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Swedish lender Nordea enjoyed a strong performance in the first three months of 2017 as income momentum improved and assets under management reached a record high.
But the bank said it is still considering opportunities to move its headquarters to Denmark or Finland in the wake of recently proposed regulatory changes by Sweden’s Social Democrat-led government that would makes banks contribute more to the country’s budget.
Operating profit rose 10 per cent to €1.1bn in the three months ended March 31, or an 8 per cent increase in local currency terms. However, this was down 12 per cent from the December quarter’s €1.25bn result.
Costs were up 5 per cent from a year earlier owing to group projects, compliance and risk. Nordea said credit quality was “solid” and loan losses remained roughly steady at 14 basis points. The bank’s common equity tier 1 capital ratio was 18.8 per cent, compared to 16.7 per cent a year ago.
Casper von Koskull, chief executive, said:
The low-intensive growth continued in the beginning of 2017, although we are now seeing good potential for a synchronised recovery with improving growth prospects. Inflation is under control, and we are prepared for low rates for a long time. That means that the significant divergence in growth between the different Nordic countries will probably narrow and we expect more similar macro trends in our four home markets.
Given that the regulatory situation in Sweden does not offer a level playing field or predictable environment, we will also look at opportunities to move to Denmark or Finland.