(Reuters) -Nordea Bank reported first-quarter operating earnings above market estimates on Wednesday, as higher income and lower expenses and loan losses compared to the previous quarter boosted the Nordic region’s biggest lender.
The Finnish bank said that while Nordic mortgage markets remained muted, there were further signs of a gradual recovery, with increasing demand for new loan promises.
Mortgage lending grew by 6% in the first three months of 2025, driven by the acquisition of Danske Bank’s personal customer and private banking business in Norway, which it closed in November. Excluding this, mortgage lending was stable.
Nordea CEO Frank Vang-Jensen said that international trade tensions and geopolitical challenges had considerably increased uncertainty in the markets.
“Still, we continue to see lower inflation and interest rates, which should support higher lending and investment activity when confidence returns,” he added in the statement.
The lender’s operating profit fell 9% year-on-year to 1.61 billion euros ($1.83 billion), but rose 10% from the fourth quarter, beating the average estimate of 1.54 billion euros from analysts polled by LSEG.
Net interest income, a key metric for measuring banks’ income from lending and deposits, was 1.83 billion euros in the quarter and beat analysts’ forecast of 1.79 billion euros.
The interest income beat was mainly due to a positive deposit hedge contribution and its treasury operations, which significantly offset substantially weaker margins, J.P.Morgan analysts said in a note to investors.
Nordea reiterated that it expected its return on equity to stay above 15% this year.
The bank’s shares were marginally lower at 0819 GMT.
($1 = 0.8814 euros)
(Reporting by Elviira Luoma in Gdansk, editing by Milla Nissi)
