Asset management growth in focus as Nordea overall interims described as 'not satisfactory'
The asset management business of Nordea, which sits in the Asset & Wealth Management arm of the universal bank, had a relatively benign first half to 2019, in contrast to the overall group performance, which was described by group CEO Casper von Koskull as "not satisfactory".
According to Nordea AM's own figures, some 81% of its portfolios outperformed benchmarks over three years to the end of June, while distribution made gains over the period across all distribution channels.
Second quarter net flows hit €2.8bn, which was up on the first quarter, while the third party fund distribution channel accounted for some €2.1bn of this, at a time that, Nordea says, the European market was characterised by "outflows and a shift to passive". It highlighted a mandate with with John Hancock (https://www.investmenteurope.net/news/4002878/nordea-replaces-aberdeen-standard-investments-ar-sub-advisory-john-hancock ) which will be onboarded in the third quarter.
"Net fee and commission income increased 1% in the quarter and has grown steadily since the third quarter of 2018. Asset management commissions and corporate advisory fees had a positive development, while cards and payments declined," Nordea's results stated.
"Asset & Wealth Management attracted new assets for the second quarter in a row. AUM increased to €306.5bn by the end of Q2, up from €300.2bn in Q1, of which €3.8bn was net inflows, corresponding to 5% of assets under management annualised."
The bank overall has had a challenging period, as admitted by Koskull's comment on performance, although this is not true for the Asset & Wealth Management business, which was described as having "satisfactory" performance.
"Throughout Nordea, we are intensifying our efforts to increase business momentum and each business area has identified a number of initiatives to drive client value and revenue growth. Examples include investments in Private Banking in Norway and Sweden, the integration of Gjensidige Bank, new distribution channels within Asset Management and Wholesale Banking and actions to regain momentum on mortgages, where we are already starting to see results," the bank stated.
The Asset & Wealth Management business is focused on three areas; private banking (some 93,000 customers served by 67 branches in the Nordic region), asset management (responsible for actively managed funds and mandates for institutional clients), and Life & Pensions (offering pension, endowment and risk products).
While the bank reported a decrease of -8% in operating profie for the asset management business part of Asset & Wealth Management, compared to the same period last year, there was a positive 8% uplift in the AUM of institutional and third party distribution channel.
Koskull used the results statement to reconfirm that he is seeking to retire from his role by the end of 2020, and that the bank has started the process to find a successor.
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