Strong performance continued * Total income was up 4% from the first quarter 2009 and up 18% from the second quarter 2008 * Risk-adjusted profit up 4% from the first quarter 2009, up 40% from the second quarter 2008 * Outlook: risk-adjusted profit is expected to be higher in 2009 compared to 2008. The recession has increased the risk for a somewhat higher loan loss ratio for the full year compared to the first half year (full outlook on page 8) Nordea's performance in the second quarter remained solid and in line with long-term targets, with continued organic growth, moderate loan loss provisions and high growth in risk-adjusted profit. Weaker loan demand in combination with revived bond market and continued prudent credit risk management have resulted in a somewhat decelerating volume growth. Despite this, profit before loan losses was up 5% from the first quarter and thus reaching a new record level. Net fee and commission income increased 8%, changing the negative trend from early last year, and also continued strong net gains in the Capital Markets and Treasury operations supported an increase in net gains/losses of 15% from the first quarter. Net interest income held up well, down 4%, despite continued pressure on deposit margins as corporate lending margins continued to increase. Operating profit decreased 2% from the first quarter to EUR 818m. Despite the recession, the net loan loss ratio was broadly in line with the outlook provided in February and was 57 basis points, excluding a one-off provision of EUR 47m concerning a legal claim, contested by Nordea. Net loan loss provisions in the second quarter amounted to EUR 425m. High income and profit before loan losses, strong capital base and competitive funding position enables Nordea to absorb its loan losses while continuing to expand business relations with customers. "In the worst recession in modern times, our staff, close customer relations and our strong capital situation have made it possible for Nordea to reach one of the best ever half-year results. We are developing according to our plans, with a somewhat higher income than anticipated. Our credit situation is solid, with loan losses having developed in line with our expectations", says Christian Clausen, President and Group CEO of Nordea. +-------------------------------------------------------------------+ | Summary key figures, | Q2 | Q1 | Change, | Q2 | Change, | | EURm | 2009 | 2009 | % | 2008 | % | |-----------------------+-------+-------+---------+-------+---------| | Total operating | | | | | | | income | 2,359 | 2,279 | 4 | 1,992 | 18 | |-----------------------+-------+-------+---------+-------+---------| | Profit before loan | | | | | | | losses | 1,243 | 1,189 | 5 | 919 | 35 | |-----------------------+-------+-------+---------+-------+---------| | Net loan losses | 425 | 356 | 19 | 36 | | |-----------------------+-------+-------+---------+-------+---------| | Loan loss ratio | | | | | | | annualised, basis | | | | | | | points | 57* | 54 | | 6 | | |-----------------------+-------+-------+---------+-------+---------| | Operating profit | 818 | 833 | -2 | 883 | -7 | |-----------------------+-------+-------+---------+-------+---------| | Cost/income ratio, % | 47 | 48 | | 54 | | |-----------------------+-------+-------+---------+-------+---------| | Risk-adjusted profit | 777 | 747 | 4 | 556 | 40 | |-----------------------+-------+-------+---------+-------+---------| | Diluted earnings per | | | | | | | share, EUR | 0.15 | 0.19 | | 0.21 | | |-----------------------+-------+-------+---------+-------+---------| | Return on equity, % | 12.0 | 13.9 | | 16.2 | | +-------------------------------------------------------------------+ *) Excluding a one-off provision of EUR 47m concerning a contested legal claim. For further information, see page 47 for contact details.
Second Quarter Report 2009
| Source: Nordea Bank AB (publ)
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