Nordea leads Nordic bank results as income surges on economic rebound

NORDEA, the Nordic region’s biggest bank by value, beat forecasts with an 81 per cent rise in fourth-quarter operating profit as solid economic growth lifted income, but gave no outlook for 2011.

Analysts said Nordea’s strong income and higher margins bode well for the region’s other banks that are set to report earnings in the next week, as higher interest rates in Sweden and shrinking loan losses help lift profits.

Nordea, one of Europe’s top performers during the financial crisis, reported its fourth-quarter operating profit rose to €1.07bn (£912m), beating average analyst forecasts of €943m.

Nordea’s wide geographic spread, an early move to raise capital and limited exposure to hard-hit markets such as the Baltics helped it pull through the downturn with ease, while analysts say it has been gaining market share in the Nordics.

Analysts were upbeat on Nordea’s comments about corporate lending, which has struggled to recover in line with a robust regional economy – Sweden’s economy grew nearly six per cent last year – as cash-rich firms have relied on their own resources.

Chief executive Christian Clausen said investments were picking up and lending margins had improved during the quarter. He added, however, that weaker international players had returned in search of new revenue.

Nordea’s shares finished 3.2 per cent lower at 77.75 Swedish crowns.