Nordea Avoids Credit Turmoil, Affirms Outlook

Nordea Bank, the Nordic region's largest financial group, on Thursday posted a 13 percent drop in third-quarter net profit, which it said was due to a large capital gain in the previous year.

The Stockholm-based company reiterated its outlook for the year, citing its continued ability to keep the gap between costs and income growth at an expected level.

Nordea said net profit for the quarter came to 759 million euros ($1.08 million), down from the 871 million euros in the same period last year, which included a gain of 199 euros ($283.18) for the sale of a stake in International Moscow Bank.

Net interest income, the bank's main source of revenue, rose to 1.09 billion euros ($1.55 billion) in the three-month period, up from 979 million euros in the third quarter in 2006.

Nordea shares rose 1.9 percent to 108.6 kronor (11.81 euros; $16.81) in Stockholm.

Nordea's president and chief executive Christian Clausen said the bank's total income, combined with business volumes and the number of customers in prioritized areas "continues to increase according to our growth plans."

However, as a result of the macroeconomic outlook in general, he said the bank is expecting "slower growth in business volumes" in the medium term, but that this is expected to be offset by stabilized, or widened, lending margins.

In its outlook for the rest of the year, and including its other Russian banking operations, Nordea said it continues to expect a gap between its revenue and cost growth of between 2-3 percentage points.