Performance evaluering af Nordea Bank Danmark i perioden 2004-2012: Et pengeinstitut, der kan levere gode resultater i dårlige tider?

Lasse Peter Lorentzen

Student thesis: Master thesis

Abstract

When the Subprime mortgage crisis started in 2007 it was the beginning of an international financial crisis. This financial crisis showed to have consequences in a scale which has not been experienced since the great depression in the 1930´s. The financial crisis had especially a big impact on banks and led to many unexpected bankruptcies. In general the Danish banking sector was highly marked by the financial crisis, but not all banks were affected in the same degree. This meant that, while many banks had to file in bankruptcies, it was possible for the two largest banks in Denmark, Danske Bank and Nordea Bank Danmark, to maintain positive returns on equity during the financial crisis. Motivated by above stated development the purpose of this study is, to evaluate the financial performance in Nordea Bank Danmark in the period 2004-2012. Using an adjusted DuPont model the analysis starts by calculating economic profit and then decomposes the realized return in order to identify profitability drivers. Furthermore the financial performance was benchmarked against the biggest banks on the Danish marked in order to indicate relative financial performance in Nordea Bank Danmark. The DuPont model used in this study was inspired by the DuPont model used in Badreldin (2009) and a Residual income model from Petersen and Plenborg (2012). The motivation for creating the adjusted model was the need of a model that is both relevant for profitability analysis of banks and calculates economic profit. The results of the study shows, that Nordea Bank Danmark realized a return on equity corresponding to marked level in the period 2004-2012 despite the financial crisis. The drivers of these good results were primarily due to: - Stabile development in net interest- and fee income. - Stabile development in cost related to staff and administration - Volatile development in depreciations on loans, where the overall level was substantial below the level of competitors. - High leverage, which has amplified the effect of the above stated developments.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2013
Number of pages82