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Nordea to cut thousands of staff, third quarter profit in line

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Nordea to cut thousands of staff, third quarter profit in line

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STOCKHOLM (Reuters) – Nordea <NDA.ST>, the Nordic region’s biggest bank by market value, said on Thursday it planned cut employees and consultant headcount by at least 6,000 in a bid to bring down costs after it posted a fall in quarterly earnings. Nordea said in a statement it would shed at least 4,000 of its 32,000 employees and approximately 2,000 consultants, generating a one-off cost of between 100 and 150 million euros to be booked in the fourth quarter. “It is time to enter the next phase of the transformation, in which we see that we can structurally bring down costs and increase efficiency,” CEO Casper von Koskull said. The bank reported an operating profit of 1.09 billion euros ($1.29 billion) for the third quarter, matching the mean forecast in a poll of analysts but below a year-ago 1.15 billion. The earnings report was the Nordic bank’s first since it announced it planned to move its headquarters to Finland from Sweden, sparking fierce criticism from a string of Swedish political leaders and labour unions. The move, aimed at cutting the cost of complying with Swedish regulations, is the first time since the 2008 financial crisis that a major bank has shifted its headquarters to avoid tougher rules. Total costs rose to 1.20 billion euros from 1.18 billion a year ago in the third quarter, lower than the expected 1.24 billion. But Nordea said it saw costs of 4.9 billion euros for the full year 2018, above its target of 4.8 billion. “We expect (that) to gradually decline to below 4.8 billion in 2021,” said von Koskull. Quarterly net interest income, which includes income from mortgages and loans to companies, rose to 1.19 billion euros from 1.18 billion a year ago, lower than the expected 1.20 billion. Commission income rose to 814 million euros from 795 million, falling short of the expected 843 million, and Nordea said it had not seen the usual pick-up in demand for corporate advisory services after the European summer. Nordea had a tier 1 capital ratio of 19.2 percent at the end of the third quarter, unchanged from the previous quarter. ($1 = 0.8457 euros)

(Reporting by Johan Ahlander; Editing by Niklas Pollard and Edwina Gibbs)
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