Danske Bank: Nordea – Q1 21

Nordea (MW): Just out with Q1 figures. On profitability, Nordea delivered, with net income of EUR788m, up from EUR725m in Q4 and significantly above Bloomberg consensus of EUR645m. Total income was up almost 8% on the quarter, with good progress in both NII and fee income (increasing 3.7% and 4.4%, respectively q/q) while trading income amounted to EUR370m (Q4: EUR247m). Operating expenses were, however, up 8% q/q and also somewhat above Bloomberg consensus (driven by higher resolution fees and FX movements). However, with loan losses of EUR63m (Q4: EUR58m Bloomberg consensus: EUR117m), Nordea still managed to deliver solid progress in net profitability. The stage 3 ratio was stable at 1.2% and the CET1 ratio increased 20bp to 17.5% compared to a regulatory requirement of 10.2%. At a first sight, we see the Q1 report as slightly credit positive, with seemingly stable asset quality and capitalization, but tailwinds to core income lines.