Bulletin: Nordea Bank's New Financial Targets Are Not Overly Demanding

FRANKFURT (S&P Global Ratings) Oct. 25, 2019--S&P Global Ratings said today that although Finnish bank Nordea Bank Abp's third-quarter results include material one-off charges, the bank's new capital policy appears credit positive. Our ratings on the bank are unaffected. Nordea plans to increase the buffer it maintains above its regulatory requirements, while still making relatively generous dividend payouts of 60%-70%. The new management team's focus on top-line revenue growth and further stringent cost management is in line with actions at other leading European banks. Nordea's new financial targets include: Return on equity (ROE) above 10% by 2022. In the first nine months of 2019, ROE adjusted for one-offs was 8.3%; Cost-to-income ratio of 50% by 2022, compared with 58% for

...FRANKFURT (S&P Global Ratings) Oct. 25, 2019--S&P Global Ratings said today that although Finnish bank Nordea Bank Abp's third-quarter results include material one-off charges, the bank's new capital policy appears credit positive. Our ratings on the bank are unaffected. Nordea plans to increase the buffer it maintains above its regulatory requirements, while still making relatively generous dividend payouts of 60%-70%. The new management team's focus on top-line revenue growth and further stringent cost management is in line with actions at other leading European banks. Nordea's new financial targets include: - Return on equity (ROE) above 10% by 2022. In the first nine months of 2019, ROE adjusted for one-offs was 8.3%; - Cost-to-income ratio of 50% by 2022, compared with 58% for the first nine months of 2019, adjusted for one-offs; and - Management buffer of 150-200 basis points above the common equity Tier 1 (CET1) ratio. We do not consider these targets overly demanding. Management...

Bulletin