Nordea banks big third-quarter profit gain

Swedish bank Nordea announced on Wednesday a sharp rise in third quarter profits despite the economic slowdown and major outlays for an IT overhaul.

Nordea banks big third-quarter profit gain
Nordea's Chief Executive Christian Clausen. Photo: TT
"In the third quarter we continued to welcome more new customers and were trusted with more savings, thereby passing the milestone of 250 billion euros in assets under management," the Swedish lender's Chief Executive Christian Clausen said in a statement.
"Nordea once again was confirmed as one of the safest banks globally," he added, referring to the low interest rate the bank secured for borrowing on the dollar market.
The Nordic banking giant's net profit shot up by more than a fifth (21 percent) to €938 million, compared to the same quarter last year. It would have been higher if it were not for a €344 million euro bill for a future IT overhaul to improve banking and payment systems.
Nordea said it has increased its activity despite slow growth in the region and a worsening global economic outlook. Turnover from loans grew by 1 percent compared to a year ago.
"As in the previous quarters, the third quarter was characterised by macro headwinds with low growth, low volatility and even lower interest rates," the bank said.
"The hope for a global recovery has been reduced due to geopolitical tensions, which also affect the export-oriented Nordic economies."
Nordea, which employs 29,500 worldwide, also announced that it had cut costs by 2 percent compared to the last quarter.

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Nordea’s Danish offices raided in money laundering probe

The Nordic region's largest bank Nordea said Monday that Danish prosecutors had raided its offices in Denmark as part of an investigation into money laundering.

Nordea's Danish offices raided in money laundering probe
File photo: Mads Claus Rasmussen / Ritzau Scanpix

The Danish State Prosecutor for Serious Economic and International Crime seized physical and digital material — including emails — from the Copenhagen offices on June 12th, reported the Danish business newspaper Børsen, which first broke the story.

The bank confirmed the raid in a statement to AFP, saying it was carried out in relation to a probe into “compliance with anti-money laundering procedures” at its international branch, which was responsible for non-Nordic customers.

“We are fully cooperating with the prosecution service to ensure that they have access to all relevant information,” said Nordea's Danish head Frank Vang-Jensen.

The bank said that in 2014, when it was refocusing its activities on Nordic countries — and away from Baltic states — it evaluated its customers at the international branch and “exited the customers who didn't meet our criteria”.

The Danish Financial Supervisory Authority then lodged a money-laundering complaint against Nordea in 2016.

In October last year, Sweden's financial crime unit also received a complaint against Nordea, which moved its Swedish headquarters to Finland later that month for tax reasons.

Nordea has set aside 95 million euros to cover potential first-quarter costs related to the money laundering probes.

The investigation comes as Denmark's largest lender Danske Bank is the target of criminal probes in several countries over some 200 billion euros in transfers that passed through its Estonian branch between 2007 and 2015, involving some 15,000 foreign clients.

READ ALSO: Nordea reported to Denmark investigators over money laundering