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Improvement due to positive macroeconomics and high customer activity

Danske Bank: Net profit of DKK 20.9 billion and return on shareholders' equity of 13.6%

Danske Bank has announced its financial results for 2017.

Thomas F. Borgen, Chief Executive Officer, comments on the financial results:

We delivered a strong financial result for 2017. The result reflects continued progress in the Nordic economies, a high level of customer activity throughout the year and our business initiatives aimed at creating a more simple, efficient and customer-centric bank. We experienced a positive development across our business units, which in many areas led to good increases in the number of customers and lending. We continuously strive to improve the customer experience and we have generally maintained the positive trend in customer satisfaction across our markets. Digitalisation increasingly creates new possibilities, and the result for 2017 gives us a good basis for continuing to invest in the development of new solutions for the benefit of our customers.

The annual report is available at
Highlights are shown below:

2017 vs 2016
Danske Bank Group delivered a net profit for 2017 of DKK 20.9 billion, up 5% from the level in 2016. The result was driven by positive macroeconomic developments, high customer activity, business volume growth and impairment levels that continued to be low.

The return on shareholders' equity after tax was 13.6%, against 13.1% in 2016.

Total income amounted to DKK 48.1 billion and was on par with the level in 2016. Total income in 2016 benefited from one-off gains, including the sale of our domicile properties:

  • Net interest income totalled DKK 23.4 billion, with the increase of 6% being driven by higher volumes and lower funding costs.

  • Net fee income amounted to DKK 15.3 billion and was up 8% from the level in 2016. Net fee income benefited from an increase in assets under management and high customer activity, especially at Corporates & Institutions.

  • Net trading income totalled DKK 7.8 billion, a decrease of 9% from the level in 2016, which benefited from the gain on the sale of VISA Europe and our shares in Danmarks Skibskredit A/S. Net trading income was driven especially by high customer trading activity early in the year.

  • Other income amounted to DKK 1.6 billion, a decrease of 49% from the level in 2016, which benefited from the sale of domicile properties.
Operating expenses amounted to DKK 22.7 billion and were on par with the level in 2016. Operating expenses were affected by higher costs related primarily to compliance, new regulation and digitalisation. Higher activity-related costs were for a large part mitigated by efficiency measures. Operating expenses also benefited from a one-off gain relating to the amended pension liability in Northern Ireland. The cost/income ratio was unchanged at 47.2%.

Credit quality is strong. We made net impairment reversals of DKK 873 million and impairments remained low as a result of improved macroeconomic conditions and higher collateral values in 2017.

At the end of December 2017, total lending was up 2% and total deposits were up 6% from the levels at the end of 2016. Lending and deposits increased in almost all markets. The figures were adversely affected by foreign exchange movements. 

Customer satisfaction at the same level
We generally maintained good customer satisfaction positions across our markets. In most markets, we were ranked in the top two. Customer satisfaction remains a key priority.

Capital position, dividends and share buy-back programme
Danske Bank’s capital position is very strong, with a total capital ratio of 22.6% and a CET1 capital ratio of 17.6% at 31 December 2017. Both ratios are above our targets.

On the basis of our strong capital position, the Board of Directors is proposing a dividend for 2017 of DKK 10 per share, or 45% of net profit. Danske Bank’s dividend policy has been revised, and going forward, the pay-out ratio will be 40-60% of net profits rather than 40-50%.

In addition, the Board of Directors has decided to initiate a new share buy-back programme of DKK 10 billion in 2018. The purpose of the share buy-back programme is to adjust the share capital to better reflect Danske Bank’s capital targets. The share buy-back programme, which will start on 5 February 2018 and run for no more than 12 months, is described in more detail in Company announcement No. 10 of today’s date.

Outlook for 2018 and financial target
We expect net profit for 2018 to be in the range of DKK 18-20 billion.

We have met our longer-term ambition for a return on shareholders’ equity of at least 12.5%. Our new longer-term ambition is to rank in the top three among major Nordic peers in terms of return on shareholders’ equity. This relative target accommodates the changing environment and will be valid throughout the economic cycle.

New domicile in 2023
In 2023, Danske Bank’s domicile will relocate from Holmens Kanal in Copenhagen to new offices constructed for Danske Bank next to Copenhagen central station. The relocation is a continuation of our strategic work in recent years to create a more simple, efficient and customer-centric bank.

Danske Bank

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