April 22 (Reuters) - Finland's Nordea Bank reported first-quarter operating earnings above market expectations on Wednesday, as higher fee and commission income and a reversal of loan losses helped
Nordea Bank Surpasses Q1 Profit Estimates on Strong Fee and Commission Income
Nordea Bank's First-Quarter 2024 Financial Performance
Operating Earnings Exceed Expectations
April 22 (Reuters) - Finland's Nordea Bank reported first-quarter operating earnings above market expectations on Wednesday, as higher fee and commission income and a reversal of loan losses helped offset effects of lower interest rates.
The Nordic region's biggest lender's operating profit rose 2% from a year ago to 1.63 billion euros ($1.91 billion), exceeding analysts' average forecast of 1.42 billion euros, according to LSEG's I/B/E/S data.
Net Interest Income and Market Impact
Net interest income, a key metric for measuring banks' income from lending and deposits, fell 4% to 1.76 billion euros, slightly above market expectations, following several central bank rate cuts last year, Nordea said.
Growth in Fee and Commission Income
Net fee and commission income grew 6% in the quarter, continuing the solid growth seen in past quarters despite being impacted by market volatility in March, it said. Provisions for net loan losses and similar net result showed a reversal of 99 million euros.
Macroeconomic Factors and Outlook
Impact of Geopolitical Events
The European Central Bank warned in March that the U.S.-Israeli war with Iran was clouding the outlook for growth and inflation in the euro zone by pushing up the cost of energy. Were this to result in a shift toward higher interest rates, Nordea and other banks operating in the euro zone would stand to benefit.
Full-Year Outlook
Return on Equity and Cost-to-Income Ratio
The Finnish bank reiterated its full-year outlook for a return on equity of greater than 15% and a cost-to-income ratio of around 45%.
($1 = 0.8518 euros)
(Reporting by Elviira Luoma in Gdansk, editing by Milla Nissi-Prussak)
