Årsredovisning 2025

Nordea Annual Report 2025 220
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.4 Fair value, cont.
The table above shows, for each class of assets and liabili-
ties categorised in Level 3, the fair value, the valuation 
techniques used to estimate the fair value, significant 
unobservable inputs used in the valuation techniques and 
the fair value sensitivity to changes in key assumptions.
The column “Range of fair value” in the table above 
shows the sensitivity of the fair value of Level 3 financial 
instruments to changes in key assumptions. In case the 
exposure to an unobservable parameter is offset across dif-
ferent instruments, only the net impact is disclosed in the 
table. The range disclosed is likely to be greater than the 
true uncertainty in determining the fair value of these 
instruments as all unobservable parameters are in practice 
unlikely to be simultaneously at the extremes of their ranges 
of reasonably possible alternatives. The disclosure is neither 
predictive nor indicative of future movements in fair value.
The reported sensitivity (range) of the fair value of 
derivatives follows the same methodologies as applied to 
the reporting of the model risk and market price uncer-
tainty additional valuation adjustments (AVAs) as defined 
in Commission Delegated Regulation (EU) No 2016/101 of 
26 October 2015 supplementing Regulation (EU) No 
575/2013 of the European Parliament and of the Council 
with regard to regulatory technical standards for prudent 
valuation under Article 105(14).
In order to calculate the sensitivity (range) of the fair 
value of shares and interest-bearing securities, the fair 
value is increased and decreased within a total range of 
2–10 percentage points depending on the valuation uncer-
tainty and underlying assumptions. Higher ranges are 
applied to instruments with more uncertain valuations rel-
ative to actively traded instruments and underlying uncer-
tainties in individual assumptions.
Movement of deferred Day 1 profit
In some cases, the transaction price for financial instru-
ments differs from the fair value at initial recognition 
measured using a valuation technique, mainly due to the 
fact that the transaction price is not established in an 
active market. If there are significant unobservable inputs 
used in the valuation technique (Level 3), the financial 
instrument is recognised at the transaction price and any 
difference between the transaction price and the fair value 
at initial recognition measured using a valuation technique 
(Day 1 profit) is deferred. The table below shows the 
aggregated difference yet to be recognised in the income 
statement at the beginning and end of the period. The 
table also shows a reconciliation of how this aggregated 
difference changed during the year. 
Deferred Day 1 profit – derivatives, net
 EURm 2025 2024
Amount at beginning of year 70 73
Deferred profit/loss on new transactions 45 42
Recognised in the income statement during the 
year1 -43 -45
Amount at end of year 72 70
1)  Of which EUR -4m (EUR -5m) due to transfers of derivatives from Level 3 to 
Level 2.
Financial assets and liabilities not held at fair value on the balance sheet
31 Dec 2025 31 Dec 2024
EURm Carrying amount Fair value Carrying amount Fair value
Level in fair  
value hierarchy3
Assets not held at fair value on the balance sheet
Cash and balances with central banks 38,206 38,206 46,562 46,562 1
Loans 300,348 301,733 281,010 282,091 3
Interest-bearing securities 5,597 5,559 1,094 1,094 1,2,3
Other assets 926 926 768 768 3
Prepaid expenses and accrued income 457 457 807 807 3
Total 345,534 346,881 330,241 331,322
Liabilities not held at fair value on the balance sheet
Deposits and debt instruments1 382,418 383,423 364,137 364,708 3
Other liabilities2 2,714 2,714 3,116 3,116 3
Accrued expenses and prepaid income 8 8 6 6 3
Total 385,140 386,145 367,259 367,830
1)  For non-maturing deposits fair value equals the nominal amount, whereas the carrying amount also includes the revaluation for the hedged items presented on the balance 
sheet row “Fair value of hedged items in portfolio hedges of intrest rate risk”. 
2) Lease liabilities presented in the line item “Other liabilities” in Note G3.3 “Classification and measurement” are not included in this table.
3) Covers both 31 December 2025 and 31 December 2024.
Cash and balances with central banks
Fair value measurement of cash is based on quoted prices 
(unadjusted) in active markets for identical assets and there-
fore categorised into Level 1. Balances with central banks 
are due to its short-term nature considered to be equivalent 
to cash and therefore also categorised into Level 1.
Loans
The fair value of “Loans to central banks”, “Loans to credit 
institutions” and “Loans to the public” has been estimated 
by discounting the expected future cash flows with an 
assumed customer interest rate that would have been 
used in the market if the loans had been issued at the time 
of the measurement. The assumed customer interest rate 
is calculated as the benchmark interest rate plus the aver-
age margin on new lending in Personal Banking, Business 
Banking and Large Corporates & Institutions, respectively. 
The fair value measurement is categorised into Level 3 
in the fair value hierarchy.
Interest bearing-securities
The fair value is EUR 5,559m (EUR 1,094m), of which EUR 
3,586m (EUR 0m) is categorised into level 1 and EUR 
1,947m (EUR 772m) into Level 2 and EUR 26m (EUR 322m) 
into Level 3. The measurement principles follow those for 
similar instruments that are held at fair value on the bal-
ance sheet.
Other assets and prepaid expenses and accrued income
The balance sheet line items “Other assets” and “Prepaid 
expenses and accrued income” consist of short-term 
receivables. The fair value is therefore considered to equal 
the carrying amount and is categorised into Level 3 in the 
fair value hierarchy.
Deposits and debt instruments
The fair value of the balance sheet line items “Deposits by 
credit institutions”, “Deposits and borrowings from the 
public”, “Debt securities in issue” and “Subordinated

===== SIDA 222 =====

Nordea Annual Report 2025 221
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.4 Fair value, cont.
liabilities” has been calculated as the carrying amount 
adjusted for fair value changes in interest rate risk and in 
own credit risk. However, for non-maturing deposits the 
fair value equals the nominal amount. The fair value is cat-
egorised into Level 3 in the fair value hierarchy. 
The fair value changes related to interest rate risk are 
based on changes in relevant interest rates compared with 
the corresponding nominal interest rates of the portfolios. 
The fair value changes in credit risk are calculated as 
the difference between the credit spread of the nominal 
interest rate and the current spread observed in the mar-
ket. This calculation is performed on an aggregated level 
for all long-term issuance recognised in the balance sheet 
items “Debt securities in issue” and “Subordinated liabili-
ties”. As the contractual maturity is short for “Deposits by 
credit institutions” and “Deposits and borrowings from the 
public”, the changes in Nordea´s own credit risk related to 
these items are assumed not to be significant. This is also 
the case for short-term issuance recognised in the balance 
sheet line item “Debt securities in issue”.
Other liabilities and accrued expenses 
and prepaid income
The balance sheet items “Other liabilities” and “Accrued 
expenses and prepaid income” consist of short-term liabil-
ities, mainly liabilities related to securities traded but not 
settled. The fair value is therefore considered to be equal 
to the carrying amount and is categorised into Level 3 in 
the fair value hierarchy.
G3.5 Offsetting
Accounting policies 
Nordea offsets financial assets and liabilities on the 
balance sheet if there is a legal right to offset and if 
the intent is to settle the items net or realise the 
asset and settle the liability simultaneously. The 
legal right to offset should exist both in the ordinary 
course of business and in case of the default, bank-
ruptcy and insolvency of Nordea and its 
counterparties.
Financial instruments set off on the balance sheet or subject to netting agreements
31 Dec 2025 31 Dec 2024
Amounts not set off but subject to master  
 netting agreements and similar agreements
Amounts not set off but subject to master  
 netting agreements and similar agreements
EURm
Gross 
 recognised 
financial 
assets1
Gross 
 recognised 
financial 
liabilities set off 
on  balance 
sheet
Net carrying 
amount on 
balance 
sheet2
Financial 
instruments
Financial 
 collateral 
received 
Cash 
 collateral 
received
Net 
amount
Gross 
 recognised 
financial 
assets1
Gross 
 recognised 
financial 
liabilities set off 
on  balance 
sheet
Net carrying 
amount on 
balance 
sheet2
Financial 
instruments
Financial 
 collateral 
received 
Cash 
 collateral 
received
Net 
amount
Assets
Derivatives3 163,686 -146,053 17,633 -13,127 – -3,367 1,139 139,246 -114,035 25,211 -18,403 – -4,221 2,587
Reverse repurchase 
agreements 41,763 -7,980 33,783 – -33,783 – 0 33,381 -5,488 27,893 – -27,893 – 0
Securities borrowing 
agreements 5,555 – 5,555 – -5,555 – 0 2,789 – 2,789 – -2,789 – 0
Variation margin 3,932 -3,932 0 – – – 0 1,904 -1,904 0 – – – 0
Total 214,936 -157,965 56,971 -13,127 -39,338 -3,367 1,139 177,320 -121,427 55,893 -18,403 -30,682 -4,221 2,587
31 Dec 2025 31 Dec 2024
Amounts not set off but subject to master  
 netting agreements and similar agreements
Amounts not set off but subject to master  
 netting agreements and similar agreements
EURm
Gross  
recognised 
financial  
liabilities1
Gross 
 recognised 
financial assets 
set off on 
 balance sheet
Net carrying 
amount on 
balance 
sheet2
Financial 
instruments
Financial 
 collateral 
pledged 
Cash 
 collateral 
pledged
Net 
amount
Gross  
recognised 
financial  
liabilities1
Gross 
 recognised 
financial assets 
set off on 
 balance sheet
Net carrying 
amount on 
balance 
sheet2
Financial 
instruments
Financial 
 collateral 
pledged 
Cash 
 collateral 
pledged
Net 
amount
Liabilities
Derivatives3 167,062 -148,984 18,078 -13,127 – -3,029 1,922 139,829 -114,795 25,034 -18,403 – -5,167 1,464
Repurchase agreements 40,912 -7,980 32,932 – -32,932 – 0 31,120 -5,488 25,632 – -25,632 – 0
Securities lending 
agreements 11,339 – 11,339 – -11,339 – 0 12,203 – 12,203 – -12,203 – 0
Variation margin 1,001 -1,001 0 – – – 0 1,144 -1,144 0 – – – 0
Total 220,314 -157,965 62,349 -13,127 -44,271 -3,029 1,922 184,296 -121,427 62,869 -18,403 -37,835 -5,167 1,464
1) All amounts are measured at fair value, except for reverse repurchase agreements of EUR 4,465m (EUR 2,804m) and repurchase agreements of EUR 4,473m (EUR 2,812m) which are measured at amortised cost. 
2)  Reverse repurchase agreements and securities borrowing agreements are classified as “Loans to central banks“, “Loans to credit institutions“ or “Loans to the public“ on the  balance sheet.  
Repurchase agreements and securities lending agreements are classified as “Deposits by credit institutions“ or “Deposits and borrowings from the public“ on the balance sheet.
3) Excluding derivatives in pooled schemes and unit-linked investment contracts as most or all of the risk in those contracts is borne by the customers or the policyholders.

===== SIDA 223 =====

Nordea Annual Report 2025 222
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.5 Offsetting, cont.
Exchanged-traded derivatives are generally accounted for 
and settled on a daily basis when cash is paid or received 
(variation margin), and the instrument is reset to market 
terms. Derivative assets, derivative liabilities, cash collat-
eral receivables and cash collateral liabilities against cen-
tral counterparty clearing houses are set off on the bal-
ance sheet if the assets and liabilities are settled in the 
same transaction currency and relate to the same central 
counterparty. Derivative assets, derivative liabilities, cash 
collateral receivables and cash collateral liabilities related 
to bilateral OTC derivative transactions are not set off on 
the balance sheet.
In addition, loans and deposits related to repurchase 
and reverse repurchase transactions with central counter-
party clearing houses are set off on the balance sheet if 
the assets and liabilities relate to the same central coun-
terparty, are settled in the same currency and have the 
same maturity date. Loans and deposits related to repur-
chase and reverse repurchase transactions that are made 
in accordance with the Global Master Repurchase 
Agreement are set off on the balance sheet if the assets 
and liabilities relate to the same counterparty, are settled 
in the same currency, have the same maturity date and are 
settled through the same settlement institution. 
The fact that a financial instrument is accounted for on 
a gross basis on the balance sheet does not imply that the 
financial instruments are not subject to master netting 
agreements or similar arrangements. Generally, financial 
instruments (derivatives, repurchase agreements and 
securities lending transactions) are subject to master net-
ting agreements, and Nordea is consequently able to ben-
efit from netting in any calculations involving counterparty 
credit risk in the event of the default of its counterparties.
For a description of counterparty risk, see also Note G11 
“Risk and liquidity management”, section 3 “Counterparty 
credit risk“.
G3.6 Hedge accounting
Accounting policies
When a hedging relationship meets the specified 
hedge accounting criteria set out in IAS 39, Nordea 
applies one of three types of hedge accounting: 
• fair value hedge accounting
• cash flow hedge accounting 
• net investment hedges.
Nordea has chosen, as a policy choice permitted 
under IFRS 9, to continue to apply hedge accounting 
in accordance with the carve-out version of IAS 39. 
Under the EU carve-out version of IAS 39, fair 
value macro hedge accounting may for instance, in 
comparison with IAS 39 as issued by the IASB, be 
applied to on-demand (core) deposits, and hedge 
ineffectiveness in a hedge of assets with prepay-
ment options is only recognised when the revised 
estimate of the amount of cash flows falls below the 
designated bottom layer.
The application of hedge accounting requires the 
hedge to be highly effective. A hedge is regarded as 
highly effective if, at inception and throughout its 
life, changes in the fair value of the hedged item, as 
regards the hedged risk, can be expected to be 
essentially offset by changes in the fair value of the 
hedging instrument. The result should be within a 
range of 80–125%.
Transactions that are entered into in accordance 
with Nordea’s hedging objectives but do not qualify 
for hedge accounting are economic hedge 
relationships.
Fair value hedge accounting
Fair value hedge accounting is applied when deriva-
tives are hedging changes in the fair value of a rec-
ognised asset or liability attributable to a specific 
risk. Fair value hedge accounting can be performed 
at both micro level (single assets/liabilities or closed 
portfolios of assets/liabilities where one or more 
hedged items are hedged using one or more hedg-
ing instruments) and macro level (open portfolios 
where groups of items are hedged using multiple 
hedging instruments).
Changes in the fair value of derivatives (hedging 
instruments), as well as changes in the fair value of 
the hedged item attributable to the risks being 
hedged, are recognised separately in the income 
statement under “Net result from items at fair value”. 
Given that the hedge is effective, the change in the 
fair value of the hedged item will be offset by the 
change in the fair value of the hedging instrument.
The changes in the fair value of the hedged item, 
attributable to the risks being hedged with the 
derivative instrument, are reflected in an adjustment 
to the carrying amount of the hedged item, which is 
also recognised in the income statement. The fair 
value changes of the hedged items held at amor-
tised cost in hedges of interest rate risks in macro 
hedges are reported separately in the balance sheet 
item “Fair value changes of hedged items in portfo-
lio hedges of interest rate risk”.
Any ineffectiveness is recognised in the income 
statement under the item “Net result from items at 
fair value”. 
If the hedging relationship does not meet the 
hedge accounting requirements, hedge accounting is 
discontinued. The hedging instrument is measured 
at fair value through profit or loss and the change in 
the fair value of the hedged item, up to the point 
when the hedge relationship is terminated, is amor-
tised to the income statement on a straight-line basis 
over the remaining maturity of the hedged item.
Cash flow hedge accounting
Cash flow hedge accounting is applied when hedg-
ing the exposure to variability in future cash flows. 
The portion of the gain or loss on the hedging 
instrument, determined to be an effective hedge, is 
recognised in other comprehensive income and 
accumulated in the cash flow hedge reserve in 
equity. The ineffective portion of the gain or loss on 
the hedging instrument is recognised in the item 
“Net result from items at fair value” in the income 
statement. The hedge is considered to be ineffective 
to the extent that the cumulative change in fair 
value from the inception of the hedge is larger for 
the hedging instrument than for the hedged item.
Gains or losses on hedging instruments recog-
nised in the cash flow hedge reserve in equity 
through other comprehensive income are recycled 
and recognised in the income statement in the same 
period as the hedged item affects profit or loss, nor-
mally in the period in which interest income or inter-
est expense is recognised.
A hedged item in a cash flow hedge can be highly 
probable cash flows from recognised assets or liabil-
ities or from future assets or liabilities. Derivatives 
used as hedging instruments are always measured 
at fair value. 
If the hedging relationship does not meet the 
hedge accounting requirements, hedge accounting 
is discontinued. Changes in the unrealised value of 
the hedging instrument will prospectively from the 
last time it was proven effective be accounted for in 
the income statement. The cumulative gain or loss 
on the hedging instrument that has been recognised 
in the cash flow hedge reserve in equity through 
other comprehensive income from the period when 
the hedge was effective is reclassified from equity to 
“Net result from items at fair value” in the income 
statement if the expected transaction is no longer 
expected to occur. 
If the expected transaction is no longer highly 
probable but is still expected to occur, the cumula-
tive gain or loss on the hedging instrument that has 
been recognised in other comprehensive income 
from the period when the hedge was effective will 
remain in other comprehensive income until the 
transaction occurs or is no longer expected to occur.
Net investment hedges
Net investment hedges are used to hedge the for-
eign currency risk of net investments in foreign

===== SIDA 224 =====

Nordea Annual Report 2025 223
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.6 Hedge accounting, cont.
operations. Foreign currency risk is defined as the 
risk of loss on investments in foreign operations 
which have a functional currency different from that 
of the Group reporting currency. 
The foreign exchange spot risk component of 
financial instruments that are designated as hedging 
instruments in a hedge of a net investment in a 
group undertaking is recognised in other compre-
hensive income, to the extent that the hedge is 
effective. This is to offset the translation differences 
affecting other comprehensive income when consol-
idating the group undertaking into Nordea, including 
the revaluation of any extended net investments. 
Any ineffectiveness is recognised in the income 
statement under “Net result from items at fair value”.
See also section “Translation of assets and liabili-
ties denominated in foreign currencies” in Note G1 
“Accounting policies”.
Critical judgements and estimation uncertainty
One important judgement in connection with cash 
flow hedge accounting is the choice of method used 
for effectiveness testing.
Where Nordea applies cash flow hedge account-
ing, the hedging instruments used are cross-cur-
rency interest rate swaps (for mid-term or long-term 
maturities) or FX swaps/FX forwards (for short-term 
maturities) which are always held at fair value. The 
currency component is designated as a cash flow 
hedge of the currency risk (including cross-currency 
basis margin and swap points) and the interest com-
ponent as a fair value hedge of the interest rate risk. 
The hypothetical derivative method is used when 
measuring the effectiveness of these cash flow 
hedges, meaning that the change in a perfect hypo-
thetical swap is used as proxy for the present value 
of the cumulative change in expected future cash 
flows on the hedged transaction (the currency com-
ponent). Critical judgement has to be exercised 
when defining the characteristics of the perfect 
hypothetical swap.
Derivatives used for hedge accounting
Fair value
Nominal 
amountEURm Positive Negative
31 Dec 2025
Fair value hedges1 1,731 2,336 191,700
Cash flow hedges1 794 551 33,533
Net investment hedges 215 280 10,106
Total 2,740 3,167 235,339
31 Dec 2024
Fair value hedges1 2,162 2,986 210,990
Cash flow hedges1 2,265 72 34,093
Net investment hedges 134 141 8,165
Total 4,561 3,199 253,248
1)  Some cross-currency interest rate swaps are used as both fair value hedges and 
cash flow hedges. The nominal amounts of these instruments have been split 
between the lines “Fair value hedges“ and “Cash flow hedges“ in the table above 
based on the relative fair value of these hedging instruments. As at 31 December 
2025 the total nominal amount of cross-currency interest rate swaps amounted 
to EUR 33,086m (EUR 32,593m).
The table above shows the fair value of derivatives used 
for hedge accounting together with their nominal 
amounts. The nominal amounts indicate the volume of 
transactions outstanding at year end and are neither indic-
ative of market risk nor credit risk. The fair value and nomi-
nal amount of derivatives in this note represent derivatives 
before offsetting between assets and liabilities on the bal-
ance sheet (gross amount) as the gross amount better 
reflects Nordea’s exposure in relation to the hedged risk. 
Risk management
As part of its risk management policy, Nordea has identi-
fied a series of risk categories with corresponding hedging 
strategies using derivative instruments, as set out in sec-
tion 4 “Market risk” in Note G11 “Risk and liquidity 
management”. 
Nordea classifies its exposures to market risk into either 
trading (the trading book) or non-trading (the banking 
book) portfolios which are managed separately. 
The trading book consists of all positions in financial 
instruments held by Nordea either with trading intent or in 
order to hedge positions held with trading intent. Positions 
held with trading intent are those held intentionally for 
short-term resale or with the intention of benefiting from 
actual or expected short-term price differences between 
buying and selling prices or from other price or interest 
rate variations. 
The banking book comprises all positions not held in 
the trading book. All hedges qualifying for hedge account-
ing are treated as banking book instruments. The hedging 
instruments and risks hedged are further described below 
by risk and hedge accounting type.
At inception, Nordea formally documents how the 
hedging relationship meets the hedge accounting criteria, 
including the economic relationship between the hedged 
item and the hedging instrument, the nature of the risk, 
the risk management objective and strategy for undertak-
ing the hedge and the method used to assess the effec-
tiveness of the hedging relationship on an ongoing basis. 
Interest rate risk
Nordea’s primary business model is to collect deposits and 
use these funds to provide loans and other funding prod-
ucts and debt instruments to its customers. Interest rate 
risk is the impact that changes in interest rates could have 
on Nordea’s margins, profit or loss and equity. Interest rate 
risk arises from mismatches between interest-bearing 
assets and interest-bearing liabilities. 
As part of Nordea’s risk management strategy, the 
Board has established limits on the non-trading interest 
rate gaps for interest rate sensitivities. These limits are 
consistent with Nordea’s risk appetite and Nordea aligns 
its hedge accounting objectives to keep exposures within 
those limits. Nordea’s policy is to monitor positions on a 
daily basis. For further information on measurement of 
risks, see section 4 “Market risk“ in Note G11 “Risk and 
liquidity management”.
For hedge accounting relationships related to interest 
rate risk, the hedged risk is the change in the fair value of 
the hedged item due to changes in benchmark interest 
rates. The hedge ratio is established by matching the nom-
inal amount of the derivatives with the principal of the 
hedged items.
In order to hedge and manage the risk and limit the 
impact on Nordea’s margins, profit or loss and equity, 
Nordea uses hedging instruments to swap interest rate 
exposures into either fixed or variable rates.
The risk components of hedged items designated by 
the Group consist of:
• Benchmark interest rate risk as a component of interest 
rate risk, i.e. IBORs. Using the benchmark interest rate 
risk can result in other risks, such as credit risk and 
liquidity risk, being excluded from the hedge accounting 
relationship. 
• Components of cash flows of hedged items.
The benchmark rate is determined as a change in the 
present value of the future cash flows using benchmark 
discount curves. The benchmark rate is separately identifi-
able and reliably measurable and is typically the most sig-
nificant component of the overall change in fair value or 
cash flows.
Fair value hedges 
Nordea enters into interest rate swaps and cross-currency 
interest rate swaps in order to reduce or eliminate changes 
in the fair value of the hedged items due to interest rate 
risk.
Hedged items are fixed-rate financial assets and liabili-
ties in both local and foreign currencies such as loans, 
debt securities classified in the category “Fair value 
through other comprehensive income”, deposits and debt 
securities in issue. 
Hedging instruments are interest rate swaps and 
cross-currency interest rate swaps (the portion related to 
interest rate risk is designated in fair value hedge 
relationships).
Nordea applies fair value hedge accounting both at 
micro and macro level. The micro level is applied for hedg-
ing fixed-rate debt securities classified in the category 
“Fair value through other comprehensive income” and 
fixed-rate debt securities in issue. The macro level is 
applied for hedging loans and deposits where fixed-rate 
loans and term deposits are initially offset and the residual 
exposure hedged using a portfolio of interest rate swaps 
up to the designated portion of either the net asset or lia-
bility in a given time bucket. 
For hedge effectiveness testing Nordea uses both criti-
cal terms matching (for prospective effectiveness testing) 
and regression analysis (for retrospective effectiveness 
testing). When assessing hedge effectiveness

===== SIDA 225 =====

Nordea Annual Report 2025 224
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.6 Hedge accounting, cont.
retrospectively, Nordea measures the fair value of a hedg-
ing instrument and compares the change in the fair value 
of the hedging instrument with the change in the fair 
value of the hedged item. The effectiveness measurement 
is made on a cumulative basis. 
Hedge ineffectiveness can arise from: 
• differences in timing of cash flows of hedged items and 
hedging instruments
• different interest rate curves applied to discount the 
hedged items and hedging instruments
• the effect of changes in Nordea’s or a counterparty’s 
credit risk on the fair value of the hedging instruments
• the disparity between expected and actual prepayments 
on the loan portfolio. 
Nordea has an established hedging programme for 
non-maturing core deposits (NMD) and applies hedge 
accounting in accordance with the EU carve-out version of 
IAS 39. The behavioural model is subject to regular 
semi-annual reviews and/or recalibration of risk parame-
ters. The most recent review of the model performed in 
2025 addressed the changes in the behavioural pass-
through sensitivities of market to customer rates in relation 
to the increased interest rate environment, which impacted 
the expected repricing profile (modelled maturity) of the 
non-maturing deposits (modelled split of NMDs into an 
interest sensitive and non-interest sensitive portion).
The hedging approach is based on a target hedge ratio 
and deviation band set by the Asset & Liability Committee 
(ALCO) commensurate with Nordea’s risk appetite limits for 
Interest Rate Risk in the Banking Book (IRRBB). The overall 
hedging strategy assumes that a conservative buffer of the 
eligible and unhedged portion of non-maturing deposits is 
maintained above the hedged bottom layer. The average 
volume of the hedged portion amounted to EUR 33.6bn 
(EUR 32.3bn), as of 31 December the hedged portion 
amounted to EUR 36.5bn (EUR 31.1bn) and as of 31 
December the hedge ratio was 73% (57%). Nordea’s assess-
ment is that the risk of unanticipated deposit withdrawals 
by bank customers that would have significant impact on, or 
lead to discontinuation of, the NMD hedging relationships is 
low. Nordea assesses the risk and potential impact of 
deposit outflow that could lead to a discontinuation of the 
hedging relationship in the reverse stress testing program. 
The table below presents the accumulated fair value adjustments arising from continuing and discontinued hedging. 
Hedged items 
Interest rate risk 31 Dec 2025 Interest rate risk 31 Dec 2024
EURm
Carrying amount of 
hedged assets/
liabilities
Of which accumulated 
amount of fair value 
hedge adjustment2
Carrying amount of 
hedged assets/
liabilities
Of which accumulated 
amount of fair value 
hedge adjustment2
Fair value hedges – micro level
Interest-bearing securities 26,904 0 26,129 0
Assets 26,904 0 26,129 0
Debt securities in issue 68,768 -450 70,539 -662
Subordinated liabilities 7,190 -170 6,350 -328
Liabilities 75,958 -620 76,889 -990
Interest rate risk 31 Dec 2025 Interest rate risk 31 Dec 2024
EURm
Carrying amount of 
hedged assets/
liabilities
Accumulated amount 
of fair value hedge 
adjustment1, 2
Carrying amount of 
hedged assets/
liabilities
Accumulated amount 
of fair value hedge 
adjustment1, 2
Fair value hedges – macro level
Loans to the public 43,851 – 66,599 –
Assets 43,851 -158 66,599 -243
Deposits by credit institutions 2,948 – 3,071 –
Deposits and borrowings from the public 36,193 – 31,145 –
Liabilities 39,141 -567 34,216 -458
1) Accumulated fair value adjustment for macro hedges is presented in the line item “Fair value changes of hedged items in portfolio hedges of interest rate risk“ on the balance 
sheet.
2) Of which EUR 26m (EUR 35m) is related to discontinued hedges of interest rate risk.
The following table provides information about the  hedging instruments. 
Hedging instruments
Fair value
EURm Positive Negative
Nominal 
amount
31 Dec 2025
Fair value hedges
Interest rate risk 1,731 2,336 191,700
31 Dec 2024
Fair value hedges
Interest rate risk 2,162 2,986 210,990
The table below presents the changes in the fair value of 
the hedging instruments and the changes in the value of 
hedged items used as the basis for recognising ineffective-
ness. These changes are recognised in the line item “Net 
result from items at fair value” in the income statement. 
Hedge ineffectiveness
Interest rate risk
EURm 2025 2024
Fair value hedges
Changes in fair value of hedging instruments 188 616
Changes in value of hedged items used as 
basis for recognising hedge ineffectiveness -146 -621
Hedge ineffectiveness recognised in the 
income statement1,2 42 -5
1) Recognised in the line item “Net result from items at fair value“.
2) When disclosing hedge ineffectiveness, valuation adjustments  
(CVA, DVA, FFVA) have not been considered as these are immaterial.
Sources of ineffectiveness include mismatches between 
the reset frequency of the swap and the benchmark fre-
quency and the fair value of the floating leg of the swap 
on a date other than the reset date.
Cash flow hedges
Nordea uses cash flow hedges when hedging interest rate 
risk on lending and borrowing at floating interest rates. 
Nordea’s cash flow hedges of interest rate risk relate to 
exposures to the variability in future interest payments 
and receipts due to the movement of benchmark interest 
rates on forecast transactions and on recognised financial 
assets and financial liabilities. This variability in cash flows 
is hedged by interest rate swaps and cross-currency inter-
est rate swaps, fixing the hedged cash flows according to 
Nordea’s policies and risk management strategy described 
in section 4 “Market risk“ in Note G11 “Risk and liquidity 
management”. 
The hypothetical derivative method is used when meas-
uring the effectiveness of cash flow hedges retrospec-
tively, meaning that the change in a perfect hypothetical 
swap is used as proxy for the present value of the cumula-
tive change in expected future cash flows from the 
hedged transaction. The hypothetical derivative represents

===== SIDA 226 =====

Nordea Annual Report 2025 225
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.6 Hedge accounting, cont.
the characteristics of the hedged items (variable rate 
loans) in terms of hedged volume, repricing and interest 
payment periods. Hedge effectiveness is calculated on a 
cumulative basis by comparing changes in a portfolio of 
interest rate swaps (hedging instruments) and hypothetical 
derivatives. Changes in the valuation of the hedging instru-
ments that are part of effective cash flow hedge relation-
ships are recognised in the cash flow hedge reserve accu-
mulated in equity through other comprehensive income.
The possible sources of ineffectiveness in cash flow 
hedges can generally be the same as those in fair value 
hedges described above. However, for cash flow hedges, 
prepayment risk is less relevant. The main causes of hedge 
ineffectiveness arise from the changes in the timing and 
the amount of forecast future cash flows. 
The table below provides information about the hedg-
ing instruments in hedges of interest rate risk, including 
the nominal amount and the fair value of the hedging 
instruments.
Hedging instruments
Fair value
EURm Positive Negative
Nominal 
amount
31 Dec 2025
Cash flow hedges
Interest rate risk 0 0 725
31 Dec 2024
Cash flow hedges
Interest rate risk 1 2 1,858
The table below specifies changes in the fair value of 
hedging instruments arising from continuing hedging rela-
tionships, irrespective of whether there has been a change 
in hedge designation during the year. The table also pre-
sents changes in the value of hedged items used to meas-
ure hedge ineffectiveness, separately showing the effec-
tive and ineffective portions.
Hedge ineffectiveness
Interest rate risk
EURm 2025 2024
Cash flow hedges
Changes in fair value of hedging instruments -2 1
Changes in value of hedged items used as 
basis for recognising hedge ineffectiveness 2 -1
Hedge ineffectiveness recognised in the 
income statement1,2 – –
Hedging gains or losses recognised in other 
comprehensive income -2 1
1) Recognised in the line item “Net result from items at fair value”.
2)  When disclosing hedge ineffectiveness, valuation adjustments 
(CVA, DVA, FFVA) have not been considered as these are immaterial.
Cash flow hedge reserve
Interest rate risk
EURm 2025 2024
Balance as at 1 Jan -3 -22
Valuation gains/losses -2 1
Tax on valuation gains/losses 0 0
Transferred to the income statement 6 22
Tax on transfers to the income statement -1 -4
Other comprehensive income, net of tax 3 19
Balance as at 31 Dec 0 -3
Of which relates to continuing hedges for 
which hedge accounting is applied 0 -3
Of which relates to hedging relationships for 
which hedge accounting is no longer applied – –
Maturity profile of the nominal amount of hedging instruments hedging interest rate risk 
EURm
Payable on 
demand
Maximum 
 3 months 3–12 months 1–5 years
More than  
5 years Total
31 Dec 2025
Instruments hedging interest rate risk – 15,375 46,050 104,157 26,843 192,425
Total – 15,375 46,050 104,157 26,843 192,425
31 Dec 2024
Instruments hedging interest rate risk – 22,751 58,833 102,685 28,579 212,848
Total – 22,751 58,833 102,685 28,579 212,848
The average interest rate on the fixed leg of instruments  
hedging interest rate risk was 2.41% (2.41%) as at 31 
December 2025.
Currency risk
Currency risk is the risk that the value of a financial instru-
ment will fluctuate due to changes in foreign exchange 
rates. 
Foreign exchange risk from trading activities is limited 
through a VaR limit. Foreign exchange risk from structural 
exposures (as described below) is limited through a stress 
loss limit for the CET1 ratio impact from foreign exchange 
fluctuations in a severe but plausible stress scenario. See 
section 4 “Market risk“ in Note G11 “Risk and liquidity 
management”. 
Nordea’s issuance of credits and borrowing can be 
denominated in the currency of the borrower or investor. 
Borrowing, investing and lending are not always executed 
in the same currency, thus exposing Nordea to a foreign 
exchange risk. Differences in exposures to individual cur-
rencies that exist between different transactions are pre-
dominantly matched by entering into cross-currency inter-
est rate swaps (for maturities below one year FX swaps/
FX forwards are used). The currency component is desig-
nated as a cash flow hedge of the currency risk and the 
interest component as a fair value hedge of the interest 
rate risk.
In addition to the above, Nordea also has exposure to 
structural foreign currency risk through its foreign opera-
tions that have a functional currency other than Nordea’s 
presentation currency, EUR (i.e. a translation risk). 
Fluctuations in spot exchange rates will cause Nordea’s 
reported net investments in foreign operations to vary and 
the CET1 ratio to fluctuate due to the currency mismatch 
between equity and risk exposure amounts. Nordea 
applies hedge accounting when hedging its investments in 
fully consolidated foreign operations whose functional 
currency is not EUR. 
For hedge accounting relationships related to currency 
risk, the hedged item is a foreign currency component. The 
hedge ratio is established by matching the nominal 
amounts of the derivatives with the principals of the 
hedged items.
The currency component is determined as the change 
in the present value of the future cash flows using foreign 
exchange curves. The foreign currency component is sepa-
rately identifiable and reliably measurable and is typically 
the most significant component of the overall change in 
fair value or cash flows.
Cash flow and net investment hedges 
Hedged items in cash flow hedges of currency risk are 
future payments of interest and the nominal amount from 
(1) issuance in foreign currencies (bonds issued, certifi-
cates of deposits and commercial paper) as well as (2) 
intra-group lending in foreign currencies where the for-
eign exchange impact is not eliminated on consolidation. 
For shorter maturities (below one year) Nordea uses 
FX-swaps/FX forwards as hedging instruments. For longer 
maturities (above one year) Nordea uses cross-currency 
interest rate swaps, both float to float and fixed to float, of 
which the portion related to foreign currency risk, includ-
ing the cross-currency basis impact, is designated as a

===== SIDA 227 =====

Nordea Annual Report 2025 226
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.6 Hedge accounting, cont.
cash flow hedge. Hedging relationships are established at 
micro or macro level.
For net investment hedges, Nordea uses short-term for-
eign exchange swaps as hedging instruments, and 
changes to the spot rate are designated as the hedged 
risk. Hedge ineffectiveness can arise to the extent that the 
hedging instruments exceed in nominal terms the risk 
exposure from foreign operations. 
The tables below provide information about the hedg-
ing instruments in hedges of currency risks, including the 
nominal amount and the fair value of the hedging 
instruments.
Hedging instruments
Fair value
EURm Positive Negative
Nominal 
amount
31 Dec 2025
Cash flow hedges 
Foreign exchange risk 794 551 32,808
Net investment hedges
Foreign exchange risk 215 280 10,106
Total derivatives used for 
hedge accounting 1,009 831 42,914
31 Dec 2024
Cash flow hedges 
Foreign exchange risk 2,264 70 32,235
Net investment hedges
Foreign exchange risk 134 141 8,165
Total derivatives used for 
hedge accounting 2,398 211 40,400
The table below specifies changes in the fair value of 
hedging instruments arising from continuing hedging rela-
tionships, irrespective of whether there has been a change 
in hedge designation during the year. The table also pre-
sents changes in the value of hedged items used to meas-
ure hedge ineffectiveness, separately showing the effec-
tive and ineffective portions. 
Hedge ineffectiveness 
Foreign  
exchange risk
EURm 2025 2024
Cash flow hedges
Changes in fair value of hedging instruments -2,474 1,912
Changes in value of hedged items used as basis for 
recognising hedge ineffectiveness 2,469 -1,912
Hedge ineffectiveness recognised  
in the income statement1, 2 -5 0
Hedging gains or losses recognised in other 
comprehensive income -2,469 1,912
Net investment hedges
Changes in fair value of hedging instruments -192 174
Changes in value of hedged items used as basis for 
recognising hedge ineffectiveness 192 -174
Hedge ineffectiveness recognised in the income 
statement1, 2 – –
Hedging gains or losses recognised in other 
comprehensive income -192 174
1)  Recognised in the line item “Net result from items at fair value“.
2)  When disclosing hedge ineffectiveness, valuation adjustments  
(CVA, DVA, FFVA) have not been considered as these are immaterial.
Cash flow hedge reserve
Foreign  
exchange risk
EURm 2025 2024
Balance as at 1 Jan 110 88
Valuation gains/losses -2,469 1,912
Tax on valuation gains/losses 496 -388
Transferred to the income statement 2,385 -1,884
Tax on transfers to the income statement -479 382
Other comprehensive income, net of tax -67 22
Balance as at 31 Dec 43 110
Of which relates to continuing hedges for which 
hedge accounting is applied 43 110
Of which relates to hedging relationships for 
which hedge accounting is no longer applied – –
Maturity profile of the nominal amount of hedging instruments hedging foreign exchange risk
EURm
Payable on 
demand
Maximum 
 3 months 3–12 months 1–5 years
More than  
5 years Total
31 Dec 2025
Instruments hedging foreign exchange risk – 14,456 13,885 12,898 1,675 42,914
Total – 14,456 13,885 12,898 1,675 42,914
31 Dec 2024
Instruments hedging foreign exchange risk – 15,588 10,953 12,520 1,339 40,400
Total – 15,588 10,953 12,520 1,339 40,400
The average forward exchange rates of instruments hedg-
ing foreign exchange risk as at 31 December are presented 
in the table below.
Average forward exchange rates of  
instruments hedging foreign exchange risk
31 Dec 2025 NOK SEK USD
EUR 11.05 10.61 1.14
31 Dec 2024
EUR 11.05 10.69 1.10

===== SIDA 228 =====

Nordea Annual Report 2025 227
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.7  Financial instruments 
pledged as collateral
Accounting policies
In repurchase transactions, securities lending trans-
actions and derivative transactions, non-cash assets 
are transferred as collateral. When the counterparty 
receiving the collateral has the right to sell or 
repledge the assets, the assets are presented in this 
note.
For more information about accounting policies, 
see Note G3.1 “Recognition on and derecognition 
from the balance sheet“, Note G3.2 “Transferred 
assets and obtained collateral“, Note G3.3 
“Classification and measurement” and Note G3.4 
“Fair value”.
Financial instruments pledged as collateral
EURm 31 Dec 2025 31 Dec 2024
Interest-bearing securities 3,364 1,922
Shares 1,910 511
Total 5,274 2,433
For information on transferred assets and reverse repur-
chase agreements, see Note G3.2 “Transferred assets and 
obtained collateral”.
G3.8 Loans
Accounting policies
Loans are financial instruments with fixed or deter-
minable payments that are not readily transferable 
without the consent of the debtor. Loans are classi-
fied and measured in accordance with the descrip-
tion in Note G3.3 “Classification and measurement”. 
Nordea’s accounting policies covering expected 
credit losses follow below. Additional information on 
the credit risk on loans is disclosed in Note G11 “Risk 
and liquidity management”.
Financial instruments classified as “Amortised 
cost” or “Fair value through other comprehensive 
income” are subject to impairment testing due to 
credit risk. This includes assets recognised on the 
balance sheet in “Loans to central banks”, “Loans to 
credit institutions”, “Loans to the public” and 
“Interest- bearing securities”. “Loans to the public” 
includes finance leases, which are also subject to 
impairment testing. These balance sheet line items 
also include assets classified as “Fair value through 
profit or loss”, which are not subject to impairment 
testing. See also Note G3.3 “Classification and 
measurement”.
Off-balance sheet commitments, contingent lia-
bilities and loan commitments are also subject to 
impairment testing.
Recognition and presentation
Amortised cost assets are recognised gross with an 
offsetting allowance for the expected credit losses if 
the loss is not regarded as final. The allowance 
account is netted against the loan balance on the 
face of the balance sheet, but the allowance account 
is disclosed separately in this note. Changes in the 
allowance account are recognised in the income 
statement and classified as “Net loan losses”.
If the impairment loss is regarded as final, it is 
reported as a realised loss and the carrying amount 
of the loan and the related allowance for impairment 
loss are derecognised. An impairment loss is regarded 
as final when the obligor has filed for bankruptcy and 
the administrator has declared the financial outcome 
of the bankruptcy procedure, or when Nordea waives 
its claims either through a legally based or voluntary 
reconstruction, or when Nordea, for other reasons, 
deems it unlikely that the claim will be recovered. See 
also the section “Write-offs” below.
Provisions for off-balance sheet exposures are 
classified as “Provisions” on the balance sheet, with 
changes in provisions classified as “Net loan losses”.
Assets classified as “Fair value through other 
comprehensive income” are recognised at fair value 
on the balance sheet. Impairment losses calculated 
in accordance with IFRS 9 are recognised in the 
income statement and classified as “Net loan losses”. 
Any fair value adjustments are recognised in “Other 
comprehensive income”. 
Impairment testing 
Nordea classifies all exposures into stages on an 
individual basis. Stage 1 includes assets where there 
has been no significant increase in credit risk since 
initial recognition. Stage 2 includes assets where 
there has been a significant increase in credit risk. 
Stage 3 (impaired loans) includes defaulted assets. 
Nordea monitors whether there are indicators of 
exposures being credit impaired (stage 3) by identi-
fying events that have a detrimental impact on the 
estimated future cash flows. Nordea applies the 
same definition of default as the Capital 
Requirements Regulation. The definition of default 
applied by Nordea was last updated in 2024 in con-
nection with the implementation of new retail inter-
nal ratings-based (IRB) models. More information 
on credit risk can be found in Note G11 “Risk and 
liquidity management”. Exposures without individu-
ally calculated allowances are covered by the mod-
el-based impairment calculation.
For significant exposures where a credit event has 
been identified, the exposure is tested for impair-
ment on an individual basis. If the exposure is con-
sidered impaired, an individual provision is recog-
nised. The carrying amount of the exposure is com-
pared with the net present value of expected future 
cash flows. If the carrying amount is higher, the dif-
ference is recognised as an impairment loss. The 
expected cash flows include the fair value of collat-
eral and other credit enhancements and are dis-
counted at the original effective interest rate. The 
estimate is based on three different forward-looking 
scenarios that are probability weighted to derive the 
net present value.
For insignificant exposures that have been indi-
vidually identified as credit impaired, the impairment 
loss is measured using the model described below 
but based on the fact that the exposures are already 
in default. 
Nordea uses the “low credit risk exemption” for 
retail exposures and non-retail exposures issued 
after transition to IFRS 9 on 1 January 2018. Such 
exposures with a 12-month probability of default 
(PD) below 0.3% are classified as stage 1. Nordea 
also applies this exception to a minor portfolio of 
interest-bearing securities in its insurance operations. 
Model-based allowance calculation
For exposures not impaired on an individual basis, a 
statistical model is used for calculating impairment 
losses. The provisions are calculated as the exposure 
at default (EAD) times the probability of default 
(PD) times the loss given default (LGD). The provi-
sions for exposures for which there has been no sig-
nificant increase in credit risk since initial recognition 
are based on the 12-month expected loss (stage 1). 
The provisions for exposures for which there has 
been a significant increase in credit risk since initial 
recognition, but which are not credit impaired, are 
based on the lifetime expected losses (stage 2). This 
is also the case for the individuallly immaterial cred-
it-impaired exposures in stage 3.
Nordea uses different models to identify whether 
there has been a significant increase in credit risk or 
not. For non-retail assets held on transition to IFRS 9, 
the change in internal rating and scoring data is used 
to determine whether there has been a significant 
increase in credit risk or not. Internal rating/scoring 
information is used to assess the risk of the custom-
ers and a deterioration in rating/scoring indicates an 
increase in the credit risk of the customer. Nordea has 
concluded that it is not possible to calculate the

===== SIDA 229 =====

Nordea Annual Report 2025 228
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.8 Loans, cont.
lifetime PD at origination without the use of hindsight 
for non-retail assets already recognised on the bal-
ance sheet at transition. Changes to the lifetime PD 
are used as the trigger for non-retail assets recog-
nised after transition and for retail assets recognised 
both before and after transition.
For assets evaluated based on lifetime PD, Nordea 
uses a mix of absolute and relative changes in PD as 
the transfer criterion. 
• Retail customers with a relative increase in lifetime 
PD above 200% are transferred to stage 2. 
• Non-retail customers with an initial 12-month PD 
below 0.5%: 
Exposures with a relative increase in lifetime PD 
above 150% and an absolute increase in 12-month 
PD above 20bp are transferred to stage 2. 
• Non-retail customers with an initial 12-month PD 
above or equal to 0.5%: 
Exposures with a relative increase in lifetime PD 
above 150% or an absolute increase in 12-month 
PD above 400bp are transferred to stage 2.
For non-retail assets recognised on the balance sheet 
before transition to IFRS 9, the change in rating/scor-
ing notches is used as the stage transfer criterion. The 
number of notches is calibrated to match the signifi-
cant increase in credit risk based on lifetime PD. 
In addition, Nordea applies the following back-
stops for transfers between stages:
• Customers with forbearance measures and cus-
tomers with payments more than thirty days past 
due are transferred to stage 2, unless already iden-
tified as credit impaired (stage 3). Exposures with 
forbearance measures will stay in stage 2 for a pro-
bation period of 24 months from when the meas-
ures were introduced. Once transferred back to 
stage 1, after the probation period, the exposures 
are treated as any other stage 1 exposure on the 
assessment of significant increase in credit risk. 
• Exposures more than 90 days past due are normally 
classified as stage 3, but this classification will be 
rebutted if there is evidence that the customer is not 
in default. Such exposures are  c lassified as stage 2. 
• Non-retail exposures with a relative change in 
annualised lifetime PD exceeding 200% and with 
at least one rating grade of deterioration are trans-
ferred to stage 2. 
• Retail exposures classified as high risk, i.e. with a 
PD above 5.83%, are transferred to stage 2. 
• Non-retail exposures classified as high risk, i.e. 
with a rating grade of 2 or below, are transferred to 
stage 2.
• Retail and Non-retail exposures with 12-month PD 
below 0.3% use a low credit risk exemption, which 
prevents movement to stage 2 from absolute or 
relative changes in PD. The exemption does not 
prevent stage movement from the other backstop 
triggers listed.
When calculating provisions, including the staging 
assessment, the calculation is based on both histori-
cal data and probability-weighted forward-looking 
information. Nordea applies three macroeconomic 
scenarios to address the non-linearity in expected 
credit losses. The different scenarios are used to 
adjust the relevant parameters for calculating 
expected losses and a probability-weighted average 
of the expected losses under each scenario is recog-
nised as provisions. The model is based on data col-
lected before the reporting date, requiring Nordea to 
identify events that could affect the provisions after 
the data is sourced to the model calculation. 
Management evaluates these events and adjusts the 
provisions if deemed necessary.
Write-offs
A write-off is a derecognition of a loan or receivable 
from the balance sheet and a final realisation of a 
credit loss provision. When assets are considered 
uncollectible, they should be written off as soon as 
possible, regardless of whether the legal claim 
remains or not. A write-off can take place before legal 
actions against the borrower to recover the debt have 
been concluded in full. Although an uncollectible 
asset is removed or written off from the balance 
sheet, the customer remains legally obligated to pay 
the outstanding debt. When assessing the recovera-
bility of non-performing loans and determining if 
write-offs are required, exposures with the following 
characteristics are in particular focus (the list is not 
exhaustive):
• Exposures past due more than 90 days. If, following 
this assessment, an exposure or part of an expo-
sure is deemed as unrecoverable, it is written off.
• Exposures under insolvency procedures where the 
collateralisation of the exposure is low.
• Exposures where legal expenses are expected to 
absorb the proceeds from the bankruptcy proce-
dure and estimated recoveries are therefore 
expected to be low.
• A partial write-off may be warranted where there 
is reasonable financial evidence to demonstrate an 
inability of the borrower to repay the full amount, 
i.e. a significant level of debt which cannot be rea-
sonably demonstrated to be recoverable following 
forbearance treatment and/or the execution of 
collateral.
• Restructuring cases.
Discount rate
The discount rate used to measure impairment is the 
original effective interest rate for loans attached to an 
individual customer or, if applicable, to a group of 
loans. If considered appropriate, the discount rate can 
be based on a method that results in an impairment 
that is a reasonable approximation using the effective 
interest rate method as basis for the calculation.
Restructured loans and modifications
In this context a restructured loan is defined as a loan 
where Nordea has granted concessions to the obli-
gor due to their financial difficulties and where such 
concessions have resulted in an impairment loss for 
Nordea. After restructuring, the loan is normally 
regarded as not impaired if it performs according to 
the new terms and conditions. In the event of recov-
ery, the payment is reported as recovery of loan 
losses. 
Modifications of the contractual cash flows of 
loans to customers in financial difficulties (forbear-
ance) reduce the gross carrying amount of the loan. 
Normally this reduction is less than the existing pro-
vision and no loss is recognised in the income state-
ment due to modifications. If significant, the gross 
amounts (loan and allowance) are reduced. 
Assets taken over for protection of claims
In a financial reconstruction the creditor may con-
cede loans to the obligor and in exchange for this 
concession acquires an asset pledged for the con-
ceded loans, shares issued by the obligor or other 
assets. Assets taken over for protection of claims are 
reported on the same balance sheet line as similar 
assets already held by Nordea. For example, a prop-
erty taken over, not held for Nordea’s own use, is 
reported together with other investment properties.
At initial recognition, all assets taken over for pro-
tection of claims are recognised at fair value and the 
possible difference between the carrying amount of 
the loan and the fair value of the assets taken over is 
recognised in “Net loan losses”. The fair value of the 
asset on the date of recognition becomes its cost or 
amortised cost value, as applicable. In subsequent 
periods, assets taken over for protection of claims are 
valued in accordance with the valuation principles 
for the appropriate type of asset. Investment proper-
ties are then measured at fair value. Financial assets 
that are foreclosed are generally classified in the cat-
egory “Fair value through profit or loss” and meas-
ured at fair value. Changes in fair value are recog-
nised in the income statement under “Net result from 
items at fair value”.
Any change in value, after the initial recognition of 
the asset taken over, is presented in the income 
statement in line with the Group’s presentation poli-
cies for the appropriate asset. The item “Net loan 
losses” in the income statement is, after the initial

===== SIDA 230 =====

Nordea Annual Report 2025 229
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.8 Loans, cont.
recognition of the asset taken over, consequently not 
affected by any subsequent remeasurement of the 
asset.
Critical judgements and estimation uncertainty
Management is required to exercise critical judge-
ments and estimates when calculating loan impair-
ment allowances. Nordea’s total lending at amortised 
cost before impairment allowances was EUR 
301,880m (EUR 282,858m) at the end of the year. 
When calculating allowances for individually sig-
nificant impaired loans, judgement is exercised to 
estimate the amount and timing of the expected 
cash flows to be received from the customers under 
different scenarios, including the valuation of any 
collateral received. Judgement is also applied when 
assigning the likelihood of the different scenarios 
occurring.
Judgement is exercised to assess when an expo-
sure has experienced a significant increase in credit 
risk. If this is the case, the provision should reflect the 
lifetime expected losses as opposed to a 12-month 
expected loss amount for exposures that have not 
increased significantly in credit risk. Judgement is 
also exercised in the choice of modelling approaches 
covering other parameters used when calculating 
the expected losses, such as the expected lifetime 
used in stage 2, as well as in the assessment of 
whether the parameters based on historical experi-
ence are relevant for estimating future losses.
The statistical models used to calculate provisions 
are based on macroeconomic scenarios, which 
requires management to exercise judgement when 
identifying such scenarios and when assigning the 
likelihood of the different scenarios occurring. 
Judgement is also exercised in the assessment of to 
what extent the parameters for the different scenar-
ios, based on historical experience, are relevant for 
estimating future losses. The model is based on data 
collected before the reporting date, requiring Nordea 
to identify events that could affect the provisions 
after the data is sourced to the model calculation. 
Nordea adjusts its collectively calculated provisions if 
the historical data does not adequately reflect man-
agement’s view regarding expected credit losses. 
Adjustments to the model-based expected credit 
losses are made to reflect the estimation uncertainty. 
For more information on adjustments to credit losses, 
see Note G11. 
Loans and impairment
EURm 31 Dec 2025 31 Dec 2024
Loans measured at fair value 92,350 83,360
Loans measured at amortised cost, not credit impaired (stages 1 and 2) 298,745 279,913
Credit impaired loans (stage 3) 3,135 2,945
- of which servicing 1,228 1,133
- of which non-servicing 1,907 1,812
Loans before allowances 394,230 366,218
- of which central banks and credit institutions 10,990 7,035
Allowances for loans that are credit impaired (stage 3) -977 -1,069
- of which servicing -402 -439
- of which non-servicing -575 -630
Allowances for loans that are not credit impaired (stages 1 and 2) -397 -536
Allowances -1,374 -1,605
- of which central banks and credit institutions -5 -10
Loans, carrying amount 392,856 364,613
Nordea has granted EUR 177bn (EUR 172bn) in mortgage credits. No intermediary credits or public sector credits  
have been granted.

===== SIDA 231 =====

Nordea Annual Report 2025 230
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.9 Interest-bearing securities 
Accounting policies
Instruments that are readily transferable and where 
the holder of the instrument receives the nominal 
amount at maturity are normally reported in the bal-
ance sheet line item “Interest-bearing securities”. 
Instruments that cannot be transferred or sold with-
out the consent of the holder of the instrument are 
normally reported as loans, see Note G3.8 “Loans”. 
In repurchase transactions and in securities lend-
ing transactions, non-cash assets are transferred as 
collateral. When the counterparty receiving the col-
lateral has the right to sell or repledge the assets, 
the assets are disclosed in Note G3.7 “Financial 
instruments pledged as collateral”. Investments in 
interest-bearing securities on behalf of customers 
(see Note G3.11 “Assets and deposits in pooled 
schemes and unit-linked investment contracts”) are 
not presented in “Interest-bearing securities”.
For more information about accounting policies, 
see Note G3.1 “Recognition on and derecognition 
from the balance sheet“, Note G3.2 “Transferred 
assets and obtained collateral“, Note G3.3 
“Classification and measurement” and Note G3.4 
“Fair value”.
Interest-bearing securities
EURm 31 Dec 2025 31 Dec 2024
State, municipalities and other public 
bodies 20,949 19,926
Mortgage institutions 23,733 20,311
Other credit institutions 25,340 24,499
Corporates 7,063 5,823
Other 2,787 2,905
Total 79,872 73,464
Provisions for credit risks amounted to EUR 2m (EUR 2m).
G3.10 Shares
Accounting policies
The balance sheet line item “Shares” includes equity 
instruments, i.e. contracts that evidence a residual 
interest in the assets of an entity after deducting all 
of its liabilities, including holdings in different funds 
such as a unit in an investment fund or private 
equity fund. However, investments in associated 
undertakings and joint ventures (see Note G9.3 
“Investments in associated undertakings and joint 
ventures”), investments in group undertakings (see 
Note G9.1 “Consolidated entities”) and investments 
in shares and fund units on behalf of customers (see 
Note G3.11 “Assets and deposits in pooled schemes 
and unit-linked investment contracts”) are not 
included in “Shares”.
In repurchase transactions and in securities lend-
ing transactions, non-cash assets are transferred as 
collateral. When the counterparty receiving the col-
lateral has the right to sell or repledge the assets, 
the assets are disclosed in Note G3.7 “Financial 
instruments pledged as collateral”. 
For more information about accounting policies, 
see Note G3.1 “Recognition on and derecognition 
from the balance sheet“, Note G3.2 “Transferred 
assets and obtained collateral”, Note G3.3 
“Classification and measurement” and Note G3.4 
“Fair value”.
Shares
EURm 31 Dec 2025 31 Dec 2024
Shares 12,320 12,884
Fund units, equity related 20,763 16,493
Fund units, interest related 6,504 6,011
Total 39,587 35,388
G3.11  Assets and deposits in pooled 
schemes and unit-linked 
investment contracts
Accounting policies
Assets and deposits in pooled schemes and unit-
linked investment contracts are contracts with cus-
tomers and policyholders where most or all of the 
risk of the assets is borne by the customers or the 
policyholders. Unit-linked contracts with investment 
guarantees or contracts which transfer significant 
insurance risk are classified as insurance contracts. 
The deposits received from customers are invested 
in different types of financial assets on behalf of the 
customers and policyholders. Since the assets and 
liabilities legally belong to Nordea, these assets and 
liabilities are recognised on Nordea’s balance sheet.
The assets and deposits under these contracts are 
measured at fair value as described in Note G3.4 
“Fair value”. For more information on the difference 
between insurance contracts and investment con-
tracts, see Note G4 “Insurance contract liabilities”. 
Assets and deposits in pooled schemes and unit-linked 
investment contracts
EURm 31 Dec 2025 31 Dec 2024
Assets
Interest-bearing securities1 2,082 2,043
Shares 67,388 57,895
Investment properties 876 751
Other assets 331 190
Total 70,677 60,879
Liabilities
Pooled schemes 4,007 4,317
Unit-linked investment contracts 67,604 57,396
Total 71,611 61,713
1) Including interest related fund units.
Nordea Life & Pension and Nordea Danmark, filial af 
Nordea Bank Abp, Finland, have assets and liabilities rec-
ognised on their balance sheets for which customers bear 
most or all of the risk. 
For information about the fair value of investment prop-
erties in pooled schemes and unit-linked investment con-
tracts, see Note G5.3 “Investment properties”.

===== SIDA 232 =====

Nordea Annual Report 2025 231
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.12 Derivatives
Accounting policies 
A derivative is a financial instrument or other con-
tract with all three of the following characteristics:
• Its value changes in response to the change in a 
specified interest rate, financial instrument price, 
commodity price, foreign exchange rate, index of 
prices or rates, credit rating or credit index, or other 
variable, provided in the case of a non-financial 
variable that the variable is not specific to a party 
to the contract (so-called “underlying”).
• It requires no initial net investment or an initial net 
investment that is smaller than would be required for 
other types of contracts that would be expected to 
have a similar response to changes in market factors.
• It is settled at a future date.
Contracts that fulfil the above requirements of being 
derivatives but where Nordea is to take delivery of a 
non-financial item for own use are not derivatives. 
All derivatives are recognised on the balance 
sheet and measured at fair value. Derivatives with a 
positive fair value, including any accrued interest, 
are recognised as assets in the line item 
“Derivatives” on the asset side. Derivatives with a 
negative fair value, including any accrued interest, 
are recognised as liabilities in the line item 
“Derivatives” on the liability side. 
Nordea incorporates credit valuation adjustments 
(CVAs) and debit valuation adjustments (DVAs) into 
derivative valuations as well as other valuation 
adjustments (XVAs). CVAs and DVAs reflect the 
impact on fair value from the counterparty’s credit 
risk and Nordea’s own credit quality, respectively. 
For more information about the calculation and 
other XVAs, see Note G3.4 “Fair value”. 
Realised and unrealised gains and losses from 
derivatives are recognised in the income statement 
under “Net result from items at fair value”. For more 
information about accounting policies and critical 
judgements, see Note G3.4 “Fair value”.
Nordea enters into derivatives for trading and risk man-
agement purposes. Nordea may take positions with the 
expectation of profiting from favourable movements in 
prices, rates or indices. The trading portfolio is treated as 
trading risk for risk management purposes. Derivatives 
held for risk management purposes include hedges that 
meet the hedge accounting requirements and hedges that 
are economic hedges but do not meet the hedge account-
ing requirements.
The table below shows the fair value of derivative 
financial instruments not used for hedge accounting 
together with their nominal amounts. The nominal 
amounts indicate the volume of transactions outstanding 
at year end and are neither indicative of market risk nor 
credit risk. For more information about derivatives used for 
hedge accounting, see Note G3.6 “Hedge accounting”.
The fair value and nominal amount of derivatives in this 
note represent derivatives before offsetting between 
assets and liabilities on the balance sheet (gross amount) 
as the gross amount better reflects Nordea’s exposure.
Derivatives
31 Dec 2025 31 Dec 2024
Fair value
Nominal 
amount
Fair value
Nominal 
amountEURm Positive Negative Positive Negative
Derivatives not used for hedge accounting 160,946 163,895 11,480,563 134,685 136,630 7,874,424
Derivatives used for hedge accounting 2,740 3,167 235,339 4,561 3,199 253,248
Total gross derivatives 163,686 167,062 11,715,902 139,246 139,829 8,127,672
Derivatives offset on the balance sheet -146,053 -148,984 -114,035 -114,795
Total derivatives 17,633 18,078 11,715,902 25,211 25,034 8,127,672
Derivatives not used for hedge accounting
31 Dec 2025 31 Dec 2024
Fair value
Nominal 
amount
Fair value
Nominal 
amountEURm Positive Negative Positive Negative
Interest rate derivatives
Interest rate swaps 147,985 150,531 8,517,590 118,410 118,799 5,309,744
FRAs 428 444 1,551,754 919 938 1,327,480
Futures and forwards 6 5 131,154 5 6 120,899
Options 1,692 1,600 178,558 2,450 2,401 228,060
Total 150,111 152,580 10,379,056 121,784 122,144 6,986,183
Equity derivatives
Equity swaps 265 467 29,705 442 270 31,678
Futures and forwards 2 9 421 3 1 901
Options 122 411 4,085 112 397 4,214
Other 0 21 – – – –
Total 389 908 34,211 557 668 36,793
Foreign exchange derivatives
Currency and interest rate swaps 2,884 2,793 253,200 5,436 7,395 267,148
Currency forwards 2,188 2,281 435,666 3,808 3,409 387,345
Options 80 1 3,309 114 0 2,250
Total 5,152 5,075 692,175 9,358 10,804 656,743
Other derivatives
Credit default swaps (CDS) 5,294 5,306 374,055 2,984 2,988 194,530
Commodity derivatives 0 26 1,040 0 9 136
Other derivatives 0 0 26 2 17 39
Total 5,294 5,332 375,121 2,986 3,014 194,705
Total derivatives not used for hedge accounting 160,946 163,895 11,480,563 134,685 136,630 7,874,424

===== SIDA 233 =====

Nordea Annual Report 2025 232
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G3.13 Deposits by credit institutions
Accounting policies 
Deposits by credit institutions include liabilities 
towards central banks, banks, credit market compa-
nies, credit companies, finance companies and mort-
gage institutions. Deposits are classified in accordance 
with Note G3.3 “Classification and measurement”.
For additional accounting policies, see Note G3.1 
“Recognition on and derecognition from the balance 
sheet”, Note G3.2 “Transferred assets and obtained 
collateral” and Note G3.4 “Fair value”.
Deposits by credit institutions
EURm 31 Dec 2025 31 Dec 2024
Central banks 7,460 5,757
Banks 24,836 21,062
Other credit institutions 1,835 1,956
Total 34,131 28,775
G3.14  Deposits and borrowings 
from the public
Accounting policies 
Deposits from the public are defined as funds in 
deposit accounts covered by the government deposit 
guarantee but also include amounts in excess of the 
individual amount limits. Individual pension savings 
are also included, but deposits in pooled schemes are 
presented as “Assets in pooled schemes and unit-
linked investment contracts“, see Note G3.11 “Assets 
and deposits in pooled schemes and unit-linked 
investment contracts”. Borrowings are other liabilities 
to the public that are not in the form of debt securi-
ties. Deposits and borrowings are classified into the 
different categories of financial instruments defined 
in Note G3.3 “Classification and measurement”.
For additional accounting policies, see Note G3.1 
“Recognition on and derecognition from the balance 
sheet”, Note G3.2 “Transferred assets and obtained 
collateral” and Note G3.4 “Fair value”.
Deposits and borrowings from the public
EURm 31 Dec 2025 31 Dec 2024
Deposits1 225,808 223,243
Repurchase agreements 17,066 9,192
Total 242,874 232,435
1) Deposits related to individual pension savings are also included.
G3.15 Debt securities in issue
Accounting policies 
Debt securities are instruments issued by Nordea 
that are readily transferable without the consent of 
Nordea. Debt securities are classified into the differ-
ent categories in accordance with Note G3.3 
“Classification and measurement”. 
For hedged items in fair value hedges at micro 
level, the hedged risk is measured at fair value and 
presented in the line item “Fair value changes in 
micro hedges of interest rate risk” in the table below 
(for more information, see Note G3.6 “Hedge 
accounting”).
For additional accounting policies, see Note G3.1 
“Recognition on and derecognition from the balance 
sheet” and Note G3.4 “Fair value”. 
Debt securities in issue
EURm 31 Dec 2025 31 Dec 2024
Certificates of deposit 38,220 29,713
Commercial paper 10,591 9,980
Covered bonds 119,299 121,380
Senior non-preferred bonds 14,689 14,703
Senior unsecured bonds 13,903 12,997
Other 24 25
Fair value changes in micro hedges of 
interest rate risk -450 -662
Total 196,276 188,136
G3.16 Other liabilities
Accounting policies 
Other liabilities are liabilities that do not qualify for 
any of the other line items covering liabilities.
For additional accounting policies, see Note G3.1 
“Recognition on and derecognition from the balance 
sheet”, Note G3.3 ”Classification and measurement” 
and Note G3.4 “Fair value”. 
Other liabilities
EURm
Financial 
liabilities
Non-
financial 
liabilities Total
31 Dec 2025
Liabilities on securities 
 settlement proceeds 1,069 – 1,069
Sold, not held, securities 3,964 – 3,964
Accounts payable 181 – 181
Cash/margin payables 3,535 – 3,535
Lease liabilities 1,045 – 1,045
Other 2,140 2,472 4,612
Total 11,934 2,472 14,406
31 Dec 2024
Liabilities on securities 
 settlement proceeds 957 – 957
Sold, not held, securities 2,980 – 2,980
Accounts payable 215 – 215
Cash/margin payables 4,222 – 4,222
Lease liabilities 1,103 – 1,103
Other 2,491 2,228 4,719
Total 11,968 2,228 14,196
G3.17 Subordinated liabilities
Accounting policies 
Subordinated liabilities are financial liabilities for 
which it has been contractually agreed that they are 
not to be repaid in the event of liquidation or bank-
ruptcy until all obligations towards other creditors 
have been fulfilled. 
For additional accounting policies, see Note G3.1 
“Recognition on and derecognition from the balance 
sheet” and Note G3.3 “Classification and 
measurement”. 
For hedged items in fair value hedges at micro 
level, the hedged risk is measured at fair value and 
presented in the line item “Fair value changes in 
micro hedges of interest rate risk” in the table below 
(for more information, see Note G3.6 “Hedge 
accounting”). For more information on the critical 
judgement needed to assess whether a subordi-
nated loan is classified as a liability or equity, see 
Note G3.3 “Classification and measurement”.
Subordinated liabilities
EURm 31 Dec 2025 31 Dec 2024
Additional Tier 1 4,367 3,436
Tier 2 4,613 4,302
Fair value changes in micro hedges of 
interest rate risk -170 -328
Total 8,810 7,410
For more information, see Note P3.14 “Subordinated liabilities”.

===== SIDA 234 =====

Nordea Annual Report 2025 233
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance 
contract liabilities 
Accounting policies 
IFRS 17 is applicable to insurance contracts issued, 
reinsurance contracts held and investment contracts 
with discretionary participation features (DPF) issued. 
An insurance contract is defined as “a contract under 
which one party (the insurer) accepts significant 
insurance risks from another party (the policyholder) 
by agreeing to compensate the policyholder if a spec-
ified uncertain future event (the insured event) 
adversely affects the policyholder”. DPF contracts 
give the policyholder the contractual right to receive, 
as a supplement to an amount not subject to the dis-
cretion of the issuer, significant additional amounts 
where the timing or amount is contractually at the 
discretion of Nordea and the investment returns are 
linked to a specified pool of assets held by Nordea. 
Insurance contracts, reinsurance contracts and invest-
ment contracts with DPF are below referred to as 
“insurance contracts”.
For Nordea, issued contracts accounted for under 
IFRS 17 include:
• Life insurance.
• Pension plans with or without guaranteed returns, 
but with additional bonus. 
• Combined insurance pensions plans with signifi-
cant additional death benefits.
• Health and personal accident insurance. 
Unit of account
For most contracts, the legal contract is the basis for 
accounting. Unit-linked contracts and Traditional 
contracts in Sweden are considered to be two sepa-
rate contracts, a saving contract and a risk contract, 
for accounting purposes. The unit-linked saving con-
tracts are accounted for under IFRS 9 and IFRS 15 
and the other contracts are accounted for under 
IFRS 17. The death cover and other risk covers of the 
Finnish contracts are regarded as separate account-
ing contracts, accounted for under IFRS 17.
Recognition and derecognition
Insurance contracts are recognised from the earliest 
of:
• the beginning of the coverage period of the group 
of contracts,
• the date when the first payment from a policy-
holder in the group becomes due, and
• for a group of onerous contracts, when the group 
becomes onerous.
Investment contracts with DPF are recognised from 
the date the entity becomes party to the contract. 
Insurance contracts are derecognised when they are 
extinguished, which means when the obligation spec-
ified in the insurance contract expires or is discharged 
or cancelled. Insurance contracts are also derecog-
nised when substantially modified, in which case a 
new contract is recognised with new terms.
General measurement model
The general measurement model (GMM) is used for 
an individual risk product in Norway (endowment con-
tracts) and different risk insurance products in Finland.
Insurance contracts are aggregated into portfolios 
of insurance contracts with similar risks and managed 
together. For each portfolio, contracts issued in one 
calendar year are further grouped into annual cohorts. 
Each of these sets of contracts is then broken down 
into groups of onerous and profitable contracts. At ini-
tial recognition, fulfilment cash flows are estimated for 
all groups of insurance contracts. For groups of con-
tracts with net positive cash flows (profitable con-
tracts), the contractual service margin (CSM) is an 
equal and opposite value on initial recognition to the 
expected net positive cash flows and is recognised as 
an insurance liability. This is because the entire value 
of the contracts relates to services to be provided in 
the future and, therefore, profit to be earned in the 
future. For groups of contracts with negative fulfil-
ment cash flows (onerous contracts), the negative 
amount is considered the loss component of the liabil-
ity for remaining coverage and is recognised as a loss 
in the income statement.
The fulfilment cash flows consist of the following 
components: 
• Unbiased and Nordea-specific estimates of 
expected cash flows that will arise as the entity 
fulfils the contracts. The estimates are updated at 
each reporting date.
• An adjustment to reflect the time value of money, in 
other words the effect of discounting. This also 
includes the financial risks to the future cash flows, 
to the extent that the financial risks are not reflected 
in the estimates of future cash flows.
• An explicit risk adjustment for non-financial risk to 
reflect the compensation that the entity requires 
for bearing the uncertainty about the amount and 
timing of cash flows that arise from non-financial 
risk.
In subsequent periods, the fulfilment cash flows are 
reassessed and remeasured at each reporting date, 
using current assumptions. The CSM is released to 
the income statement as services are provided. For 
investment contracts with DPF, the release is based 
on when investment services are provided and for 
the remaining contracts it is based on when insur-
ance contract services are provided.
Variable fee approach
The variable fee approach (VFA) is used for all con-
tracts with direct participation features. These con-
tracts are at inception accounted for in the same 
way as under the general measurement model. 
Nordea
 provides investment- and insurance- r elated 
services and is compensated for the services by a 
fee that is determined with reference to the underly-
ing assets. The CSM is adjusted after initial recogni-
tion, where changes related to Nordea’s share of the 
fair value of the underlying assets also adjust the 
CSM liability. The adjusted CSM is the basis for the 
future release to the income statement. 
Premium allocation approach
The premium allocation approach (PAA) is used for 
short-term contracts (with a coverage period of less 
than one year), normally related to health and disa-
bility risks, although some such contracts in Finland 
are measured under the general measurement 
model. The liability consists of two parts:
• Liability for remaining coverage.
• Liability for incurred claims.
The liability for remaining coverage is measured 
based on unearned premiums received and released 
to the income statement based on the amount of 
expected premium receipts allocated to the period 
on the basis of passage of time. The liability for 
incurred claims is measured in the same way as 
under the general measurement model. 
Nordea has chosen to recognise the acquisition 
cash flows as expenses when they occur under the 
PAA model. Under this model when measuring the 
liability for incurred claims, Nordea adjusts future 
cash flows for the time value of money if those cash 
flows are expected to be paid or received more than 
one year from the date the claims are incurred.
Insurance acquisition cash flows
Insurance acquisition cash flows (IACF), relating to 
insurance contracts measured under the GMM and 
VFA models, are allocated to groups of insurance 
contracts at initial recognition and amortised as ser-
vices are provided. IACF allocated to groups with a 
short contract boundary measured under the GMM 
and VFA recognise an asset for IACF for each related 
group of insurance contracts before the related group 
of insurance contracts is recognised. The asset for 
IACF is derecognised when the IACF are included in 
the cash flows and measurement of the related group 
of insurance contracts. There is an assessment of the 
recoverability of the asset for IACF if facts and cir-
cumstances indicate that the asset may be impaired. 
If an impairment loss is identified, the carrying 
amount of the asset is adjusted and an impairment 
loss in profit or loss is recognized. The PAA is used for 
insurance contracts with a coverage period of one

===== SIDA 235 =====

Nordea Annual Report 2025 234
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insur ance contract liabilities, cont.
year or less. Under the PAA measurement model, the 
IACF are recognised as an expense when incurred.
Critical judgements and estimation uncertainty
A valuation of insurance liabilities includes estima-
tions and assumptions, both financial and actuarial, 
that affect the present value of future cash flows. 
For most of the products risk-neutral stochastic 
modelling techniques are used, while for some prod-
ucts deterministic models are used. The methods 
and processes used were stable during the year.
The main assumptions used when calculating the 
insurance liabilities are explained below.
In scope of IFRS 17
Nordea applies IFRS 17 to insurance contracts 
issued, reinsurance contracts held and investment 
contracts with discretionary participation features 
(DPF) issued.
Insurance contracts are, as stated in the account-
ing policies above, contracts under which Nordea 
accepts significant insurance risk from the policy-
holder by agreeing to compensate the policyholder 
if a specified uncertain future event adversely 
affects the policyholder. 
If the contract does not transfer any significant insur-
ance risk but contains DPF, it is accounted for under 
IFRS 17 since Nordea also issues insurance contracts. 
Thus there is a necessity to determine if an investment 
contract is to be classified as comprising DPF.
The evaluation of the existence of significant 
insurance risk is made on a contract-by-contract 
basis and given that the contract exposes Nordea to 
insurance risk, further investigation is performed to 
assess if significant insurance risk exists. 
A contract transfers significant insurance risk if 
there exists any scenario of commercial substance at 
initial recognition in which the policyholder receives 
additional amounts (5%-10%) that exceed the 
investment component. The investment component 
is defined as the amount that an insurance contract 
requires Nordea to repay to a policyholder even if an 
insured event does not occur.
An investment contract with DPF is defined as a 
financial instrument that provides a particular inves-
tor with the contractual right to receive, as a supple-
ment to an amount not subject to the discretion of 
Nordea, additional amounts:
• that are expected to be a significant portion 
(>10%) of the total contractual benefits,
• the timing or amount of which are contractually at 
the discretion of Nordea (profit sharing, mutualis-
ation elements exists and/or Board decided return 
allocation), and
• that are contractually based on:
 - the returns on a specified pool of contracts or a 
 specified type of contract,
 -  realised and/or unrealised investment returns  
on a specified pool of assets held by Nordea, or
 - the profit or loss of Nordea. 
Release of CSM
An amount of CSM is recognised as profit or loss in 
each period and the amount reflects the service pro-
vided. The release-pattern of the CSM is determined 
by first identifying coverage units for the group of 
contracts, representing the quantity of benefits 
under the expected coverage duration, and secondly 
release coverage units for each period reflecting the 
service provided. For investment contracts with DPF, 
the release is based on when investment services are 
provided and for the remaining contracts it is based 
on when insurance contract services are provided.
Expenses
Operating expenses are part of future cash flows 
and correspond to the costs of maintaining the cur-
rent in-force business, adjusted for inflation. 
Increased expected expenses reduce future 
expected profits. Expenses are allocated to groups 
of contracts using well-defined methodologies that 
are consistent over time.
Surrender rates
Partial and full surrender and transfers of capital 
affect the insurance liabilities and profits. Surrender 
assumptions are derived using trends in historical 
data and vary by e.g. product type and type of con-
tract. Higher surrender rates than assumed will 
reduce profits if the underlying contracts are 
profitable. 
Mortality, longevity and morbidity
Standard industry tables are used when setting the 
assumptions for mortality, longevity and morbidity. 
The assumptions vary with e.g. the policyholder’s 
gender and age, product type and class. Deviations 
from the assumed rates will affect the expected 
future profits.
Risk adjustment for non-financial risk
The risk adjustment aims to capture the compensa-
tion required by Nordea for bearing the uncertainty 
around the amount and timing of the cash flows that 
arises from non-financial risk. Nordea determines the 
risk adjustment using a single equivalent scenario 
stress approach, which has a confidence level of 79% 
(78% in 2024). The stress parameters are updated on 
a yearly basis. The entire change in risk adjustment is 
fully presented in the line item “Net insurance reve-
nue” and relates to both current and future services. 
Discount rates 
Methods and assumptions used to derive the dis-
count rates are applied consistently within Nordea 
Life & Pension. Further, for each jurisdiction, the dis-
count rate is consistently applied for all products. 
The discount rate is determined using a bot-
tom-up approach as the sum of a risk-free compo-
nent and an illiquidity component. The risk-free 
component ensures that the discount rate reflects 
the time value of money and is consistent with 
observable market prices. The illiquidity component 
reflects the characteristics of the liabilities. 
The discount rates used to calculate the present 
value of future cash flows are presented in the table 
below. 
1 year 3 years 5 years 10 years 20 years
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
EUR 2.1% 2.3% 2.5% 1.9% 2.8% 2.0% 3.4% 2.2% 3.4% 2.0%
SEK 2.0% 2.3% 2.3% 2.3% 2.5% 2.4% 2.9% 2.6% 3.1% 2.9%
NOK 4.2% 4.7% 4.2% 4.6% 4.2% 4.4% 4.2% 4.3% 4.1% 4.2%
DKK 2.2% 2.4% 2.4% 2.3% 2.6% 2.3% 3.0% 2.4% 3.4% 2.4%

===== SIDA 236 =====

Nordea Annual Report 2025 235
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance contract liabilities, cont.
Insurance contract liabilities
EURm 31 Dec 2025 31 Dec 2024
General measurement model (GMM) 167 147
Variable fee approach (VFA) 32,578 29,854
Subtotal 32,745 30,001
Premium allocation approach (PAA) 455 434
Asset for insurance acquisition cash flows -103 -84
Total insurance contract liabilities 33,097 30,351
Life and disability insurance is mainly measured under the 
measurement model GMM. Insurance contracts with 
direct participation features are measured under the 
measurement model VFA. For some life and disability 
insurance contracts, with a coverage period of one year or 
less, the PAA model is used instead. 
More information regarding the measurement models 
can be found in the accounting policies. See also Note G2.4 
“Net insurance result”.
Analysis by remaining coverage and incurred claims – contracts measured under GMM and VFA
31 Dec 2025 31 Dec 2024
Liabilities for remaining coverage
Liabilities  
for incurred claims
Liabilities for remaining coverage
Liabilities  
for incurred claimsEURm
Excluding loss 
component Loss component Total
Excluding loss 
component Loss component Total
Opening balance 29,761 23 217 30,001 26,971 16 215 27,202
Changes through the income statement
Insurance revenue
Contracts under the modified retrospective approach -35 – – -35 -32 – – -32
Contracts under the fair value approach -360 – – -360 -341 – – -341
Other contracts -127 – – -127 -98 – – -98
Insurance revenue -522 – – -522 -471 – – -471
Insurance service expenses
Incurred claims and other expenses – -21 252 231 0 -12 223 211
Changes to liabilities for incurred claims – – 2 2 – – 5 5
Amortisation of insurance acquisition cash flows 14 – – 14 13 – – 13
Losses and reversal of losses on onerous contracts – 24 – 24 – 20 – 20
Insurance service expenses 14 3 254 271 13 8 228 249
Net insurance revenue -508 3 254 -251 -458 8 228 -222
Insurance finance income or expenses 2,311 – -2 2,309 2,561 – 3 2,564
Total changes through the income statement 1,803 3 252 2,058 2,103 8 231 2,342
Investment components -2,631 – 2,631 0 -2,229 – 2,229 0
Cash flows
Premiums received 3,417 – – 3,417 3,276 – – 3,276
Claims and other insurance service expenses paid, including 
investment components – – -2,773 -2,773 – – -2,459 -2,459
Insurance acquisition cash flows -24 – – -24 -24 – – -24
Total cash flows 3,393 – -2,773 620 3,252 – -2,459 793
Other movements 27 – -123 -96 – – – –
Translation differences 162 – – 162 -336 -1 1 -336
Closing balance 32,515 26 204 32,745 29,761 23 217 30,001

===== SIDA 237 =====

Nordea Annual Report 2025 236
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance contract liabilities, cont.
Analysis by measurement component – contracts measured under GMM and VFA
31 Dec 2025 31 Dec 2024
Contractual service margin (CSM) Contractual service margin (CSM)
EURm
Estimates of 
present value  
of  future  
cash flows
Risk adjustment 
for non- financial 
risk
Contracts under 
modified  
retrospective 
approach
Contracts under  
fair value 
approach Other  contracts Subtotal Total
Estimates of 
present value  
of  future  
cash flows
Risk adjustment 
for non- financial 
risk
Contracts under 
modified  
retrospective 
approach
Contracts under  
fair value 
approach Other  contracts Subtotal Total
Opening balance 28,059 225 167 1,398 152 1,717 30,001 25,443 187 168 1,300 104 1,572 27,202
Changes through the income statement
Changes that relate to future services
Changes in estimates that adjust CSM -103 2 22 63 16 101 0 -415 46 17 314 38 369 0
Changes in estimates that result in losses on groups of onerous 
contracts and reversals of such losses 18 3 – – – – 21 17 1 – – – – 18
Effects of contracts initially recognised during the year -72 17 7 – 51 58 3 -77 17 5 – 57 62 2
Changes that relate to current services
CSM recognised for services provided – – -26 -196 -57 -279 -279 – – -22 -167 -50 -239 -239
Risk adjustment recognised for risk expired – -27 – – – – -27 – -26 – – – – -26
Experience adjustments 30 – – – – – 30 19 -1 – – – – 18
Changes that relate to past services
Adjustment to liabilities for incurred claims 1 0 – – – – 1 4 1 – – – – 5
Net insurance revenue -126 -5 3 -133 10 -120 -251 -452 38 0 147 45 192 -222
Insurance finance income or expenses 2,307 – – – 2 2 2,309 2,563 – 0 0 1 1 2,564
Total changes through the income statement 2,181 -5 3 -133 12 -118 2,058 2,111 38 0 147 46 193 2,342
Cash flows
Premiums received 3,417 – – – – – 3,417 3,276 – – – – – 3,276
Claims and other insurance service expenses paid, including 
investment components -2,773 – – – – – -2,773 -2,459 – – – – – -2,459
Insurance acquisition cash flows -24 – – – – – -24 -24 – – – – – -24
Total cash flows 620 – – – – – 620 793 – – – – – 793
Other movements -96 – – – – – -96 14 4 – -21 3 -18 0
Translation differences 158 1 – 2 1 3 162 -302 -4 -1 -28 -1 -30 -336
Closing balance 30,922 221 170 1,267 165 1,602 32,745 28,059 225 167 1,398 152 1,717 30,001

===== SIDA 238 =====

Nordea Annual Report 2025 237
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance contract liabilities, cont.
Analysis by remaining coverage and incurred claims – contracts measured under PAA
31 Dec 2025 31 Dec 2024
Liabilities for remaining coverage Liabilities for incurred claims Liabilities for remaining coverage Liabilities for incurred claims
EURm
Excluding loss 
 component Loss component
Estimates of present 
value of future 
cash flows
Risk adjustment for 
non-financial risk Total
Excluding loss 
 component Loss component
Estimates of present 
value of future 
cash flows
Risk adjustment for 
non-financial risk Total
Opening balance 21 4 404 5 434 25 8 402 2 437
Changes through the income statement
Insurance revenue -186 – – – -186 -181 – – – -181
Insurance service expenses – 9 174 2 185 0 -7 157 0 150
Net insurance revenue -186 9 174 2 -1 -181 -7 157 0 -31
Insurance finance income or expenses – -3 -6 – -9 – 1 9 – 10
Total changes through the income statement -186 6 168 2 -10 -181 -6 166 0 -21
Cash flows
Premiums received 188 – – – 188 177 – – – 177
Claims and other insurance service expenses paid – – -158 – -158 – – -157 – -157
Total cash flows 188 – -158 – 30 177 – -157 – 20
Other movements – – – – – – 2 -5 3 0
Translation differences 0 0 1 0 1 0 0 -2 0 -2
Closing balance 23 10 415 7 455 21 4 404 5 434
Insurance contracts issued during the period – measured under GMM and VFA
2025 2024
EURm
Non-onerous 
contracts issued
Onerous 
contracts issued Total
Non-onerous 
contracts issued
Onerous 
contracts issued Total
Claims and other insurance service expenses 
paid including investment components 1,623 32 1,655 1,478 26 1,504
Insurance acquisition cash flows 8 2 10 5 1 6
Estimates of the present value of future  
cash outflows 1,631 34 1,665 1,483 27 1,510
Estimates of the present value of future  
cash inflows -1,704 -33 -1,737 -1,561 -26 -1,587
Risk adjustment for non-financial risk 15 2 17 16 1 17
Contractual service margin (CSM) 58 0 58 62 0 62
Increase in insurance contract liabilities from 
contracts recognised in the period 0 3 3 0 2 2

===== SIDA 239 =====

Nordea Annual Report 2025 238
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance contract liabilities, cont.
The following table sets out when the Group expects to recognise the remaning CSM in profit or loss after the reporting 
date for contracts measured under the GMM and the VFA.
Remaining contractual service margin (CSM) from insurance contracts
Insurance contracts  
EURm 1 year or less 1–2 years 2–3 years 3–4 years 4–5 years 5–10 years More than 10 years Total 
31 Dec 2025
Traditional insurance 78 71 66 62 54 225 366 922
Unit-linked insurance 71 55 49 43 38 133 143 532
Life and disability 
insurance 31 10 9 8 8 30 52 148
Total 180 136 124 113 100 388 561 1,602
31 Dec 2024
Traditional insurance 69 63 59 55 49 214 387 896
Unit-linked insurance 80 67 60 53 45 166 213 684
Life and disability 
insurance 30 9 8 7 7 28 48 137
Total 179 139 127 115 101 408 648 1,717
Expected derecognition of the assets for insurance acquisition cash flows
31 Dec 2025 31 Dec 2024
 
EURm
Unit-linked 
insurance
Life and 
disability 
insurance Total 
Unit-linked 
insurance
Life and 
disability 
insurance Total 
1 year or less 10 – 10 8 – 8
1–2 years 14 7 21 10 3 13
2–3 years 13 4 17 10 3 13
3–4 years 11 1 12 9 3 12
4–5 years 11 1 12 9 2 11
5–10 years 29 0 29 26 1 27
Total 88 13 101 72 12 84
Asset for insurance acquisition cash flows
EURm 31 Dec 2025 31 Dec 2024
Opening balance 84 71
Amounts incurred during the year 42 37
Amounts derecognised and 
included in the measurement of 
insurance contracts -19 -20
Impairment losses -4 -3
Translation difference 0 -1
Closing balance 103 84
Fair value of underlying assets backing insurance 
 contract liabilities measured under the VFA model
EURm 31 Dec 2025 31 Dec 2024
Interest-bearing securities 5,809 6,132
Shares 23,592 20,623
Investment properties 2,203 2,121
Other 764 682
Total 32,368 29,558
The return on assets backing insurance liabilities is 
 disclosed in Note G2.4 ”Net insurance result”.
Nature and extent of risk that arise from 
contracts within the scope of IFRS 17
Nordea is exposed to a variety of risks through insurance 
activities. These include market, default, liquidity, opera-
tional, business, strategic, regulatory, ESG and underwrit-
ing risks. Market and underwriting risks being the most 
relevant from a capital and profit perspective. More infor-
mation on these risks, reinsurance and the main sensitivi-
ties follows below. Operational risks are described in Note 
G11 “Risk and liquidity management”, section 5. 
In addition to compliance with IFRS 17, adherence to 
 Solvency II is crucial for regulatory compliance and financial 
stability. More details on Solvency II can be found in the 
 Solvency and Financial Condition report, which is available 
on nordea.com.
Market risk
Measurement and analysis of market risk
Market risk arises mainly due to the mismatch between 
assets and liabilities and the sensitivity of the values of 
these assets and liabilities to changes in the level or in the 
volatility of market prices or rates. Market risk mainly orig-
inates from investments in products with embedded 
guarantees. 
Nordea carries the risk of fulfilling these guarantees to 
policyholders. Market risks are measured via exposure 
measurement on investment assets, forward-looking bal-
ance sheet projections and stress and sensitivity analysis. 
The results prove that Nordea is resilient to the stresses 
performed. Market risks are monitored against the risk 
appetite and risk limits.
Equity risk
Nordea is exposed to decreases in equity prices impacting 
financial guarantees in traditional insurance products. 
Credit spread risk 
Nordea is exposed to movements in credit spreads via the 
credit portfolios within the traditional insurance products. 
The widening of credit spreads reduces market values and 
thus the expectations of future profits. The following table 
shows the exposure to different credit ratings and how it has 
changed since last year.
Fixed income exposures, including fixed income funds
EURm 31 Dec 2025 31 Dec 2024
AAA 5,167 5,590
AA 1,605 1,152
A 1,322 1,393
BBB 1,427 1,179
BB and below 1,164 614
Not rated 1,471 1,847
Total 12,156 11,775
Market concentration risk 
Nordea is exposed to the concentration of market risks by 
e.g. counterparty, guarantee levels, region and industry.

===== SIDA 240 =====

Nordea Annual Report 2025 239
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance contract liabilities, cont.
Concentration risk is both addressed in each investment 
mandate and on an aggregated level. Nordea manages 
concentration risk by setting upper limits for the size of indi-
vidual investments and for aggregate investments by cate-
gory. Concentration risks are also addressed on an aggre-
gated level and managing these risks is an integrated part 
of the investment strategy. 
Nordea reduces concentration risk on an ongoing basis 
in the revision and adjustment of asset portfolios. Due to 
the diversification across the portfolios in the local entities 
Nordea has no significant unmanaged concentration of 
market risk at Nordea Life & Pension Group level.
Guarantee levels, estimates of present value of future 
cash flows
EURm 31 Dec 2025 31 Dec 2024
0% 370 378
0–2% 4,665 4,137
2–3% 3,132 2,933
3–4% 1,924 2,143
Over 4% 1,242 1,349
Total 11,333 10,940
Interest rate risk
Nordea is exposed to movements in interest rates, mainly 
through the duration mismatch between assets and liabili-
ties within traditional insurance products. Also life and dis-
ability insurance products come with interest rate risk due 
to the discounting of future cash flows.
Property risk
Nordea holds commercial, industrial and residential prop-
erties and is exposed to falls in their prices.
Currency risk
Nordea actively invests in global assets. Virtually all of the 
currency exposure in the local entities is hedged against 
the local reporting currencies. 
Management of market risk
Business decisions are formed balancing short-term and 
long-term objectives, customers, considerations for compet-
itiveness, legal requirements, profitability, liquidity and capi-
tal. At the same time, the liability-driven investment strat-
egy, risk considerations and the Prudent Person Principle 
must be observed. 
In order to ensure that all aspects are considered con-
tinuously, market risks are monitored regularly against the 
risk appetite and risk limits.
Counterparty default risk
Counterparty default risk reflects potential losses from 
unexpected default of Nordea’s counterparties and debt-
ors, taking into account risk-mitigating contracts, reinsur-
ance, securitisations and derivatives as well as receivables 
from intermediaries. Nordea is exposed to counterparty 
default through cash and deposits held by counterparties 
as well as the derivatives used to hedge portfolios. 
Nordea monitors counterparty derivative exposures on 
a daily basis. The results prove that Nordea is resilient to 
the stresses performed. To mitigate the exposure to unex-
pected defaults, Nordea ensures diversification by coun-
terparty. Concentrations to individual counterparties are 
mitigated through the investment limit framework. 
Nordea has bilateral agreements with derivative coun-
terparties which define the nature, timing and quality of 
eligible collateral. Nordea manages and monitors collat-
eral for derivatives on a weekly and ad hoc basis as 
necessary.
Liquidity risk
Liquidity risk is the risk of being able to meet liquidity 
commitments only at increased cost or, ultimately, being 
unable to meet obligations as they fall due. Liquidity risk 
arises both from illiquidity of investment assets (market 
liquidity risk) and from changed cash flows on liabilities as 
a result of changed claims and/or lapses (funding liquidity 
risk). Liquidity risk can also arise from short-term pay-
ments affecting the short-term liquidity need. Liquidity 
risk derives primarily from traditional insurance products. 
Management and measurement of liquidity risk
Nordea’s exposure to liquidity risk is managed based on 
local liquidity rules, investment guidelines and limits. 
Liquidity risk is monitored through:
• liquidity scoring of current investment assets,
• calculation of forward-looking liquidity risk indicators 
under both normal and stressed conditions, and
• calculation of a liquidity ratio for the traditional insur-
ance portfolios. 
Liquidity risk is monitored as part of the Risk Appetite 
Framework of Nordea Life & Pension Group and its local 
entities. Moreover, the liquidity risk indicators are integrated 
into the Nordea Group’s overall monitoring of liquidity risk. 
Expected yearly net cash flows, undiscounted
EURm 31 Dec 2025 31 Dec 2024
1 year or less 2,621 2,297
1–2 years 2,950 2,609
2–3 years 2,577 2,329
3–4 years 2,382 2,136
4–5 years 2,231 1,991
More than 5 years 30,513 26,843
Total 43,274 38,205
Amounts payable on demand
EURm 31 Dec 2025 31 Dec 2024
Amounts payable on demand 31,381 28,653
Assets backing insurance contract 
liabilities 32,845 30,040
Business, strategic and regulatory risk
Business risk is defined as the risk associated with uncer-
tainty over business conditions such as market environ-
ment, customer behaviour and technological progress as 
well as the financial effects of reputational risk. 
Strategic risk is defined as the long-term implications 
associated with the selected business strategy such as 
product range, customer segments, markets, distribution 
channels and technological platforms. These may arise 
due to improper implementation of decisions or lack of 
responsiveness to industry changes. 
Risks related to regulatory changes arise as a result of 
inadequate or imperfect implementation of new or 
changed regulation. This could potentially impact reputa-
tion, processes and costs. 
Business and strategic risks are mitigated through 
actions such as monitoring sales, costs and risk results 
regularly and analysing the drivers of profit. 
Risks related to the legal environment are mitigated 
through continuous monitoring of the regulatory develop-
ments and through establishing specific programmes to 
handle the implementation. The compliance function at 
Nordea Life & Pension monitors compliance with existing 
laws, regulations and internal rules applicable to Nordea 
Life & Pension.
Environmental, social and governance (ESG) risk
ESG risk is a risk category that has gained importance in 
recent years. Nordea Life & Pension Group considers the 
double materiality of ESG, i.e. the fact that Nordea Life & 
Pension Group is exposed to ESG risk while its own 
actions and investment decisions impact ESG factors, and 
has developed a consistent approach to sustainability risk 
and the consideration of ESG factors in the investment 
process. 
The perception of ESG risk at Nordea Life & Pension 
Group comprises: 
• the physical impact of climate change, 
• the transition to a low-carbon and climate resilient 
economy,

===== SIDA 241 =====

Nordea Annual Report 2025 240
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance contract liabilities, cont.
• an increasing awareness of social objectives, working 
and safety conditions and human rights, and 
• an increasing importance of good governance practices 
within companies, anti-bribery and corruption practices 
and compliance with relevant laws and regulations. 
Nordea Life & Pension Group has established a compre-
hensive database for ESG risk indicators such as green-
house gas emissions (GHG emissions), the Climate Value 
at Risk (Climate VaR), ESG ratings and many others. The 
database is updated regularly and developed continuously 
in order to achieve a good coverage of assets with availa-
ble best practice indicators of ESG risk. 
ESG risks may materialise through other risk types. The 
table below shows how material the impact may be on the 
different risk types: 
Risk type Impact of ESG factors
Market Risk High
Underwriting Risk Low
Operational and Compliance Risk Medium
Reputational Risk High
ESG factors are considered to have a high impact on mar-
ket risk. Market risk may arise from disruptions and shifts 
associated with the transition to a low-carbon and climate 
resilient economy. Those risks may be motivated by policy 
changes, market dynamics, technological innovation or 
reputational factors. Key examples of transition risks 
include wrong assessments of climate-induced risks and 
opportunities, policy changes and regulatory reforms, 
which affect carbon-intensive sectors. Policy and regula-
tory measures may affect specific classes of financial 
assets (such as real estate portfolios), in addition to those 
affecting capital markets.
Climate risks related to investments are in general 
assumed to be captured in the market value of the assets. 
An asset composition heavily weighted towards sectors 
that are vulnerable to climate changes will however repre-
sent concentration risk that requires awareness. 
The graph below shows the insurance contracts’ equity 
and corporate bond exposure towards different sectors. 
The largest exposures are found within financials, technol-
ogy and non-cyclical consumer products and services.
ESG data concentration
0
5
10
15
20
25
30
%
2025 2024
OtherUtilities
Basic Materials
TechnologyIndustrialsFinancials
Energy
Consumer, 
non-cyclical
Consumer, cyclicalCommu-
nications
While these are not necessarily industries which are asso-
ciated with heavy scope 1 emissions (direct carbon emis-
sions), scope 2 (indirect carbon emissions) and scope 3 
emissions (carbon emissions in the full value chain) must 
also be taken into consideration. Overall, the equity and 
corporate bond investments managed by Nordea Life & 
Pension Group have a scope 1 and 2 carbon intensity aver-
aging at 58 tons of CO2 per EURm of sales, compared to 
the MSCI World average of 112 tons of CO2 per EURm of 
sales. This underlines that while investing in a similar mix 
of industrial sectors, Nordea Life & Pension Group makes 
investment choices within the sectors that underpin the 
overall net zero emission target. Despite the overall small 
investments in the utility, industrials and basic materials 
industries, these sectors contribute significantly to the 
scope 1 and scope 2 emissions profile of the equity invest-
ments. Those sectors in which Nordea Life & Pension 
Group makes most of its investments contribute compara-
tively little to its emissions profile.
Nordea Life & Pension Group uses scenario data from 
the Network for Greening the Financial System as the 
basis for the forward-looking analysis of climate-related 
risks. Forward-looking analysis is facilitated by the MSCI 
Climate VaR which enables analyses of policy-related 
risks, technological opportunities and physical risks across 
different scenarios associated with a variety of tempera-
ture outcomes and transition narratives. The Climate VaR 
quantifies these risks in terms of a return-based valuation 
of companies.
The industry sectors that currently have the highest 
GHG emissions also are the ones that are expected to 
incur negative effects on their market values due to regu-
lation and policy changes. The upside is, however, that 
these sectors also provide opportunities for developing 
more GHG efficient technological solutions. The challenge 
is therefore not to avoid these industry sectors altogether, 
but to reduce ESG-induced market risk from these sectors, 
to carefully select the leading companies in terms of ESG-
driven development potential and to engage with compa-
nies, industry associations and policy makers. Based on 
the current assessments, ESG-induced market risk is con-
sidered as immaterial for Nordea Life & Pension Group. 
Reputational risk can arise due to failure to deliver on 
internal and external promises and expectations can lead 
to negative attention from customers and media, claims 
and law suits, which in turn can increase lapses and 
reduce new business. To understand the impact of ESG-
related reputational risk different scenarios are analysed 
where lapses increase. The outcome of the scenarios is 
that there is a negative profit effect which may affect prof-
its in the longer run and also business plans. ESG-related 
reputational risk can therefore not be dismissed as 
immaterial.
Underwriting risk
Underwriting risk is defined as the risk of loss, or of 
adverse change in the value of insurance liabilities, result-
ing from changes in the level, trend, or volatility of mortal-
ity rates, longevity rates, disability rates and surrenders 
and lapses, with such a change leading to an increase in 
the value of insurance liabilities. 
Measurement and analysis of underwriting risk
Underwriting risks are primarily controlled using actuarial 
methods, i.e. through tariffs, rules for acceptance of cus-
tomers, reinsurance contracts, stress testing and setting 
adequate provisions for risks. Experience analyses and 
benchmarking are performed at least annually for each 
underwriting risk. 
Nordea measures underwriting risks by measuring the 
sensitivity of the balance sheet to stressed underwriting 
scenarios via regular stress and scenario testing. The 
results prove that Nordea is resilient to the stresses per-
formed. Neither Nordea’s underwriting risk exposures nor 
the approach to measurement changed materially over 
the reporting period. 
Lapse risk
Lapse risk includes partial and full surrender, transfers of 
capital and transition to paid-up policies. Exposure to 
lapse risk is due to the potential deviation between the 
actual lapse rates and expected lapse rates. 
Lapse risk is linked to policyholder behaviour. It is miti-
gated by ensuring that products meet customers’ needs. 
Lapses are stress tested, monitored and reported regularly. 
Monitoring helps Nordea to identify and address emerg-
ing trends.

===== SIDA 242 =====

Nordea Annual Report 2025 241
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G4 Insurance contract liabilities, cont.
Longevity 
Longevity risk arises from the annuities in payment and in 
deferral within Nordea’s traditional insurance products. 
Mortality rates and life expectancies are updated and 
benchmarked annually. 
Concentration of underwriting risks
Nordea’s insurance portfolios comprise individual and 
group policies, all of which are well diversified by industry, 
geography and demography as well as by product type 
and risk. Within Nordea’s insurance portfolios, large com-
panies may pose a geographic risk concentration. 
Concentration risk is managed on local entity level and 
mitigated by reinsurance wherever deemed necessary. 
Management of underwriting risk
Management of underwriting risk includes, among others, 
underwriting procedures, reinsurance programme and 
product approval processes. 
Underwriting procedures
Underwriting is performed in compliance with the local 
entity’s strategic documents for underwriting and insur-
ance risks. These documents are established to ensure 
strong underwriting processes and sound advice to 
customers. 
Underwriting procedures intend to ensure the fair and 
ethical treatment of all new customers and the acceptance 
or rejection of individual risks on an informed basis. Sound 
underwriting ensures that the right products are offered to 
the customers to meet their needs. Individual underwrit-
ing is used for life and health policies. Depending on the 
nature of the risk coverage and the level of benefits, 
underwriting may include a health assessment. 
The Actuarial function highlights risks and makes rec-
ommendations regarding underwriting in its annual 
report. The Actuarial function reviews the strategic docu-
ments governing underwriting annually and ad hoc when-
ever deemed necessary. 
Reinsurance
Nordea’s reinsurance programme covers individual and 
aggregate mortality and disability risks, including mortal-
ity catastrophe cover in Finland and Norway. It includes 
individual risk retention limits and aggregate stop loss 
cover. Reinsured risks include mortality, disability and 
mortality catastrophe. The aim of the reinsurance pro-
gramme is to minimise claims volatility, stabilise annual 
results and protect Nordea from underwriting risk concen-
trations and catastrophes. New business with large indi-
vidual risk exposures is underwritten with facultative 
reinsurance. 
The reinsurance programme is monitored monthly via 
the risk result by product line. The Actuarial Function is 
responsible for reviewing the reinsurance strategy and 
programme as a minimum once a year. 
Sensitivities
Nordea regularly performs stress tests of the contractual 
service margin (CSM) and profit to assess the impact of 
various scenarios. The stress tests are conducted by apply-
ing overnight market stresses and changes to underwrit-
ing assumptions. Due to the long-term nature of the life 
and pension business Nordea is sensitive to interest rate 
movements, which in combination with lower equity 
prices and wider spreads would have a significant impact 
on profit and the CSM. The methodologies used are 
aligned with other stress tests carried out and have been 
developed for IFRS 17 purposes. The relevant sensitivities 
and their effect on profit and CSM are shown in the table 
below.
Impact on profit Impact on CSM
EURm
31 Dec 
2025
31 Dec 
2024
31 Dec 
2025
31 Dec 
2024
Equities -20%1 -32 -29 -216 -230
Interest rates -50bp 0 0 -96 -111
Interest rates +50bp 0 0 83 98
Spread +50bp -3 -3 -13 -13
Combined market stress2 -46 -44 -327 -362
Lapses +10% -6 -5 -21 -21
Expenses +10% -15 -14 -95 -88
Mortality +10% 1 2 3 7
Disability +10% -15 -13 -3 -3
Longevity +10% -3 -5 -10 -21
1) Including alternative investments and -5% on properties.
2) Interest rates -50bp, Equities -20% and Spread +50bp.

===== SIDA 243 =====

Nordea Annual Report 2025 242
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G5 Intangible and 
tangible assets 
G5.1 Intangible assets
Accounting policies
Intangible assets are identifiable, non-monetary 
assets without physical substance. The assets are 
under Nordea’s control, which means that Nordea 
has the power and rights to obtain the future eco-
nomic benefits flowing from the underlying 
resource. Nordea’s intangible assets mainly consist 
of goodwill, IT development/computer software and 
customer-related intangible assets.
Goodwill
Goodwill represents the excess of the cost of an 
acquisition over the fair value of Nordea’s share of 
net identifiable assets of the acquired group under-
taking/associated undertaking/joint venture at the 
date of acquisition. Goodwill on acquisitions of group 
undertakings is included in “Intangible assets”. 
Goodwill on acquisitions of associated undertakings 
and joint ventures is not recognised as a separate 
asset but included in “Investments in associated 
undertakings and joint ventures”. Goodwill is tested 
annually for impairment or more frequently if events 
or changes in circumstances indicate that it might be 
impaired. Goodwill is carried at cost less accumu-
lated impairment losses. Impairment losses on good-
will cannot be reversed in subsequent periods. 
Goodwill related to associated undertakings and 
joint ventures is not tested for impairment separately 
but included in the total carrying amount of the asso-
ciated undertakings and the joint ventures. The poli-
cies covering impairment testing of associated 
undertakings and joint ventures are disclosed in Note 
9.3 “Investments in associated undertakings and joint 
ventures”.
IT development/computer software
Costs associated with maintaining computer software 
programs are expensed as incurred. Costs directly 
associated with major software development invest-
ments, with the ability to generate future economic 
benefits, are recognised as intangible assets. These 
costs include software development staff costs and 
overhead expenditures directly attributable to prepar-
ing the asset for use. Computer software also includes 
acquired software licences not related to the function 
of a tangible asset.
Amortisation is calculated on a straight-line basis 
over the useful life of the software, generally a 
period of three to five years, and in some circum-
stances for strategic infrastructure up to a maximum 
of ten years.
Customer-related intangible assets
In business combinations a portion of the purchase 
price is normally allocated to a customer-related 
intangible assets if the asset is identifiable and under 
Nordea’s control. An intangible asset is identifiable if 
it arises from contractual or legal rights or can be 
separated from the entity and sold, transferred, 
licensed, rented or exchanged. The asset is amortised 
over its useful life, generally over ten years.
Impairment 
Goodwill and IT development not yet taken into use 
are not amortised but tested for impairment annu-
ally irrespective of any indications of impairment. 
Impairment testing is also performed more fre-
quently if required due to any indication of impair-
ment. Intangible assets in use and amortised are 
also evaluated for indications of impairment and if 
such indications are found, the assets are tested for 
impairment. The impairment charge is calculated as 
the difference between the carrying amount and the 
recoverable amount. 
The recoverable amount is the higher of fair value 
less costs to sell and the value in use of the asset or 
the cash- generating unit ( CGU), which is defined as 
the smallest identifiable group of assets that 
generate largely independent cash flows in relation 
to other assets. For goodwill and IT development not 
yet taken into use, the CGUs are defined as the oper-
ating segments. The value in use is the present value 
of the cash flows expected to be realised from the 
asset or the CGU. 
Critical judgements and estimation uncertainty 
The identification of CGUs and to what extent 
they can be aggregated to groups that are tested 
together requires judgement. Internally developed 
software is included in the impairment test and 
allocated to the CGUs. Nordea’s total goodwill 
amounted to EUR 2,185m (EUR 2,180m) at the end 
of the year. Internally developed software amounted 
to EUR 1,696m (EUR 1,530m) at the end of the year.
The estimation of future cash flows and the calcu-
lation of the rate used to discount those cash flows 
are subject to estimation uncertainty. The forecast of 
future cash flows is sensitive to the cash flow projec-
tions for the near future (generally 3–5 years) and to 
the estimated sector growth rate for the period 
beyond 3–5 years. The growth rates are based on 
historical data, updated to reflect the current situa-
tion, which implies estimation uncertainty. Also, the 
estimate for the long-term growth rate requires criti-
cal judgement.
The derived cash flows are discounted at a rate 
based on the market’s long-term risk-free rate of 
interest and yield requirements.
Impairment testing
The impairment test is performed for each CGU by com-
paring the carrying amount of the net assets, including 
goodwill, with the recoverable amount. The recoverable 
amount is the value in use and is estimated based on the 
discounted cash flows. Due to the long-term nature of the 
investments, cash flows are expected to continue 
indefinitely. 
Cash flows for the coming three years are based on 
financial forecasts. The forecasts are based on Nordea’s 
macroeconomic outlook, including information on GDP 
growth, inflation and benchmark rates for the relevant 
countries. Based on these macroeconomic forecasts, the 
business areas project how margins, volumes, sales and 
costs will develop over the coming years. Credit losses are 
estimated using the long-term average for the different 
business areas. This results in an income statement for 
each year. The projected cash flow for each year is the 
forecast net result in these income statements, reduced by 
the regulatory capital needed to grow the business in 
accordance with the long-term growth assumptions. For 
CGUs with more capital than the Group’s CET1 target, the 
expected dividends are included in the cash flows gener-
ated by the CGUs until these meet the Group’s CET1 target 
over a three-year period. 
The projections take into consideration the major pro-
jects initiated at Nordea. There is also an allocation of cen-
tral costs to business areas to make sure that the cash 
flows for the CGUs include all indirect costs. Tax costs are 
estimated based on the standard tax rate. Cash flows for 
the period beyond the forecasting period are based on 
estimated sector growth rates. Growth rates are based on 
historical data, updated to reflect the current situation. 
The derived cash flows are discounted at a rate based 
on the market’s long-term risk-free rate of interest and 
yield requirements. The discount rate used in 2025 was 
9.0% (8.5%) post-tax, corresponding to a pre-tax rate of 
11.7% (11.0%). The estimated growth rate was 2.0% (2.0%). 
The CGUs cover all Nordic currencies and Nordea dis-
counts the future estimated cash flows using one EUR rate 
for all CGUs. 
The impairment tests conducted in 2025 did not indi-
cate any need for goodwill impairment. 
Both an increase in the discount rate of 1 percentage 
point and a reduction in the future growth rate of 1 per-
centage point are considered to be reasonably possible

===== SIDA 244 =====

Nordea Annual Report 2025 243
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G5.1 Intangible assets, cont.
changes in the key assumptions. Such a change would not 
result in any impairment. 
In addition to the cash flow test for CGUs, internally 
developed IT systems are qualitatively assessed for indica-
tions of impairment. If such indications exist, an analysis is 
performed to assess whether the carrying amount of the 
assets is fully recoverable. This is assessed on an individual 
asset level based on a qualitative analysis. Both external 
and internal impairment triggers are reviewed. 
External impairment triggers could be that the market 
is moving to new cloud solutions that are significantly 
more cost efficient compared to an on-premise solution. 
Another trigger could be that a product that is supported 
by the development becomes redundant or replaced by 
another product in the market, indicating that the value of 
the development may be impaired.
Internal impairment triggers are internal decisions indi-
cating that products supported by the functionality will be 
discontinued, that a line of business will be discontinued, 
that it is expected/decided internally that the functionality 
will be moved to cloud or replaced by new on-premise 
functionality, etc.
Intangible assets
Cash-generating units, EURm
Goodwill1 
31 Dec 2025
Internally 
developed 
software  
31 Dec 2025
Total  
31 Dec 2025
Goodwill1 
31 Dec 2024
Internally 
developed 
software  
31 Dec 2024
Total  
31 Dec 2024
Personal Banking 1,084 549 1,633 1,081 484 1,565
Business Banking 882 570 1,452 881 508 1,389
Large Corporates & Institutions 151 359 510 151 327 478
Asset & Wealth Management 68 218 286 67 211 278
Total 2,185 1,696 3,881 2,180 1,530 3,710
Other intangible assets2 – – 207 – – 172
Total intangible assets 2,185 1,696 4,088 2,180 1,530 3,882
1) Excluding goodwill in associated undertakings.
2) Including bought software licences outside internal development projects of EUR 136m (EUR 106m).
Movements in goodwill,  
EURm
31 Dec 
2025
31 Dec 
2024
Acquisition value at beginning of year 2,180 2,227
Translation differences 5 -47
Acquisition value at end of year 2,185 2,180
Total 2,185 2,180
Movements in internally developed software,  
EURm
31 Dec 
2025
31 Dec 
2024
Acquisition value at beginning of year 2,554 2,503
Acquisitions 474 407
Sales/disposals -15 -313
Reclassifications 3 -3
Translation differences 49 -40
Acquisition value at end of year 3,065 2,554
Accumulated amortisation at beginning of year -942 -911
Amortisation according to plan -337 -296
Accumulated amortisation on sales/disposals 5 251
Translation differences -20 14
Accumulated amortisation at end of year -1,294 -942
Accumulated impairment charges  
at beginning of year -82 -135
Accumulated impairment charges  
on sales/disposals 10 62
Impairment charges -2 -12
Translation differences -1 3
Accumulated impairment charges  
at end of year -75 -82
Total 1,696 1,530
G5.2 Properties and equipment
Accounting policies
Properties and equipment consist of properties for 
own use, leasehold improvements, IT equipment, fur-
niture and other equipment. Right-of-use assets 
under leasing agreements are presented in this item; 
see Note G5.4 “Leases” for more information. Items of 
properties and equipment are measured at cost less 
accumulated depreciation and accumulated impair-
ment losses. The cost of an item of property and 
equipment comprises its purchase price as well as 
any directly attributable costs of bringing the asset to 
the working condition for its intended use. Parts of an 
item of property and equipment are accounted for as 
separate items if they have different useful lives.
Owner-occupied properties backing issued insur-
ance contracts with direct participation features are 
measured using the fair value model in accordance 
with IAS 40. For more information about valuation 
and processes, see Note G5.3 “Investment properties”.
Improvements are recognised as assets if they pro-
vide an improved function of the asset, while mainte-
nance does not improve the function of the assets 
and is expensed as incurred.
Properties and equipment are depreciated on a 
straight-line basis over the estimated useful life of 
the assets as specified below. The estimates of the 
useful life of different assets are reassessed on a 
yearly basis. 
Buildings 30–75 years
Equipment 3–5 years
Leasehold  
improvements 
For changes within buildings, the shorter 
of 10 years and the remaining lease term. 
For new construction, the shorter of the 
principles used for owned buildings and 
the remaining lease term. Fixtures 
installed in leased properties are 
depreciated over the shorter of 10–20 
years and the remaining lease term.
At each balance sheet date, Nordea assesses 
whether there is any indication that an item of prop-
erty and equipment may be impaired. If any such 
indication exists, the recoverable amount of the 
asset is estimated, and any impairment loss is 
recognised.
Impairment losses are reversed if the recoverable 
amount increases. The carrying amount is then 
increased to the recoverable amount but cannot 
exceed the carrying amount that would have been 
determined had no impairment loss been 
recognised.

===== SIDA 245 =====

Nordea Annual Report 2025 244
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G5.2 Pr operties and equipment, cont.
Properties and equipment
31 Dec 2025 31 Dec 2024
EURm
Owned assets 
measured at cost
Owned assets 
measured at fair value
Right- 
of-use assets Total
Owned assets 
measured at cost
Owned assets 
measured at fair value
Right- 
of-use assets Total
Equipment 354 – 6 360 349 – 7 356
Land and buildings 26 35 1,143 1,204 26 36 1,243 1,305
Total 380 35 1,149 1,564 375 36 1,250 1,661
Equipment
Acquisition value at beginning of year 621 – 16 637 1,074 – 15 1,089
Acquisitions 81 – 3 84 91 – 4 95
Sales/disposals -42 – -3 -45 -530 – -3 -533
Reclassifications -5 – – -5 -3 – – -3
Translation differences 1 – -2 -1 -11 – 0 -11
Acquisition value at end of year 656 – 14 670 621 – 16 637
Accumulated depreciation at beginning of year -271 – -9 -280 -723 – -9 -732
Accumulated depreciation on sales/disposals 40 – 3 43 518 – 3 521
Reclassifications 2 – – 2 – – – –
Depreciation according to plan -72 – -3 -75 -72 – -3 -75
Translation differences -1 – 1 0 6 – 0 6
Accumulated depreciation at end of year -302 – -8 -310 -271 – -9 -280
Accumulated impairment charges at beginning of year -1 – – -1 -4 – – -4
Accumulated impairment charges on sales/disposals – – – – 3 – – 3
Translation differences 1 – – 1 0 – – 0
Accumulated impairment charges at end of year 0 – – 0 -1 – – -1
Total 354 – 6 360 349 – 7 356
Land and buildings
Acquisition value at beginning of year 30 27 2,030 2,087 32 28 1,924 1,984
Acquisitions – – 36 36 0 – 159 159
Sales/disposals – – -28 -28 -2 – -45 -47
Translation differences – -1 11 10 0 -1 -8 -9
Acquisition value at end of year 30 26 2,049 2,105 30 27 2,030 2,087
Accumulated depreciation at beginning of year -4 – -777 -781 -4 – -676 -680
Accumulated depreciation on sales/disposals – – 28 28 0 – 38 38
Depreciation according to plan – – -143 -143
0 – -143 -143
Translation differences 0 – -4 -4 0 – 4 4
Accumulated depreciation at end of year -4 – -896 -900 -4 – -777 -781
Accumulated impairment charges at beginning of year – – -10 -10 – – -15 -15
Reclassifications – – – – – – 5 5
Translation differences – – 0 0 – – 0 0
Accumulated impairment charges at end of year – – -10 -10 – – -10 -10
Fair value adjustment at beginning of year – 9 – 9 – 11 – 11
Fair value adjustment – 0 – 0 – -1 – -1
Translation differences – 0 – 0 – -1 – -1
Fair value adjustment at end of year – 9 – 9 – 9 – 9
Total 26 35 1,143 1,204 26 36 1,243 1,305
G5.3 In vestment properties
Accounting policies
Investment property is property (land or a building 
or part of a building or both) held to earn rentals or 
for capital appreciation or both, rather than for 
Nordea’s own use in the ordinary course of business. 
Investment properties are recognised on the bal-
ance sheet when it is probable that the future eco-
nomic benefits from the asset will flow to the com-
pany and the cost of the investment property can be 
measured reliably.
An investment property is initially measured at its 
cost. Transaction costs are included in the initial 
measurement. The cost of a purchased investment 
property comprises its purchase price and any 
directly attributable expenses. Directly attributable 
expenses include, for example, professional fees for 
legal services, property transfer taxes and other 
transaction costs.
Nordea applies the fair value model for subsequent 
measurement of investment properties. The best evi-
dence of fair value is normally quoted prices in an 
active market for similar properties in the same loca-
tion and condition. As these prices are rarely availa-
ble, discounted cash flow projection models based on 
reliable estimates of future cash flows are also used. 
The fair value measurement of investment properties 
takes into account a market participant’s ability to 
generate economic benefits through the highest and 
best use of the property, i.e. taking into account the 
use of the property in a way that is physically possi-
ble, legally permissible and financially feasible.
Net rental income, gains and losses as well as fair 
value adjustments are recognised directly in the 
income statement as “Net result from items at 
fair value”.
Fair value measurements of investment proper-
ties are categorised under the three levels of the 
IFRS fair value hierarchy. The fair value hierarchy 
gives the highest priority to quoted prices

===== SIDA 246 =====

Nordea Annual Report 2025 245
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G5.3 In vestment properties, cont.
(unadjusted) in active markets for identical invest-
ment properties (Level 1) and the lowest priority to 
unobservable inputs (Level 3). The categorisation of 
the investment properties is based on the lowest 
level input that is significant to the fair value meas-
urement in its entirety.
For more information about the estimation of fair 
value and the fair value hierarchy, see Note G3.4 
“Fair value”. 
Critical judgements and estimation uncertainty
Investment properties are measured at fair value. As 
there are normally no active markets for investment 
properties, the fair value is estimated based on dis-
counted cash flow models. These models are based 
on assumptions about future rents, vacancy levels, 
operating and maintenance costs, yield require-
ments and interest rates.
The carrying amount of investment properties was 
EUR 3,091m (EUR 2,883m) at the end of the year. 
Amounts recognised in the income statement
1
EURm 2025 2024
Fair value  adjus tments2 55 -16
Rental income 114 108
Direct operating expenses that generated 
rental income -33 -40
Direct operating expenses that did not  
generate rental income -2 -2
Total 134 50
1) Incl uded in “Net result from items at fair value“.
2) Ex cluding fair value adjustments on investment properties presented as “Assets 
in pooled schemes and unit-linked investments contracts” on the balance sheet. 
Categorisation in the fair value hierarchy 
All investment properties in Nordea are categorised as 
Level 3 in the fair value hierarchy. The fair value of these 
investment properties are presented in the table below.
Level 3 - Fair value of investment 
properties1, EURm 
31 Dec 
2025
31 Dec 
2024
Investment properties 2,215 2,132
- of which Life & Pension 2,209 2,125
Investment properties in pooled schemes 
and unit-linked investment contracts
2 876 751
- of which Life & Pension 876 751
Total 3,091 2,883
1) All it ems are measured at fair value on the balance sheet on a recurring basis at 
the end of each reporting period. 
2) F or further information, see Note G3.11 “Assets and deposits in pooled schemes 
and unit-linked investment contracts“.
Determination of fair value 
The valuation of the investment properties takes into 
account the purpose and the nature of the properties by 
using the most appropriate valuation methods to derive 
fair value. The primary valuation approach is a discounted 
cash flow model using current cash flows, market interest 
rates and the current yield requirements for the respective 
properties. Fair value is based on external independent 
valuers for 100% (100%) of the total fair value of invest-
ment properties on the balance sheet.
Movements in Level 3
The tables below present the movements in Level 3. 
Unrealised gains and losses relate to the investment prop-
erties held at the end of the year. Fair value gains and 
losses in the income statement during the year are 
included in “Net result from items at fair value” (see Note 
G2.5 “Total net result from items at fair value”). 
Fair value gains/losses 
recognised in the income 
statement  during the y ear
EURm 1 Jan Realised Unrealised 
Purchases/
issues Sales
Reclassifi-
cation2
Translation 
differences 31 Dec
2025
Investment properties 2,132 -3 58 130 -56 -63 17 2,215
- of which Life & Pension 2,125 -3 59 129 -55 -63 17 2,209
Investment properties in assets in pooled 
schemes and unit-linked investment 
contracts1 751 – 9 59 -7 63 1 876
- of which Life & Pension 751 – 9 59 -7 63 1 876
2024
Investment properties 2,199 7 -23 43 -24 -35 -35 2,132
- of which Life & Pension 2,191 7 -22 42 -23 -35 -35 2,125
Investment properties in assets in pooled 
schemes and unit-linked investment 
contracts1 729 – -43 67 -25 35 -12 751
- of which Life & Pension 729 – -43 67 -25 35 -12 751
1) F or further information, see Note G3.11 “Assets and deposits in pooled schemes and unit-linked investment contracts”.
2) R eclassification from/to the balance sheet item “Properties and equipment” (see Note G5.2 “Properties and equipment”) due to changed use of properties.
The valuation process for fair value measurements 
The main part of the investment properties of Nordea is 
held by Life & Pension entities. The valuation of the invest-
ment properties is performed at least quarterly by external 
valuers throughout all Life & Pension entities. The princi-
ples used by all entities are in accordance with regulations 
issued by the local financial supervisory authorities as well 
as with international valuation principles and the IFRS.
In addition, there is an internal joint Nordic committee 
that focuses on the pricing and valuation of the balance 
sheet items and regularly monitors price deviations and 
the correctness of valuations.
Life & Pension’s investment properties are backing the 
insurance and investment contracts. This means that the 
impact on Nordea’s income statement and on sharehold-
ers’ equity is based on the profit structure of the portfolio 
of contracts backed by the investments.
The significant unobservable inputs used in the fair 
value measurement of the investment properties are mar-
ket rent and yield requirement. Significant increases 
(decreases) in the market rate or yield requirement would 
in isolation result in a significantly lower (higher) fair 
value.

===== SIDA 247 =====

Nordea Annual Report 2025 246
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G5.3 In vestment properties, cont.
Valuation techniques and inputs used in fair value measurements in Level 3
31 Dec 2025 31 Dec 2024
EURm Fair value1
Of which Life 
& Pension Valuation techniques Unobservable input
Range of  
unobservable input
Weighted average of 
 unobservable input Fair value1
Of which Life 
& Pension Valuation techniques Unobservable input
Range of  
unobservable input
Weighted average of 
 unobservable input
Norway 937 937 Discounted cash flows Market rent 778 778 Discounted cash flows Market rent
- Commercial EUR 125–149/m2 130 EUR/m2 - Commercial EUR 119–144/m2 123 EUR/m2
- Office EUR 158–534/m2 282 EUR/m2 - Office EUR 104–556/m2 255 EUR/m2
- Other EUR 128–509/m2 355 EUR/m2 - Other EUR 119–490/m2 341 EUR/m2
Yield requirement Yield requirement
- Commercial 6.5–6.5% 6.5% - Commercial 6.5–6.5% 6.5%
- Office 4.5–6.3% 5.2% - Office 4.5–6.8% 5.4%
- Other 4.8–6.0% 4.9% - Other 4.9–6.0% 5.1%
Finland2 853 853 Discounted cash flows Market rent 906 906 Discounted cash flows Market rent
- Commercial EUR 144–366/m2 255 EUR/m2 - Commercial EUR 144–370/m2 257 EUR/m2
- Office EUR 144–579/m2 362 EUR/m2 - Office EUR 144–579/m2 362 EUR/m2
- Flat EUR 183–324/m2 254 EUR/m2 - Flat EUR 186–312/m2 249 EUR/m2
- Other EUR 120–306/m2 213 EUR/m2 - Other EUR 122–321/m2 222 EUR/m2
Yield requirement Yield requirement
- Commercial 4.8–8.5% 6.6% - Commercial 4.8–8.5% 6.6%
- Office 4.8–13.0% 8.9% - Office 4.8–12.5% 8.6%
- Flat 4.2–5.8% 5.0% - Flat 4.3–5.5% 4.9%
- Other 5.3–8.8% 7.0% - Other 4.8–8.3% 6.5%
Sweden 417 417 Discounted cash flows Market rent 366 366 Discounted cash flows Market rent
- Commercial EUR 146–252/m2 200 EUR/m2 - Commercial EUR 140–206/m2 167 EUR/m2
- Office EUR 275–631/m2 418 EUR/m2 - Office EUR 268–570/m2 383 EUR/m2
- Flat EUR 196–206/m2 200 EUR/m2 - Flat EUR 178–184/m2 181 EUR/m2
- Other EUR 82–119/m2 97 EUR/m2 - Other EUR 80–113/m2 93 EUR/m2
Yield requirement Yield requirement
- Commercial 5.7–6.8% 6.4% - Commercial 5.7–6.8% 6.4%
- Office 4.3–5.6% 4.9% - Office 4.3–5.7% 4.9%
- Flat 4.3–4.4% 4.3% - Flat 4.2–4.4% 4.2%
- Other 5.3–6.7% 5.5% - Other 5.3–6.7% 5.5%
Denmark 878 878 Discounted cash flows Market rent 826 826 Discounted cash flows Market rent
- Commercial – – - Commercial – –
- Office EUR 83–206/m2 161 EUR/m2 - Office EUR 57–260/m2 140 EUR/m2
- Flat EUR 155–302/m2 247 EUR/m2 - Flat EUR 124–348/m2 213 EUR/m2
Yield requirement Yield requirement
- Commercial – – - Commercial – –
- Office 4.0–7.9% 6.0% - Office 5.0–8.0% 6.0%
- Flat 3.1–5.0% 4.0% - Flat 3.0–6.0% 4.0%
Other 6 – Discounted cash flows 7 – Discounted cash flows
Total 3,091 3,085 2,883 2,876
1)  Split bas ed on the valuation methodologies used in different countries.
2)  Of which EUR 87 6m (EUR 751m) is related to investment properties in pooled schemes and unit-linked investments in Life & Pension. For more information, see Note G3.11 “Assets and deposits 
in pooled schemes and unit-linked investment contracts“.

===== SIDA 248 =====

Nordea Annual Report 2025 247
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G5.4 Leases
Accounting policies
A lease is a contract that conveys the right to control 
the use of an identified asset for a period of time in 
exchange for consideration. 
Nordea as lessor
 Finance leases are reported as receivables from the 
lessee and included in “Loans to the public” (see 
Note G3.8 “Loans”) at an amount equal to the net 
investment in the lease. The lease payment, exclud-
ing cost of services, is recorded as repayment of 
principal and interest income. The income allocation 
is based on a pattern reflecting a constant periodic 
return on the net investment outstanding in respect 
of the finance lease. 
Nordea as lessee
At inception Nordea assesses whether a contract is 
or contains a lease. 
The right to use an asset in a lease contract is rec-
ognised on the commencement date as a right-of-
use (ROU) asset and the obligation to pay lease pay-
ments is recognised as a lease liability. The ROU 
asset is initially measured as the present value of the 
lease payments plus initial direct costs and the cost 
of obligations to refurbish the asset less any lease 
incentives received. Non-lease components are sep-
arated. The discount rate used to calculate the lease 
liability for each contract is the incremental borrow-
ing rate at commencement of the contract. In signifi-
cant premises contracts the rate implicit in the con-
tract may be used if available. 
The ROU assets are presented as similar owned 
assets and the lease liabilities as “Other liabilities” 
on the balance sheet. The depreciation policy is con-
sistent with that of similar owned assets, but the 
depreciation period is capped at the end of the lease 
term. Impairment testing of the ROU assets is per-
formed according to the same principles that apply 
to similar owned assets. Interest expense on lease 
liabilities is presented as “Interest expense” in the 
income statement. 
The assets are classified as “Land and buildings” 
and “Equipment”. Equipment mainly comprises vehi-
cles and IT hardware. Nordea applies the practical 
expedient for short-term contracts (with a contract 
term of 12 months or less) both for “Land and build-
ings” and for “Equipment”. The practical expedient 
for low-value assets is applied to “Equipment”. 
Short-term and low-value contracts are not recog-
nised on the balance sheet and the payments are 
recognised as “Other expenses” in the income state-
ment on a straight-line basis over the lease term 
unless another systematic way better reflects the 
time pattern of Nordea’s benefit. 
The lease term is the expected lease term. This 
comprises the non-cancellable period of lease con-
tracts and any options that Nordea is reasonably 
certain to exercise. The length of contracts with no 
end date is estimated by considering all facts and 
circumstances. 
Embedded leases
Agreements can contain a right to use an asset in 
return for a payment or a series of payments 
although the agreement is not in the legal form of a 
lease contract. If applicable, these assets are sepa-
rated from the contract and accounted for as leased 
assets.
Critical judgements and estimation uncertainty
For a lessee, critical judgement has to be exercised 
when estimating the expected lease term by consid-
ering all facts and circumstances that create an eco-
nomic incentive to exercise an extension or termina-
tion option. The expected lease term for contracts 
with no end date is estimated in the same way. 
Backstop rules on the average expected lifetime of 
different types of real estate contracts are used as a 
guidance when making the estimate for branch 
offices. A more detailed analysis is performed for 
more significant contracts. Head office contracts are 
estimated to be more long term in nature than 
branch office contracts where the business environ-
ment is changing at a more rapid pace. The back-
stop rule covering branch offices is currently limiting 
the expected lease term of contracts with no end 
date and contracts with extension options to five 
years. It is possible to deviate from the backstop rule 
if the circumstances show that Nordea is likely to 
stay for a longer/shorter period. The carrying 
amount of ROU assets was EUR 1,149m (EUR 
1,250m) at the end of the year. 
For a lessor, critical judgement has to be exercised 
when classifying lease contracts. A lease is classified 
as a finance lease if it transfers substantially all the 
risks and rewards related to ownership. A lease is 
classified as an operating lease if it does not transfer 
substantially all the risks and rewards related to 
ownership.
Nordea as lessor
Nordea’s leasing operations comprise finance leases. The 
leased assets mainly comprise vehicles, machinery and 
other equipment.
The table below shows a reconciliation of gross invest-
ments and the present value of future minimum lease 
payments. 
EURm 31 Dec 2025 31 Dec 2024
Gross investments 10,118 10,349
Less unearned finance income -1,623 -1,715
Net investments in finance leases 8,495 8,634
Less unguaranteed residual values accruing 
to the benefit of the lessor -2 -2
Present value of future minimum lease 
 payments receivable 8,493 8,632
Accumulated allowance for uncollectible 
 minimum lease payments receivable -12 -16
The residual value risk of finance leases is carried by the 
vendor or by the lessee according to the terms of the 
contract.
As at 31 December 2025 the gross investment and the 
net investment by remaining maturity were distributed as 
follows:
31 Dec 2025
EURm
Gross 
investment
Net 
 investment
2026 2,684 2,178
2027 2,392 1,976
2028 1,889 1,574
2029 1,143 993
2030 788 674
Later years 1,222 1,100
Total 10,118 8,495

===== SIDA 249 =====

Nordea Annual Report 2025 248
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G5.4 L eases, cont.
Nordea as lessee
Leases are mainly related to office premises contracts but 
also to company cars, IT hardware and other assets normal 
to the business. The premises contracts are actively man-
aged with focus on the effective use of the premises and 
changes in the business environment. The lease payments 
generally include fixed payments and especially in premises 
contracts also variable payments that depend on an index. 
Residual value guarantees or purchase options are gener-
ally not used. 
Lease expenses are disclosed in the table below.
EURm 2025 2024
Expense related to short-term leases -15 -11
Expense related to low-value leases -1 0
Expense related to variable payments -13 -13
Interest expense -19 -17
Sub-lease income 2 1
Total cash outflow for leases -160 -192
The table below shows the contractual maturity of undis-
counted cash flows on lease liabilities. 
EURm 31 Dec 2025 31 Dec 2024
Less than one year 125 129
1–2 years 111 118
2–5 years 277 281
5–10 years 343 345
10–15 years 265 292
15–20 years 67 92
20–25 years – –
Total 1,188 1,257
More information on right-of-use assets and the maturity 
profile can be found in Note G5.2 “Properties and equip-
ment” and in Note G10.3 “Maturity analysis“.
There are no significant lease commitments for leases 
that have not yet commenced at the end of the year.
Nordea operates from leased premises. The premises 
are mainly divided into head office contracts, branch office 
contracts and other contracts. 
The expected lease term in most of the premises con-
tracts is 1–10 years, whereas the expected lease term of 
the main head office contracts in the Nordic countries is 
10–20 years. These contracts usually have renewal 
options. The head office contracts generally have fixed 
lease terms, whereas branch office contracts either have 
fixed lease terms or are without an end date with the right 
to terminate. The termination clauses are generally 6–12 
months. The main principle is that premises contracts do 
not contain purchase options. 
Company car contracts generally have a fixed lease 
term of less than five years.
G6 Provisions
Accounting policies
Provisions (which are presented as a liability) are rec-
ognised when Nordea has a present obligation (legal 
or constructive) as a result of a past event if it is prob-
able (i.e. more likely than not) that an outflow of 
resources embodying economic benefits will be 
required to settle the obligation, where a reliable esti-
mate can be made of the amount of the obligation. 
The amount recognised as a provision is the best esti-
mate of the expenditure required to settle the present 
obligation at the end of the reporting period.
Accounting policies relating to employee benefits 
are further described in Note G8 “Employee benefits 
and key management personnel remuneration” and 
relating to financial guarantee contracts and credit 
commitments in Note G7 “Off-balance sheet items”. 
Accounting policies for provisions for off-balance 
sheet items can be found in Note G3.8 “Loans”. 
Critical judgements and estimation uncertainty
Within the framework of normal business opera-
tions, Nordea faces a number of operational and 
legal risks potentially resulting in reputational 
impacts, fines, sanctions, disputes, remediation 
costs, losses and/or litigation. Specifically, Nordea 
faces potential claims related to the provision of 
banking and investment services and other areas in 
which it operates. Currently, such claims are mainly 
related to lending and insolvency situations, various 
investment services, and sub-custody and withhold-
ing taxation matters. At present, none of the current 
claims are considered likely to have any significant 
adverse effect on Nordea or its financial position. As 
previously stated, Nordea has expected to be fined 
in Denmark for weak AML processes and procedures 
in the past and has made a provision for ongoing 
AML-related matters. Nordea cannot exclude the 
possibility of fines which could impact the bank’s 
financial performance. In addition, some of these 
proceedings could lead to litigation. See also section 
6 “Compliance Risk” in Note G11 “Risk and liquidity 
management”.
Provisions
EURm 31 Dec 2025 31 Dec 2024
Restructuring 44 64
Guarantees/commitments 158 193
Other 146 139
Total 348 396
Provisions for restructuring costs consist of staff-related 
restructuring of EUR 33m (EUR 47m) and premises-related 
obligations of EUR 11m (EUR 17m). 
The staff-related provision is related to contracts 
entered into, or activities communicated but not yet exe-
cuted, where payments have not been made. These con-
tracts are entered into in the ordinary course of business. 
Approximately EUR 25m (EUR 28m) out of the total 
restructuring provision is expected to be utilised/paid out 
in 2026. All staff-related activities are expected to be exe-
cuted on in 2026, but payments are expected to extend 
into 2027. As for any other provision, there is uncertainty 
surrounding the timing and the amount to be finally paid. 
The uncertainty is expected to decrease as the plans are 
executed.
Loan loss provisions for off-balance sheet items 
amounted to EUR 158m (EUR 193m). More information on 
these provisions can be found in section 2 “Credit risk“ in 
Note G11 “Risk and liquidity management” and Note G7 
“Off-balance sheet items”. 
More information on the provision for AML-related mat-
ters can be found in section 6.3 “Financial crime preven-
tion“ in Note G11 “Risk and liquidity management”. 
Restruc turing Other
EURm 2025 2024 2025 2024
At beginning of year 64 75 139 128
New provisions made 24 32 113 98
Provisions utilised -39 -42 -88 -88
Reversals -6 -3 -18 0
Reclassifications – 4 – 2
Translation differences 1 -2 0 -1
At end of year 44 64 146 139

===== SIDA 250 =====

Nordea Annual Report 2025 249
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G7 Off-balance 
sheet items
G7.1 C ontingent liabilities
Accounting policies
A contingent liability is: 
• a possible obligation whose existence will be con-
firmed only by future event(s) not wholly within 
Nordea’s control, or
• a present obligation that is not recognised because 
it is not probable that an outflow of resources will 
be required to settle the obligation or the amount 
of the obligation cannot be measured with suffi-
cient reliability. 
Contingent liabilities are not recognised as liabilities 
on the balance sheet but disclosed as an off-balance 
sheet item unless the possibility of an outflow is 
remote. 
When an outflow is more likely than not, a provi-
sion is recognised on the balance sheet. The 
accounting policies covering provisions can be found 
in Note G6 “Provisions”.
Guarantees and documentary credits are recog-
nised on the balance sheet under the expected credit 
loss requirements as further defined in Note G3.8 
“Loans”. Changes in provisions are recognised in the 
income statement in the line item “Net loan losses“. 
Premiums received for financial guarantees are 
amortised over the guarantee period and recognised 
as “Fee and commission income” in the income state-
ment. The contractual amounts are recognised off bal-
ance sheet, net of any provisions.
Critical judgements and estimation uncertainty
See also ”Critical judgements and estimation uncer-
tainty” in Note G6.
The table below includes all issued guarantees, also those 
for which the possibility of an outflow of resources is con-
sidered remote.
Contingent liabilities
EURm 31 Dec 2025 31 Dec 2024
Loan guarantees 1,995 1,834
Other guarantees 17,550 18,503
Documentary credits 451 434
Other contingent liabilities 13 70
Total 20,009 20,841
In its normal business, Nordea issues various forms of 
guarantees in favour of its customers. Loan guarantees are 
provided for customers to guarantee obligations in other 
credit and pension institutions. Other guarantees mainly 
consist of commercial guarantees such as bid guarantees, 
advance payment guarantees, warranty guarantees and 
export-related guarantees. Contingent liabilities also 
include unutilised irrevocable import documentary credits 
and confirmed export documentary credits. These transac-
tions are part of the bank´s services and support Nordea´s 
customers. 
The 2025 Annual General Meeting decided that Nordea 
Bank Abp will cover or reimburse the members of the 
Board of Directors all costs and expenses related to or 
arising from the Board membership, including travel, logis-
tics and accommodation as well as consultative, legal and 
administrative costs. The legal costs can e.g. include 
required costs of legal defence and claims made (during 
and after their period of office) against Board members in 
cases where Board members are not found liable or guilty 
of any intentional wrongdoing or grossly negligent 
behaviour.
The members of the GLT are afforded coverage and 
reimbursement corresponding to that of the Board in 
instances related to or arising from their GLT membership. 
In addition, since 2019 and until 2025 Nordea Bank Abp 
had undertaken to indemnify the members of the GLT 
against legal expenses incurred in relation to certain 
claims or investigations by third parties based on circum-
stances or events which occurred during the members’ 
respective terms of office, excluding crimes or actions 
made with intent or gross negligence, up to a capped 
aggregate amount of EUR 37.5m, unless the Board decides 
otherwise on a case-by-case basis.
Nordea Bank Abp has undertaken, in relation to certain 
individuals and on certain conditions, to be responsible for 
the potential payment liability against these individuals in 
their capacity of managing directors or board members of 
group undertakings of Nordea Bank Abp. 
Nordea Bank Abp purchases directors and officers lia-
bility insurance, which provides cover for personal liabili-
ties of its Board of Directors and management as well as 
liability assumed by the bank to a certain extent following 
indemnification undertakings. The terms and conditions 
including the total limit of liability of the directors and 
officers liability insurance programme are in line with 
large European banks.
A limited number of employees are entitled to sever-
ance pay if they are dismissed before reaching their nor-
mal retirement age. For further information, see Note G8.4 
“Key management personnel remuneration”.
Within the framework of normal business operations, 
Nordea faces a number of operational and legal risks 
potentially resulting in reputational impacts, fines, sanc-
tions, disputes, remediation costs, losses and/or litigation. 
Specifically, Nordea faces potential claims related to the 
provision of banking and investment services and other 
areas in which it operates. See the section “Critical judge-
ments and estimation uncertainty” in Note G6 “Provisions”.
G7.2 Commitments
Accounting policies 
Commitments are irrevocable promises to extend 
credit or make other types of payments in the future. 
Unutilised credit facilities are also disclosed as 
commitments.
Irrevocable commitments are recognised on the 
balance sheet under the expected credit loss 
requirements as further defined in Note G3.8 
“Loans”. Changes in provisions are recognised in 
“Net loan losses” in the income statement. 
Premiums received on credit commitments are 
generally amortised over the loan commitment 
 period. The contractual amounts are recognised off 
balance sheet, net of any provisions.
Commitments
EURm 31 Dec 2025 31 Dec 2024
Unutilised overdraft facilities 28,876 28,325
Loan commitments 66,134 58,623
Future payment obligations 767 817
Other commitments 2,030 1,986
Total 97,807 89,751
Reverse repurchase agreements are recognised on and 
derecognised from the balance sheet on the settlement 
date. As at 31 December 2025 Nordea had signed reverse 
repurchase agreements that have not yet been settled and 
consequently are not recognised on the balance sheet. On 
the settlement date, these reverse repurchase agreements 
will, as far as possible, replace existing reverse repurchase 
agreements not yet derecognised as at 31 December 2025. 
The net impact on the balance sheet is minor. These 
instruments have not been disclosed as commitments.
For more information on reverse repurchase agree-
ments, see Note G3.2 “Transferred assets and obtained 
collateral”.

===== SIDA 251 =====

Nordea Annual Report 2025 250
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G7.3  Assets pledged
Accounting policies
Assets recognised on the balance sheet and pledged 
as security for Nordea’s own liabilities are disclosed 
as “Assets pledged as security for own liabilities”. 
Assets recognised on the balance sheet and pledged 
for other than own liabilities are disclosed as “Assets 
pledged as security for other than own liabilities”. 
Securities borrowed and then used as collateral are 
presented as “Transferred assets and obtained collat-
eral” (see Note G3.2 “Transferred assets and obtained 
collateral” for accounting policies).
Assets pledged 
EURm 31 Dec 2025 31 Dec 2024
Assets pledged as security for own liabilites 248,530 216,648
Assets pledged as security for other than 
own liabilities 169 236
Total 248,699 216,884
Assets pledged as security for own liabilities
EURm 31 Dec 2025 31 Dec 2024
Assets pledged as security for own 
liabilities 
Securities etc. 4,800 2,415
Loans to the public 185,536 163,058
Other assets pledged 58,194 51,175
Total 248,530 216,648
The above pledges pertain to  
the following liabilities1
Deposits by credit institutions 5,174 3,663
Deposits and borrowings from the public 4,164 1,022
Derivatives 4,341 5,532
Debt securities in issue2 117,619 124,355
Other liabilities and commitments 54,035 45,776
Total 185,333 180,348
1) Liabilitie s after offsetting between assets and liabilities on the balance sheet.
2) Ex cluding fair value hedge adjustment.
Assets pledged as security for own liabilities comprise 
securities pledged as security under repurchase agree-
ments and under securities lending agreements. The 
transactions are conducted under standard agreements 
employed by financial market participants. Counterparties 
to the transactions are credit institutions and the public. 
The transactions are typically short term and mature 
within three months. Securities related to life operations 
are also pledged as security for the corresponding insur-
ance liabilities.
Loans to the public have been registered as collateral 
for issued covered bonds and mortgage bonds in line with 
local legislation. In the event of the company´s insolvency, 
the holders of these bonds have priority to the assets reg-
istered as collateral.
Other assets pledged relate to certificates of deposit 
pledged by Nordea to comply with the authorities’ 
requirements.
Assets pledged as security for 
other than own liabilities 
Assets pledged as security for other than own liabilities 
mainly relate to interest-bearing securities pledged as 
security for payment settlements with central banks and 
clearing institutions. Only securities pledged overnight are 
disclosed (securities pledged intraday are excluded). 
Collateral pledged for items other than Nordea’s own lia-
bilities, e.g. for a third party or for Nordea’s own contin-
gent liabilities, is also presented under this item.

===== SIDA 252 =====

Nordea Annual Report 2025 251
Introduction Strategic report Our stakeholders Business areas Board of Directors’ report Financial statements Other
G8 Employee benefits 
and key management 
personnel remuneration
All forms of consideration given by Nordea to its employees 
as compensation for services performed are employee ben-
efits. Employee benefits consist of short-term benefits, 
post-employment benefits and share-based payment plans.
Short-term benefits are to be settled within twelve 
months after the reporting period when the services have 
been performed. Short-term benefits consist mainly of 
fixed and variable salary. For more information, see Note 
8.1 “Fixed and variable salaries”. 
Post-employment benefits are benefits payable after 
termination of the employment. Post-employment bene-
fits in Nordea consist only of pensions. For more informa-
tion, see Note 8.2 “Pensions”. 
Share-based payment plans cover share-based pay-
ments for services from employees. For more information, 
see Note G8.3 “Share-based payment plans”.
In addition, remuneration to key management person-
nel is disclosed in Note G8.4 “Key management personnel 
remuneration”. 
Additional disclosures on remuneration 
The Board of Directors’ report includes a separate section 
on remuneration. Further, in accordance with the Finnish 
Corporate Governance Code 2025 the Remuneration 
Report for Governing Bodies 2025 will be prepared for the 
Annual General Meeting on 24 March 2026. Finally, aggre-
gated disclosures for key management personnel and 
material risk takers (Pillar III, CRR article 450) will be pub-
lished on nordea.com ahead of the Annual General 
Meeting.
G8.1 Fix ed and variable salaries
Accounting policies
Short-term benefits
Short-term benefits consist mainly of fixed and vari-
able salary. Both fixed and variable salaries are 
expensed in the period when the employees per-
form services for Nordea. 
Short-term benefits related to the fulfilment of 
insurance contracts accounted for under IFRS 17 are 
included gross in this note. In the income statement 
those costs are presented as part of the accounting 
for insurance contracts and not as “Staff costs”, see 
Note G4 “Insurance contract liabilities” and Note 
G2.4 “Net insurance result”.
Short-term benefits that fulfil the capitalisation 
requirements defined in the accounting policies in 
Note G5.1 “Intangible assets” are included gross in this 
note, but capitalised and added to “Intangible assets” 
on the balance sheet.
Termination benefits
Termination benefits normally arise if employment is 
terminated before the normal retirement date or if 
an employee accepts an offer of voluntary 
redundancy.
Termination benefits are expensed when Nordea 
has an obligation to make the payment. An obligation 
arises when a formal plan has been committed to on 
the appropriate organisational level and when Nordea 
is without realistic possibility of withdrawal, which nor-
mally occurs when the plan has been communicated 
to the affected individual or employee(s) or their 
representatives.
Termination benefits can include both short-term 
benefits, for instance a number of months’ salary, 
and post-employment benefits, normally in the form 
of early retirement benefits. 
Nordea’s Short Term Incentive Plans
Nordea operates Short Term Incentive Plans (STIPs). 
These are the Nordea Incentive Plan (NIP), which is 
offered to the CEO and members of the Group Leadership 
Team (GLT) and, subject to invitation, to other employees, 
or bonus schemes (bonus) for selected employees in spe-
cific business areas or units as approved by the Board of 
Directors (Board). The NIP should primarily be used for 
roles where variable remuneration is a widespread market 
practice and makes up a significant part of the total remu-
neration package.
STIPs have been offered for several years primarily as 
the Executive Incentive Programme (EIP) and since 2022 
as the NIP with similar terms and conditions.
The STIPs cover a performance period of one year and 
deliver cash to the participants and if they are material risk 
takers also share awards. Deferral is applied for material 
risk takers to part of the award for delivery annually in 
equal instalments over the following four or five years and 
subject to a 12-month retention period. Variable remunera-
tion paid in cash and not linked to Nordea’s share price 
performance is expensed when earned and included in 
“Fixed and variable salaries” below. Amounts earned and 
deferred in shares or linked to Nordea’s share price perfor-
mance, also expensed as “Fixed and variable salaries” in 
the below table, are disclosed in the separate Note G8.3 
“Share-based payment plans”.
Staff costs
EURm 2025 2024
Fixed and variable salaries1 -2,569 -2,452
Pension costs (specification in Note G8.2) -300 -288
Social security  c ontributions -486 -457
Other staff costs -104 -108
Total  gross -3,459 -3,305
Expenses to fulfil insurance
contracts in scope of IFRS 17 90 81
Expenses capitalised in IT development
projects2 135 118
Total -3,234 -3,106
1)  Of which all ocation to profit sharing for 2025 amounted to EUR 65m (EUR 64m), 
consisting of a new allocation of EUR 62m (EUR 64m) and an adjustment related 
to prior years of EUR 3m (EUR 0m). 
2)  See No te G5.1 “Intangible assets”.

===== SIDA 253 =====