Nordea Q3 earnings miss estimates as loan losses and rate volatility weigh

Nordea's third-quarter earnings fell short of expectations, with operating profit declining 4% to €1.54 billion, below analyst consensus of €1.57 billion. Total operating income grew 2% to €2.97 billion, also missing projections of €3 billion. Diluted earnings per share were €0.35, down from €0.36 the previous year. Net interest income increased by 1% to €1.80 billion, as higher lending volumes and better deposit margins were partially offset by reduced lending margins.

However, the net fair-value result dropped 19% to €198 million, primarily due to significant interest-rate volatility late in the quarter. Net loan losses totaled €74 million, up from a €19 million net recovery in the prior year, exceeding the €66 million expected by analysts, which equated to seven basis points of lending and remained within Nordea's anticipated range of around 10 basis points.

Costs, excluding regulatory fees, remained flat after adjusting for foreign exchange effects, despite salary inflation and higher amortization being offset by cost management. Nordea's cost-to-income ratio, excluding regulatory fees, stayed at 45%, slightly unchanged from a year earlier, while return on equity declined to 15.1% from 15.8%.

The bank maintained its guidance for 2026, expecting return on equity to stay above 15% and a cost-to-income ratio of 44% to 45%, excluding regulatory fees. CEO Frank Vang-Jensen stated that the company entered the fourth quarter with solid business momentum, but cautioned that rising market interest rates could negatively impact consumer confidence in the coming months.