BankNordik: Reversals and costs were higher than expected in Q3 - Nordea

Both NII and NCI came in slightly better than expected in Q3. NII was 1% above our estimate while NCI landed 3% ahead of our estimate. Moreover, asset quality remained strong in the quarter with reversals coming in at DKK 12m versus our estimate of DKK 3m. Meanwhile, costs came in 5% above our estimate, led by increased employee costs during a period of transition. As expected, the investment portfolio was negatively impacted by the current market turbulence. Finally, net profit came in at DKK 20m, in line with our estimate. The Q3 report will not cause us to make any significant estimate revisions for the remainder of 2022. However, further rate hikes since our last report will likely lead to positive EPS revisions of 3-5% for 2023E-24E. We expect the BankNordik share to trade roughly flat today.

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