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Nordea’s profits ‘higher than expected’

The largest Nordic bank, Nordea, on Wednesday posted rising quarterly profit amid falling loan losses that helped it shrug off the effects of lower interest rates and sluggish demand for corporate credit.

Published: 24 April 2013 13:21 CEST

Nordea's profits 'higher than expected'

Net profit in the January to March period edged up two percent to 794 million euros ($1.03 billion), beating a 753 euro consensus by analysts polled by Dow Jones Newswires.

But shares in the financial heavyweight fell as investors worried over the bank’s capitalization.

“Net interest income is negatively affected by low interest rates, putting pressure on our deposit margins. Demand for credit remains subdued, especially in the corporate sector,” chief executive Christian Clausen said in a statement.

However, results were shored up by narrowing net credit losses of 199 million euros in the period, compared with a loss of 218 million last year.

SEE ALSO: Get the latest exchange rates and transfer money on The Local’s Currency page

Nordea’s tier one capital ratio is lower than some of its rivals, and the bank’s financial plan aims to keep it above 13 percent. At the end of the first quarter the measure stood at 13.2 percent, rising just 0.1 percentage points on a quarterly basis.

“The Nordic economies broadly continued to perform relatively well compared to the rest of Europe,” the bank said, citing Sweden and Norway as the strongest performers.

“Finland remains more closely tied to developments in the eurozone and was affected by the general weak sentiment. Likewise, the Danish economy continued (its) relative under performance,” it added.

Shares in Nordea were down 2.55 percent in midday trading on the Stockholm Stock Exchange, where the main index was 0.77 percent lower.

AFP/The Local/og

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Was Norway ill prepared for the Covid-19 pandemic?

Photo by Eirik Skarstein on Unsplash

The 450-page report was submitted to Prime Minister Erna Solberg by medical professor Stener Kvinnsland, who led the review.

The commission found that, generally, Norway had handled the pandemic well compared to the rest of Europe. That was in part due to citizens taking infection control measures on board.

“After a year of pandemic, Norway is among the countries in Europe with the lowest mortality and lowest economic impact. The authorities could not have succeeded if the population had not supported the infection control measures;” the report states.

However, the commission’s report also outlined that Norway did not properly prepare itself for the pandemic.

“The authorities knew that a pandemic was the most likely national crisis to have the most negative consequences. Nevertheless, they were not prepared when the extensive and serious Covid-19 pandemic came,” it said.

Prime Minister Erna Solberg said during an interview with the commission, conducted as part of its work, that the government did not have an infection control strategy of its own.

“We had a ‘we have to deal with a difficult situation’ strategy. We had to do everything we could to gain control and get the infection down. It was really only at the end of March (2020) that we found the more long-term strategy,” she told the commission.

Low stocks of personal protective equipment were another source of criticism in the report.

“The government knew that it would in all probability be difficult to obtain infection control equipment in the event of a pandemic. Nevertheless, the warehouses were almost empty,” Kvinnsland said at a press conference.

Norwegian health authorities were praised for the swiftness with which they implemented infection control measures. But the commission said that the decision should have been formally made by the government, rather than the Norwegian Directorate of Health.

READ MORE: Norway saw fewer hospital patients in 2020 despite pandemic

The implementation of restrictions in March 2020 was critiqued for failing to ensure that “infection control measures were in line with the constitution and human rights.”

One-fifth of municipalities in Norway lacked a functioning plan in the event of a pandemic according to the report, and the government did not provide enough support to municipalities.

“We believe that government paid too little attention to the municipalities. The municipalities were given much larger tasks than they could have prepared for,” Kvinnsland said.

The report was also critical of Norway’s lack of a plan for dealing with imported infections in autumn 2020.

“The government lacked a plan to deal with imported infections when there was a new wave of infections in Europe in the autumn of 2020,” the report found.

“When the government eased infection control measures towards the summer of 2020, they made many assessments individually. The government did not consider the sum of the reliefs and it had no plan to deal with increasing cross-border infection,” it added.

The report also concluded that Norway allowed itself to be too easily lobbied by business when deciding to ease border restrictions last summer.

The division of roles in handling aspects of the pandemic was scrutinised in the report. Here, the division of responsibilities between the Ministry of Health and Care Services, The Norwegian Directorate of Health and the Norwegian Institute of Public Health were unclear.

The prime minister has asked the commission to continue its work.

“We are not done with the pandemic yet. Therefore, it is natural that the commission submits a final report. There will also be topics where the learning points can only be drawn later,” Solberg said.

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