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mttssn research · Nordic Deep Dive
Nordea Bank (NDA-SE.ST)
Financials · Largest Nordic universal bank (EUR) · LTM Q1 2026
Analysis date: 2026-06-09
Price at analysis: SEK 173.34
Method: mttssn_streamlined_v1
Conviction: MEDIUM
HOLD
Conviction: MEDIUM
The largest Nordic universal bank — pan-Nordic scale, ROE ~16%, CET1 15.7%, ~45% cost/income, near-zero losses — returning capital aggressively (6% dividend + very large buybacks + a planned mid-year dividend = a double-digit total shareholder yield). At 1.80x book / 2.09x tangible it sits ~5% above a normalized-ROE Gordon anchor (~EUR 15.2). HOLD; base EUR 15.5.
Return on Equity
16.1%
Cost of equity ~10.0%
Price / Book
1.80×
1.80x book / 2.09x tangible; normalized-ROE Gordon ~1.71x
Fair P/B (Gordon)
1.87×
(ROE−g)/(COE−g); g 3%
Price / Target
SEK 173 → SEK 169
-15% base; HOLD
Price / Earnings
11.2×
~11.2x earnings
P / TBV
1.82×
Price / tangible book
Economic Profit
+SEK 17,706M
Residual income +EUR 1.9bn; ROE ~16% vs 10% COE
Equity (book)
SEK 286.7B
CET1 15.7%; AT1 redeemed (clean common equity)
Thesis

Nordea is the largest Nordic universal bank, operating across Finland, Sweden, Norway and Denmark with pan-Nordic scale, a large deposit/mortgage base and leading positions. It earns a high ROE ~16% (LTM; FY2025 15.5%, normalized ~15%; ROTCE ~18.8%) at a ~45% cost/income ratio with near-zero credit losses, CET1 15.7% — residual income +EUR 1.9bn over a 10% cost of equity, a ~6pp value-creative spread. Capital return is exceptional: a 6% dividend plus very large buybacks (EUR ~900m FY2025, more in 2026) plus a planned mid-year dividend — a double-digit total shareholder yield.

On bank primitives it trades at 1.80x book, 2.09x tangible and 11.2x earnings. On a normalized 15% ROE the Gordon fair P/B implies ~EUR 15.2 (-4.6%); on the FY2025 ROE ~EUR 15.8 (~in line). So at ~EUR 16 it sits ~5% above the normalized anchor with P/TBV >2x — high quality + outstanding capital return, but limited margin of safety. Q1 2026 IFRS ROE (13.4%) was depressed by EUR 190m of 2030-strategy restructuring (underlying ~15.4%). HOLD.

Valuation · residual income (equity frame) & scenarios

Gordon fair P/B = (ROE-g)/(COE-g) with COE 10%, g 3%: a normalized 15% ROE -> ~EUR 15.2 (-4.6%); the FY2025 15.5% ROE -> ~EUR 15.8. Current 1.80x book, 2.09x tangible, 11.2x earnings, 6% yield + buybacks.

Base EUR 15.5 (~normalized anchor; capital return is the return); bull EUR 18 if ROE holds ~16%+ + the huge buyback continues; bear EUR 12.5 on NII compression / a Nordic credit cycle + a de-rate.

Market-implied ROE
17.4%
sustainable ROE the price already demands — vs 16.1% observed
Current → Fair P/B
1.80× → 1.87×
at a sustained 16.1% ROE, Ke 10.0%, g 3%
Excess-return premium
SEK 74 / sh
value above SEK 84.41 book from the +6.1pp ROE−Ke spread

The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 17.4% vs 16.1% currently earned; at a sustained 16.1% ROE the warranted P/B is 1.87× (SEK 158/sh, -9%).

Scenario24m targetImpl. ROEUpsideProb.Driver
BullSEK 17217%-1%30%ROE holds ~16%+; huge buyback continues
BaseSEK 14815%-15%45%~Normalized anchor; capital return is the return
BearSEK 11913%-32%25%NII compression / Nordic credit cycle + de-rate
Prob-weightedSEK 148-15%100%Scenario-weighted expected value

Sensitivity — fair value / share at Ke × ROE

Ke \ ROE10%14%18%22%26%30%34%
8.50%107169230292353414476
9.25%95149203257311365419
10.00% (base)84133181229277326374
10.75%76120163207251294338
11.50%70109149189228268308

Green = fair value above the current price of SEK 174.30. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.

Method & data. ROE 16.1% and book equity are observed (net income / total equity). Cost of equity 10.0% and terminal g 3% are assumptions, shown explicitly and overridable.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. Capital return

6% dividend + very large buybacks + a planned mid-year dividend = double-digit total yield.

2. Pan-Nordic scale

Leading positions across four Nordic markets; ~45% cost/income.

3. High ROE

ROE ~16% (ROTCE ~18.8%) — value-creative (+EUR 1.9bn residual income).

4. Fortress capital + low losses

CET1 15.7%, near-zero cost of risk.

Key risks
Conclusion

Nordea is the largest, high-ROE (~16%), fortress-capitalised Nordic universal bank with an exceptional double-digit total shareholder yield — but at 1.80x book / 2.09x tangible it sits ~5% above its normalized-ROE Gordon anchor. HOLD; base EUR 15.5.

Own it for the capital return + scale quality; the upside from here is the yield + buyback, not multiple re-rating.

Footnote evidence & sources

Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.

Adjustment / figureValueSourceWhy mttssn treats it this way
Net profit to shareholders (FY2025)4,840Group quarterly/full-year summaryFY2025 net profit for the period EUR 4,840m (vs 5,059m FY2024, -4%). Anchor for the LTM build.
Net profit to shareholders (LTM Q1 2026)4,850Group income statement summaryLTM = Q1 2026 1,244 + FY2025 4,840 - Q1 2025 1,234 = 4,850. Fully attributable to common (no AT1 in equity, no material NCI).
Net interest income (LTM)7,097Group income statement summaryCore bank revenue. LTM = 1,759 + 7,167 - 1,829 = 7,097. NII down ~4-5% YoY on policy-rate cuts; NIM 1.57%.
Net fee and commission income (LTM)3,298Group income statement summarySecond core revenue line. LTM = 842 + 3,249 - 793 = 3,298. Fees +6% YoY in Q1 2026 on higher AuM (EUR 464bn) and activity.
Total operating income (LTM)11,679Group income statement summaryLTM = 2,910 + 11,743 - 2,974 = 11,679. Resilient despite NII headwind, helped by fees; net fair value result weak in Q1 (markets/Middle East).
Operating profit (LTM)6,343Group income statement summaryPre-tax profitability proxy for a bank. LTM = 1,634 + 6,316 - 1,607 = 6,343. Q1 2026 op profit boosted by a +99 loan-loss reversal, offset by EUR 190m restructuring in costs.
Total common equity (31 Mar 2026)30,092Balance sheet - GroupLatest-quarter equity snapshot is the bank invested-capital base. Down from 32,419 at 31 Dec 2025 on the 2025 dividend accrual and buybacks. No AT1 holders line (redeemed 2024); fully common equity.
Total equity (31 Dec 2025)32,419Balance sheet - GroupFY2025 year-end equity. AT1 holders line is '-' (zero) at year-end vs 750 a year earlier, confirming the AT1 redemption; reported equity is clean common equity.
Intangible assets (31 Mar 2026)4,163Balance sheet - Group, AssetsTotal intangibles EUR 4,163m deducted from common equity to reach tangible common equity 25,929 for ROTCE / P-TBV. Goodwill/other split not disclosed in interim report (Annual Report Note only).
Return on equity (FY2025, reported)0.155Ratios and key figures - GroupReported full-year RoE (with amortised regulatory fees) 15.5%; ROTE 17.8%. Bank return measure; supports normalized through-cycle 15.0% for the Gordon anchor.
Return on equity (Q1 2026)0.154Summary of the quarter / Ratios (excl. items affecting comparability)Underlying Q1 2026 RoE 15.4% (vs 15.7% a year ago). IFRS reported RoE INCLUDING items was 13.4% due to EUR 190m restructuring costs — earnings-quality caveat noted.
Common Equity Tier 1 ratio (CET1)0.157Summary of the quarter / capitalRegulatory capital strength. CET1 15.7% (Q1 2026 and FY2025), 1.9pp above the current regulatory requirement; Tier 1 17.7%, total capital ratio 20.4%.
Cost-to-income ratio (Q1 2026)0.455Summary of the quarter / RatiosC/I 45.5% (excl. regulatory fees, ex-items) Q1 2026 vs 43.7% a year ago; FY2025 45.0%. Targeting ~45% in 2026 and 40-42% by 2030. Higher than Handelsbanken's ~40% but competitive for a universal bank.
Net loan loss ratio (Q1 2026)-0.001Ratios and key figures - GroupNet loan loss ratio -10bp in Q1 2026 (a NET REVERSAL) driven by the EUR 160m release of the COVID management-judgement buffer; FY2025 +1bp. Ex-release Q1 cost of risk was +6bp. Strong credit quality, long-term expectation ~10bp.
Shares registered / own shares (31 Mar 2026)3,397Statement of changes in equity, footnote 1Total shares registered 3,412m less 15.1m own shares = 3,396.9m outstanding; used for BVPS, P/B, P/E and market cap. Share count falling on buybacks (3,491m a year earlier).
Equity per share (31 Mar 2026)8.85Ratios and key figures - Group (incl. items affecting comparability)Report's stated equity per share EUR 8.85 (31 Mar 2026); matches our computed BVPS 8.859 (equity 30,092 / 3,396.9m shares). Confirms the equity and share-count inputs.
Dividend per share FY20250.96Summary of the quarter / Board proposalOrdinary dividend EUR 0.96/share for 2025 (vs 0.94 for 2024), paid April 2026; 60-70% payout policy. Plus a planned mid-year 2026 dividend (~50% of H1 net profit, max EUR 3bn).
Share buyback (FY2025)896Statement of changes in equity, footnote 2Buyback EUR 896m in FY2025 (vs 372m in 2024) and EUR 380m in Q1 2026, recorded as a reduction in retained earnings. EUR 500m programme launched Q4 2025, completed 20 April 2026. Very large capital return on top of the dividend.
Diluted EPS (LTM rolling 12m)1.42Ratios and key figures - Group (excl. items)Report's own rolling-12m underlying EPS EUR 1.42 (reported IFRS 1.37); matches our computed LTM EPS 1.43 (net profit 4,850 / 3,396.9m shares). Drives P/E ~11.2x.
Analysis history

How the mttssn view has evolved — each prior dated note is preserved.

Quality · Buffett tenets12 / 15
Understandable business
Nordea — the largest Nordic universal bank (Finland/Sweden/Norway/Denmark); reports in EUR; legible.
Durable moat
Wide: pan-Nordic scale across four markets, a large deposit/mortgage base + leading market positions.
Able & honest management
Disciplined, exceptional capital return (large buybacks + high dividend), efficient (C/I ~45%).
Financial strength
CET1 15.7%, low cost of risk, ROE ~16% — high quality + value-creative (+EUR 1.9bn residual income).
Margin of safety
Limited: 1.80x book / 2.09x tangible, ~5% above a normalized-ROE Gordon anchor; double-digit total shareholder yield.