Nordea Bank reported robust Q3 2023 results characterized by ongoing uncertainty in the financial markets and a fragile macroeconomic and geopolitical environment. Despite the economic slowdown in the Nordic region, the bank’s operating profit grew by 34% and EPS by 41% YoY. Total income rose by 19%, primarily driven by a 36% increase in net interest income.

Key takeaways from the call:

• Nordea’s Q3 results showed strong performance, with operating profit growing by 34% and EPS by 41% YoY.
• Total income increased by 19%, mainly driven by a 36% increase in net interest income.
• Net commission income decreased by 4% YoY, while net insurance income increased by 66%.
• The bank’s cost-to-income ratio improved to 42% or 40% excluding regulatory fees.
• Nordea’s CET1 ratio was 16.3%, 4.3 percentage points above regulatory requirements.
• The bank continues to focus on strengthening its technology and risk management capabilities.
• Nordea reported positive net flows in private banking, Nordic retail funds, and life and pensions in the third quarter.
• Gross written premiums in life and pensions reached EUR1.8 billion, up from EUR1.3 billion last year.

Despite the volatile markets, Nordea reported positive net flows in private banking, Nordic retail funds, and life and pensions in the third quarter. The bank attracted new customers and had net flows and internal channels of EUR0.6 billion. Gross written premiums in life and pensions reached EUR1.8 billion, up from EUR1.3 billion last year. Total income for the third quarter was up 15% YoY, and assets under management increased by 5% YoY to EUR360 billion.

Nordea’s executives discussed various topics during the earnings call, including the potential introduction of a digital euro, hedging compatibility with rate trajectories, and the potential impact of a systemic risk buffer on real estate lending in Denmark. They mentioned some signs of clients moving from savings accounts to investment instruments and expressed optimism about net interest income in the near term.

Nordea expects a return on equity above 15% for the full year ’23 and plans to provide a target update for ’25 in the Q4 report. The bank has consistently improved performance and profitability and holds a strong market position in the Nordic financial services industry. The bank’s CET1 ratio was 16.3%, 4.3 percentage points above regulatory requirements. Nordea Bank (NASDAQ: NDA) continues to focus on strengthening its technology and risk management capabilities and driving sustainable growth.