"Lower inflation and prospects of lower interest rates have increased consumer confidence, and we have seen signs of this in the activity among both households and companies," says Frank Vang-Jensen in a written comment in the bank's report for the third quarter.
"Business volumes were stable and customer activity was good, which contributed to a revenue increase compared to the same quarter last year," he adds.
Stable Mortgage Volumes, Dampened Market
Vang-Jensen describes lending as stable on sluggish markets.
"We were active in contact with our corporate customers, who were more focused on refinancing existing loans than borrowing more to invest in growth, and were thus able to maintain a stable lending on the corporate side. Mortgage volumes remained stable on dampened housing markets," he says.
Nordea reports an operating profit before credit losses of 1,685 million euros (corresponding to 19.2 billion kronor) for the third quarter of the year. This can be compared to 1,758 million euros during the corresponding quarter a year earlier.
The net interest income, what the bank earns on the difference between deposit and lending rates, fell 1 percent to 1,882 million euros. However, the so-called fee and commission net income rose 4 percent to 774 million euros.
Better than Expected
The bank's operating expenses increased simultaneously by 11 percent to 1,329 million euros, and credit losses rose to 51 million euros, up from 33 million euros a year earlier.
The result was slightly better than expected.
Analysts had expected an operating profit before credit losses of 1,594 million euros and a net interest income of 1,877 million euros, according to a compilation of forecasts made by Bloomberg.
A few minutes before the interim report, Nordea announced that the bank is launching a new program for repurchasing shares, a form of dividend, for 250 million euros (approximately 2.86 billion kronor). The announcement comes after clearance from the European Central Bank (ECB).
