Nordea moves to double cost saving programme as profits disappoint

Nordic banking group Nordea has seen its operating profit grow by two per cent to €1.01bn (£600m) for the fourth quarter while net profit slid by eight per cent to €773m from €842m in the previous year.

Analysts at Reuters had forecast an operating profit of €1.1bn (£660m) for the period.

In wake of the disappointing results the bank plans to ramp its cost savings programme aiming to create €900m of savings from 2013 to 2015 - double the previous €450m.

CEO Christian Clausen, commented on the results:

2013 was another year of low growth and interest rates declined to record-low levels. In this environment, we delivered a stable income level (in local currencies) and saw a continued inflow of relationship customers.

We expect that the economic growth and the interest rates levels will stay low for a prolonged period of time. Thus, we expect that the loan demand and customer activity will be at a lower level than we foresaw last year when we announced our plans for the future relationship bank.

However, there was good news for shareholders as Nordea proposed raising its dividend by 26 per cent as the bank managed to build larger capital buffers. Nordea's tier one ratio rose to 14.9 per cent of risk-weighted assets at the end 2013, from 14.4 per cent in the three months through September.