Danske Bank (DANSKE) Q3 2015 earnings summary

Executive summary

• 9M net profit rose 28% YoY to DKK 13.1bn; core profit before tax increased 18% to DKK 16.9bn.

• Cost control and lower impairments offset negative-rate and margin pressure; Q3 customer activity and income eased from H1.

• Return on equity reached 11.5%, above the 9.5% full-year ambition; a strong capital position supported strategy execution.

Financial highlights

• Total income was DKK 33.0bn, up 1%; net interest income fell 2% to DKK 16.2bn, fee income rose 12% to DKK 9.0bn, and trading income fell 9% to DKK 5.3bn.

• Operating expenses fell 4% to DKK 16.0bn; cost/income ratio improved to 48.3% from 50.6%.

• Core loan impairment charges were DKK 196m versus DKK 1.935bn in 9M 2014; the core loan loss ratio was 1bp.

• Profit before tax was DKK 16.9bn, including DKK 33m from non-core activities; net profit was DKK 13.1bn.

• Lending was DKK 1,589.8bn, up 2% from year-end; deposits were DKK 823.6bn, up 8%.

Outlook and guidance

• FY2015 net profit guidance remained above DKK 16bn; total income was expected in line with 2014 and expenses below DKK 22bn.

• Core impairment charges were expected significantly below 2014; non-core profit before tax was forecast at ~DKK 0m.

• Q4 net interest income was expected to be flattish; economic conditions, monetary policy, trading and insurance income remained uncertain.