Fourth Quarter and Full Year Results 2017
CEO Casper von Koskull's comments on the results:
"In 2017, volumes and margins were relatively stable, and business momentum was solid overall. At the end of 2017, we were negatively impacted by a very low activity level on capital markets. The planned de-risking of the bank, with reduced exposure to Russia, Shipping, Offshore & Oil Services, also reduced income levels.
After years of intense investments, things are happening now and we are entering the next stage on our transformation journey. We have built up our capabilities within compliance and risk management functions. Our digital investments result in an increased roll out frequency of improved products and services to our customers. The core banking platform replacement is proceeding in line with budget and will lead to lower operational risks and improved customer satisfaction. Costs are being reduced as part of improved cost efficiency structures throughout the organisation.
Capital generation in 2017 remains strong and we increased the Common Equity Tier 1 ratio by 110 bps to a record-high 19.5%. The Board proposes a dividend per share of EUR 0.68, compared to EUR 0.65 in 2016. This is in line with Nordea's dividend and capital policy.
We are not satisfied with the development in profit during the latter part of 2017. For 2018 we are confident that net profit will grow, and we expect to see slightly higher revenues, lower costs and a stable credit quality. Nordea today stands much more robust and resilient and I am thus confident that we stand prepared to handle both the risks and challenges, and capitalise on future opportunities in our home markets."
Full year 2017 vs. Full year 20161,2 (Fourth quarter 2017 vs. Fourth quarter 20161,2)
- Net interest income EUR 4,666m, -1%; -1% in local currencies (-8%, -6% in local currencies)
- Total operating income1 EUR 9,469m, -3%; -3% in local currencies (-14%, -13% in local currencies)
- Total expenses2 EUR 5,102m, +4%; +5% in local currencies (+3%, +4% in local currencies)
- Profit before loan losses1,2 EUR 4,367m, -10%; -10% in local currencies (-32%, -30% in local currencies)
- Net loan losses EUR 369m, -26%; -26% in local currencies (-45%, -43% in local currencies)
- Operating profit1,2 EUR 3,998m, -8%; -8% in local currencies (-30%, -29% in local currencies)
- Common Equity Tier 1 capital ratio 19.5%, up from 18.4% (up from 18.4%)
- Cost/income ratio1,2 54% up from 50% (up 10%-points from 51%)
- Loan loss ratio3 of 12 bps, down from 15 bps (down 7 bps from 16 bps)
- Return on equity1,2 9.5%, down from 11.5% (down 5.2%-points from 12.9%)
- Diluted EPS1,2 EUR 0.75 vs. EUR 0.88 (EUR 0.15 vs. EUR 0.25)
Exchange rates used for Q4 2017 for income statement items are for DKK 7.4387, NOK 9.3317 and SEK 9.6378.
1 Excl. items affecting comparability in Q2 2016: gain related to Visa Inc.'s acquisition of Visa Europe amounting to EUR 151m net of tax and Q4 2016: additional gain related to Visa of EUR 22m before tax.
2 Excl. items affecting comparability in Q4 2016: gain in staff costs related to change in pension agreement in Norway of EUR 86m before tax.
3 Incl. Loans to the public reported in Assets held for sale in Q3 2017.
Fourth Quarter and Full Year Results 2017 (PDF):