Nordic Banks Q1 2025 Results: NII Pressure Becoming More Broad-Based

Morningstar DBRS has released a commentary discussing the Q1 2025 results on four large Nordic banks (Swedbank, SEB, Nordea and Danske Bank). Summary highlights from the commentary include:

-- Compared to the previous year, profitability in Q1 2025 declined at most Nordic banks, as lower rates reduced net interest income. This was most visible in the Swedish banks' results because of the lack of hedging.

-- Fees and capital market related revenue lines continued to grow, driven by high asset valuations and higher customer activity, but not enough to offset the revenue pressure from lower net interest income.

-- Operating expenses trends were mixed, as wage inflation and targeted investments were partly offset by lower regulatory levies.

"Most banks reported an improvement in loan loss provisions as asset quality remained stable," said Sonja Förster, Senior Vice President, European Financial Institution Ratings. "While most Nordic banks expect the impact from potential U.S. tariffs to be manageable, banks have been cautious and mostly abstained from further releases of their management overlays."