8th November 2019

Challenging trends of H1 continue into Q3 for Danske Bank

Danske Bank A/S has announced its financial results for the first nine months of 2019, when it delivered a net profit of DKK10.0bn, a decrease of 14 per cent from the level in the first nine months of 2018.

The challenging trends of the first half of the year continued into the third quarter and had a negative effect on the results. Customer activity was good, and the underlying business remains solid, but performance is under pressure.

Commenting, Chris Vogelzang, Chief Executive Officer, said: “The first nine months of 2019 were characterised by challenging interest rate levels and margins as well as higher impairment levels and an increase in costs, related especially to compliance.

"We saw a good underlying business with high customer activity and lending growth, but overall, our performance is under pressure. Therefore, we [now] present a new set of ambitions for 2023 and the key elements of the plan that will enable us to realise them.

"Through diligent cost management, significant investments in digitalisation and in our organisation as well as disciplined execution, we are committed to becoming a better bank for all our stakeholders: customers, employees, society and shareholders."

Highlights:
• Total income amounted to DKK32.8bn, a decrease of 2 per cent from the level in the first nine months of 2018.
• Net interest income totalled DKK16.3bn, a decrease of 8 per cent. Lending grew (in local currency) in all markets, but this was more than offset by higher funding costs and margin pressure.
• Net fee income amounted to DKK11.7bn, an increase of 3 per cent from the level in the first nine months of 2018 and 11 per cent from the level in the second quarter of 2019. Net fee income benefited from significant remortgaging activity in Denmark and the inclusion of SEB Pension Danmark, but was adversely affected by the provision for the compensation payable in relation to the Flexinvest Fri case made in the second quarter of 2019.
• Net trading income totalled DKK2.9bn, a decrease of 22 per cent from the level in the first nine months of 2018 as the challenging conditions on the financial markets continued.
• Other income amounted to DKK1.9bn, against DKK0.7bn in the first nine months of 2018. The increase was due mainly to the sale of Danica Pension Sweden
• The return on shareholders’ equity after tax in the first nine months of 2019 was 8.5 per cent, against 10.1 per cent in the first nine months of 2018.