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Nordic banking giant Nordea posts profits drop

Sweden's biggest bank Nordea reported a 6.0-percent fall in net profits in the second quarter on Wednesday, blaming the drop on uncertain and volatile markets.

Published: 17 July 2013 15:23 CEST

Nordic banking giant Nordea posts profits drop

The bank turned in net profit of €772 million ($1.01 billion) in the period from April to June which was close to analyst predictions cited by Dow Jones Newswires.

The bank noted that “costs have been unchanged for 11 quarters.”

The profit figure was on a 12-month comparison, and the bank said its total operating income was down by two percent in the quarter to €2.49 billion ($3.27 billion).

“We continue to deliver on our plan on income initiatives, cost efficiency and improved capital position,” CEO Christian Clausen said in a statement.

Nordea said it had stabilised its loan portfolio, but added that “provisions for future loan losses in Denmark and shipping remained elevated.”

“The volatility in the financial markets has increased and uncertainty has grown related to Bank of Japan’s liquidity injection and the US Federal Reserve’s asset purchase program. General activity levels in the economies are still low, and interest rates continue to be under pressure,” Clausen said.

The bank noted that it had reached a “core tier one” capital ratio of 14 percent, marking an improvement of 2.7 percentage points since 2010 and meeting the requirement of Basel III, a global standard for capital adequacy.

“This is an excellent illustration that our profitability is high enough to support growth, dividends and increase our capital ratios,” it said.

In the second quarter of the year, Nordea announced its departure from Poland with the planned sale of three firms in the banking, financing and life insurance industries to Bank Polski at a price of €694 million ($912 million).

The Local/AFP

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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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