It’s the End of a (Very Profitable) Era for Nordic Bank Investors
- Negative rates, scandals and capital rules weigh on sector
- Development marks a major shift for banks once deemed stars
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For years, Nordic banks have sent their shareholders eye-popping rewards. But after half a decade of negative interest rates compounded by financial scandals, the industry can’t afford more of the same.
Swedbank AB, which used to boast the most generous dividend policy among Nordic banks, just slashed its target by a third. Nordea Bank Abp can no longer guarantee its payout will grow each year. Investors at Svenska Handelsbanken AB, who were used to getting a bigger cash dividend every year, have this year seen their payments stagnate. Danske Bank A/S, which is at the epicenter of Europe’s biggest money-laundering scandal, has shelved share buybacks.