Interim full year results published by Nordea suggest that although the Nordic banking group suffered a slip in profitability at the group level in 2017, the asset management business continued to grow following strong sales in recent years.
The profitability hit has been linked to ongoing investment costs necessitated by responding to regulation and digitalisation, combined with low volatility in capital markets – something that was particularly felt in the last quarter of the bank’s financial year, the results note.
Asset management products performed well, the results state, with “88% of all composites outperforming benchmarks over three months and 92% over three years.”
In the fourth quarter, income from AM activities was €289m, up 16% on the third quarter, and up 11% on the same quarter a year earlier. AM operating profit at €198m was up 20% on the previous quarter, and up 14% on the same quarter the previous year. Operating profit for the full year 2017 hit €703m, up 17% from €602m in 2016.
Net fee and commission income from AM activities reached €972m for the year, up 14% from €849m in 2016.
The continued growth necessitated employing more full-time staff in asset management: the number hit 742, up 12% from the previous year.
Assets under management were around €330bn at the end of the fourth quarter, of which some €61.5bn were in Nordic retail funds, €99bn were in private banking, €96bn in institutional sales and €74bn in life and pensions.
To read the full interim results click here: https://www.nordea.com/Images/33-244391/Interim%20Report%20Fourth%20Quarter%202017.pdf