Nordea Bank Abp (NRDBY) AI Stock Analysis

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Nordea Bank Abp

(OTC:NRDBY)

79Outperform

Nordea Bank Abp's stock is rated favorably due to strong financial growth, attractive valuation, and positive technical indicators. However, challenges in cash flow stability and specific earnings call concerns temper the outlook.

Nordea Bank Abp (NRDBY) vs. S&P 500 (SPY)

Market Cap

$39.10B

Dividend Yield4.19%

Average Volume (3M)362.01K

Price to Earnings (P/E)7.2

Beta (1Y)0.51

Revenue Growth12.29%

EPS Growth4.54%

CountryUS

Employees30,157

SectorFinancial

Sector Strength82

IndustryBanks - Regional

Share Statistics

EPS (TTM)1.56

Shares Outstanding3,490,888,000

10 Day Avg. Volume65,758

30 Day Avg. Volume362,012

Financial Highlights & Ratios

PEG Ratio1.58

Price to Book (P/B)N/A

Price to Sales (P/S)4.03

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Nordea Bank Abp Business Overview & Revenue Model

Company DescriptionNordea Bank Abp is a leading financial services group in the Nordic region, providing a broad range of banking services to personal and corporate customers. Headquartered in Helsinki, Finland, Nordea operates across various sectors including retail banking, wholesale banking, wealth management, and insurance. The bank delivers its services through a comprehensive network of branches and digital platforms, aiming to provide innovative financial solutions tailored to meet the diverse needs of its clientele.

How the Company Makes MoneyNordea Bank Abp generates revenue through multiple streams, primarily from interest income on loans and advances to customers and institutions. The bank earns fees and commissions on services such as asset management, payment processing, and financial advisory services. Additionally, Nordea makes money from trading activities, including foreign exchange and securities trading. The bank's wealth management division contributes to earnings through investment management fees. Nordea also benefits from strategic partnerships and collaborations that enhance its product offerings and market reach. The bank focuses on digital banking solutions to improve operational efficiency and customer experience, which further drives profitability.

Nordea Bank Abp Financial Statement Overview

Summary

Nordea Bank Abp shows strong revenue and profit growth with a solid equity base and reduced leverage risk. However, cash flow volatility may pose risks. Income and balance sheet metrics are strong, but stable cash generation needs focus.

Income Statement

Very Positive

Nordea Bank Abp has demonstrated strong revenue growth, with a notable increase from €8.49 billion in 2020 to €12.07 billion in 2024. The net profit margin has been robust, particularly in 2024 with a margin of 41.9%, reflecting efficient cost management and profitability. However, EBIT margin data is unavailable for 2024, which slightly limits the analysis. Overall, the income statement indicates a positive growth trajectory and strong profitability.

Balance Sheet

Positive

The balance sheet shows a strong equity base with equity increasing from €31.4 billion in 2019 to €32.4 billion in 2024, and a healthy equity ratio of 5.2% in 2024. The absence of total debt in 2024 significantly improves the financial stability and reduces leverage risk. However, the overall equity ratio remains relatively low due to the high asset base typical in the banking industry. Return on equity is impressive at 15.6% in 2024, demonstrating effective utilization of shareholders' funds.

Cash Flow

Positive

The cash flow statement reveals volatility, with a significant recovery in operating cash flow from negative in 2023 to €906 million in 2024. The free cash flow has also turned positive in 2024, indicating improved liquidity and operational efficiency. However, the fluctuations in free cash flow over the years suggest potential risks in cash flow stability. The operating cash flow to net income ratio is low for 2024, indicating potential challenges in converting income into cash.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
12.07B	11.74B	9.75B	9.68B	8.49B
	Gross Profit
12.07B	11.90B	9.75B	9.68B	8.49B
	EBIT
0.00	6.88B	7.92B	4.94B	2.96B
	EBITDA
0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
5.06B	4.93B	3.59B	3.83B	2.27B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.64B	51.36B	62.70B	49.89B	39.20B
	Total Assets
623.36B	584.70B	594.84B	570.35B	552.16B
	Total Debt
0.00	188.27B	190.28B	183.66B	182.48B
	Net Debt
-50.64B	-52.53B	127.58B	133.77B	143.28B
	Total Liabilities
590.92B	553.48B	563.44B	536.85B	518.42B
	Stockholders Equity
32.44B	31.23B	31.40B	33.49B	33.73B
Cash Flow		Free Cash Flow
383.00M	-6.97B	21.57B	17.17B	-1.83B
	Operating Cash Flow
906.00M	-6.47B	21.98B	17.59B	-1.34B
	Investing Cash Flow
-2.92B	-535.00M	-629.00M	-380.00M	-1.01B
	Financing Cash Flow
-2.35B	-4.01B	17.86B	-4.93B	-2.65B

Nordea Bank Abp Technical Analysis

Technical Analysis Sentiment

Negative

Last Price11.15

Price Trends

50DMA

12.55

Negative

100DMA

11.72

Negative

200DMA

11.49

Negative

Market Momentum

MACD

0.07

Positive

RSI

46.77

Neutral

STOCH

3.78

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NRDBY, the sentiment is Negative. The current price of 11.15 is below the 20-day moving average (MA) of 12.91, below the 50-day MA of 12.55, and below the 200-day MA of 11.49, indicating a bearish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 46.77 is Neutral, neither overbought nor oversold. The STOCH value of 3.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NRDBY.

Nordea Bank Abp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NRDBY	79 Outperform	$39.10B	7.17	16.39%	4.19%	12.29%	4.54%
ITUB	76 Outperform	$52.46B	8.24	20.84%	7.36%	-7.01%	15.18%
LYG	76 Outperform	$50.07B	10.55	9.95%	4.36%	36.29%	-19.79%
PNC	73 Outperform	$60.47B	11.12	11.10%	4.16%	7.24%	7.51%
MFG	71 Outperform	$50.43B	9.30	8.56%	2.70%	13.63%	27.77%
USB	70 Neutral	$57.38B	9.73	11.00%	5.41%	5.59%	15.52%
Sector *	64 Neutral	$12.70B	9.08	9.19%	4.89%	16.29%	-8.64%

* Financial Sector Average

Performance Comparison

NRDBY

Nordea Bank Abp

11.38

-0.09

-0.78%

ITUB

Itau Unibanco

5.24

-0.45

-7.91%

LYG

Lloyds Banking

3.32

0.81

32.27%

MFG

Mizuho Financial

4.38

0.48

12.31%

PNC

PNC Financial

149.76

-5.90

-3.79%

USB

US Bancorp

36.40

-5.57

-13.27%

Nordea Bank Abp Earnings Call Summary

Earnings Call Date: Jan 30, 2025 | % Change Since: -4.21% | Next Earnings Date: Apr 16, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Nordea's strong financial performance, growth in assets under management, and successful strategic acquisitions, contributing to a positive outlook. However, there were challenges such as a decline in net interest income and specific loan losses in certain segments, which were notable concerns.

Highlights

Strong Financial Performance

Nordea reported a full-year income increase of 3% for 2024, with a return on equity exceeding 16% for the second consecutive year.

Q4 Income Growth

Total income for Q4 increased by 1% year-on-year, driven by an 8% rise in net fee and commission income, and higher net insurance and net fair value results.

Asset Under Management Growth

Assets under management grew by 11% in Q4, supported by robust net flows of EUR8.5 billion.

Improved Cost Efficiency

The cost-to-income ratio improved to 48.9% in Q4 from 50.6% a year earlier.

Stable Credit Quality

Net loan losses were EUR54 million or 6 basis points, reflecting continued solid credit quality.

Successful Acquisition

The acquisition of Danske Bank's Norwegian business boosted Nordea's market share in Norway from 11% to 15%.

Dividend Increase

The Board proposed a dividend of EUR0.94 per share for 2024, up from EUR0.92 in 2023.

Recognition and Awards

Nordea was named Sweden's Bank of the Year by Privata Affarer and recognized as the best private bank in Sweden and the Nordics by Professional Wealth Management.

Lowlights

Decline in Net Interest Income

Net interest income decreased by 5% year-on-year in Q4 due to lower deposit margins in a declining rate environment.

Market Making Losses

Market Making was negative due to high volatility in connection with the U.S. election.

Specific Loan Losses

Increased loan losses in Retail Banking, Finland, and Business Banking in Denmark were noted, driven by a few individual corporate circumstances.

Challenges in Norway

The Norwegian loan book acquired was smaller than expected due to aggressive market competition before the acquisition.

Company Guidance

In the call, Nordea provided detailed guidance on various metrics for the fourth quarter and full year 2024. The company reported a 3% increase in full-year income, with a return on equity exceeding 16% for the second consecutive year. In the fourth quarter, total income rose by 1% year-on-year, driven by an 8% increase in net fee and commission income and higher net insurance and net fair value results, while net interest income decreased by 5%. Operating profit increased by 4% to EUR 1.5 billion, and the return on equity was 14.3%, up from 14.1% in Q4 2023. Lending and deposit volumes grew, supported by the acquisition of Danske Bank's Norwegian business, with mortgage lending increasing by 6% year-on-year. The cost-to-income ratio improved to 48.9% from 50.6% a year earlier, and net loan losses were EUR 54 million. The CET1 ratio stood at 15.8%, 2.2 percentage points above the regulatory requirement. The Board proposed a dividend of EUR 0.94 per share for 2024, a 2% increase from 2023. For 2025, Nordea expects to maintain a return on equity above 15% and anticipates modest cost growth of about 2% to 2.5%.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.