Danske Bank Ireland reports ‘strong performance’ in Q1

Danske Bank Ireland has reported a “strong performance” in the first quarter of 2017 with the institution on course to deliver “solid returns”.

Terry Browne, country manager and head of corporate and institutional banking at Danske Bank Ireland, said it was pleased with the performance.

“As we close out the first quarter of our 2017 financial year, we are pleased to announce that our corporate and institutional division has once again delivered a strong performance, allowing us to continue to generate solid returns,” he said.

“Our financial advisory expertise, coupled with our investment in high-quality technology-based products, ensures our clients have the tools necessary for the growth of their businesses, both at home and abroad.

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“We are committed to supporting our clients, some of the leading corporates and institutions based in Ireland, as they navigate challenges presented by an increasingly complex international marketplace.”

Overall, Danske Bank had a “good start” to 2017 with net profit increasing to €743.5 million from €663.7 million in the first quarter of 2016. This represents an increase of 12 per cent.

The result was driven by generally better macroeconomic developments in the Nordic countries and high customer activity at all business units.

The return on shareholders’ equity after tax was 14.4 per cent, against 13.1 per cent in the first quarter of 2016.

Total income amounted to €1.7 billion, up 10 per cent from €1.5 billion in the first quarter of 2016, with increases in most income lines.

High activity

Operating expenses amounted to €769.6 million, an increase of 8 per cent from a low level in the first quarter of 2016. The increase reflected the “high activity level”, and the bank’s “continued focus” on digitalisation and costs related to regulatory compliance.

Loan-impairment charges remained low, with net reversals of €31.6 million in the first quarter of 2017. The reversals were the result of “generally better macroeconomic conditions and credit quality remaining strong”.

In Northern Ireland, profit before tax decreased 22 per cent. The decrease was the result of reduced loan impairment reversals and increased operating expenses. The underlying performance remained “strong”.

The bank said it expected to maintain its long-term outlook. “We expect net profit for 2017 to be in the range €2.2 billion- €2.6 billion,” it said. “We maintain our longer-term ambition for a return on shareholders’ equity of at least 12.5 per cent.”

Danske Bank chief executive Thomas Borgen said the first quarter was characterised by "high customer activity at all business units".

“This resulted in higher income, driven in particular by increased activity in the financial markets and increased lending to our customers,” he said.

“The Nordic economies are generally doing better, and this benefited our performance. Impairments remained at a very low level.

“We continued to attract new customers, especially in Norway and Sweden, and we also saw a positive trend in the volume of business with existing customers. Overall, we had a good start to the year.”