DANSKE BANK, the parent of National Irish Bank (NIB) and Northern Bank, posted a second-quarter profit after loan impairments declined in Finland and the Baltic countries.
Net income was 937 million kroner (€126 million), compared with a net loss of 828 million kroner a year earlier, the Copenhagen-based company said in a statement yesterday.
Loan losses dropped to 3.48 billion kroner from 6.55 billion kroner. Danske suffered the largest loan losses of any Nordic bank in 2009, in part because of its Irish exposure, but also on the back of economic problems at home and in the Baltic states.
The bank, Denmark’s largest lender, said it expected loan losses, which have dropped for six consecutive quarters, “to remain high in 2010, although somewhat lower than in 2009”.
Net interest income missed the estimate of Citigroup, analyst Henrik Christiansson said.
“The bank notes emerging pressure on lending margins and continued stiff competition for deposits, and expects net interest income to remain under pressure due to low interest rates,” Mr Christiansson said in a note.
“While we expect 2010 to continue to be challenging, we expect a turnaround in earnings power in 2011, driven by improved efficiency, no state guarantee fees, asset quality normalisation and resuming growth.”
Danske said in its statement: “Recent macroeconomic indicators offer hope, however, that the business environment will gradually improve even though the recovery is still fragile and the debt level in the euro zone adds to the uncertainty.”
As well as owning NIB and Northern Bank, Danske owns Sampo Bank in Finland and it also operates in Sweden, Norway, Estonia, Latvia and Lithuania.
– (Bloomberg)
