Shares in Nordea were up 4.7% at 0845 GMT.

"Although uncertainty remains, the risk of a renewed severe downturn has decreased," Vang-Jensen said in the earnings report, adding increased economic activity was driving income growth.

The bank did not report any loan losses in the quarter, but instead a positive adjustment of 2 million euros. That compared with loan losses of 331 million euros a year earlier and analysts' forecast for losses of 76 million euros.

Yet, Nordea reiterated its forecast for 1 billion euros of loan losses across 2020.

Net interest income, which includes income from mortgages, rose 6% to 1.14 billion euros, beating analysts' estimate of 1.11 billion.

Nordea said it intended to pay a dividend for 2019, but was refraining from doing so for now, with the European Central Bank (ECB) currently urging banks to save cash.

"It was a strong result, both on core income and loan losses ... we can expect a positive share reaction this morning," said Kepler Cheuvreux analyst Robin Rane.

Net fee and commission income fell 4% to 729 million euros from a year earlier, with card and payments volumes suffering from lower levels of commerce during global lockdowns.

Expenses declined to 1.1 billion euros from 2.2 billion a year earlier, as the bank's cost savings programme and temporary savings due to the pandemic reduced spending, Nordea said.

($1 = 0.8477 euros) (Reporting by Anne Kauranen in Helsinki and Colm Fulton in Stockholm; Editing by Muralikumar Anantharaman and Mark Potter)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
NORDEA BANK ABP. -0.04% 74.25 Delayed Quote.-1.84%
SVENSKA HANDELSBANKEN AB -0.25% 88.4 Delayed Quote.-12.39%
SWEDBANK AB 0.10% 157.86 Delayed Quote.13.20%
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Financials
Sales 2020 43 920 M 5 196 M 5 196 M
Net income 2020 15 067 M 1 782 M 1 782 M
Net Debt 2020 - - -
P/E ratio 2020 11,7x
Yield 2020 5,39%
Capitalization 175 B 20 735 M 20 730 M
Capi. / Sales 2020 3,99x
Capi. / Sales 2021 3,90x
Nbr of Employees 12 588
Free-Float 89,2%
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Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 97,47 SEK
Last Close Price 88,40 SEK
Spread / Highest target 24,4%
Spread / Average Target 10,3%
Spread / Lowest Target -20,8%
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NameTitle
Carina Åkerström President, Chief Executive Officer & Director
Pär Boman Chairman
Katarina Berner Frösdal Chief Operating Officer
Carl Cederschiöld Chief Financial Officer
Lars Fredrik Elis Lundberg Deputy Chairman
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