Denmark’s biggest bank raised its full-year forecast after profit more than doubled last quarter on smaller loan losses and higher trading income.
Net income in the third quarter rose to 3.19 billion kroner (€429 million) from 1.54 billion kroner a year earlier, Danske Bank said today in a statement.
The bank raised its outlook for 2014 and now sees net profit of 11.5 billion kroner to 13.5 billion kroner, compared with an earlier estimate for 10 billion kroner to 13 billion kroner.
Since taking over as chief executive officer a year ago, Thomas Borgen has sought to turn Danske into a leaner organization with less debt and fewer costs. The strategy earned the bank a one-step ratings upgrade at Standard and Poor’s in April to A, helping reduce funding costs.
“The results are encouraging, but we still have some way to go before reaching our long-term targets,” Borgen said in the statement. “We will continue to execute our strategy and focus on becoming a truly customer-driven, simple and efficient bank.”
Danske delivered a return on average shareholders’ equity of 8.5 percent compared with 4.3 per cent a year earlier. The bank’s common equity Tier 1 capital ratio was 15 per cent relative to risk-weighted assets at the end of September, versus 14.2 per cent a year earlier.
Earlier this month, Denmark's Financial Supervisory Authority said Danske will need to write down its common equity Tier 1 capital by 2.2 billion kroner before tax after conducting an asset quality review of the nation's four biggest banks.
