Third Quarter Results 2016

26.10.2016

Third Quarter Results 2016

CEO Casper von Koskull’s comments on the results:
“The third quarter was characterised by a stable environment with low volatility on financial markets but also continued low growth. Net interest income was down 4% in local currencies compared to the third quarter of 2015, but is up 1% from the previous quarter, and we continue to believe that the trough levels are now over. Net inflow to our assets under management was at an all-time-high of EUR 9.6bn and Nordea’s leading position in corporate advisory services was confirmed. In terms of deal value, we are ranked as number two in Europe as global co-ordinator of IPO’s. Total income increased by 10% compared to the third quarter in 2015, and the cost-to-income ratio improved by 1.0%-point to 48.1%. Our credit quality remains solid with a loan loss level at the 10-year average. Despite an increase in CET1 ratio of 160bps to 17.9%, the return on equity improved 1.2%-points to 11.6% compared to the third quarter of 2015.
We are now one year into our business and culture transformation journey. We are simplifying our legal structure, replacing the core banking platform and investing in our compliance functions, as well as appointing world-class experts, many of whom have an international background, to several key strategic positions. The overall aim is to continue building the bank our customers want us to be. ”
Third quarter 2016 vs. Third quarter 2015 (Third quarter vs. Second quarter[1])
• Net interest income EUR 1,178m, -4%; -4% in local currencies (+1%, +1% in local currencies)
• Total operating income[1] EUR 2,466m, +9%; +10% in local currencies (+3%, +3% in local currencies)
• Total expenses EUR 1,183m, +7%; +8% in local currencies (-2%, -1% in local currencies)
• Profit before loan losses[1] EUR 1,283m, +12%; +12% in local currencies (-5%, -5% in local currencies)
• Net loan losses EUR 135m, +21%; +23% in local currencies (+6%, +5% in local currencies)
• Operating profit[1] EUR 1,148m, +11%; +11% in local currencies (+7%, +7% in local currencies)
• Common Equity Tier 1 capital ratio 17.9%, up from 16.3% (up 110 bps from 16.8%)
• Cost/income ratio[1] 48%, down from 49% (down 2%-points from 50%)
• Loan loss ratio of 16 bps, up from 13 bps (up 1 bps from 15 bps)
• Return on equity[1] 11.6%, up from 10.4% (up 20 bps from 11.4%)
• Diluted EPS EUR 0.22 vs. EUR 0.19 (EUR 0.22 vs. EUR 0.25)


Summary key figures, EURm

3Q 2016 2Q 2016 Chg, % Loc. curr., % 3Q 2015 Chg, % Loc. curr., % Jan-Sep 2016 Jan-Sep 2015 Chg, % Loc. curr., %
Net interest income 1 178 1 172 1 1 1 233 -4 -4 3 518 3 760 -6 -4
Total operation income1 2 466 2 405 3 3 2 253 9 10 7 166 7 495 -4 -3
Total operation income 2 466 2 556 -4 -3 2 253 9 10 7 317 7 495 -2 -1
Profit before loan losses 1 283 1 350 -5 -5 1 145 12 12 3 750 4 014 -7 -5
Net loan losses -135 -127 6 5 -112 21 23 -373 -337 11 15
Operation profit1 1 148 1 072 7 7 1 033 11 11 3 226 3 677 -12 -11
Operation profit 1 148 1 223 -6 -6 1 033 11 11 2 377 3 677 -8 -7
Diluted eatnings per share, EUR 0,22 0,25 0,19 0,66 0,70
ROE1, % 11,6 11,4 10,4 11,1 12,6
ROE, % 11,6 13,4 10,4 11,8 12,6
Exchange rates used for Q3 2016 for income statement items are for DKK 7.4474, NOK 9.3801 and SEK 9.3713.
1Excl. non-recurring items (Q2 2016: gain related to VISA Inc.'s acquisition of VISA Europe amounted to EUR 151m, net of tax).

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