Finnish bank Nordea reported a 26% rise in second quarter operating profit, as higher interest rates boosted revenue despite negative effects from weak Nordic currencies.
Nordea's operating profit for the quarter grew to €1.72 billion, against analyst estimates of €1.70 billion. The double-digit increase marked the bank's tenth straight quarter of profit growth.
Net interest income jumped 40% to €1.83 billion, helped by soaring interest rates in the Nordic region over the past year. However, weakening Nordic currencies like the Swedish crown and Norwegian krone capped overall profit growth.
While mortgage lending volumes slowed due to higher costs and lower demand, Nordea said corporate lending continued to grow, especially in Norway and Sweden.
The bank raised its return on equity guidance for 2022 to above 15% from over 13% previously. Its second-quarter return on equity stood at 18.4%.
Analysts at JPM said the results were a "slightly better-than-expected" showing and a "positive read across for the Nordic peers yet to report," though they noted Nordea's relatively higher exposure to Finland, a smaller market.
