Fourth-quarter and full-year results 2020

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Nordea Bank Abp
Financial Statement Release
4 February 2021 at 7:30 EET

Summary of the quarter:

  • Continued strong growth in customer business volumes in all countries. Mortgage loans grew by a record 6%, year on year, with further increases in market shares. SME lending increased by 8%, supported by the acquisition of SG Finans, now Nordea Finance Equipment (NFE). Furthermore, assets under management grew by 9% to a record high of EUR 354bn, supported by an all-time-high quarterly net inflow in retail funds.

  • Operating profit up 11%, driven by income growth. Total income increased by 4%, with net interest income increasing by 6%. Net fee and commission income was up 2%, while net fair value result was down 13%. Operating profit increased by 11% compared with the fourth quarter of 2019. Return on equity (RoE) for the quarter was 8.4%, having been negatively affected by Nordea’s very high level of capitalisation. Nordea’s overall RoE development demonstrates good progress towards the target of above 10% in 2022.
  • 2020 costs in line with guidance – new cost outlook for 2021. Total operating costs were in line with Nordea’s full-year guidance of below EUR 4.7bn. Operating costs were 3% higher than in the fourth quarter of 2019 after absorbing certain non-recurring items, such as costs from the integration of NFE, non-core IT impairments and provisions related to new Danish holiday pay legislation. Underlying costs were down 3% compared with last year. Work to increase operational efficiency continues and 2021 costs are expected to be below EUR 4.6bn, with continuing efficiency gains partially offset by pay inflation, higher depreciation and amortisation, and higher costs from the integration of NFE.
  • Strong credit quality with low loan losses. Net loan losses amounted to EUR 28m or 3bp in the fourth quarter. The management judgement buffer of EUR 650m has been retained in full, as the impact of the pandemic on Nordea’s customers remains uncertain.
  • Capital position among best in Europe – CET1 ratio 17.1%. After deducting the proposed 2019 and 2020 dividends in full, the Group’s CET1 ratio was up 70bp on the previous quarter at 17.1%. This is 6.9 percentage points above the current regulatory requirement. Nordea’s capital position is among the strongest in Europe.
  • 2020 dividend proposal of EUR 0.39 per share, in line with dividend policy. Nordea’s Board has proposed a dividend of EUR 0.39 per share for 2020. In addition, the Board will decide in February to distribute EUR 0.07 per share as the first instalment of the delayed 2019 dividend of EUR 0.40 per share. The Board also proposes that the Annual General Meeting authorise it to pay out the remaining part of the 2019 dividend (EUR 0.33 per share) and the 2020 dividend (EUR 0.39 per share) – a total of EUR 0.72 per share – after September 2021, in line with the European Central Bank recommendation.
  • On track to reach 2022 financial targets. Nordea continues to focus on creating great customer experiences, growing income and improving operational efficiency in line with its plan, and is progressing well towards meeting its 2022 financial targets.
Group quarterly results and key ratios Q4 2020
excluding items affecting comparability1
Q4 Q4 Q3 Jan-Dec Jan-Dec
2020 2019 Chg % 2020 Chg % 2020 2019 Chg %
Net interest income 1,169 1,108 6 1,146 2 4,515 4,318 5
Net fee and commission income 792 775 2 729 9 2,959 3,011 -2
Net fair value result 217 250 -13 257 -16 900 1,012 -11
Other income 41 7 23 78 92 144 -36
Total operating income 2,219 2,140 4 2,155 3 8,466 8,485 0
Total operating expenses -1,218 -1,179 3 -1,089 12 -4,643 -4,877 -5
Profit before loan losses 1,001 961 4 1,066 -6 3,823 3,608 6
Net loan losses and similar net result -28 -86 19 -860 -242
Operating profit 973 875 11 1,085 -10 2,963 3,366 -12
Cost-to-income ratio with amortised resolution fees, % 57 58 53 55 57
Return on equity with amortised resolution fees, % 8.4 7.6 10.1 7.1 8.2
Diluted earnings per share, EUR 0.18 0.15 0.21 0.55 0.61

1) Items affecting comparability: see page 6 in the Q4 2020 Report for further details.

CEO comment

“We begin 2021 with high expectations for overcoming COVID-19 and starting the recovery from the pandemic. However, the ongoing lockdowns and restrictions remind us about the importance of endurance and patience. Nothing is certain, but there are several signs that we are heading towards brighter times. We have already found new ways of living, working and consuming. More importantly, the approval and initial roll-out of vaccines supports our view that we will eventually beat the virus.

I am very happy to see that we made good progress in 2020. We improved our performance and delivered on our business plan and key priorities. Our business volumes grew and we gained market shares across the Nordics. We created better customer experiences, improved customer satisfaction scores and reduced customer complaints by more than 20%. At the same time, we also reduced costs and increased operational efficiency. Our work to build a strong cost culture has started well and we are determined to continue on the same track. Furthermore, the resilience of our business model was tested and proven in difficult circumstances. The remarkable efforts of our employees and our advanced digital capabilities kept the bank fully operational, with high levels of customer activity.

In the fourth quarter we saw continued strong growth in customer business volumes in all countries. Mortgage loans grew by a record 6%, year on year, and market shares continued to show strong growth across the Nordic region. SME lending increased by 8%, supported by the acquisition of SG Finans, now Nordea Finance Equipment (NFE). Our assets under management (AuM) grew by 9% to record-high levels following an all-time-high retail funds net inflow.

Our operating profit increased by 11% and total income was up 4% compared with the fourth quarter of last year. Net interest income grew by 6%, the highest growth rate since 2008. Savings income increased by 8%. Card fee income continues to be affected by reduced travel and lower economic activity related to the pandemic.

Our 2020 costs were in line with our full-year guidance of below EUR 4.7bn. Costs in the fourth quarter were higher than in the previous quarter due to certain non-recurring items. We will continue working to improve cost efficiency and expect total costs for 2021 to be below EUR 4.6bn.

We have steadily improved our cost-to-income ratio, from 57.5% in 2019 to 54.8% in 2020, and are making good progress towards meeting our 2022 target of 50%. Our return on equity was 8.4% in the fourth quarter and we are on track to reach the target of above 10% by 2022.

Our credit quality remained strong in 2020. In the second quarter we communicated that we expected full-year loan losses to be below EUR 1bn – and 2020 loan losses were comfortably below this level at EUR 860m. Realised loan losses have been very low and net loan losses for the fourth quarter were EUR 28m. However, we have retained our EUR 650m management buffer. We believe this prudent approach is appropriate, as the full economic impact of the pandemic remains uncertain.

All our business areas continued to show progress in the fourth quarter. Personal Banking saw further mortgage lending growth in all countries. Savings income had good momentum, especially in Finland and Denmark. 

In Business Banking lending volumes increased, particularly in Sweden and Norway. Income also increased, both when including and excluding the impact of the integration of NFE, which was included in the Group results from 1 October.

Large Corporates & Institutions continued with its strategic repositioning. Business activity remained at high levels. Return on capital at risk improved to 10.5% from 6.1% in the same quarter last year.

In Asset & Wealth Management AuM and lending volumes continued to grow in 2020. We also saw strong demand for our ESG products, which contributed 70% of the net inflow in the fourth quarter.

At the end of the quarter our Group CET1 ratio was 17.1%, 6.9 percentage points above the current regulatory requirement and among the strongest in Europe. We continue to generate capital and increase our CET1 ratio, even after having deducted the proposed 2019 and 2020 dividends.

During the pandemic we have been able to support our customers and the societies around us, maintain our financial strength and ensure that we are fully operational. We understand the reasoning behind the exceptional capital distribution measures promoted by the European Central Bank (ECB) for the European banking industry, and we have followed the ECB’s recommendations, even though our financial position is very strong.

Our capital and dividend policy is unchanged. Dividends are important to our shareholders and benefit both them and society at large.

We consider dividend payment to be a matter of timing only. Our Board has proposed a dividend of EUR 0.39 per share for 2020. Including the delayed 2019 dividend of EUR 0.40 per share, this would mean a total payout of EUR 0.79 per share in 2021. We propose to pay this out to our shareholders in two instalments: the first instalment of EUR 0.07 per share after the Board decision in February and the remaining EUR 0.72 per share after September.

In the quarter we decided on a new sustainability strategy with progressive targets for 2030, further strengthening our leading position in sustainable banking. We firmly believe that the increasing demand for sustainability-linked products and services is good for our business and for society.

All in all, we are well on track towards meeting our 2022 targets, thanks in no small part to our dedicated and highly competent people. I couldn’t be any prouder of their efforts and commitment in these extraordinary times. Our focus will remain on our three key priorities: to create great customer experiences, drive income growth initiatives and optimise operational efficiency.

The recovery from the pandemic is not going to be easy. We will have to rebuild our societies and businesses will need to find their feet again. We are a strong and personal financial partner and will continue to take action – to drive sustainable growth and recovery together with our customers.”

Frank Vang-Jensen
President and Group CEO

Income statement
Q4 Q4 Q3 Jan-Dec Jan-Dec
2020 2019 Chg % 2020 Chg % 2020 2019 Chg %
Net interest income 1,169 1,108 6 1,146 2 4,515 4,318 5
Net fee and commission income 792 775 2 729 9 2,959 3,011 -2
Net result from items at fair value 217 250 -13 257 -16 900 1,012 -11
Profit from associated undertakings and joint
ventures accounted for under the equity method 5 -1 6 -17 -1 50
Other operating income 36 146 -75 17 93 232 -60
Total operating income 2,219 2,278 -3 2,155 3 8,466 8,623 -2
Staff costs -722 -648 11 -686 5 -2,752 -3,017 -9
Other expenses -319 -375 -15 -245 30 -1,286 -1,639 -22
Depreciation, amortisation and impairment
charges of tangible and intangible assets -177 -156 13 -158 12 -605 -1,330 -55
Total operating expenses -1,218 -1,179 3 -1,089 12 -4,643 -5,986 -22
Profit before loan losses 1,001 1,099 -9 1,066 -6 3,823 2,637 45
Net loan losses and similar net result -28 -86 -67 19 -860 -524 64
Operating profit 973 1,013 -4 1,085 -10 2,963 2,113 40
Income tax expense -248 -263 -6 -248 0 -698 -571 22
Net profit for the period 725 750 -3 837 -13 2,265 1,542 47
Business volumes, key items1
31 Dec 31 Dec 30 Sep
2020 2019 Chg % 2020 Chg %
Loans to the public 329.8 323.1 2 320.5 3
Loans to the public, excl. repos 317.6 304.2 4 302.7 5
Deposits and borrowings from the public 183.4 168.7 9 190.0 -3
Deposits from the public, excl. repos 182.1 166.4 9 184.9 -2
Total assets 552.2 554.8 0 574.8 -4
Assets under management 353.8 324.7 9 326.2 8
Equity 33.7 31.5 7 32.6 3
Ratios and key figures2
Q4 Q4 Q3 Jan-Dec Jan-Dec
2020 2019 Chg % 2020 Chg % 2020 2019 Chg %
Diluted earnings per share, EUR 0.18 0.19 -5 0.21 -14 0.55 0.38 45
EPS, rolling 12 months up to period end, EUR 0.55 0.38 45 0.56 -2 0.55 0.38 45
Share price1, EUR 6.67 7.24 -8 6.49 3 6.67 7.24 -8
Proposed dividend per share, EUR 0.39 0.40 -3
Equity per share1, EUR 8.35 7.80 7 8.06 4 8.35 7.80 7
Potential shares outstanding1, million 4,050 4,050 0 4,050 0 4,050 4,050 0
Weighted average number of diluted shares, million 4,039 4,039 0 4,040 0 4,039 4,035 0
Return on equity, % 8.9 10.0 10.6 7.1 5.0
Return on tangible equity, % 10.0 11.4 12.0 8.1 5.7
Return on risk exposure amount, % 1.9 2.0 2.2 1.4 1.0
Return on equity with amortised resolution fees, % 8.4 9.4 10.1 7.1 5.0
Cost-to-income ratio, % 55 52 51 55 69
Cost-to-income ratio with amortised resolution fees, % 57 54 53 55 69
Net loan loss ratio, amortised cost, bp 9 17 0 35 22
Common Equity Tier 1 capital ratio1,3, % 17.1 16.3 16.4 17.1 16.3
Tier 1 capital ratio1,3, % 18.7 18.3 18.2 18.7 18.3
Total capital ratio1,3, % 20.5 20.8 19.9 20.5 20.8
Tier 1 capital1,3, EURbn 29.1 27.5 6 27.4 6 29.1 27.5 6
Risk exposure amount1, EURbn 155 150 3 151 3 155 150 3
Number of employees (FTEs)1 28,051 29,000 -3 27,880 1 28,051 29,000 -3
Economic capital1, EURbn 23.5 25.7 -9 23.7 -1 23.5 25.7 -9

1 End of period.
For more detailed information regarding ratios and key figures definied as alternative performance measures,
3 Including the result for the period.


Key priorities to meet 2022 financial targets
Nordea’s business plan focuses on three key priorities to meet its 2022 financial targets: 1) to optimise operational efficiency, 2) to drive income growth initiatives, and 3) to create great customer experiences.

Financial targets 2022
Nordea’s financial targets for 2022 are:

  • a return on equity above 10%

  • a cost-to-income ratio of 50%

Costs (operating expenses)
Total costs for 2021 are expected to be below EUR 4.6bn.
Previous: In 2020 Nordea expects to reach a cost base of below EUR 4.7bn, with planned continued net cost reductions beyond 2020.

Capital policy
A management buffer of 150-200bp above the regulatory CET1 requirement, from 1 January 2021.

Dividend policy
Nordea’s dividend policy stipulates a dividend payout ratio of 60-70%, applicable to profit generated from 1 January 2021. Nordea will continuously assess the opportunity to use share buy-backs as a tool to distribute excess capital.

Dividend for 2019 and 2020
On 15 December 2020 the ECB issued an updated dividend recommendation to banks. The ECB in general expects dividends and share buy-backs to remain below 15% of the cumulated profit for 2019-20 and not to exceed 20bp of the CET1 ratio until the end of September 2021. The Board of Directors of Nordea decided on 16 December 2020 to follow the updated ECB recommendation.

Based on the recommendation and after a dialogue with the ECB, the Board of Directors will, on 18 February, decide on a dividend distribution of EUR 0.07 per share, in accordance with the mandate received from the 2020 Annual General Meeting (AGM). The record date for such dividend payment would be 22 February and the earliest payment date would be 1 March. In addition, the Board decided to propose that the 24 March 2021 AGM authorise it to decide on a dividend payment of a maximum of EUR 0.72 per share. The payment would be distributed based on the balance sheet to be adopted for the financial year ended 31 December 2020, in one or several instalments. The authorisation would remain in force until the beginning of the next AGM.

The proposed amount of EUR 0.72 maximum per share is in line with Nordea’s dividend policy and includes the residual amount of the 2020 AGM dividend mandate (EUR 0.33 per share) as well as 70% of the net profit for the financial year 2020 (EUR 0.39 per share). The Board of Directors will refrain from deciding on a dividend payment based on the proposed authorisation before 1 October 2021 unless the ECB updates or revokes its current recommendation.

Nordea will publish any future decisions on dividend payment by the Board of Directors separately, and will simultaneously confirm the dividend record and payment dates.

On 31 December 2020 Nordea Bank Abp’s distributable earnings, including profit for the financial year, were EUR 19,977m and other unrestricted equity amounted to EUR 4,573m.

2020 publications
Nordea’s Annual Report for the financial year 2020, which includes the Audited Financial Statements, the Board of Directors’ Report and the Corporate Governance Statement, will be published in week 9 by way of stock exchange release and will also be available at 

The entire report can be found on the below link on our website.
Nordea Group Q4 2020 Report

For further information:

Frank Vang-Jensen, President and Group CEO, +358 503 821 391 Ian Smith, Group CFO, +45 5547 8372
Matti Ahokas, Head of Investor Relations, +358 405 759 178 Ulrika Romantschuk, Head of Brand, Communication and Marketing,
+358 10 416 8023

The information provided in this stock exchange release was submitted for publication, through the agency of the contact persons set out above, at 07.30 EET (06.30 CET) on 4 February 2021.


Nordea is a leading Nordic universal bank. We are helping our customers realise their dreams and aspirations – and we have done that for 200 years. We want to make a real difference for our customers and the communities where we operate – by being a strong and personal financial partner. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us on