The Nordea Bank AB logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/File Photo, the Nordic region's biggest bank, on Monday reported a slightly bigger than expected increase in second-quarter operating profit as rising interest rates outweighed negative currency translation effects.
Operating profit at the Finnish lender grew year-on-year for a tenth straight quarter, by 26% to 1.72 billion euros , against a mean forecast of 1.70 billion in a Refinitiv poll of analysts."However, it is clear that the economic slowdown and interest rate increases have had a negative impact on our business volume growth, mainly in mortgages," Nordea said in a statement.
"Higher living costs and lower consumer confidence have been reflected in lower demand for housing loans and investment products." The bank said net commission income decreased by 6%, mainly due to subdued capital markets activity and lower savings income. Negative effects from the weak Norwegian and Swedish currencies also capped profit growth.
Nordea raised its guidance for return on equity this year to above 15% from a previous forecast of above 13%. In the second quarter, it was 18.4%.