Finland’s most valuable and widely held publicly traded company, Nordea, saw a slight dip in profits last year, but signals of a reviving housing market offer a glimmer of optimism.
With over 300,000 shareholders in Finland alone, Nordea’s performance is closely watched. The bank’s full-year operating profit decreased by approximately four percent to €6.3 billion.
Despite the overall dip, the bank noted emerging signs of revitalization in the housing market.
A key metric for Nordea’s success, net interest income, fell nearly six percent year-over-year to €7.2 billion. Net interest income represents the difference between the interest a bank earns on its loans and the interest it pays on deposits.
When interest rates rose rapidly a few years ago, for example, mortgage rates followed suit more quickly than deposit rates. In 2023, Nordea’s net interest income increased by more than 30 percent.
Nordea benefits from its operations across all Nordic countries, where economic conditions and housing markets have generally outperformed Finland in recent years.
Interest rates have since begun to decline, but Nordea has managed to maintain a healthy net interest income thanks to hedges taken against changes in deposit rates. However, the benefits of these hedges are short-lived.
According to the Finnish Foundation for Share Ownership, Nordea consistently ranks as the most popular “people’s share” in Finland. The bank’s market capitalization is the largest on the Helsinki Stock Exchange, exceeding €58 billion.
Nordea’s share price has risen more than 40 percent over the past year.
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