Nordea Strategic execution on track. Buyback in Q3.

Research evidence excerpt

Nordea Strategic execution on track. Buyback in Q3.

To % ch Cons.

strategy for EUR 600m in gross cost reductions by 2030 heavily centres on tech 12/26E 1.48 1.48 0 1.42

improvements and AI savings. We forecast H2 costs growing by 2.4% underlying 12/27E 1.56 1.54 -1 1.56

compared to 1.3% in H1 - still in line with its medium term plan. 12/28E 1.58 1.57 -1 1.65

Capital distribution delayed, not denied Johan Ekblom, CFA

Analyst

We were surprised by the lack of a buyback announcement in Q2. While there was some johan.ekblom@ubs.com

debate on the magnitude (Cons. EUR 250m vs. UBSe EUR 500m), we believe very few +44-20-7568 3580

people considered there would be an absence of a buyback altogether. This led to

Joshua Humphreysmultiple questions regarding capital allocation on the earnings call and potential priority

Associate Analyst

changes, with management noting that at this point in time they view buybacks as a less joshua.humphreys@ubs.com

effective use of capital than growth but reiterating the overall strategy. We do not view +44-20-7567 0385

this as a deviation from the plan. While there may be downside risk to consensus

expectations on buybacks for 2026, we believe it is more likely that the timing is (slightly)

delayed rather than a material change in magnitude. We expect a buyback to be

announced before the Q3 earnings.

Valuation: Trading at 11.0x 27E EPS and 2.0x TNAV for an expected ~16% ROTE

Compared to its own history, NDA is trading slightly cheaper relative to the sector but at

a premium on an absolute basis. We still believe it is offering the most attractive

combination of growth and profitability among Nordic large cap banks. We recognise

that share price upside is more limited given current absolute valuation, but see upside