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Nordea reports annual profit stable as cost cuts continue

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(Globalpost/GlobalPost)

Swedish bank Nordea posted on Wednesday a stable profit for 2013 despite a low-growth environment and falling interest rates, thanks to a cost-cutting programme.

The yearly net profit slightly decreased to 3.116 billion euros ($4.261 billion) in 2013 from 3.126 in 2012, and revenue fell by one percent to 9.891 billion euros.

"2013 was another year of low growth and interest rates declined to record-low levels," chief executive Christian Clausen said in a statement.

"For the 13th consecutive quarter, we have kept costs flat."

In the fourth quarter, net profit dropped by eight percent to 773 million euros, falling short of the 845 million euros predicted by analysts polled by Dow Jones Newswires.

The revenue for the quarter remained stable at 2.426 billion euros.

The company said it expected the challenging economic environment to continue "for a prolonged period of time."

"We expect that the loan demand and customer activity will be at a lower level than we foresaw last year," Clausen said.

"As a consequence we will accelerate and expand our cost efficiency programme. This will enable us to adjust our capacity to the lower activity level and to maintain our position as a strong bank."

Nordea said that its costs fell overall by 210 million euros in 2013.

The cost-cutting programme, launched in the fourth quarter of 2012 with an ambition to save 450 million euros during 2013 to 2015, will now be expanded, according to the bank.

"We are seeing many of these initiatives delivering better than expected and in addition we will also accelerate the efficiency programme," Clausen said.

"Thus, we have raised the ambition from 450 million euros towards a level of 900 million euros during 2013 to 2015."

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NORDEA BANK

http://www.globalpost.com/dispatch/news/afp/140129/nordea-reports-annual-profit-stable-cost-cuts-continue