38.6 bn DKK against DKK 29.0 bn
18.8 bn DKK against DKK 19.6 bn
294 m DKK against 794 m DKK
15.5 bn DKK against 6.5 bn DKK
Return on equity
12.5% against 5.1%
CET1 capital ratio
Supporting customers with a robust capital position
Credit quality was strong, although we saw some credit deterioration in the economic sectors first affected by the interest rate increases. We remain prudent with significant buffers in place, and furthermore note that Fitch Ratings upgraded Danske Bank to A+.
Against this backdrop, Danske Bank continued in the period to help our customers navigate the challenging environment.
Strong core banking performance
Operating expenses continued to decrease, both in the quarter and year-over-year, as underlying expenses continued to develop according to plan.
As a result of the commercial momentum, customer activity, strong credit quality and cost focus, we increased our return on equity from 5.1% to 12.5% for the first nine months.
Stephan Engels on the results
In the first nine months on the year, we delivered a strong core banking performance, resulting in a 33% increase in total income. Our strong net interest income benefited from the normalisation of rates and our repricing initiatives, while net fee income remained resilient due to increased customer activity among business customers and in the capital markets, largely outweighing the effect of the continually subdued housing market.Stephan Engels
Our cost/income ratio of 48.7% is underpinning our enhanced profitability and persistent cost focus. Due to our strong credit quality, impairments remain low, even though some cyclical sectors are starting to be impacted, and macro models are reflecting the uncertain outlook.
Our solid financial results, well-capitalised balance sheet and funding position with a strong deposit base continued to allow us to help our customers and other stakeholders navigate the new normal of macroeconomic uncertainty and higher rates.
CFO, Danske Bank
Finalising Better Bank - Forward ’28 execution underway
To strengthen our position further and unleash Danske Bank’s full potential, we announced our new Forward ’28 strategy in June, which will take effect from 2024. We have set our strategic direction towards 2028, and this reflects our ambitions to deliver a solid return on equity by setting new financial targets for 2026. While we focus on finalising the Better Bank strategy, we have also already begun to lay the foundation for the next chapter. We have entered into a strategic partnership with Infosys to support us in our ambition to be a leading bank in a digital age, and we have entered into an agreement to sell our personal customer business in Norway to further focus our retail business.
Sustainability is a core part of our strategy, and in the third quarter of 2023, our progress in this area continued. Danske Bank and Realkredit Danmark also ramped up ESG efforts in the property sector with a new reporting tool that should make ESG reporting easier for real estate companies. Furthermore, Danske Bank received an 'A' score in Position Green’s annual assessment of 300 companies’ ESG reporting in Denmark, Norway and Sweden.
Developments in business units
Fee income decreased 18% from the same period last year, but customer activity picked up in the third quarter of 2023 relative to the preceding quarters, and this had a positive effect on especially service fees. Also, fees from loan establishment and remortgaging increased from the level in the preceding quarters, although the level for the first nine months was still significantly lower than in the first nine months of 2022. Credit quality remained solid, and loan impairment charges were flat relative to the year-earlier period.
Profit before tax amounted to DKK 6.17 billion in the first nine months of 2023, an increase of 111% from the same period in 2022. The increase was driven by higher net interest income and lower operating expenses.
We continued to support our customers with expert financial advisory services tailored for their needs.
In the first nine months of 2023, profit before tax amounted to DKK 7.1 billion, an improvement of 42% from the level in the same period in 2022.
In Debt Capital Markets, we remained the leading Nordic bank in the European debt capital markets in terms of volumes supported. In addition, a further inflow of new customers in Sweden and an increasing market share within cash management services continued to provide net interest income tailwinds, and net interest income rose 28% from the same period in 2022. Furthermore, we continued to be a trusted adviser for our customers on sustainable finance solutions, where we maintained our leading market position in sustainable bonds and sustainability-linked loans.
Profit before tax amounted to DKK 6.7 billion, an increase of 66% from the same period last year, driven primarily by higher net interest income and net trading income.
Despite an ongoing focus on the possibility of a recession, it did not materialise, and the negative impact from 2022 has been partly offset by the positive development in 2023.
Net income at Danica Pension amounted to DKK 0.9 billion in the first nine months of 2023 and recovered from the level in the same period in 2022 as the net financial result improved due to the positive developments in the financial markets.
Outlook for 2023
The outlook is subject to uncertainty and depends on volume growth and macroeconomic conditions.
Stefan Singh Kailay, Head of Media Relations
Tel. +45 45 14 14 00