13.4 bn DKK against DKK 10.2 bn
6.3 bn DKK against DKK 6.4 bn
147 m DKK against 234 m DKK
5.2 bn DKK against 2.8 bn DKK
Return on equity
12.7% against 6.2%
CET1 capital ratio
Strong capital position to the benefit of our stakeholders
The sound credit quality of our portfolio and our well-capitalised balance sheet became a clear benefit for our stakeholders as we were able to continue to use our solid foundation and expert advisory solutions to help customers, and the broader society, navigate the macroeconomic uncertainty.
Solid performance in uncertain environment
Net interest income came in stronger than in the year-earlier period due to further normalisation of interest rates, despite a relatively flat development adjusted for currency effects. In addition, despite high volatility in the financial markets and general uncertainty, fee income was resilient, whereas more supportive market conditions and good customer activity had a positive impact on income from trading and insurance activities.
Costs were down slightly, and credit quality continued to be strong as only modest loan impairment charges were recognised due to a small negative effect from model adjustments.
Stephan Engels on the results
The first quarter was marked by continually low macroeconomic visibility and thus by high volatility in the financial markets. Despite these market conditions, our diversified business model and core activities continued to deliver. Net interest income increased 43% in the first quarter – and for the tenth consecutive quarter – as a result of higher interest rate levels and our repricing initiatives.Stephan Engels
Net fee income stayed sound, despite lower activity on the housing market. We also saw our income from trading and insurance activities normalise as market conditions improved.
Credit quality continued to be strong, while we remain cautious, as seen by our full-year guidance on impairments.
Our efforts to increase efficiency continued to result in a decrease in underlying costs, and as reflected in our early, positive adjustment of our full year guidance, we remain confident in our ability to help our customers navigate the current low visibility environment.
CFO, Danske Bank
Developments in business units
Fee income decreased due to lower remortgaging activity and lower investment income as a result of the uncertainty on the financial markets. Operating expenses decreased due to continued efficiency gains.
Credit quality remained solid, but due to the macroeconomic outlook, loan impairment charges increased.
Profit before tax in the first quarter of 2023 amounted to DKK 1.9 billion, an increase of 51% from the same period in 2022 that was driven by higher income and lower operating expenses, while the higher loan impairment charges had a partly offsetting effect.
In the first quarter of 2023, profit before tax amounted to DKK 2.4 billion, an improvement of 79% from the level in the same period in 2022. This was driven primarily by higher income from deposits as a result of the rising market rates and our repricing initiatives, but also by the repricing of service fees and transfer of customers to a service-based fee model.
Remortgaging fees decreased due to the slowdown in the commercial property market. The financial performance was adversely affected by the depreciation of currencies.
We continue to see positive underlying momentum, as illustrated by continued growth in everyday banking fees, by our leading position in sustainable finance, and by the inflow of new customers in Sweden. Furthermore, we are starting to see positive effects from our new fixed income strategy, calibrating our market risk to new market dynamics. As a result, we are pleased to report strong net trading income in the first quarter of 2023, while having reduced our capital base by 5% since the preceding quarter.
Profit before tax amounted to DKK 2.9 billion, an increase of 69% from the level in the same period last year, due primarily to higher trading income and net interest income.
Net income at Danica Pension amounted to DKK 0.5 billion in the first quarter of 2023, an increase from the level in the same period in 2022.
Stefan Singh Kailay, Head of Media Relations
Tel. +45 45 14 14 00