Danske Bank has announced its financial results for the first quarter of 2018.

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

“We had a satisfactory start to the year despite financial market developments that caused lower activity compared with the same period last year. Across our business, the underlying trend was good, with customer demand for credit remaining positive, just as our partnership agreements in Norway, Sweden and Finland continued to attract new customers and create good activity. In Denmark, we also saw good activity partly as a result of continued interest in our new home financing solutions. At the same time, we maintained solid credit quality across our markets. We continued to make considerable investments in new innovative solutions, some in cooperation with external partners, which contributes to delivering enhanced customer experiences.”

The interim report is available at danskebank.com.
Highlights are shown below:

First quarter 2018 vs first quarter 2017
Danske Bank posted a net profit of DKK 4.9 billion in the first quarter, a decrease of 12% from the level in the first quarter of 2017. This is a satisfactory start to the year despite uncertainty in the financial markets, which led to lower activity compared with the year-earlier period, and reflects good developments in the Nordic economies.

The return on shareholders’ equity after tax was 12.6%, against 14.4% in the first quarter of 2017.

Total income amounted to DKK 11.5 billion, a decrease of 9% from the level in the first quarter of 2017, as continued growth in net interest income was more than offset by decreases in net fee income and net trading income.

• Net interest income increased 1% to DKK 5.9 billion due to lending growth. Especially our activities in Sweden contributed to lending growth.


• Net fee income amounted to DKK 3.8 billion, a decrease of 4% due to lower customer activity at Corporates & Institutions and Wealth Management, in particular.


• Net trading income totalled DKK 1.4 billion, a decrease of 43% from the level in the first quarter of 2017, when the level of trading activity was high. Moreover, the investment result from the health and accident business was lower in the first quarter of 2018.

Operating expenses amounted to DKK 5.6 billion, a decrease of 2% from the level in the first quarter of 2017. The expense level was positively affected by lower activity and ongoing efficiency measures and negatively affected by costs related to compliance and continued digitalisation. The cost/income ratio rose to 49.0% from 45.3% in the first quarter of 2017.

Credit quality was strong. Loan impairment charges remained low with a net reversal of DKK 330 million for the first quarter of 2018.

At the end of March 2018, total lending was up 2% from the level at the end of March 2017, and total deposits were up 6%. Deposits and lending grew in almost all markets.

Developments at business units

Personal Banking posted a profit before tax of DKK 1.5 billion, an increase of 21% compared with the figure for the first quarter of 2017. The result was driven mainly by continuously increasing business volumes in Sweden and Norway, lower operating expenses and net impairment reversals.

Business Banking posted a profit before tax of DKK 2.2 billion, an increase of 5% from the level in the first quarter of 2017. The level of activity remained good, and also the business momentum was good with increasing lending across the Nordics.

Corporates & Institutions posted a profit before tax of DKK 1.4 billion, a decrease of 35% from the level in the first quarter of 2017. The decrease was due primarily to lower trading income in FICC and Capital Markets compared with the same period in 2017 when activity was high. Operating expenses decreased 3% due to lower activity and a continuous focus on cost efficiency gains.

Wealth Management posted a profit before tax of DKK 0.9 billion, a decrease of 18% from the level in the first quarter of 2017. The financial performance was influenced by uncertainty in the financial markets, causing a lower investment result from the health and accident business and slightly lower assets under management. Danica Pension saw strong premium growth.

Despite ongoing macroeconomic uncertainty, the underlying performance of Danske Bank in Northern Ireland was satisfactory with continued growth in lending and deposits. However, profit before tax declined 45% (in local currency) on the basis of higher loan impairment charges.

Strong capital ratios
Danske Bank’s capital position remained strong, with a total capital ratio of 21.4% and a CET1 capital ratio of 16.4%. Both ratios are above our targets.

Outlook unchanged
We expect net profit for 2018 to be in the range of DKK 18-20 billion. We maintain our ambition to rank in the top three among our Nordic peers in terms of return on shareholders’ equity.

Other initiatives

Changes to our Baltic business
As part of our strategy to focus on the Nordic markets, we will in the Baltics serve only subsidiaries of our Nordic customers and global companies with business interests in the Nordics going forward. All other banking activities will be transferred to our Non-core unit.

Changes to the financial reporting
As described in Company Announcement No. 23 of 6 April 2018, the financial reporting will be aligned with our new organisational structure. The interim report for the first half of 2018 will show pro forma figures, whereas the interim report for the first nine months of 2018 will reflect the new structure.

Yours faithfully
Danske Bank