© Reuters. FILE PHOTO: The Nordea Bank AB logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/File Photo
HELSINKI (Reuters) – The Nordic region’s biggest bank Nordea reported fourth-quarter profits below expectations on Monday and said it expects a return on equity above 15% in 2024 and 2025.
Fourth quarter operating profit at the Finnish lender fell to 1.42 billion euros ($1.53 billion) against a year-earlier 1.61 billion and a mean forecast in an LSEG poll of analysts of 1.64 billion euros.
Nordea and its Nordic peers such as SEB, Swedbank and Danske Bank have been racking up hefty profits over the past two years on the back of soaring interest rates, which are expected to begin falling this year.
“In the fourth quarter we continued our proactive approach to supporting our customers and maintained solid underlying profitability despite the very low net fair value result,” Chief Executive Frank Vang-Jensen said in a statement.
Nordea provided an update to its financial outlook, adding a new target of a return on equity above 15% in 2024 and upping its 2025 target to 15% from 13% previously.
The company said its full-year return on equity increased to 16.9% in 2023 from 13.8% in 2022.
“Given our strong financial position and full-year results, our board of directors has proposed a dividend of EUR 0.92 per share for 2023, a year-on-year increase of 15%,” Vang-Jensen said.
Still, the dividend missed analysts’ mean forecast of 0.95 euros per share.
($1 = 0.9279 euros)
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