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Danish branch of Nordea is bleeding dragging down Nordea's earnings

Wednesday, 24 October 2012
Evidence that the Danish Financial sector is not yet healing has been evident in recent reports from the leading bank in the Nordic region, Nordea.

Losses in excess of Dkr 1 billion in July, August and September is what Nordea Danish branch is reported to have lost. And it looks really bad in the department in a bank, otherwise the bank would have been heading for a record earnings in 2012.

The Danish Nordea branches in the third quarter made an operating profit of Dkr163.9 million, which is a decrease of 72 percent from the previous quarter in 2011.

"The continuing difficult economic situation has had a negative impact on residential customers and farmers with large debts," writes the bank of it Danish operations.

With the sharp decline,  Denmark finds it self at the bottom of the earnings scale. Poland then follows with a decline of 62 percent in operating profit, while the Finnish section saw a decrease of 20 percent.

It was completely different with Norway, where the operating profit increased by 39 percent in the third quarter of this year compared to the same quarter of 2011. In the Baltic countries as a whole, profit increased by 15 percent, while Sweden increased by 11 percent.

The item that really weighs on the performance in Denmark is also loss of customers. The Danish division wrote down loans with over a billion Danish Krona and it is 93 percent more than in the third quarter of 2011.

"The housing market remains weak and characterized by a high number of foreclosures and a general caution when it comes to private consumption and investment," writes the bank and continues:
"But the fundamentals of the Danish economy is still relatively strong with the expectation of moderate GDP growth in 2012, strong public finances, low interest rates and low unemployment."

Net income rose to €686 million from €404 million a year earlier, according to a statement today. It was initially expected that the banks' earning will reach the €751 million on average according to estimate of 19 analysts surveyed by Bloomberg.
by Scancomark.com Team

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