Danske Bank A/S raised its full-year forecast after profit in the second quarter climbed as a recovering economy helped reduce loan losses.
The bank also said it would start treating its operations in Northern Ireland as a "standalone business unit" and no longer include it in its personal banking and business banking.
“We have made a business review that concluded that synergies between the Northern Irish market and the Nordic markets are limited,” Danske said.
The bank will send separate accounts for the unit, starting January 1st, it said.
Denmark’s biggest bank said it expects net income to exceed 16 billion kroner (€2.1 billion) this year, about 2 billion kroner more than it had previously estimated.
“The stronger outlook is owing mainly to positive developments in income supported by high customer activity at all business units and in impairments as macroeconomic conditions continue to improve,” Danske said in the statement.
Net income rose 8 per cent to 4.5 billion kroner in the three months through June, beating the average 3.8 billion-krone estimate of analysts surveyed by Bloomberg. The bank was able to reverse 219 million kroner in provisions set aside for impairments, after losing 626 million kroner a year earlier.
Chief executive Thomas Borgen has raised fees, closed branches and shed non-core operations to boost earnings and buy back shares even as he grapples with the lowest central bank rates in history. He's succeeded in raising Danske's earnings to match its competitors, Standard and Poor's said this month, as it raised the bank's outlook to stable, after taking into account a reduced likelihood of government support.
Like other banks in the Nordic region, Danske is struggling to generate revenue after policy interest rates sank well below zero. The bank said net interest income slipped about 3 per cent to 5.5 billion kroner in the second quarter. Net trading income sank 32 per cent while income from fees rose 17 percent, the bank said.
Bloomberg
