Update to internal allocation framework affecting business area results as of 2024
Nordea has updated its internal allocation framework to drive increased transparency and accountability and to enable better decision-making in terms of capital deployment and resource allocation. This change does not impact the Nordea Group’s consolidated financial statements but affects the business area results across income, costs and capital.
From the beginning of 2024, Nordea has updated its internal allocation framework, which affects the business area results. The updated framework aims to provide further alignment of business area and Group profitability metrics and includes the allocation of a significant part of currently unallocated capital and cost to business areas. It will also enable better decision-making by implementing a local approach for tax and capital requirements, reflecting the true cost of conducting business in the different countries, instead of using Group averages for both.
This update results in changes to the income and costs recorded under the business areas. In addition, due to the updated capital allocation framework, Nordea is introducing a revised profitability metric for the business areas in order to better align with the Group’s return on equity. Going forward, business area profitability is measured as return on allocated equity and business area capital consumption is measured as allocated equity.
The comparative information for the quarterly and full-year 2023 business area results are attached to this release and available on our web pages.
For further information:
Ilkka Ottoila, Head of Investor Relations, +358 9 5300 7058
Media inquiries, +358 10 416 8023 or press@nordea.com
We are a universal bank with a 200-year history of supporting and growing the Nordic economies – enabling dreams and aspirations for a greater good. Every day, we work to support our customers’ financial development, delivering best-in-class omnichannel customer experiences and driving sustainable change. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us at nordea.com.