Nordea aims for a return on equity above 13% in 2025

The Nordea Bank AB logo is seen at the SIBOS banking and finance conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren/File Photo

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HELSINKI, Feb 3 (Reuters) – Nordea Bank (NDAFI.HE) unveiled more ambitious profitability targets on Thursday after the Nordic region’s biggest lender reported better-than-expected fourth-quarter earnings.

The Helsinki-based bank is now targeting a return on equity (RoE) above 13% for 2025 and has raised its 2022 target to above 11% from 10% as it benefits from a continued boom in mortgage lending and growth in assets under management.

“I am pleased that we exceeded our 2022 financial targets a year ahead of schedule and that all of our businesses met their respective targets,” chief executive Frank Vang-Jensen said in a statement.

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“Our mortgages grew by 6%, SME (small and medium-sized business) loans by 6% and assets under management… by 17%, reaching all-time highs.”

Nordea catches up with Handelsbanken (SHBa.ST) on its profitability targets, the Swedish bank reported an RoE of 11.5% in October for the first three quarters of 2021 and a RoE of 12.4% for the third trimester.

Its Danish counterpart Danske Bank (DANSKE.CO) has a RoE target of 8.5-9% for 2023. read more

Nordea’s fourth-quarter net profit rose to 1.02 billion euros ($1.15 billion) from 725 million a year ago, beating analysts’ average forecast of 949.1 million, the data shows. from Refinitiv.

Nordea’s board has proposed a dividend of around 0.69 euros per share for 2021, up 77% from 0.39 euros per share for 2020, the company said.

($1 = 0.8851 euros)

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Reporting by Anne Kauranen; Editing by Clarence Fernandez, Shailesh Kuber and Carmel Crimmins

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