Nordea Enhances Internal Allocation Framework for Improved Decision-Making

Nordea Enhances Internal Allocation Framework for Improved Decision-Making

(IN BRIEF) Nordea announces the update of its internal allocation framework at the onset of 2024, aimed at bolstering transparency, accountability, and decision-making efficacy in capital deployment and resource allocation. The revised framework aligns business area profitability metrics with the Group’s objectives, reallocates unallocated capital and costs, and implements a localized approach for tax and capital requirements. As a result, changes in income, costs, and capital allocation across business areas are expected. Nordea introduces a revised profitability metric measuring return on allocated equity and capital consumption. Detailed comparative information for quarterly and full-year 2023 business area results accompanies the announcement, available for review on Nordea’s website.

(PRESS RELEASE) HELSINKI, 26-Mar-2024 — /EuropaWire/ — Nordea has updated its internal allocation framework to drive increased transparency and accountability and to enable better decision-making in terms of capital deployment and resource allocation. This change does not impact the Nordea Group’s consolidated financial statements but affects the business area results across income, costs and capital.

From the beginning of 2024, Nordea has updated its internal allocation framework, which affects the business area results. The updated framework aims to provide further alignment of business area and Group profitability metrics and includes the allocation of a significant part of currently unallocated capital and cost to business areas. It will also enable better decision-making by implementing a local approach for tax and capital requirements, reflecting the true cost of conducting business in the different countries, instead of using Group averages for both.

This update results in changes to the income and costs recorded under the business areas. In addition, due to the updated capital allocation framework, Nordea is introducing a revised profitability metric for the business areas in order to better align with the Group’s return on equity. Going forward, business area profitability is measured as return on allocated equity and business area capital consumption is measured as allocated equity.

The comparative information for the quarterly and full-year 2023 business area results are attached to this release and available on our web pages.

We are a universal bank with a 200-year history of supporting and growing the Nordic economies – enabling dreams and aspirations for a greater good. Every day, we work to support our customers’ financial development, delivering best-in-class omnichannel customer experiences and driving sustainable change. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us at nordea.com.

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Ilkka Ottoila
Head of Investor Relations
+358 9 5300 7058

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press@nordea.com

SOURCE: Nordea