Danske Bank sees forecast-beating first-quarter profit, lifts full-year guidance

By Dominic Chopping

Danske Bank AS late Thursday raised its full-year profit guidance and said it expects to report a forecast-beating first-quarter net profit as higher interest rates and high trading income helped boost earnings at the start of the year.

The Copenhagen-based bank said it now expects a net profit of between 16.5 billion and 18.5 billion Danish kroner ($2.45 billion-$2.74 billion) in 2023 compared with previous expectations of DKK15 billion-DKK17 billion.

"Following a turbulent period for banks in general, we are pleased with the performance that we have seen in the first quarter of 2023," Chief Executive Carsten Egeriis said.

"The strong financial result benefited from the improved interest-rate environment and high trading income driven by good customer activity at Large Corporates & Institutions. Benign financial market conditions further supported income from insurance activities, and impairment charges remained at a very low level in the first quarter."

The bank still expects core income lines to grow this year, with income from trading and insurance activities recovering toward normalized levels and costs within a DKK25 billion-DKK25.5 billion range. Fee income this year is expected to be slightly below the 2022 level.

Loan impairment charges this year are now seen at up to DKK2.5 billion, from up to DKK3.0 billion previously, amid strong credit quality and recoveries seen in the first quarter, it added.

Danske Bank is due to report first-quarter earnings on April 28, but ahead of the release it said preliminary results show a net profit of around DKK5.1 billion and net interest income of around DKK8 billion.

A FactSet forecast had seen first-quarter net profit of DKK4.2 billion on net interest income of DKK8.16 billion.

Fee income in the quarter is seen at around DKK2.9 billion with net trading income and net income from insurance business around DKK1.6 billion and DKK0.5 billion, respectively. Expenses will be around DKK6.3 billion and impairments around DKK0.2 billion.

Write to Dominic Chopping at dominic.chopping@wsj.com

-Dominic Chopping

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04-14-23 0245ET

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