Nordic Banks 2024 Results: Swedish Lenders Feel the Impact of Interest Rate Cuts

Morningstar DBRS has released a commentary discussing the Q4 2024 results on four large Nordic banks (Swedbank, SEB, Nordea and Danske Bank). Summary highlights from the commentary include:

-- Overall, profitability remained high at Nordic banks in 2024, but rate cuts started to have an adverse impact on net interest income of Swedish banks.
-- Fees and revenue lines related to capital markets were strong in 2024, driven by high asset valuations.
-- Operating expenses were still elevated at some banks but are generally on a downward sloping trend. Cost of Risk was stable to lower.

"For 2025, we expect a decline in profitability, albeit still at high levels, driven by further pressure on net interest margins." said Sonja Förster, Senior Vice President, European Financial Institution Ratings. "This is mitigated by resilient fee income and lower expense growth, while we expect credit costs to remain stable." she continued.