* Bank repeats 2022 costs goal despite quarterly rise
* First quarter net profit at 788 mln euros
* Bank considers share buy-backs
* CEO dismisses concern of property bubble (CEO comments, share reax)
STOCKHOLM, April 29 (Reuters) – Nordea Bank on Thursday said it was on course to hit its financial targets for 2022 as the Nordic region’s biggest lender reported a boom in mortgages, growth of its assets under management and low levels of bad debt despite the pandemic.
After a decade of stagnation, Nordea 18 months ago unveiled a turnaround plan that targets a 10% return-on-equity and 50% cost-to-income ratio by the end of 2022 to be achieved through higher revenues and containing costs.
Nordea repeated its cost target for the year despite increased first quarter expenses as the bank was hit by adverse exchange rates.
Shares in the lender were up over 4% at 0900 GMT, outperforming the European banking index’s 0.8% gain.
“We have managed the pandemic very well, particularly at a time when business activity is so high,” Chief Executive Frank Vang-Jensen told Reuters by phone.
He dismissed concerns of a property bubble, saying the bank’s asset quality and customers’ repayment ability was strong, but current growth was not sustainable over the long term.
First-quarter net profit rose to 788 million euros ($956 million) from 460 million euros a year ago, beating the mean forecast of 632 million euros seen by analysts, Refinitiv data showed.
Loan loss provisions, a figure closely watched after the economic slump caused by the pandemic, fell to 52 million euros from a year-ago 155 million euros, exceeding a forecast of 116 million euros seen by analysts.
Fee and commission income rose to 827 million euros from 765 million euros a year ago, above the 802 million euros expected by analysts, as the bank grew assets under management by 33% to an all-time high of 372 billion euros.
Interest income, which includes income from mortgages, increased 9% to 1.21 million euros from 1.11 billion a year ago, just over the 1.19 billion seen by analysts.
Mortgage lending increased by 6% in the Nordic region, the bank said, spurred by a strong property market.
Total expenses increased to 1.32 billion from 1.25 billion a year-ago. Nordea repeated its cost target of 4.6 billion for the year, but said a boom in business activity made the figure challenging.
It saw opportunities for share buy-backs as a tool to distribute excess capital, it said, as authorities restrict dividends during the pandemic.
$1 = 0.8247 euros Reporting by Colm Fulton; Editing by Niklas Pollard, Edmund Blair and Barbara Lewis
