Nordic Banks FY22 Results Driven by Strong NII Growth; Cost of Risk Remains Low

DBRS Morningstar has released a commentary discussing the FY22 results of the six large Nordic banks (Svenska Handelsbanken, Swedbank, SEB, Nordea, Danske Bank and Nordea). The banks reported strong results in 2022 mainly driven by significantly higher net interest income as a result of interest hikes by the central banks.

Key highlights include:

• Higher interest rates are compensating for the weaker operating environment, especially in Sweden.

• Asset quality remains robust and the cost of risk is still very low for the Nordic Banks even after model adjustments to account for a more uncertain economic outlook.

• The Nordic banks maintained very strong capital positions in 2022 with significant capital cushions against minimum capital requirements.

“We consider the Nordic Banks to be well positioned to navigate the more challenging operating environment in 2023, supported by strong revenue generation ability, robust asset quality metrics and ample capital cushions,” notes Maria Jesus Parra, Vice President, Global FIG at DBRS Morningstar.