Nordea 1st quarter net profit rises by 3 percent on higher fee and commission income

Nordea Q1 net profit up 3 pct on higher fee income

STOCKHOLM — The Nordic region’s largest bank Nordea AB Wednesday said its first quarter profit rose by 3 percent, helped by higher fee and commission income.

The bank, based in Stockholm, said net profit for the first quarter climbed to euro642 million ($854 million) from euro626 million in the same period a year ago.

Its main source of revenue, net interest income, fell by 9 percent to euro1.23 billion ($1.64 billion) from euro1.36 billion as a result of the low interest rates in the Nordic region. However, net fee and commission income increased by 25 percent to euro475 million ($632 million) from euro381 million previously.

The bottom-line result was higher than analysts had expected, while net interest income was weaker than forecast. Nordea shares rose by 1.9 percent to 68.6 kronor ($9.5) in Stockholm trading.

Nordea Chief Executive Officer Christian Clausen said the bank has managed to increase its market share in home markets during the quarter without diluting its lending margins.

“Business confidence, especially among large companies, grew in the first quarter, and we have seen a pick up in corporate lending,” Clausen said in a statement. “Household lending also developed well.”

Nordea said it expects the macro-economic recovery to continue in 2010, but the development is still fragile and uncertainty remains.

The bank reiterated its forecast that risk-adjusted profit is expected to fall in 2010 compared to 2009, but said it now believes net loan losses will be lower in 2010 than in 2009.

It had previously forecast that loan losses “could remain at a high level” in the year to come.