Danske’s net income rises 9% helped by higher interest rates

Danske Bank posted a 9 per cent advance in first-quarter net income, roughly in line with analyst expectations, as higher interest rates improved profitability at Denmark’s largest lender.

Profit by that measure was 5.63 billion kroner (S$1.09 billion) compared with an average estimate of 5.56 billion kroner in a Bloomberg survey of analysts. The Copenhagen-based bank’s net interest income – or the difference Danske earns from lending and paying for deposits – rose 14 per cent from a year earlier to 9.14 billion kroner. 

The lender’s profitability has recovered after it closed the door to a money laundering scandal that has cost it billions of dollars. As a result, Danske has also this year been able to start its first share buy-back programme in six years.

“Overall, our income increased, supported by good customer activity throughout our business, our sustained focus on efficiency kept costs down, and strong credit quality resulted in modest loan impairments,” chief executive officer Carsten Egeriis said in a statement on Friday (May 3). 

Danske last quarter saw its net interest income shrink for the first time in almost three years. Analysts, however, have said they expect a rebound as the bank uses interest hedges that have been a headwind and may be about to turn into a tailwind. 

The bank reiterated its 2024 outlook for a net profit of 20-22 billion kroner and operating expenses in the range of 26-26.5 billion kroner. BLOOMBERG