Nordea Starts Share Buybacks as Recovery Lifts Nordic Banks

HELSINKI/STOCKHOLM—Finland’s Nordea and Sweden’s Swedbank reported higher net for the 3rd 4th connected Thursday arsenic banks crossed the portion recovered powerfully from the interaction of the pandemic and shifted excess superior to shareholders.

Helped by the easing of restrictions, Nordic banks similar their peers elsewhere successful Europe person benefited from rising firm and user enactment portion a glut of mergers and acquisitions (M&A) and archetypal nationalist offerings (IPOs) has yielded affluent pickings for their concern banking arms.

After forecast-beating net from Sweden’s SEB and Handelsbanken this week, the region’s biggest lender Nordea saw its quarterly operating nett emergence to 1.27 cardinal euros ($1.48 billion) from 1.09 cardinal a twelvemonth ago, successful enactment with marketplace expectations.

“We person entered a caller signifier of betterment from the pandemic and, arsenic a bank, we person done truthful from a presumption of strength,” Nordea Chief Executive Frank Vang-Jensen said successful a statement.

Meanwhile, Swedbank, Sweden’s oldest retail bank, said its nett net roseate to 5.50 cardinal crowns ($664 million) from 5.26 cardinal ($610 million) a twelvemonth earlier, beating analysts’ expectations of 5.10 cardinal ($590 million) successful a Refinitiv poll.

“The 4th has been characterized by a gradual instrumentality to the caller normal,” Swedbank CEO Jens Henriksson told reporters. “We spot a beardown recovery, not slightest successful Sweden.”

Capping disconnected the slew of banking earnings, Norway’s largest bank, DNB, reported its champion ever third-quarter net and said it would present marque a dividend outgo for 2020.

Andreas Hakansson, banking expert astatine Danske Bank, said Nordea’s nett was successful enactment with expectations but somewhat little connected important income lines specified arsenic nett involvement income and committee income.

“So from that constituent of presumption it is possibly a small weaker than expectations,” helium said. “Swedbank bushed the expectations connected immoderate of the important lines and I deliberation the stock volition beryllium traded up connected that.”

Worries astir souring debts owed to the pandemic person rapidly subsided for the banks portion fiscal regulators person relaxed impermanent curbs connected shareholder payouts, helping thrust beardown gains for stocks crossed the sector.

On apical of a 0.72 euro dividend paid retired successful October, Nordea said it would administer excess superior to shareholders by starting to bargain backmost its ain shares from Oct. 22 astatine the earliest.

Nordea besides said it expected to use for support from the European Central Bank for different buyback programme successful aboriginal 2022.

Its Nordic rivals person besides ramped up payouts with SEB unveiling a caller dividend and the opening of stock repurchases earlier this week.

A lingering uncertainty for immoderate of the region’s banks remains, and determination are efforts to support a lid connected costs.

In July, Nordea raised its 2021 outgo guidance to astir 4.6 cardinal euros ($5.36 billion), having antecedently said it would beryllium beneath that figure, owed to the acquisition of Nordea Finance Equipment and higher unit payouts owed to a beardown show successful the quarter.

The Helsinki-based lender stood by its outgo outlook connected Thursday arsenic did Swedbank, which is besides burdened by elevated ineligible spending stemming from wealth laundering investigations successful its Baltic concern successful caller years.

By Essi Lehto