December 21, 2018 / 8:06 AM / in 6 months

UPDATE 2-Activist Cevian takes stake in Nordea, pushes for bigger cost cuts

* Cevian discloses 2.3 percent stake in Nordea

* Says bank should be most profitable in region

* Investor wants more aggressive cost cuts (Adds comments from Cevian, shares, background, detail)

STOCKHOLM, Dec 21 (Reuters) - Swedish activist investor Cevian Capital has built a 2.3 percent stake in Nordea , saying it saw large potential for the Nordic region’s largest bank to cut costs and lift profitability in the coming years.

Cevian, which is very familiar with the Nordic banking scene having previously held stakes in both Danske Bank and Swedbank, will join the Nordic bank’s nomination board, which selects directors and has a say in executive pay.

“Cevian sees significant value potential in Nordea,” co-founder Christer Gardell said in a statement on Friday. “We will work with Nordea’s owners, board of directors and management to realize this value potential without unnecessary time delay.”

Nordea is trading at a discount of 30 percent versus its peers mainly due to its lower profitability, Gardell told Reuters. Nordeas peers, in addition to Danske Bank and Swedbank, also include Handelsbanken, SEB and DNB .

“We see no excuse for that,” Gardell said. “On the contrary, the biggest bank should be the most efficient one”.

Nordea said in October it expects its cost base to fall below 4.8 billion euros ($5.5 billion) in 2018, and to further cut its cost base in constant currencies by another 3 percent by 2021, implying a level of around 4.65 billion.

“We see more aggresive targets on the cost side,” Gardell said. “We think 4.4 billion is suitable for 2021, and then 4 billion somewhere around 2022-2023”.

The bank, which this year moved its headquarters to Finland from Sweden, has 29,300 full-time employees, according to its website.

Nordea shares slipped 0.1 percent by 0940 GMT, slightly better than a 0.5 percent dip for the European banking sector .

Nordea said it was pleased that Cevian saw potential value in the bank. It said Cevian would join the nomination board, which was set up this year to present proposals concerning the election of members of the board and remuneration.

The nomination board will present its proposals at Nordea’s annual general meeting to be held on March 28, 2019.

Gardell declined to comment on whether Cevian wanted a seat on Nordea’s board of directors or whether the firm intended to raise its stake further.

Cevian’s other holdings include stakes in blue-chips such as robotics and automation group ABB, steel-to-elevators firm Thyssenkrupp, and mobile network equipment maker Ericsson. ($1 = 0.8750 euros) (Reporting by Johannes Hellstrom and Anne Kauranen; Editing by Susan Fenton/Keith Weir)

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