Nordea: Fourth-quarter and full-year results 2024
Nordea Bank Abp
Financial Statement Release
30 January 2025 at 7.30 EET
Summary of the quarter
Continued income growth. Total income was up 1%. Net interest income was down 5% following policy rate reductions. Net fee and commission income continued to grow, and was up 8%. Net insurance result was strong and net fair value result improved by 31%. Costs were stable, and included higher investment in growth, technology and risk management. Operating profit increased by 4%, to EUR 1.5bn.
Return on equity 14.3% - earnings per share EUR 0.32. Nordea's return on equity remained solid at 14.3% in the fourth quarter. Full-year return on equity stood at 16.7%, reflecting resilience and continued high performance. The fourth-quarter cost-to-income ratio with amortised resolution fees was 48.9%, compared with 50.6% a year ago. Earnings per share were EUR 0.32, compared with EUR 0.31 a year ago.
Lending and deposit volumes up. Nordic mortgage and corporate lending markets remained slow, though demand for new loan promises again increased, indicating that housing markets are improving. Mortgage lending grew by 6% year on year, driven by the acquisition of Danske Bank's personal customer and private banking business in Norway. Excluding this, mortgage lending grew by 1%. Corporate lending grew by 1%. Retail and corporate deposit volumes increased by 5% and 8%, respectively. Assets under management increased by 11% and Nordic net flows amounted to EUR 6.1bn in the quarter.
Solid credit quality, with net loan losses remaining below Nordea's long-term expectation. Net loan losses and similar net result amounted to EUR 54m or 6bp. EUR 21m was released from the management judgement buffer, reducing the total buffer to EUR 414m.
Continued strong capital generation; share buy-backs ongoing. The CET1 ratio was 15.8% at the end of the quarter, 2.2 percentage points above the regulatory requirement, as strong capital generation offset the impact of the Norwegian acquisition and the share buy-back deduction. Nordea's Board of Directors has proposed a dividend of EUR 0.94 per share for 2024, an increase of 2% compared with 2023. Nordea will complete its current buy-back programme by 28 February 2025 and is already in close dialogue regarding a new programme.
Outlook for 2025: return on equity to stay above 15%. Nordea has a strong and resilient business model, with a very well-diversified loan portfolio across the Nordic region. This enables the bank to support its customers and deliver high-quality earnings, with high profitability and low volatility, through the economic cycle. It also enables Nordea to continue to generate capital, seek opportunities to deploy capital to drive growth, and distribute excess capital to shareholders in the form of share buy-backs.
(For further viewpoints, see the CEO comment. For definitions, see page 53 in the Q4 2024 report.)
Group quarterly results and key ratios
| EURm | Q4 2024 | Q4 2023 | Chg % | Q3 2024 | Chg % | Jan-Dec 2024 | Jan-Dec 2023 | Chg % |
|---|---|---|---|---|---|---|---|---|
| Net interest income | 1,854 | 1,946 | -5 | 1,882 | -1 | 7,594 | 7,451 | 2 |
| Net fee and commission income | 825 | 763 | 8 | 774 | 7 | 3,157 | 3,021 | 5 |
| Net insurance result | 69 | 40 | 73 | 60 | 15 | 253 | 217 | 17 |
| Net fair value result | 201 | 154 | 31 | 284 | -29 | 1,023 | 1,014 | 1 |
| Other income | 6 | 12 | -50 | 14 | -57 | 57 | 40 | 43 |
| Total operating income | 2,955 | 2,915 | 1 | 3,014 | -2 | 12,084 | 11,743 | 3 |
| Total operating expenses excluding regulatory fees | -1,416 | -1,397 | 1 | -1,311 | 8 | -5,213 | -4,922 | 6 |
| Total operating expenses | -1,434 | -1,417 | 1 | -1,329 | 8 | -5,330 | -5,238 | 2 |
| Profit before loan losses | 1,521 | 1,498 | 2 | 1,685 | -10 | 6,754 | 6,505 | 4 |
| Net loan losses and similar net result | -54 | -83 |
| -51 |
| -206 | -167 |
|
| Operating profit | 1,467 | 1,415 | 4 | 1,634 | -10 | 6,548 | 6,338 | 3 |
|
|
|
|
|
|
|
|
|
|
| Cost-to-income ratio excluding regulatory fees, % | 47.9 | 47.9 |
| 43.5 |
| 43.1 | 41.9 |
|
| Cost-to-income ratio with amortised resolution fees, % | 48.9 | 50.6 |
| 44.5 |
| 44.1 | 44.6 |
|
| Return on equity with amortised resolution fees, % | 14.3 | 14.1 |
| 16.7 |
| 16.7 | 16.9 |
|
| Diluted earnings per share, EUR | 0.32 | 0.31 | 3 | 0.36 | -11 | 1.44 | 1.37 | 5 |
CEO comment
2024 reminded us of how unpredictable the world can be. In the Nordics, we are fortunate to live in stable and prosperous societies. Even so, our open economies are not immune to uncertainty. Challenges remain, especially with geopolitical tensions and security threats a part of our everyday reality.
The good news is that inflation has fallen back towards central banks' target levels and policy interest rates are coming down from their peak, bringing some welcome relief to households and businesses. There are signs that economic activity is picking up and our region may be turning a corner.
At Nordea, we have stayed focused on what matters most: delivering on our priorities and fulfilling our role as a strong and resilient partner for customers, shareholders and society. That strength and resilience was evident in our 2024 financial results. Year on year, income grew by 3%, and return on equity reached 16.7%, supported by good business momentum and high levels of customer activity in savings and investments.
This is the second year in a row in which we have achieved a return on equity well above 15%. I would like to thank our employees for their hard work and contribution to this strong result, and also express my gratitude to our customers and shareholders for their continued support.
Our sustained high profitability reflects the considerable progress we have made since our repositioning in 2019. Supported by our strategic investments, we have grown the business, created sustainable efficiencies and strengthened customer experience - with customer satisfaction up across the board. We see this in both our internal data and external benchmarks, such as Prospera's 2024 corporate and private banking rankings, where we performed very well. We have also made great strides in Sweden, where, five years ago, we launched a strategic initiative to strengthen our market position. Last month, I was proud to see Nordea named Sweden's Bank of the Year by a leading Swedish financial publication for the first time. That recognition shows that we are on the right path.
In November we completed the acquisition of Danske Bank's Norwegian personal customer and private banking business. The acquisition brought us more than 235,000 new customers, and added EUR 3bn in deposits and EUR 9bn in (mostly mortgage) lending, as well as EUR 2bn in assets under management. It significantly strengthens our business in Norway and demonstrates our proven capacity to successfully integrate large-scale businesses.
In the fourth quarter of 2024 we sustained our good financial performance, with income up 1% year on year. The increase was driven by strong net fee and commission income as we helped customers grow their savings and investments. Net interest income decreased year on year, which was expected as policy rates continued to decline. Costs included higher levels of strategic investment and were in line with our operating plan. Our cost-to-income ratio improved to 48.9%, compared with 50.6% a year earlier. Operating profit grew by 4%, to EUR 1.5bn, and return on equity was 14.3%.
Despite the pressure on finances felt by Nordic households and businesses in recent years, our customers have maintained stable financial positions - seen, for example, in strong deposit activity and continued low credit losses. In the fourth quarter corporate deposit volumes rose by 8% year on year. Retail deposit volumes increased by 2%, or 5% including the Norwegian acquisition. Lending volumes held up well in subdued markets. Fourth-quarter mortgage lending was up 1% year on year, or 6% including the acquisition. Corporate lending increased by 1%.
Loan losses were low, reflecting our strong credit quality and diversified loan portfolio. Net loan losses and similar net result for the quarter was EUR 54m, or 6bp. We continued to reduce our management judgement buffer, releasing a further EUR 21m during the quarter to bring the total to EUR 414m.
In Personal Banking we performed well in the fourth quarter, with solid business volumes. There were further signs that the Nordic markets are beginning to gradually recover, with demand for housing loan promises growing. Customers also continued to up their investment activity, increasing their recurring savings amounts. Mobile bank users and logins both increased by 7% year on year as customers made the most of our expanding digital offering.
In Business Banking we performed well, supporting our customers through our broad offering. In Norway, we finished onboarding customers to Nordea Business, thereby completing the Nordic roll-out of our digital banking platform. Deposit volumes grew by 4% year on year in local currencies, while lending volumes rose by 1%. We also saw an increase in customer satisfaction in the quarter, driven by the small business segment. Our investments to strengthen service quality continue to pay off, with better call resolution rates and even shorter waiting times in our contact centres.
In Large Corporates & Institutions Nordic customers continued to choose Nordea to support them, driving higher volumes and activity levels. Lending volumes and deposit volumes increased by 1% and 12%, respectively, year on year. Debt Capital Markets activity remained high. In 2024 as a whole, we arranged more than 600 transactions, supporting strong fee income. In Investment Banking and Equities we again delivered a strong performance and maintained our number one Nordic equity capital markets ranking.
In Asset & Wealth Management we kept up good momentum as we onboarded more private banking customers. This helped drive Nordic net flows of EUR 6.1bn (including the Norwegian acquisition). Assets under management increased by 11% year on year, bringing the total to EUR 422bn. In Asset Management we won several new mandates for our global and European equity strategies. We also performed well in Life & Pension, with record-high net flows.
We continue to generate capital and have a strong capital position. Our CET1 ratio stood at 15.8% at the end of the quarter, 2.2 percentage points above our regulatory requirement and unchanged from the previous quarter, after absorbing the impact of the Norwegian acquisition. We will continue to deploy capital in this manner to drive growth and aim to keep returning excess capital through share buy-backs.
We enter 2025, the final year of our current strategy period, as one of the top-performing universal banks in Europe. Our Board of Directors has proposed a dividend of EUR 0.94 per share for 2024, compared with EUR 0.92 per share for 2023. We are targeting further strong financial performance this year, and expect return on equity to stay above 15% in 2025. Building on our strong franchise and unique Nordic scale, we aim to continue to grow in prioritised areas and deliver market-leading profitability. We will provide an update on our strategic priorities at our next Capital Markets Day, in the fourth quarter of 2025.
Frank Vang-Jensen
President and Group CEO
Outlook
Financial outlook for 2025 (new)
Nordea's financial outlook for 2025 is a return on equity of above 15%.
Capital policy
A management buffer of 150bp above the regulatory CET1 requirement.
Dividend policy
Nordea's dividend policy stipulates a dividend payout ratio of 60-70%, applicable to profit for the financial year. Nordea will continuously assess the opportunity to use share buy-backs as a tool to distribute excess capital.
Dividend for 2024
On 31 December 2024 Nordea Bank Abp's distributable earnings, including profit for the financial year and after subtracting capitalised development expenses, were EUR 20,871m, and other unrestricted equity, consisting of Additional Tier 1 capital and invested unrestricted equity, amounted to EUR 1,803m.
Nordea's Board of Directors has decided to propose that the Annual General Meeting (AGM) of 20 March 2025 authorise it to decide on a dividend payment of a maximum of EUR 0.94 per share. This corresponds to approximately 65% of the net profit for the year. The intention is for the Board to decide on a dividend payment in a single instalment based on the authorisation immediately after the AGM. The dividend will not be paid for shares held by Nordea on the dividend record date.
Income statement
| EURm | Q4 2024 | Q4 2023 | Chg % | Q3 2024 | Chg % | Jan-Dec 2024 | Jan-Dec 2023 | Chg % |
|---|---|---|---|---|---|---|---|---|
| Net interest income | 1,854 | 1,946 | -5 | 1,882 | -1 | 7,594 | 7,451 | 2 |
| Net fee and commission income | 825 | 763 | 8 | 774 | 7 | 3,157 | 3,021 | 5 |
| Net insurance result | 69 | 40 | 73 | 60 | 15 | 253 | 217 | 17 |
| Net result from items at fair value | 201 | 154 | 31 | 284 | -29 | 1,023 | 1,014 | 1 |
| Profit from associated undertakings and joint ventures accounted for under the equity method | -3 | 2 |
| 4 |
| 10 | -3 |
|
| Other operating income | 9 | 10 | -10 | 10 | -10 | 47 | 43 | 9 |
| Total operating income | 2,955 | 2,915 | 1 | 3,014 | -2 | 12,084 | 11,743 | 3 |
| Staff costs | -817 | -735 | 11 | -779 | 5 | -3,106 | -2,908 | 7 |
| Other expenses | -451 | -323 | 40 | -380 | 19 | -1,530 | -1,206 | 27 |
| Regulatory fees | -18 | -20 | -10 | -18 | 0 | -117 | -316 | -63 |
| Depreciation, amortisation and impairment charges of tangible and intangible assets | -148 | -339 | -56 | -152 | -3 | -577 | -808 | -29 |
| Total operating expenses | -1,434 | -1,417 | 1 | -1,329 | 8 | -5,330 | -5,238 | 2 |
| Profit before loan losses | 1,521 | 1,498 | 2 | 1,685 | -10 | 6,754 | 6,505 | 4 |
| Net loan losses and similar net result | -54 | -83 | -35 | -51 | 6 | -206 | -167 | 23 |
| Operating profit | 1,467 | 1,415 | 4 | 1,634 | -10 | 6,548 | 6,338 | 3 |
| Income tax expense | -338 | -309 | 9 | -368 | -8 | -1,489 | -1,404 | 6 |
| Net profit for the period | 1,129 | 1,106 | 2 | 1,266 | -11 | 5,059 | 4,934 | 3 |
Business volumes, key items1
| EURbn | 31 Dec 2024 | 31 Dec 2023 | Chg % | 30 Sep 2024 | Chg % |
|---|---|---|---|---|---|
| Loans to the public | 357.6 | 344.8 | 4 | 348.9 | 2 |
| Loans to the public, excl. repos/securities borrowing | 329.0 | 324.0 | 2 | 319.3 | 3 |
| Deposits and borrowings from the public | 232.4 | 210.1 | 11 | 222.1 | 5 |
| Deposits from the public, excl. repos/securities lending | 215.4 | 202.6 | 6 | 206.9 | 4 |
| Total assets | 623.4 | 584.7 | 7 | 617.4 | 1 |
| Assets under management | 422.0 | 378.5 | 11 | 412.4 | 2 |
1. End of period.
Ratios and key figures1
|
| Q4 2024 | Q4 2023 | Chg % | Q3 2024 | Chg % | Jan-Dec 2024 | Jan-Dec 2023 | Chg % |
|---|---|---|---|---|---|---|---|---|
| Diluted earnings per share, EUR | 0.32 | 0.31 | 3 | 0.36 | -11 | 1.44 | 1.37 | 5 |
| EPS, rolling 12 months up to period end, EUR | 1.44 | 1.37 | 5 | 1.42 | 1 | 1.44 | 1.37 | 5 |
| Share price2, EUR | 10.50 | 11.23 | -7 | 10.59 | -1 | 10.50 | 11.23 | -7 |
| Proposed/actual dividend per share, EUR |
|
|
|
|
| 0.94 | 0.92 | 2 |
| Equity per share2, EUR | 9.30 | 8.86 | 5 | 8.98 | 4 | 9.30 | 8.86 | 5 |
| Potential shares outstanding2, million | 3,503 | 3,528 | -1 | 3,506 | 0 | 3,503 | 3,528 | -1 |
| Weighted average number of diluted shares, million | 3,493 | 3,534 | -1 | 3,503 | 0 | 3,505 | 3,579 | -2 |
| Return on equity with amortised resolution fees, % | 14.3 | 14.1 |
| 16.7 |
| 16.7 | 16.9 |
|
| Return on equity, % | 14.4 | 14.7 |
| 16.8 |
| 16.7 | 16.9 |
|
| Return on tangible equity, % | 16.5 | 16.9 |
| 19.2 |
| 19.2 | 19.4 |
|
| Return on risk exposure amount, % | 2.9 | 3.2 |
| 3.3 |
| 3.2 | 3.5 |
|
| Cost-to-income ratio excluding regulatory fees, % | 47.9 | 47.9 |
| 43.5 |
| 43.1 | 41.9 |
|
| Cost-to-income ratio with amortised resolution fees, % | 48.9 | 50.6 |
| 44.5 |
| 44.1 | 44.6 |
|
| Cost-to-income ratio, % | 48.5 | 48.6 |
| 44.1 |
| 44.1 | 44.6 |
|
| Net loan loss ratio, incl. loans held at fair value, bp | 6 | 10 |
| 6 |
| 6 | 5 |
|
| Common Equity Tier 1 capital ratio2,3, % | 15.8 | 17.0 |
| 15.8 |
| 15.8 | 17.0 |
|
| Tier 1 capital ratio2,3, % | 18.4 | 19.4 |
| 18.4 |
| 18.4 | 19.4 |
|
| Total capital ratio2,3, % | 21.0 | 22.2 |
| 20.9 |
| 21.0 | 22.2 |
|
| Tier 1 capital2,3, EURbn | 28.7 | 26.8 | 7 | 28.2 | 2 | 28.7 | 26.8 | 7 |
| Risk exposure amount2, EURbn | 155.9 | 138.7 | 12 | 153.7 | 1 | 155.9 | 138.7 | 12 |
| Net interest margin, % | 1.73 | 1.83 |
| 1.77 |
| 1.78 | 1.72 |
|
| Number of employees (FTEs)2 | 30,157 | 29,153 | 3 | 29,895 | 1 | 30,157 | 29,153 | 3 |
| Equity2, EURbn | 32.4 | 31.2 | 4 | 31.5 | 3 | 32.4 | 31.2 | 4 |
1. For more detailed information regarding ratios and key figures defined as alternative performance measures, see https://www.nordea.com/en/investor-relations/reports-and-presentations/group-interim-reports.
2. End of period.
3. Including the result for the period.
2024 publications
Nordea's Annual Report for the financial year 2024, which includes the audited financial statements, the Board of Directors' Report, the Corporate Governance Statement and the Sustainability Statement, will be published in week 9 by way of a stock exchange release and will also be available at www.nordea.com.
This release is a summary of Nordea's fourth-quarter and full-year results for 2024. The complete report is attached to this release and can also be found on our website via the link below.
A webcast will be held on 30 January at 11.00 EET (10.00 CET), during which Frank Vang-Jensen, President and Group CEO, will present the results. This will be followed by a Q&A audio session for investors and analysts with Frank Vang-Jensen, Ian Smith, Group CFO, and Ilkka Ottoila, Head of Investor Relations.
The event will be webcast live and the recording and presentation slides will be posted on www.nordea.com/ir.
For further information:
Frank Vang-Jensen, President and Group CEO, +358 503 821 391
Ian Smith, Group CFO, +45 5547 8372
Ilkka Ottoila, Head of Investor Relations, +358 9 5300 7058
Ulrika Romantschuk, Head of Brand, Communication and Marketing, +358 10 416 8023
The information provided in this stock exchange release was submitted for publication, through the agency of the contacts set out above, at 07.30 EET (06.30 CET) on 30 January 2025.
We are a universal bank with a 200-year history of supporting and growing the Nordic economies - enabling dreams and aspirations for a greater good. Every day, we work to support our customers' financial development, delivering best-in-class omnichannel customer experiences and driving sustainable change. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us at nordea.com.