Nordea AA rating confirmed by S&P

Rating agency Standard & Poor’s has given Nordic bank Nordea an AA rating with a stable outlook on the basis of its business position and adequate capital and earnings.

Nordea CFO Fredrik Rystedt said: “This reaffirms our strong financial position and is an indication that our relationship banking strategy is working.”

“This is yet another proof of the financial markets’ strong confidence in Nordea and underpins our efforts to become one of Europe’s leading banks with focus on strong customer relations. In its research Standard & Poor’s emphasises that Nordea is expected to progress steadily with adequate capital and a resilient risk profile.”

Nordea notes that few other banks in Europe have a rating equal to its own.

However, although well capitalised, it has been under pressure from investors to explain its current 15% ROE target in light of the increasing regulatory costs hitting the banking sector, even as profit margins on different types of lending products have been squeezed.

The bank’s group chief executive Christian Clausen (pictured) emphasised at a Capital Markets Day in London recently that cost cutting and margin preservation is a key response to the macroeconomic and regulatory environment – rather than stressing any ability to grow its top line.

Fund investors in the domestic market Sweden, where Nordea has its headquarters, have also put pressure on the bank over the performance of its products. In October the bank announced the replacement for its Nordea Fonder business.

 

 

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