February 3, 2022
COPENHAGEN (Reuters) -Danske Bank on Thursday maintained its 2023 profitability target and said it expected to increase profits this year after reporting fourth quarter net profit slightly above expectations.
Denmark’s biggest lender expects net profit for 2022 between 13 and 15 billion Danish crowns ($1.97-$2.28 billion), citing stable costs, fewer loan impairments and higher income from core activities.
“Our business continued to develop positively with total income increasing 4%, and our initiatives to become a more efficient bank resulted in costs decreasing 4%,” Chief Executive Carsten Egeriis said in a statement.
Denmark’s largest bank has been dogged by a money laundering scandal since 2018, which has sent its compliance-related costs skywards, and more negative client cases have been uncovered since.
In November, the lender lowered its profitability target, citing increased competition and margin pressure as factors.
Danske affirmed its aim of reaching a return on equity of between 8.5% and 9% in 2023, a goal it adopted in November when it revised down its earlier target range.
Costs in 2021 decreased by 4%, while loan impairment charges, which indicates a bank’s assessment of the macroeconomic situation as well as how many loans could turn bad, dropped 95% compared to last year.
“Danske Bank has cemented itself as by far the least profitable Scandinavian major bank, and this will not change in the coming years,” Nordnet analyst Per Hansen said in a note, adding that results were in line with expectations.
Danske reported fourth quarter net profit of 3.65 billion Danish crowns, slightly above an average of 3.4 billion forecast by analysts.
Danske Bank proposed to pay a total dividend of 7.5 crowns per share for 2021.
($1 = 6.5859 Danish crowns)
(Reporting by Nikolaj Skydsgaard; Editing by Sam Holmes and Tomasz Janowski)