Nordea Bank profit sinks 28 percent as revenue dips

Bloomberg

Scandinavia’s biggest bank said profit plunged 28 percent last quarter as revenue sank after negative rates and market selloffs created an inhospitable environment for the industry.
Nordea Bank AB reported net income of 782 million euros ($884 million), missing the 792 million-euro estimate of analysts surveyed by Bloomberg. Net interest income slipped 7 percent while total operating income declined 16 percent, the bank said on Wednesday. Operating costs declined 1 percent.
“Volatility on financial markets and lower interest rates put pressure on revenues,” Chief Executive Officer Casper von Koskull said in the statement. “Given the environment the result is acceptable.”
Nordea’s common equity Tier 1 ratio increased 20 basis points to 16.7 percent at the end of March, following a payout from the bank’s pension unit.
Nordic banks are among the most exposed to negative interest rate policies, making it hard to generate income from traditional lending. To make up for the lost revenue, banks in the region are increasingly turning to areas such as wealth management, with the pool of assets growing as Scandinavians look for alternative ways to invest their money in a low-rate environment.
Nordea Bank is a Swedish financial services group operating in Northern Europe. The bank is the result of the successive mergers and acquisitions of the Finnish, Danish, Norwegian and Swedish banks. The largest share holder of Nordea is Sampo, a Finnish insurance company with around 20 percent of the shares. Nordea is listed on the Copenhagen Stock Exchange, Helsinki Stock Exchange and Stockholm Stock Exchange.