Nordea Closes Good Year 2021, Reaching Return on Equity Target a Year Early

Nordea closed a good year with fourth-quarter operating profits of EUR 1,281 million, up 1% versus the quarter-ago period. In 2021, Nordea achieved a respectable return on tangible equity of 12.6%, surpassing its 2022 targets early. Encouraged by this performance, management adjusted the return on equity target upward toward above 13% while at the same time pushing it out until 2025. We maintain our fair value estimate of SEK 93 per share and no-moat rating. We await Nordea’s capital markets day on Feb. 17, which should bring greater clarity on its new strategic outlook, before updating our model and potentially adjusting our fair value estimate.