Danske Bank Upgrades Guidance After 2Q Beat
Denmark's biggest lender, Danske Bank A/S (DANSKE.KO), Thursday upgraded its full-year profit guidance after seeing continued customer growth in Norway and Sweden and as it expects a boost to net interest income this year.
The Copenhagen-based bank posted net profit of 4.59 billion Danish kroner ($710.6 million) for the three months to Jun. 30, from DKK4.26 billion a year earlier, beating the DKK4.46 billion estimate of analysts in a FactSet poll.
The bank now expects full-year net profit at between DKK18 billion and DKK20 billion from a previous estimate of DKK17 billion to DKK19 billion. Net interest income is 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.
"Customer activity was good throughout the period, contributing to a good income development," Chief Executive Thomas F. Borgen said. "The increase was due partly to growth in Norway and Sweden, where we continued to attract new customers. Activity in the financial markets remained high, but subsided in the second quarter, although from a very high level in the first quarter."
Danske noted that total income at its Northern Irish operation fell 9%, reflecting continuing uncertainty following the Brexit vote and the U.K. election outcome. "This resulted in a continuation of low interest rates and a weak GBP." Its Northern Ireland unit contributes 2.5% to group net interest income.
Quarterly group net interest income dipped to DKK14.27 billion from DKK14.33 billion while loan impairments increased to DKK240 million from DKK60 million a year earlier.
Danske said its common equity Tier 1 capital ratio--a key measure of financial strength--stood at 16.2% 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
July 20, 2017 04:13 ET (08:13 GMT)