Nordea Bank Shows Good Underlying Performance in 2020; Fair Value Estimate Maintained

We maintain our fair value estimate of SEK 74 per share and no moat rating for Nordea Bank. The group reported a good end to 2020 largely in line with our expectations. On an underlying basis, net profit for the full year has declined 9% to EUR 2.3 billion, but the overall picture is brighter in our view. The culprit of this performance has been loan-loss provisions. In 2020, Nordea booked EUR 860 million versus EUR 242 million a year ago. Excluding this elevated line item during the coronavirus, profit before loan losses showed an applaudable 6% increase year over year supported by a flat income line and lower operating expenses.