Nordea Bank Q4 net falls 25%
By Louise Nordstrom | February 11, 2009, Wednesday | Print Edition
THE Nordic region's biggest financial group, Nordea Bank AB, yesterday posted a 25-percent fall in fourth-quarter profit and said it plans to raise 2.5 billion euros (US$3.25 billion) from shareholders to fend off the effects of the financial crisis.
Net profit for the three months ended December 31 fell to 637 million euros from 852 million euros a year earlier, mainly on the back of higher loan losses and impaired loans due to the financial turmoil.
The Stockholm-based company also said that it would cut its dividend for 2008, to 20 cents a share from 50 cents a share, in a move to strengthen its capital position by a total of 3 billion euros.
Nordea's rights issue follows similar moves by Swedbank and SEB, meaning three of Sweden's four biggest banks have sought cash injections from shareholders amid the global financial turmoil.
Nordea's net interest income, the bank's main source of revenue, rose to 1.4 billion euros in the fourth quarter from 1.1 billion euros during the same period a year earlier.
The largest increase of impaired loans was recorded in Denmark, and the sectors taking the biggest hits were construction, real estate, consumer durables, retail and consumer financing.
Nordea Chief Executive Christian Clausen called the results solid, considering the circumstances, but warned that the bank will need to brace itself for "another challenging year."
"Loan losses increased as expected following the economic slowdown and they will remain at a high level in 2009," he said.
In its outlook for the year, Nordea noted that the economies in the Nordic countries are weakening at a "high speed," and that economic growth is expected to be negative in 2009.