Danske Bank Upgrades Guidance for Second Consecutive Quarter

By Dominic Chopping Features Dow Jones Newswires

Denmark's biggest lender, Danske Bank A/S (DANSKE.KO), on Thursday upgraded its full-year profit guidance for the second quarter in a row on the back of positive macroeconomic developments, high customer activity and increasing business volumes.

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The Copenhagen-based bank posted net profit of 4.73 billion Danish kroner ($739.1 million) for the three months to Sept. 30, compared with DKK4.74 billion a year earlier, beating the DKK4.54 billion analysts expected in a FactSet poll.

The bank now expects full-year net profit of between DKK19 billion and DKK21 billion, up from a previous estimate of DKK18 billion to DKK20 billion, after seeing higher-than-expected income on all major income lines and lower loan impairment charges so far this year. Net interest income is still expected to rise compared with 2016, as the bank benefits from volume growth and lower funding costs, it said.

Net fee income is seen higher than in 2016 and expenses are expected to be around the 2016 level.

"Our partnership agreements in Norway and Sweden continued to attract new customers, and our lending and investment activity was generally high across our markets," Chief Executive Thomas F. Borgen said.

"We maintained a fast pace of innovation, launching several new business initiatives within areas such as mortgage finance, investments and mobile solutions. The solid financial results enable us to continue the considerable investments in digitalization that we initiated some years ago and to continuously adapt our business to the major changes facing the financial industry."

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Quarterly group net interest income rose to DKK8.12 billion from DKK8.22 billion and it posted loan loss reversals of DKK399 million, from a charge of DKK247 million a year earlier.

Danske said its common equity Tier 1 capital ratio--a key measure of financial strength--stood at 16.7% at the end of the quarter, up from 15.8% a year earlier.

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

November 02, 2017 04:02 ET (08:02 GMT)