NBNKF - Nordea Bank Abp (NRDBY) Q4 2023 Earnings Call Transcript
2024-02-05 08:30:05 ET
Nordea Bank Abp (NRDBY)
Q4 2023 Earnings Conference Call
February 05, 2024, 04:00 AM ET
Company Participants
Ilkka Ottoila - Head of Investor Relations
Frank Vang-Jensen - President and Chief Executive Officer
Ian Smith - Group Chief Financial Officer
Conference Call Participants
Magnus Andersson - ABGSC
Andreas Hakansson - SEB
Namita Samtani - Barclays
Sofie Peterzens - JPMorgan
Tarik El Mejjad - Bank of America
Hugh Moorhead - Berenberg
Jacob Kruse - Autonomous
Geoff Dawes - SG
Markus Sandgren - Kepler Cheuvreux
Presentation
Ilkka Ottoila
Good morning and welcome to Nordea's Fourth Quarter and Full Year 2023 Results Presentation. I am Ilkka Ottoila, the Head of Investor Relations for Nordea. Here in Helsinki, we have our CEO, Frank Vang-Jensen and our CFO, Ian Smith. Today we'll start with a presentation by Frank followed by further details on our updated 2025 targets by Ian. After that, you will have a chance to ask questions. Please remember to dial into the teleconference to ask questions.
With that, I'll leave the stage to our CEO, Frank Vang-Jensen.
Frank Vang-Jensen
Good morning. Today, we have published our fourth quarter and full year 2023 results. 2023 was not a strong year for Nordea. Despite the weakening economic environment, we kept up good business momentum and we moved forward in line with our priorities and business plan and this led to solid financial result. Our return on equity was 16.9% for the full year, up from 13.8% in 2022.
The trend has clearly been positive. Return on equity has consistently improved over the past four years, making us one of the strongest and most profitable banks in Europe. Our higher level of profitability and strong capital generation have above all else, given us a great capacity to support our customers. This has always been our priority and is all the more important in the current economic climate.
Rising prices and higher interest rates have affected economic activity. Households and businesses are feeling more uncertain about the future, but our customers have generally adjusted well to the new environment and the Nordic economies have demonstrated considerable resilience. At the same time, we have seen that our customers continued to show trust and confidence in Nordea as their financial partner. This was evident in higher customer activity and improved customer satisfaction scores in 2003. All-in-all, this was a good year for Nordea with good business momentum, which we also carried through Q4.
If you look at the highlights for the quarter, our return on equity was 15.9% excluding the write-offs of intangible assets we made in Q4. Earnings per share was €0.31. Our underlying profitability was supported by a 19% increase in net interest income as net interest margins continued to improve. Net commission income decreased by 3% year-on-year and net insurance result decreased by 15%. Net fair value result was unusually low after being negatively affected by interest rates volatility. Total income was up 1% year-on-year despite the very low net fair value result.
In Q4, we continued to see robust levels of lending despite the slow markets. Mortgage lending was stable and corporate lending was up 1%. Our cost to income ratio was 42% excluding regulatory fees and the write-offs. We continued to have low net loan losses and our credit quality remained strong, as did our capital generation. Given our strong financial position and our full year results, our Board has proposed a dividend of €0.92 per share for 2023, a year-on-year increase of 15%....
Nordea Bank Abp (NRDBY) Q4 2023 Earnings Call Transcript