* Operating profit down 66% due to the pandemic
* Nordea expects 2020 loan losses to be less than € 1 billion
* Fees and commissions down 9%
* Equities up 0.6% (Comparison with peers, details, share price)
TALLINN / STOCKHOLM, July 17 (Reuters) – Nordea Bank on Friday reported a worse-than-expected drop in operating profit in the second quarter as the Nordic region’s largest lender was hit by heavy loan losses linked to the coronavirus.
Nordea’s performance contrasted with regional peers Danske Bank and Swedbank which exceeded expectations earlier on Friday thanks to an increase in lending.
Nordea, which has reduced its exposure to the riskier markets of Russia and the Baltic states, announced a 66% drop in operating profit to 306 million euros ($ 348 million) from 885 million euros. euros forecast by analysts and 900 million euros last year.
Loan losses, a figure closely watched for the impact of the wider economy affected by the pandemic, jumped to € 698m from a Refinitiv forecast of € 317m and a loss of € 154m. euros a year ago. If you urgently need a loan just use https://www.paydaychampion.com/
Industry analysts generally expect banks to see an increase in bad loans as the pandemic plunges economies into recession, but Swedish rival Handelsbanken on Wednesday reported lower loan losses than he had seen since many years.
Nordea’s share price rose 0.6% at 08:05 GMT, while Swedbank of Sweden rose 3% and Danske Bank of Denmark by 1.4%.
The coronavirus lockdowns also affected income net of fees and commissions, which fell 9% to 673 million euros from 743 million a year ago, as the locks reduced transactions.
Net interest income, however, rose 2% to € 1.09 billion from € 1.07 billion a year ago, driven by increased lending and lower costs. funding.
Nordea said it updated its estimated credit losses for the year to less than € 1 billion. In 2019, the bank reported net loan losses, net of exceptional items, of € 254 million.
“We consider this proactive approach to be prudent and appropriate given the current economic uncertainty,” said Managing Director Frank Vang-Jensen, adding that the credit quality of Nordea’s registered loan remains strong.
An accounting rule from 2018 requires lenders to take on expected losses from the crisis up front, meaning banks must factor economic forecasts into their losses.
Nordea reiterated that it would decide on a dividend of up to 0.40 euro per share after October 1.
“Obviously, our financial strength allows us to support our customers and pay a dividend,” said Vang-Jensen.
$ 1 = 0.8783 euros Report by Tarmo Virki in Tallinn, Colm Fulton in Stockholm; Editing by Tom Hogue and Elaine Hardcastle