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Regional Winner | Nordea

Nordea has the region’s largest banking platform and either leads or comes second place in terms of market share in all four of the major economies. Group CEO Christian Clausen says that “despite a challenging economic environment, Nordea delivered improved revenues and lower costs leading to increased profitability.” The bank’s operating profit increased by 9%, while costs were 4% lower, reducing the cost/income ratio to 49%. Clausen notes that Nordea attracted more new customers and further strengthened its capital position, its Tier I capital ratio improving by 1.8 percentage points to 15.7%. “We also took the next step,” he says, “in the transformation to meet our customers’ changing behavior and the new regulatory requirements. To facilitate the development of more personalized customer solutions and systems that efficiently fulfill the increasing monitoring and reporting requirements under the new regulation, we are simplifying processes in all parts of the bank. As part of this process, we will increase our IT investments by 30% to 35% over the coming years and build new core banking and payment platforms, significantly increasing our agility, benefits of scale and resilience.”

Christian Clausen, Group CEO and president

Denmark | Danske Bank

Denmark’s largest bank was hit harder than most during the financial crisis, owing to its large exposure to residential mortgages, both in the domestic market and through its Irish subsidiary, but Danske Bank is now firing on all cylinders, with enhanced profitability driven by growth across all income lines, lower loan impairments and reduced costs. Total income was up by 10%, while expenses were 5% lower, thanks to continuing cost efficiency measures. Underlying profits were up by 82%, and even after €1.2 billion of goodwill impairments, the bank generated a net profit of nearly €517 million. On the back of reduced risk levels and a strengthened capital base, Danske Bank was able to boost the dividend and announce a share buyback—the first in more than a decade.

Thomas Borgen, CEO

Finland | Pohjola

Although the Finnish economy is still struggling to emerge from recession, total income at OP Pohjola in 2014 grew by 10%, driven largely by improved earnings from the now wholly-owned and integrated banking and insurance group. Assets under management increased by 14% to €43.3 billion, and the loan portfolio grew by 5% to €14.9 billion. A renewed focus on cutting internal costs and boosting customer-facing activities, combined with efficient use of capital, enhanced profitability. Return on equity was 14.3%, and the directors approved a dividend of €0.43, representing a 30% dividend pay-out ratio. The Tier 1 capital ratio rose to 12.4%.

Reijo Karhinen, director general

Iceland | Landsbankinn

The restructuring of legacy loans at Iceland’s largest “good bank” is now complete, and although CEO Steinthór Pálsson acknowledges that “positive value adjustments of loans and revenues from equities have been large factors in the bank’s income,” his focus now is on “increasing efficiency and improving revenue structure.” A sizable increase in housing loans boosted the bank’s lending by 6%, while nonperforming loans shrank to 2.3% of the portfolio. Profits rose slightly last year to 29.7 billion Icelandic króna ($225 million), and ROE was 12.5%. Landsbankinn’s capital adequacy ratio was high in global terms at 29.5% at year-end, compared with 26.7% in 2013, and retained earnings boosted the capital base by 4% to 250.8 billion króna, despite the bank’s having paid out 20 billion króna in dividends.

Steinthór Pálsson, CEO

Norway | DNB

This last year has seen a high level of customer activity at DNB, which contributed to a substantial increase in profits of more than NKr3 billion ($370 million) to NKr20.6 billion. The Norwegian economy remains strong despite the drop in the price of oil. In particular, the housing market was buoyant, and DNB entered into more than 150,000 residential mortgage contracts amid intense competition. Net interest income increased by 7.6%, owing to higher lending volumes and inflows of deposits. The bank’s Tier 1 capital ratio improved from 11.8% to 12.7% at year-end, while return on equity rose to 13.8%. DNB’s goal is to be the most accessible bank in Norway, and last year saw a record of close to six million direct dialogues with customers, whether in branch or through telephone banking or social media such as Facebook.

Rune Bjerke, CEO

Sweden | Nordea

During 2014 the bank added 30,000 new relationship customers amid accelerating change in their behavior and preferred ways of banking. Last year saw a 90% increase in mobile transactions and Lennart Jacobsen, head of Nordea Sweden, says that “we continuously expand the opportunities for customers to interact with us as they prefer, whether it be though mobiles or tablets, calling our contact center, using the Netbank or getting a fast answer to an inquiry via Facebook. Household business volumes continued to grow with record inflow to retail funds, including the newly launched Nordea Nordic Stars Equity Fund. Net interest income was steady at just a bit over €1 billion, and net fee and commission income increased by  €377 million. The cost/income ratio improved to 53%. The bank plans to hike its investment in new core banking and payment platforms.

Lennart Jakobsen, country senior executive


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