Danske Bank raises outlook after beating Q2 forecasts
Profit at the bank increased by 10% in H1 compared to same period last year
The Danske Bank Ireland headquarters at Tallaght, Co Dublin. (Photograph: Eric Luke/The Irish Times)
Danske Bank raised its full-year outlook after beating second-quarter pretax profit forecasts on Thursday supported by strong Nordic markets.
It expects a full-year net profit of 18 billion crowns (€2.4 billion) to 20 billion crowns, up from guidance of 17 billion to 19 billion crowns.
Terry Browne, country manager and head of corporate and institutional banking at Danske Bank Ireland, said: “Our corporate and institutional business has delivered another strong performance in Q2. As always, we are committed to supporting our clients, some of the leading businesses in Ireland, as they continue to leverage the opportunities and manage the challenges of the current marketplace.”
“Customer activity was good throughout the period, contributing to a good income development. The increase was due partly to growth in Norway and Sweden, where we continued to attract new customers,” chief executive Thomas Borgen said.
Danske Bank is the Nordic region’s second-biggest bank after Nordea, which missed second-quarter expectations on Thursday.
Danske Bank’s pretax profit rose to 6.18 billion Danish crowns for the three months to in June 30 from 5.78 billion a year earlier.
That topped the 5.83 billion crowns expected by analysts polled by Reuters.
Loan impairment levels remained low and lending volumes rose, Danske said.
Net interest income rose to 5.69 billion crowns from 5.49 billion crowns, but fell short of the 5.74 billion expected by analysts.
Danske Bank in Northern Ireland has blamed a number of factors including the “adverse impact” of the lower Bank of England base rate on its income for a slide in its pre-tax profits to £56.5 million for the first six months of this year.
The bank, which has 44 branches and three regional business centres in the North, said higher expenses as a result of restructuring, increased pension costs and a new investment programme also contributed to the drop in pre-tax profits – which were down from £64.5 million in the first half of 2016.
The latest financial results show that the bank’s total income – £112.3 million for the six months to June of this year – also remained largely flat which Danske said reflected lower interest rates.
But the bank’s lending balances grew eight per cent year on year and Danske’s net credit in loan impairments fell to £15.2 million in the first half of 2017 compared to £16.5 million in the first six months of last year.
Overall, Kevin Kingston, Danske Bank UK chief executive, said the underlying performance of the bank remained strong.
Mr Kingston emphasised the bank’s growth in both customer lending and deposit volumes in the six months to June and said it had also continued to build on a record year for its mortgage business in 2016.
He said among the highlights so far this year for Danske Bank UK, which employs 1,400 people in the North, was the introduction of Apple Pay and its initiative to relocate small business advisers to key branches throughout Northern Ireland.
-(Additional reporting: Reuters)