Update: Nordea Bank Abp

The stable outlook on Nordea reflects our expectation that the bank will continue to work on generating income growth, operating profitability, and cost efficiencies to meet its financial target of ROE above 13% by 2025. We therefore consider the bank will maintain performance indicators in line with those of highly rated peers over the next 12-24 months. We expect its strengthened position in its home markets, agility in terms of digital customer offering, and strong financial position will underpin the bank's lending capacity and earnings generation. We could take a negative rating action in the next 12-24 months if Nordea is unable to demonstrate sustainable business generation and maintain its performance trajectory to meet its key financial target. Although less

...S&P Global Ratings expects Nordea to be well positioned to achieve its ambitious 2025 profitability targets, helped to some extent by the higher interest rate environment and capital optimization. Nordea's current financial target is to reach a return on equity (ROE) above 13% over the next two years, which it believes will be supported by a cost-income ratio of 45%-47%. While the benefits of the higher interest rate environment started to pass through to net interest income in 2022, the largest increase is likely to be seen in 2023. Non-interest income will likely underperform,...

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