OREANDA-NEWS. May 05, 2011. Nordea Bank Estonia, part of a leading European finance group, continues to grow at a fair pace by earning EUR 11.4 million in Q1 profits; this is a threefold year-on-year growth. Total revenue increased by 25% year-on-year, to EUR 19.9 million, reported the press-centre of Nordea.

„We have seen stable growth of our revenues both for loan and investment products, we have increased our number of customers as well as the number of online bank users. Loan losses have gone down significantly, reflecting the end of the economic crises on one hand and our well-functioning credit policy on the other,“ Head of Nordea Estonia Vahur Kraft commented the results.

During the last years, Nordea Bank has grown from a small loans bank into a big home bank, occupying the third place in Estonian banking market. “Nordea is sailing with a fair wind – our brand recognition has increased by 16% in a year according to EMOR’s survey. Our clients value our flexibility and ability to take into account the interests of the customer; this reflects Nordea Bank’s promise to be the most personalised home bank,“ Kraft said.

At the end of March, Nordea Estonia’s total assets amounted to EUR 2.97 billion. At the end of Q1, the volume of the loan and leasing portfolio was EUR 2.78 billion, meaning that in a retracting market, the bank has managed to grow it by 6% year-on-year. At the end of March, the loan portfolio of the bank amounted to EUR 2.36, meaning a 6% y/y growth. The leasing portfolio grew by 7% y/y, to EUR 419 million, reaching the second place in Estonian leasing market.

At the end of March, the volume of Nordea Estonia’s corporate loan and leasing portfolio was EUR 1.7 billion, growing by an impressing 8% y/y and reaching the second position in the corporate loan market.

Private loan and leasing portfolio grew by 5% y/y to EUR 961 million by the end of March. The ratio of loan losses to the portfolio was 0.17% in Q1.

Compared to previous years, customers are focusing more and more on investment products; the volume of private savings and investment products at Nordea has increased by 7.6% y/y, to nearly EUR 300 million. The amount of deposits has decreased compared to last year, the volume of investment products has, however, increased twofold. “Although deposit interest rates have increased, depositors continue to seek out new investment possibilities to retain yield. This will definitely mean that the role of banks as advisors will become ever more important,” Kraft commented on the context of the growth in investment products.

In addition to the bank, also Nordea Finance Estonia and Nordea Pensions Estonia, operating under Nordea’s brand umbrella, ended Q1 with positive results.

Nordea Finance Estonia’s growth strategy continues to be a success and the company finished Q1 with EUR 2.6 in profits, keeping its three-year market leader position in issuing new leasing credits. In Q1, EUR 50 million worth of new leasing credits were issued, increasing the volume of new leasing credits by 177% y/y.

The volume of Nordea’s pension funds has increased by EUR 13.7 million or 70.5% in a year. The number of customers has increased by nearly 8000, mostly including well-informed, above-average income customers.

At the end of March, Nordea had 157 478 customers, 21 branch offices, and 568 employees in Estonia. By the end of Q1, the bank had issued 82 225 bank cards and had 97 796 online bank users.

Q1 results of Nordea Group were also excellent.

CEO Christian Clausen's comment to the report: "I am proud to present another strong quarter. Our relationship strategy continues to deliver. Income is at record level. Both operating and risk-adjusted profit increased more than 10% from the first quarter last year. European banks face large challenges with the costs of new regulation. Nordea is committed to take the necessary steps to maintain its position in the top league. In our New Normal plan, we will focus on increased ROE and take measures to increase capital and cost efficiency."
 
First quarter 2011 vs first quarter 2010 (vs fourth quarter 2010):

Total income up 9% (0%)

Risk-adjusted profit up 14% (up 7%)

Number of Gold and Private Banking customers up 210,000 or 8%
(up 47,000, a 6% growth rate)

Net loan losses 22 basis points, 31 basis points including a one-off Danish deposit guarantee fund provision (23 bps in the fourth quarter, 37 bps in the first quarter 2010)

Core tier 1 capital ratio 10.7% excluding transition rules (10.3% in the fourth quarter, 10.1% in the first quarter 2010)

Return on equity 12.0% (12.8% in the fourth quarter, 11.3% in the first quarter 2010).