Denmark’s biggest lender Danske Bank on Friday reported first-quarter net profit in line with expectations and kept its full-year guidance unchanged despite a high level of macroeconomic uncertainty. The bank also highlighted a “strong underlying financial performance” at its Northern Ireland unit where it grew its mortgage business by 5 per cent, citing “resilient demand” for home loans.

First-quarter net profit rose to 5.6 billion Danish krone (€750 million) from 5.2 billion a year earlier, compared with the 5.6 billion krone average forecast by analysts in a poll provided by the bank.

“It is still very much a mixed picture with many areas of the Nordic economies performing well, but we also see businesses facing headwinds, for example within construction,” CEO Carsten Egeriis said in a statement.

Operating expenses at the bank were stable year-on-year at 6.3 billion krone amid “sustained focus on efficiency kept costs down”, said Mr Egeriis.

In spite of the “geopolitical uncertainty” that characterised the first three months of the year, Danske said it had seen “some positive developments lately as many areas of the Nordic economies are performing well and inflation is trending down. For the Danish economy specifically, growth has been supported by a solid activity level in the services sector and a strong pharmaceutical sector, leading to a continually low unemployment rate and resilient household finances.”

Danske saw “good customer activity” in its personal banking division while business banking grew due to the performance of the Nordic economies. Profit before tax amounted to 1.7 billion krone, down 28 per cent from the first quarter of last year, despite a rise in net fee income.

Meanwhile, the bank reported a “strong underlying financial performance” in Northern Ireland, where it operates 24 branches. Danske’s mortgage home loan business continued to grow in the first quarter of 2024 and “are much improved year-on-year, supporting continued growth in lending (up 5 per cent in local currency).”

It expects mortgage demand in the North to “remain resilient” in the year ahead.

Pretax profit at Danske Northern Ireland fell to 457 million krone from 506 million krone last year, “reflecting a small loan impairment charge”, the lender said. – Additional reporting: Reuters

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