Last time we did a detailed SWOT analysis of HSBC. Now, in this case, the study will analyze the SWOT analysis of Nordea – A European Financial group that is operating in Northern Europe.
Nordea is a bank that provides financial services to private, corporate and institutional customers which operate mainly in four business areas which include personal banking, business banking, large corporations and institutions, and lastly asset and wealth management. It also provides investments, savings and pensions solutions, transaction banking and as well as financial services, etc.
Nordea Bank is a marketing strategy that allows the company to expand into new markets across the world. It shows the results of current customer trends and preferences. This shows the importance of how marketing plays a vital role in sustaining the global market. Talking about marketing check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
Before we go in-depth in the SWOT analysis of Nordea, let’s understand the bank as a company.
About Nordea
Nordea companies trace its roots back to 1820 as Sparekassen for Kjøbenhavn Og Omega in Denmark around 300 banks including some of the oldest banks in the Nordic region. Nordea’s credit portfolio is distributed across Finland(21%), Denmark (26%), and Norway approximately (21%). Nordea expanded their company’s market strategy to Poland, the Baltics and Russia in the early 2000s, with 2% of total revenues from the Poland and Baltics region.
Nordea Bank, commonly referred to as Nordea, is a European financial services group that operates in Northern Europe and is based in Helsinki, Finland. The bank is the result of the successive mergers and acquisitions of Finnish, Swedish, Danish and Norwegian banks of Nordbanken, Unibank, Merita bank and Kreditkassen which took place between 1997 and 2001. It serves 9.3 million private and 5,30,000 active corporate customers including 2,650 large corporations and institutions.
| Founder | Sparekassen for kjobenhavn og omegn |
|---|---|
| Year Founded | 1820 |
| Origin | Helsinki, Finland |
| No. of Employees | 29,000 |
| Company Type | Public |
| Market Cap | $ 47.70 Billion (2021) |
| Annual Revenue | € 8.635 Billion (2016) |
| Net Income/ Profit | € 1.542 Billion (2016) |
Products & Services by Nordea
Below are a few products of Nordea:
- Fx and Money Markets
- Nordea Analytics
- Equities
- Investment Banking
- Corporate and Retail Banking
- Asset Management
Competitors of Nordea
Following are the major competitors of Nordea-
- Swedbank
- Sampo Bank
- Handelsbanken
- Skandinaviska Enskilda Banken AB (SEB)
- Abbey National Plc
SWOT Analysis of Nordea
SWOT analysis of Nordea is the study of strengths, weaknesses, opportunities, and threats of the company. This will help the company understand strong factors for their growth, weakness, and threats to rectify them for further growth.
To better understand the SWOT analysis of Nordea, refer to the infographics below:
Below is a step-by-step detailed guide to help you with the SWOT analysis of Nordea.
Strengths of Nordea
Certain abilities of an organization that are advantageous in capturing market share, attracting more customers, and maximising profits can be called the strengths of that organization.
- Distribution and Reach: The bank has more than 29,000 employees with a customer base of 530,000 active and 9.3 Million private which includes 2,650 large corporates and institutions.
- Awards & Recognition: The bank is considered the most sustainable bank in Scandinavia according to Corporate Knights. Also, Nordea is in the list of the top 50 largest banks in Europe as per Business Insider 2021 list.
- Brand Reputation: Nordea has been in the business of banking for a large number of years. Also, with the variety of products and services it provides, it is established as a leader in the industry. This helps the corporation to gain a reputation and get recognized easily.
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- Automation of Activities: Successful automation of banking activities with a well-developed IT structure and Infrastructure has made the overall efficiency better.
- Strong Digital Marketing Strategy: With a very strong online presence on every social media site has built a strong customer relationship. Want to know how social media works as a strength for Nordea? Then you must check out the benefits of social media marketing to get the answer to your query.
- Financial Position: Nordea has a strong financial position with consecutive profits in the past 5 years, with accumulated profit reserves.
Weaknesses of Nordea
The weaknesses are a major drawback that stops the organisation from performing at its optimum level. They are the areas in which businesses can make improvements. The major drawbacks are as follows:
- Limited Success Across the Core Business: Although Nordea is one of the leading organizations in its industry it faces challenges in moving to other product segments with its present culture.
- Cash Flow Problems: There is a lack of proper financial planning at Nordea regarding cash flows, leading to certain circumstances where there isn’t enough cash flow as required leading to unnecessary unplanned borrowing.
- Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas Nordea needs to invest more money in technology to integrate the processes across the board. Currently, the investment in technology is not on par as per the vision of the company.
- Customer Service: Improper customer service, as well as lack of solving customer queries, can cause a negative image of the brand. This can either be through mouth publicity or by any other means.
- Depend on Nordic Countries: Nordea global presence is not up to the mark. The bank is dependent more on Nordic Countries. Also, Nordea lags behind the top 20 European banks in terms of several branches and coverage.
Opportunities of Nordea
Opportunities are the favourable external factors that may give the organization a competitive advantage over others. The opportunities of Nordea are as follows:
- Expansion to Other Global Markets: The company is planning to expand to more developing countries as well as European nations too. This serves them as an opportunity to acquire a new customer base.
- Development of Technology: Since the FinTech industry is growing at a very rapid pace, there are advancements in technologies too. Using these kinds of technologies can increase efficiency and decrease cost.
- Increasing Income: There has been an increase in average household income along with an increase in consumer spending following the recession. This will result in growth in Nordea’s target market with new customers that can be attracted towards the business.
- Population: The population has been growing and is expected to grow at a positive rate for the upcoming years. This is beneficial for Nordea as there will be an increase in the number of potential customers that it can target.
- Interest Rate: Lower interest rates than compared to previous years provides an opportunity for Nordea to undergo expansion projects that are financed with loans at a cheaper interest rate.
- Low Inflation Rate: The low inflation rate can bring more stability in the market and enable credit at a lower interest rate to the customers of Nordea.
Threats of Nordea
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of Nordea are as follows:
- Competitor Technical Advancements: New technological advancements by a few competitors within the sector constitute a threat to Nordea since customers who are drawn to this new technology may switch to competitors, reducing Nordea’s overall market share.
- Pandemic: Financial losses incurred by companies as well as individuals can cause a threat to the bank in repayment of loans.
- Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages which are being sent by competitors. It clutters up the space, which leads to losing out on customers. You must also be well versed with a variety of digital marketing skills to get ahead of the competition.
- Regulatory Changes: Regulatory changes and economic uncertainties in Nordic countries and Europe will have a significant effect on Nordea.
This ends our in-depth SWOT analysis of Nordea. Let us conclude our learning below.
To Conclude
Nordea is growing in the sector of banking in Nordic countries, Europe, as well as the global market too. As we had a look at the SWOT Analysis of Nordea, there is a lot more to grow in many aspects.
With the emergence of the digital world, where almost every individual spends at least an hour of his/her time on phones, proper digital marketing and online presence can be a great way to improve customer relations.
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We hope this blog on the SWOT Analysis of Nordea has given you a good insight into the company’s strengths, weaknesses, opportunities and threats. You can also read our comprehensive study on the SWOT Analysis of JP Morgan Chase.
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