Nordea CEO 'Convinced' Bank Will Deliver After Investors Recoil

(Bloomberg) -- The chief executive officer of Nordea Bank Abp is asking investors to believe in his strategy after unveiling yet another set of results that drove down the lender’s stock.

Some of Nordea’s most influential shareholders have voiced anger over the bank’s failure to deliver top-line growth after years of focusing on cost cuts. On Tuesday, the biggest Nordic bank published first-quarter results that again disappointed the market, as net interest income lagged behind analyst estimates. The stock fell more than 4 percent.

CEO Casper von Koskull says that after years of restructuring, everything is now in place for Nordea to generate profit growth that will satisfy shareholders. That comes after the bank divested operations it deemed too risky and brought in robots to handle the work of 1,500 full-time staff.

“I’m pleased with what we have done,” von Koskull, who’s been CEO at Nordea since 2015, said in an interview on Tuesday. “Ultimately, we also need to show that we deliver on the bottom line and I’m convinced that will happen.”

Nordea’s failure so far to generate sustainable revenue growth has drawn criticism from its biggest shareholder, Sampo Oyj, as well as activist investor Cevian. The relationship appeared to grow tenser after fourth-quarter results showed that income was falling faster than costs. On Tuesday, Nordea reiterated its commitment to reducing its expenses as management tries to reassure the market that its high-stakes experiment with automation and reducing the scale of its business will pay off.

Von Koskull may have some breathing room before pressure from investors becomes unbearable. Sampo, which owns about 21 percent of Nordea, has signaled it expects to see a turnaround in three years. But Cevian, which according to the most recent filing has a 2.3 percent stake, is pushing for faster improvement after slamming fourth-quarter profits for being “way too low.”

Von Koskull says Nordea is on track to reduce its structural costs and is working hard on the top line. He says part of that is making sure the bank devotes more time to customer relations. He also signaled that there’s room for improvement, especially when it comes to households in Sweden, Denmark and Finland.

“We have had a healthy improvement in fee and commission, and fair value, which were really the weak lines in 2018,” von Koskull said. “In that sense, key figures are developing in the right direction, underlying revenue up and underlying costs down. I’m happy with the direction, now we just need more momentum.”

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