* Q4 op profit 1.01 bln euros vs avg forecast for 1.10 bln
* Targets 900 mln euros in cost savings through 2015
* Aims to raise dividend payout ratio this year and next
* Proposes 0.43 euro dividend per share, just below
* Shares down 0.9 percent
(Adds share price, CEO, analyst comments)
By Johan Ahlander and Mia Shanley
STOCKHOLM, Jan 29 Nordea will double
its target for cost savings as the Nordic region's biggest bank
by market value braces for a prolonged period of weak lending,
which had sent its fourth-quarter earnings below analyst
The bank, one of Europe's most strongly capitalised lenders,
said the outlook for the region was uneven, with lukewarm growth
in Finland and Denmark and a struggling housing market in Norway
contrasting with a more dynamic recovery in Sweden.
"In general, the upswing in Europe is slow - it will not be
financed very much by borrowing," CEO Christian Clausen said.
"We are adjusting to that, so we are taking out activity-related
Clausen said consumers were starting to spend more, but that
they were not borrowing more. Companies, he said, remained
cautious on investments and employment.
Nordea said it now aims to create 900 million euros in cost
savings from 2013 to 2015, up from a previous 450 million euros.
Nick Anderson, an analyst at Berenberg bank, said the plan
"They have a very good track record of delivering, so
delivery I wouldn't doubt. The interesting question to pose is:
Will this impact revenues?" he said.
Credit Suisse said in a note that the bank's plan to lower
its cost base by five percent by 2015 looked credible, saying it
implied a 4-6 percent upgrade to earnings forecasts for 2015.
Shares in Nordea fell 0.9 percent by 1152 GMT,
underperforming a modestly higher blue-chip Stockholm index
Nordea's earnings follow weaker-than-expected results from
Swedish rival Swedbank on Tuesday.
Handelsbanken and SEB report next week.
Nordic banks have been busy strengthening their balance
sheets, pulling out of riskier areas such as Poland and Russia
in order to focus on core markets, and have benefited from far
lower funding costs relative to peers.
Strong public finances in Sweden - with a top-notch AAA
investment rating - have made them especially attractive to
investors seeking shelter as the debt crisis played out in
Still, many investors who had hoped the well-capitalised
banks would start returning more capital through special
dividends, share buybacks or higher payout ratios may have to
wait a bit longer.
Regulatory uncertainty remains a concern, so banks are keen
to retain high capital buffers as they wait on authorities to
decide on countercyclical capital buffers and possibly higher
risk weights for mortgages.
Nordea laid the ground for higher dividends this year and
next, but said the impact of tougher regulatory requirements was
too uncertain for it to decide on its long-term target for
returning capital to shareholders.
It proposed a dividend of 0.43 euros per share for the year,
up 26 percent from a year ago but just missing analyst
Nordea's operating profit for the fourth quarter was 1.01
billion euros ($1.38 billion) compared with a mean forecast for
1.10 billion seen in a Reuters poll of analysts and a year-ago
($1 = 0.7319 euros)
(Reporting by Mia Shanley and Johan Ahlander; editing by Niklas
Pollard and Louise Heavens)