Nordea, the biggest bank in the Nordic region, said Thursday it would slash 6,000 jobs to improve competitivity, as it posted a six-percent drop in third-quarter net profit due to historically low interest rates weighing on margins.
“In order to secure longterm competitiveness, we … plan to reduce the number of employees and consultants (by) at least 6,000,” chief executive Casper von Koskull said in the company’s earnings report.
Some 2,000 consultants will be let go, as well as 4,000 employees across the Nordic region, representing 13 percent of the bank’s workforce, over a period of three to four years.
Von Koskull said the cuts were necessary to face the rapid growth of online banking services.
“We’re building the digital bank of the future… Our clients wants to meet us digitally … and that means fewer direct employees,” he told Swedish public radio SR.
Nordea said it would book a “transformation cost of 100-150 million euros in the fourth quarter of 2017.”
For the July-September period, Nordea posted a six-percent decrease in net profit to 832 million euros ($978 million), weighed down by the Swedish central bank’s decision to keep interest rates at a record low -0.50 percent since February 2016.
Nordea’s total operating income dropped by four percent to 2.4 billion euros.
It said the third quarter “featured improving economic conditions despite elevated geopolitical risks”, but noted that demand for corporate loans was “low and we have not seen the usual pick-up in corporate advisory activities after the summer.”
Net interest income inched up by one percent to 1.18 billion euros.
Nordea announced in September that it would relocate its head office from Stockholm to Finland, a eurozone member, in order to flee higher Swedish banking taxes.
