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Nordea Bank (OTC) (NRDBY)
OTHER OTC:NRDBY
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Nordea Bank Abp
(OTC:NRDBY)
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Rating:70Outperform
Price Target:
$21.50
▲(12.51% Upside)
Action:ReiteratedDate:01/31/26
The score is driven primarily by resilient profitability and supportive earnings-call guidance/capital returns, offset by inconsistent cash-flow generation and high leverage risk. Technicals are moderately positive, and valuation looks favorable with a mid-range P/E and high dividend yield.
Positive Factors
Strong ROE
Sustained ROE above 15% demonstrates durable earnings generation and efficient capital deployment. This supports internal capital formation, enables continued dividends and buybacks, and signals competitive returns potential across the bank's retail and corporate franchises over the medium term.
Robust Capital Buffer (CET1)
A CET1 of 15.7% provides a meaningful cushion vs regulatory minimums, reducing regulatory and solvency risk. The capital headroom supports lending growth, strategic buybacks/dividends and absorption of potential credit or market shocks, bolstering long‑term financial resilience.
Growing Wealth AUM and Net Inflows
Record AUM and persistent net inflows indicate strong client trust and distribution capabilities, supporting recurring fee income and product cross‑sell. This structural shift toward wealth management diversifies revenue and improves long‑run fee resilience versus lending reliance.
Negative Factors
Rising Leverage
A higher, rising debt-to-equity ratio (~7.9 TTM) increases sensitivity to funding costs and macro shocks. Elevated leverage constrains balance‑sheet flexibility, raises refinancing and liquidity risk, and heightens the impact of credit losses on capital over the medium term.
Volatile, Negative Cash Generation
A swing to materially negative operating and free cash flow increases uncertainty about cash quality and internal funding. Persistent negative cash generation can force greater reliance on wholesale funding, limit reinvestment and shareholder returns, and complicate capital planning.
Net Interest Income & Margin Pressure
Structural NII pressure from policy rate cuts and intense mortgage competition (notably Norway) compresses net interest margins. Unless pricing power or mix shifts improve, sustained NII headwinds can limit earnings growth and make ROE targets harder to sustain over multiple rate/cycle scenarios.
Nordea Bank Abp (NRDBY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$64.06B
Dividend Yield5.3%
Average Volume (3M)95.51K
Price to Earnings (P/E)12.3
Beta (1Y)0.55
Revenue Growth-4.15%
EPS Growth-1.27%
CountryUS
Employees30,343
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.39
Shares Outstanding3,417,805,400
10 Day Avg. Volume267,205
30 Day Avg. Volume95,510
Financial Highlights & Ratios
PEG Ratio-3.32
Price to Book (P/B)1.72
Price to Sales (P/S)2.56
P/FCF Ratio-14.71
Enterprise Value/Market Cap3.32
Enterprise Value/Revenue10.53
Enterprise Value/Gross Profit24.09
Enterprise Value/Ebitda44.02
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Nordea Bank Abp Business Overview & Revenue Model
Company DescriptionNordea Bank Abp offers banking products and services in Sweden, Finland, Norway, Denmark, and internationally. It operates through Personal Banking, Business Banking, Large Corporates and Institutions, and Asset and Wealth Management segments. The Personal Banking segment provides various financial services to household customers through internet and mobile banking, over the phone, online meetings, and branch offices. The Business Banking segment offers payments, cash management, cards, working capital management, and finance solutions to corporate and personal customers. The Large Corporates and Institutions segment provides financing, cash management and payment, investment banking, and securities services, as well as capital market products to corporate and institutional customers. The Asset and Wealth Management segment offers investment, savings, and risk management solutions to high net worth individuals and institutional investors. This segment also offers life and pensions products and services. The company was founded in 1820 and is headquartered in Helsinki, Finland.
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 Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive picture: the bank delivered strong full-year profitability (ROE 15.5%), record AUM (+13% to EUR 478bn) and robust net inflows (EUR 6.5bn), continued cost discipline, very low credit losses (5 bps) and solid capital metrics (CET1 15.7%). Challenges include pressure on net interest income and margins from rate cuts and competition (notably in Norway), some country-specific credit and impaired asset movements, and near-term uncertainty around NII and a yet-to-be-quantified restructuring charge. On balance the achievements and strategic positioning materially outweigh the headwinds, with management maintaining constructive 2026 and 2030 targets.Q4-2025 Updates
Positive Updates
Strong Full-Year Profitability and ROE Target Delivered
Full-year 2025 return on equity of 15.5%, meeting the multi-year commitment and above the initial target (>13% then lifted to >15%). Q4 ROE was 14.4% (14.3% a year earlier).
Earnings Per Share and Operating Profit Growth
Q4 earnings per share EUR 0.34, up from EUR 0.32 a year earlier. Operating profit for Q4 increased 3% year-on-year to EUR 1.5 billion.
Business Volume and Deposit Momentum
Corporate lending grew 8% year-on-year; mortgage lending increased 1% year-on-year; total deposits up 1% with retail deposits up 6%.
Record Assets Under Management and Net Inflows
Assets under management rose 13% year-on-year to a record EUR 478 billion. Net inflows were EUR 6.5 billion for the quarter (Nordic channels EUR 4.8 billion, international EUR 1.7 billion).
Income Mix Strength and Markets Performance
Net fee and commission income up 3% year-on-year; net fair value result up 28% year-on-year driven by higher customer activity, FX and interest-rate hedging, and stronger treasury/markets performance. Secondary equities income up 26% year-on-year.
Cost Discipline and Efficiency Progress
Costs decreased 3% year-on-year in Q4; full-year operating expenses EUR 5.4 billion in line with guidance. Q4 cost-to-income ratio 46.2% (excluding regulatory fees) and full-year ratio 45%.
Very Strong Credit Quality and Low Losses
Net loan losses of EUR 49 million in Q4 (5 basis points), well below long-term expectation (~10 bps). Management judgment buffer reduced by EUR 17 million in the quarter.
Robust Capital Position and Shareholder Returns
CET1 ratio 15.7%, 1.9 percentage points above regulatory requirements. Board proposed dividend EUR 0.96 per share (up from EUR 0.94). Completed EUR 250 million buyback and launched new EUR 500 million program. Total shareholder return ~322% over the multi-year period (~26% p.a.).
Customer Satisfaction and Digital Achievement
Customer satisfaction scores increased by 4–10 index points across all four business areas. Achieved target for everyday banking to be met digitally by end-2025; digital app users and logins up (3% and 5% respectively).
Forward-Looking Targets and Strategy
Published 2026 outlook and 2030 ambition: target ROE >15% each year to 2030 and cost-to-income (ex regulatory fees) ~40–42% by 2030. Guidance for 2026: ROE >15%, cost-to-income around 45%.
Negative Updates
Net Interest Income Pressure
Net interest income decreased 5% year-on-year and 1% quarter-on-quarter as policy rate reductions in Sweden and Norway took effect. Group net interest margin was 1.57% in Q4 (1.59% prior quarter). Management expects Q1 2026 to be a quarterly trough and full-year NII flat to slightly down.
Flat Total Income and Market Pressure on Margins
Total income was flat year-on-year for the quarter. Competitive pressure, especially in mortgage markets and corporate lending, has constrained margin expansion and pressured mortgage margins.
Norway Personal Banking NII Decline and Intense Competition
Net interest income in Norway Personal Banking was down 11% quarter-on-quarter in local currency. Management highlighted intense competition and consolidation in Norway, weighing on margins and NII.
Selective Weaknesses in Business Areas
Personal Banking total income down 3% year-on-year; Asset & Wealth Management total income down 2% and net fee and commission income down 1% (mix shift to lower-margin products and demand for lower-risk/low-margin products). Brokerage and advisory income also lower due to weaker debt capital markets activity.
Country-Specific Credit and Impairment Signals
Finland showed higher retail and business credit charges (noted as heavier mix exposure and year-end catch-up). There were increases in impaired loans in large corporate segments in Sweden and Denmark, flagged as non-systemic but notable.
Management Judgment Buffer Release Pace
Management judgment allowance decreased by only EUR 70 million in Q4 vs larger releases in prior quarters, with only EUR 10 million of that an actual release — raising questions about timing (potentially more back-end loaded into 2026) though management maintains intent to utilize or release the ~EUR 300 million buffer over 2026.
Near-Term Cost-to-Income Visibility and Restructuring
2026 cost-to-income guidance around 45% (flat vs 2025) despite longer-term targets to improve annually; a restructuring charge is expected to be booked in 2026 but size/scope unspecified (management said lower than 2019 provision, to be excluded from KPIs).
Quarterly Variability and Day-Count Effects
Q1 2026 expected to face lower day count and absence of annual/semi-annual fees (approx. EUR 26 million in Q4), implying short-term quarter-on-quarter declines in NII and some fee lines.
Corporate Deposit Dynamics
Large corporate deposit volumes decreased 3% year-on-year, which management interprets as increased risk appetite by corporates but could also reduce low-cost funding.
Company Guidance
Nordea guided to a full‑year 2026 return on equity of greater than 15% and a cost‑to‑income ratio (excluding regulatory fees) of around 45% (FY2025 C/I excl. fees: 45%, Q4: 46.2%), while reiterating medium‑term targets to 2030 of ROE >15% each year (and “significantly higher” in 2030) and a C/I (excl. fees) of 40–42% by 2030. Management also signalled Q1‑2026 may be the quarterly NII trough (full‑year NII expected flat to slightly down), fee income upside if activity holds, cost growth of roughly 2–3% (FY2025 operating expenses €5.4bn), a restructuring charge to be booked in 2026 but “not material” (and below the 2019 provision, excluded from KPI guidance), CET1 at 15.7% (1.9pp above requirements), proposed dividend €0.96/share for 2025 plus a midyear 2026 dividend ≈50% of H1 net profit, a €500m buyback (to be completed by 8 May), and continued strong credit guidance (long‑term net loan losses ≈10bps; Q4 2025 was 5bps / €49m; management buffer now ~€276m).Nordea Bank Abp Financial Statement Overview
Summary
Solid profitability and ROE support the score (net income broadly stable and strong margins where provided), but it is held back by the weakest area—highly volatile and often negative operating/free cash flow—and structurally high leverage typical for banks.Income Statement
Revenue has been volatile, with a sharp decline in 2024 followed by a strong rebound in 2025 (annual revenue growth of 21.43%). Despite that choppiness, profitability has been consistently solid: net income has generally held in the ~€3.6B–€5.1B range over 2021–2025, and net profit margin has been strong where provided (about 37%–42% in 2022–2024). The main weakness is the uneven top-line trajectory year to year, which reduces visibility versus a steadier growth profile.74
Positive
Balance Sheet
The balance sheet is large and stable in size, with total assets rising overall (roughly €552B in 2020 to ~€654B in 2025). However, leverage is high: debt is ~€205B against ~€32B of equity in 2025 (and debt-to-equity is ~5.4–6.1x in 2020–2024), which is typical for banks but still a key risk factor in stressed conditions. Returns on equity have been healthy where provided (about 11%–16% in 2021–2024), but equity has been relatively flat while debt has crept up.67
Positive
Cash Flow
Cash generation is the weakest area due to large swings: operating cash flow was strongly positive in 2021–2022, but turned negative in 2020, 2023, and 2025, with free cash flow also negative in those years. Even in 2024, when cash flow was positive, free cash flow was modest relative to net income. Overall, the variability and multiple negative cash-flow years increase uncertainty around cash conversion and funding flexibility.41
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 21.83B | 12.07B | 24.02B | 12.83B | 10.41B |
| Gross Profit | 11.74B | 12.07B | 11.74B | 9.68B | 9.66B |
| EBITDA | 6.28B | 0.00 | 6.95B | 5.35B | 5.54B |
| Net Income | 4.84B | 5.06B | 4.93B | 3.59B | 3.83B |
Balance Sheet | |||||
| Total Assets | 654.35B | 623.36B | 584.70B | 594.84B | 570.35B |
| Cash, Cash Equivalents and Short-Term Investments | 45.15B | 50.64B | 52.53B | 62.70B | 47.90B |
| Total Debt | 205.09B | 197.31B | 191.05B | 190.28B | 183.79B |
| Total Liabilities | 621.93B | 590.92B | 553.48B | 563.44B | 536.85B |
| Stockholders Equity | 32.42B | 32.44B | 31.23B | 31.40B | 33.49B |
Cash Flow | |||||
| Free Cash Flow | -3.79B | 383.00M | -6.97B | 21.57B | 17.17B |
| Operating Cash Flow | -3.16B | 906.00M | -6.47B | 21.98B | 17.59B |
| Investing Cash Flow | -579.00M | -2.92B | -535.00M | -629.00M | -380.00M |
| Financing Cash Flow | -3.34B | -2.35B | -4.01B | -6.58B | -4.93B |
Nordea Bank Abp Technical Analysis
Neutral
19.11
Price Trends
19.36
Negative
18.28
Positive
16.70
Positive
Market Momentum
-0.01
Positive
38.83
Neutral
23.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NRDBY, the sentiment is Neutral. The current price of 19.11 is below the 20-day moving average (MA) of 19.65, below the 50-day MA of 19.36, and above the 200-day MA of 16.70, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 38.83 is Neutral, neither overbought nor oversold. The STOCH value of 23.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NRDBY.
Nordea Bank Abp Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $84.88B | 11.84 | 12.16% | 3.77% | 2.91% | 33.77% | |
74 Outperform | $94.62B | 12.49 | 22.50% | 9.77% | 11.82% | 3.41% | |
72 Outperform | $86.41B | 12.79 | 11.99% | 3.11% | 1.79% | 30.93% | |
70 Outperform | $64.06B | 12.35 | 15.34% | 5.30% | -4.15% | -1.27% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $78.90B | 15.00 | 10.47% | 3.19% | -20.94% | -18.71% | |
57 Neutral | $107.62B | 15.67 | 10.22% | 2.31% | -2.84% | 25.48% |
* Financial Sector Average
NRDBY
Nordea Bank Abp
18.78
6.18
49.02%
ITUB
Itau Unibanco
8.86
4.35
96.41%
LYG
Lloyds Banking
5.47
1.82
49.95%
MFG
Mizuho Financial
8.67
3.01
53.18%
PNC
PNC Financial
214.23
40.12
23.05%
USB
US Bancorp
54.63
11.49
26.64%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.