January 25, 2018 / 7:22 AM / a year ago

UPDATE 1-Nordea Q4 profit lags estimate, raises dividend

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STOCKHOLM, Jan 25 (Reuters) - Nordea, Nordic region’s biggest banking group, reported on Thursday a steeper-than-expected fall in fourth-quarter earnings, but said it would raise its dividend marginally more than forecast for 2017.

Operating profit in the quarter fell to 796 million euros ($991 million) from 1.25 billion a year ago, below an average forecast of 900 million euros in a Reuters poll of analysts, the company said.

“We are not satisfied with the development in profit during the latter part of 2017,” Nordea said in a statement.

Nordea said low market volatility, reduced exposure to the Russian market, shipping and oil-related services had dented earnings. The result was also impacted by the deconsolidation of its Baltic operations, where Nordea has merged with Norway’s DNB .

The company said it was confident its net profit would grow this year, and it expected to see slightly higher revenues, lower costs and a stable credit quality.

The bank raised its proposed dividend to 0.68 euro per share from 0.65 euro last year and slightly higher than the 0.67 euro forecast by analysts. The bank’s ambition is to achieve a yearly increase in dividend.

Net interest income, which includes income from mortgages and loans to companies, came in at 1.11 billion euros compared with 1.21 billion a year ago, lower than the expected 1.15 billion, while commission income also missed analysts’ expectations.

Total costs rose to 1.36 billion euros from 1.23 billion a year ago, slightly less than the 1.38 billion seen by analysts.

$1 = 0.8034 euros Reporting by Johan Ahlander, Editing by Niklas Pollard and Sherry Jacob-Phillips

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