Good Q4 for Nordea; We Raise Our Fair Value Estimate to SEK 131

Fourth-quarter 2022 results were good for no-moat Nordea. Operating profit increased 26% to EUR 1.609 billion, mostly due to higher interest rates propelling net interest income up 31%, which more than offset 12% weaker net commission income. It also more than compensated for a 10% increase in operating expenses as Nordea absorbed inflation adjustments to its cost base and increased its investment into financial crime-prevention capabilities. Loan losses remained subdued at EUR 59 million or 7 basis points, signaling that credit quality still holds up well.