Danske Bank reports net profit of DKK 3.8 billion (EUR 516.7 million)
Before goodwill impairments, the net profit for the year was DKK 12.9 billion
(EUR 1,739.1 million) – an increase of 82%
Danske Bank today announced its financial results for 2014.
The announcement and the annual report can be viewed at www.danskebank.com/reports.
"2014 was a year of considerable progress for Danske Bank. Our focus on delivering value to our customers helped strengthen our underlying business and our results," says Thomas F. Borgen, Chief Executive Officer. "Although we still have some way to go to meet our ambitions and realise the full potential of Danske Bank, the progress confirms that we are on track to deliver on our targets. We will continue to diligently execute our strategy to become a more customer-centric, simple and efficient bank for the benefit of both customers and shareholders."
Highlights are shown below:
2014 vs 2013
- Danske Bank Group generated a net profit for 2014 of DKK 3.8 billion (EUR 516.7 million). The net profit was affected by goodwill impairments of DKK 9.1 billion (EUR 1,222.4 million) (see Company announcement No. 26 dated 15 December 2014). Before goodwill impairments, net profit rose 82% to DKK 12.9 billion (EUR 1,739.1 million), against DKK 7.1 billion (EUR 953.7 million) in 2013 and DKK 4.7 billion (EUR 633.3 million) in 2012. The increase was driven by growth in all income lines, lower expenses and lower loan impairments.
- The return on shareholders’ equity after tax was 2.4% for 2014. Before goodwill impairments, the figure was 8.5%, against 5.0% for 2013.
- Total income amounted to DKK 43.9 billion (EUR 5,893.1 million) and was up 10%.
- Expenses amounted to DKK 22.6 billion (EUR 3,041.7 million) and fell 5% because of continuing cost-efficiency measures. The cost/income ratio before goodwill impairments improved 8.3 percentage points to 51.6%.
- Loan impairments in our core activities remained low and stood at DKK 2.8 billion (EUR 374.5 million). This corresponds to 0.15% of lending and guarantees, against 0.21% in 2013. The development reflects improving macroeconomic conditions in Danske Bank’s core markets. Impairments fell at all business units.
- The result of Non-core activities, which consist mainly of the Non-core Ireland exposures, was a loss before tax of DKK 1.5 billion (EUR 201.9 million), an improvement of DKK 0.3 billion (EUR 36.3 million) from 2013.
- At the end of 2014, total lending was up 2% from the level at the end of 2013. Most of Danske Bank’s markets saw weak growth and low demand for credit. Total deposits were 2% below the level at the end 2013.
- We have decided to refocus our activities in the Baltic countries and to strengthen our business banking operations through further investments in IT, among other things. At the same time, our personal customer operations will be gradually phased out.
- The common equity tier 1 capital ratio and the total capital ratio were 15.1% and 19.3%, respectively, against 14.7% and 21.4% at 31 December 2013. With a liquidity coverage ratio (LCR) of 129% at 31 December 2014, Danske Bank Group’s liquidity position remained robust.
Dividend payments and share buy-back programme
- The Board of Directors is proposing a dividend of DKK 5.5 (EUR 0.74 ) per share. This corresponds to 43% of net profit before goodwill impairments.
- On the back of reduced risk levels, our strong capital base and improved credit ratings, the Board of Directors has decided to adjust our capital structure and initiate a share buy-back programme of DKK 5 billion (EUR 671.7 million) in 2015.
- For 2015, we expect a net profit of above DKK 14 billion (EUR 1,880.8 million). Taking the goodwill impairments in 2014 into account, we are committed to a long-term return on equity target of above 12.5% by 2018 at the latest.
Outlook for 2015
Contacts available on 3 February 2015 from 10.00am CET:
Thomas F. Borgen, CEO, tel. +45 45 14 60 01
Henrik Ramlau-Hansen, CFO, tel. +45 45 14 06 66
The Annual Report 2014 will be presented at a press conference at 10.00am CET.
You can follow a live webcast of the press conferene.
Danske Bank will hold a conference call at 2.30pm CET.
You can follow a live webcast of the conference call.
View Danske Bank’s online reports at: www.danskebank.com/onlinereport.