* Q1 op profit 1.11 bln euros vs 1.09 bln forecast
* Sees pick-up in corporate advisory business
* Says in low-rate environment still focused on cost cuts
* Shares rise 3 percent, outperform wider Stockholm bourse
(Rewrites first paragraph, adds CEO, analyst comments, shares,
By Mia Shanley
STOCKHOLM, April 29 Nordea Bank AB
posted forecast-beating first-quarter earnings on the back of a
strong performance in its corporate advisory business, saying on
Tuesday it saw further growth in activity by companies in its
home Nordic markets.
Shares in the Nordic region's biggest lender were up 3.1
percent at 93.4 Swedish crowns by 0855 GMT, outperforming the
broader Stockholm blue-chip index and trading not far
from a record high of 94.05 crowns set earlier this month.
Analysts see Nordea and other Nordic banks as offering
relative stability during uncertainties over factors such as the
tensions between Russia and Ukraine.
Equally, buoyant equity markets and returning corporate
confidence have led to a flurry of stock market listings and
deals in recent months, and Nordic banks are expected to benefit
from a pick-up in activity this year.
"Companies are taking in equity, they are refinancing their
balance sheets, taking advantage of the favourable conditions in
the bond market, and they are also filling up gaps in their
activity in terms of buying companies," Nordea Chief Executive
Christian Clausen told Reuters.
"We see quite a few Nordic companies doing acquisitions
outside of Sweden, even outside Europe actually, and thereby
strengthening their business models," Clausen said.
Nordea's first-quarter operating profit rose 6 percent to
1.11 billion euros ($1.5 billion) compared with a mean forecast
for 1.09 billion seen in a Reuters poll of analysts.
The bank, which has been grabbing market share from the
region's usual go-to corporate bank SEB, saw a 13
percent rise in net commissions and fees - above forecasts - as
demand for investment banking services boosted income.
Recent deals which Nordea has been involved in include the
purchase of a 26 percent stake in Danish state-owned oil and gas
group Dong Energy by Goldman Sachs and two
pension funds, as well as the stock market listings of Danish
companies ISS and OW Bunker.
Still, Clausen was cautious about the road ahead, saying
loan demand remained subdued and interest rates were at very low
levels, pressuring the margin between what banks earn on loans
and pay in interest.
A focus on keeping costs down have helped most Nordic banks
reach double digit profitability, putting them well ahead of
their European peers, and Nordea said it would continue to focus
on cost cuts to meet targets to create 900 million euros in
savings and lift profitability to 13 percent by 2015.
Asked if reaching that profitability target meant more job
cuts were in the works, Clausen said: "We are going to come back
to that after Q2. Of course we are reducing the number of staff.
We have done that in the past three years and we are going to
continue in the coming years as well."
Nordea shares are up almost 8 percent so far this year
compared with a near 3 percent rise in the wider STOXX Europe
600 Banks index.
Still, a cloud of uncertainty for some Nordic banks is the
situation in Russia and Ukraine, something which both SEB and
Swedbank - large players in the Baltic region - have
Nordea has a smaller exposure to the Baltics and a 1.8
percent lending exposure to Russia, where it said it had seen
minimal impact since sanctions were targeted to a limited number
Nordea is the third Swedish bank to report quarterly
earnings, following SEB's stronger-than-forecast results as it
got a boost from stronger corporate business and Swedbank's
largely in-line earnings.
Handelsbanken reports earnings on Wednesday.
($1 = 0.7319 euros)
(Additional reporting by Johan Ahlander, Editing by Kim Coghill
and David Holmes)