Nordea's Q2 Earnings Maintain Attractive Shareholder Yield

Nordea Bank Abp reported Q2 earnings with a strong year-to-date performance, but its ADSs have been softer since March. The bank's shareholder yield is set to remain attractive.

Nordea Bank Abp has released its Q2 2025 financial report, highlighting a robust year-to-date performance. Despite challenging market conditions, the bank reported strong profitability and resilience, with a second-quarter return on equity of 16.2% [1]. This performance reflects Nordea's ability to navigate external pressures, such as trade tariffs and geopolitical tensions, which have led to significant financial market turmoil [1].

Key financial highlights include:
- Earnings per share (EPS): EUR 0.35, down 5% year-on-year.
- Operating profit: EUR 1.6bn, stable quarter-on-quarter.
- Total income: EUR 2.9bn, a 4% year-on-year decrease.
- Cost-to-income ratio: 46.1%, with amortised resolution fees included.
- Assets under management: EUR 437bn, up 9% year-on-year.
- Net loan losses and similar net result: EUR 21m reversal, a decrease of 13% year-on-year.

Nordea's strong capital position is evident in its CET1 ratio, which stood at 15.6% at the end of the second quarter, 1.9 percentage points above the regulatory requirement [1]. The bank's capital generation has enabled it to support lending growth and continue its share buy-backs. A new EUR 250m share buy-back programme was launched on 16 June and is expected to be completed by 30 September 2025 [1].

The bank's mortgage lending grew by 6% year-on-year, driven by organic growth in Sweden and the contribution from its recent acquisition in Norway [1]. Retail and corporate deposit volumes increased by 8% and 5%, respectively, while corporate lending was strong, up 5% year-on-year [1].

Nordea's ADSs have been softer since March, but the bank remains committed to its shareholder yield strategy. The bank's dividend policy stipulates a payout ratio of 60–70%, applicable to profit for the financial year [1].

Nordea's outlook for 2025 remains unchanged, with the bank expecting to deliver a return on equity of above 15% [1]. The bank's well-diversified business model and structurally improved profitability have positioned it to outgrow the market and continue delivering market-leading returns.

References:
[1] Nordea Bank Abp Half year financial report 17 July 2025 at 7.30 EET. https://www.nordea.com/en/press/2025-07-17/half-year-results-2025