Bloomberg News

Nordea Cost-Cutting Plan Signals 940 More Bank Jobs to Be Lost

January 30, 2013

Nordea Bank AB (NDA) Chief Executive Officer Christian Clausen signaled he still needs to cut as many as 940 more jobs at Scandinavia’s biggest lender to reach a goal of lowering headcount by at least 10 percent.

“We have reduced our staff by 8 percent, we have come far,” Clausen said in an interview with Bloomberg Television’s Francine Lacqua today. “From now on it’s more like becoming more efficient and thereby reducing staff where it’s possible. The number of manual transactions is going down. Our customers are using the Internet.”

The Nordic region’s biggest bank said today net income in the fourth quarter rose 7 percent after it booked 18 percent more in income from fees and commissions to its clients. Profit for the period reached 840 million euros ($1.13 billion), also after loan losses slipped 7 percent, the bank said.

The number of full-time employees at the bank dropped to 31,466 in the fourth quarter from 33,068 a year earlier, according to today’s report. “We will continue to increase cost efficiency by approximately 3 percent annually in order to largely maintain flat costs going forward,” the bank said.

Nordea’s total operating costs slipped 0.6 percent in 2012 from the year earlier, it said.

The bank plans to “reduce staff by about 2 to 3 percent more in the coming two to three years,” Clausen said. “Distribution is changing because customers are changing behavior.”

Lagging Rivals

The pan-Nordic bank, which is lagging behind its Swedish rivals Svenska Handelsbanken AB and Swedbank AB in boosting capital buffers, said today it managed to increase profit even as demand for banking services was “constrained” by a tough economic climate.

Nordea repeated its dividend policy and will pay out 44 percent of profit to shareholders. Swedish rival Swedbank, the second-best capitalized major lender in the European Union as of the third quarter, today raised its dividend payout ratio to 75 percent from 50 percent.

Nordea reported a core Tier 1 capital ratio -- a measure of financial strength -- of 13.1 percent of its risk-weighted assets for the end of 2012, up from 12.2 percent at the end of September. Swedbank’s core Tier 1 ratio was 17.4 percent.

Both exceeded the 10 percent minimum requirement that Sweden’s biggest banks will need to meet this year and also topped the 12 percent floor that becomes effective in 2015.

To contact the reporter on this story: Niklas Magnusson in Stockholm at

To contact the editor responsible for this story: Frank Connelly at

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