Nordic banks successful in Finland over first quarter of 2008

The basic banking operations kept the profitability of two large Nordic banking groups at a sound level in January through March. The groups are Danske Bank and Nordea, who both published their first quarter interim reports on Tuesday.
      The Finnish banking operations form the basis for both banks’ income growth.
     
Nordea in particular enjoyed a successful start to the year. Its lending to the public increased by 14% compared with the same period in 2007, while deposit volumes were up 12%, compared with the same period a year ago.
      The net profit for the period was EUR 687 million, down 2% from last year.
      According to Christian Clausen, the President and Group CEO of Nordea, there is ”no evidence of a slowdown in customer activities”. This means that the international financial crisis and the weakened economic outlook have not affected the bank’s Nordic customers.
      The financial outlook for 2008 is maintained unchanged, while the growth in profit is expected to be in the range of 5 to 10%.
     
”Finland is one of Nordea’s most profitable markets. Particularly deposits are profitable here as Finns still prefer to keep their money in a bank”, says analyst Matti Ahokas from Handelsbanken.
      According to analysts, Nordea’s conservative strategy, namely the focusing on the basic banking operations instead of pursuing investment adventures, is now bearing fruit.
     
The result for the first quarter of 2008 indicates that Sampo Bank was also successful in Finland in January through March. The bank’s total lending increased by 13%, while deposit volumes were up 10% compared with the same period in 2007.
      The bank’s profit before tax was EUR 29 million - the same as in the corresponding period last year.
      The problems relating to a glitch in the bank’s data systems following the merger of the information systems of Sampo Bank and Danske Bank were not yet seen in the first quarter interim report. Only the item ”integration expenses EUR 23 million” referred to the merger.
      The Finnish Sampo was transferred into the ownership of the Danish Danske Bank during the Easter weekend, but the transition was by no means smooth, as numerous earlier articles have testified.
     
The Nordic banks have so far managed to escape the effects of the international financial crisis, as they have concentrated on the basic banking business.
      However, clear signs of the crisis can already be seen reflecting on the Nordic banks as well. One of these signs is the item ”credit loss expenses” that has resurfaced in the interim reports after having been absent for a long time.


Previously in HS International Edition:
  Sampo Bank problems continue - cards fail again on Wednesday (10.4.2008)
  Serious problems with launch of new online service of Sampo Bank (26.3.2008)
  Finnish Sampo Bank Group to be sold to Danish Danske Bank for EUR 4.05 billion (9.11.2006)

Links:
  Sampo Bank
  Nordea