BankNordik: Good cost savings, while income remains soft - Nordea
Costs came in 7% below our estimate in Q2 2020, and hence costs were once again a positive surprise. This was mainly driven by lower staff costs and other expenses. Total income remained under pressure in this quarter with a 3% miss, as both fee income and other income disappointed.
Lending growth was a tad below our estimate, but this was offset by slightly higher deposit margins than expected. Net interest income was hence in line with our estimate. In Q2 2020, BankNordik quickly returned to reversals of loan loss provisions, which stresses its solid asset quality.
We lift our 2020E adjusted EPS by 6%, while we lower our 2021E-22E adjusted EPS by ~2%. Based on our new estimates, our Gordon growth model-based fair value range is DKK 104-126 (previously DKK 107-129)