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Nordea confident of resilient performance despite rate falls
By Jerry
HELSINKI, April 18 (Reuters) – Finland’s Nordea (NDAFI.HE), opens new tab reported first-quarter profits above expectations on Thursday and said its strong performance would continue this year and next, despite falling interest rates.
The Nordic region’s biggest bank said first quarter return on equity (RoE) was 18.1%, in line with its goal of above 15% in 2024 and 2025, and a similar return to its regional rivals.
The European Central Bank (ECB) has flagged an interest rate cut for June 6 and is debating the schedule and need for more.
Nordea cited its hedging and improving mortgage margins for some of the dynamics that CEO Frank Vang-Jensen said will support the bank’s “resilience” in the downward rate cycle.
“Usually the mortgage margins will, when rates start to decline and activity starts to revert, come to more decent levels than today,” Vang-Jensen said.
Nordea’s Chief Financial Officer Ian Smith told analysts on a webcast that subject to how rivals react, that the ECB’s initial rate cuts would be “relatively margin-insensitive compared to what we might see later in the cycle”.
Source: REUTER
