Nordea maintains strong profit, boosts shareholder returns despite rate cuts

Nordea Bank Abp on Thursday reported a third-quarter operating profit of 1.6 billion euros, as lending growth helped offset a decline in income from lower interest rates.

The Nordic lender's return on equity was 15.8%, down from 16.7% a year earlier but in line with its full-year target of above 15%, the company said.

Net interest income, the difference between what the bank earns on loans and pays on deposits, fell 6% to 1.78 billion euros, which the company attributed to policy rate reductions.

The decline was partly offset by a 5% rise in net fee and commission income, while both mortgage and corporate lending grew by 6% year-on-year.

The bank's credit quality remained strong, leading to a net loan loss reversal of 19 million euros, compared with a 51 million euro loss in the same period last year.

"Credit quality remains exceptionally strong," Chief Executive Frank Vang-Jensen said in a statement.

Continuing its policy of returning capital to shareholders, Nordea also announced it will launch a new 250 million euro share buy-back program on or around Oct. 20.

The move follows several larger buy-backs in recent years as the bank aims to maintain an efficient capital structure.