Nordea Shares Drop as Earnings Miss and Capital Return Prospects Disappoint

By Dominic Chopping

Nordea shares dropped to the bottom of the Stoxx Europe 600 index Monday after the Nordic bank posted earnings that missed expectations while its capital return prospects disappointed.

At 0940 GMT shares in the Helsinki-listed bank were down 4.8% at EUR10.79.

Nordea reported net profit attributable to shareholders of 1.11 billion euros ($1.19 billion) for the fourth quarter, down from EUR1.27 billion in the same period a year earlier and missing the EUR1.2 billion seen in a poll of analysts by FactSet, driven mostly by weaker trading income.

"Overall a somewhat disappointing set of 4Q numbers, but with the majority of the miss explained by trading which is unlikely to get extrapolated," UBS analyst Johan Ekblom said in a note.

The dividend is slightly shy of expectations at EUR0.92 versus consensus of EUR0.96, due to the 4Q earnings miss and a payout ratio of 66% compared with the bank's target of 60%-70%, Ekblom added.

Nordea also stated that it has paid EUR6 billion of dividends and EUR4 billion of buybacks in 2022​-​23 and a further EUR7 billion​-EUR​8 billion for dividends and buybacks are available for 2024 and 2025.

Barclays analysts Namita Samtani and Saif Shaikh say that consensus was looking for a figure of EUR9 billion, which at the mid-point implies EUR1.5 billion downside risk to consensus numbers, representing around 4% of market capitalization.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

February 05, 2024 05:14 ET (10:14 GMT)

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