The recession in the real economy and the deep financial crisis have created a generally more difficult business environment.
In 2009, the Group will focus mainly on serving the large existing customer base across all its markets.
Danish GDP is now expected to contract by 2.4% in 2009. At the publication of Annual Report 2008, the forecast was for a contraction of 0.7%. The Group’s other markets are expected to see similarly negative developments, and the outlook for Ireland and the Baltic region is particularly bleak.
Short-term interest rates fell by around two percentage points in the first quarter of 2009. The remainder of 2009 is likely to see only minor interest rate cuts.
In recent years, the labour market in Denmark has been very tight. As the demand for goods and services has slowed, unemployment has begun to rise, although the level will probably remain relatively low.
Because of the economic climate, the Group expects the level of loan impairment charges to remain high throughout 2009. The turbulent markets are expected to stabilise gradually, however.
Expenses for the Danish state guarantee scheme and the subordinated loan also reduce the Group’s expected earnings for 2009.
The performance of market-related activities – in Danske Markets, Danske Capital and Danica Pension – will depend greatly on trends in the financial markets, including the level of securities prices at the end of the year.
The year 2009 will be a very challenging year for the financial sector. The Group’s solid earnings and capital base and its strong focus on risk, liquidity and capital management give it a good foundation for withstanding the effects of the economic slump. The Group will further strengthen this foundation by adjusting prices, product ranges and costs, and by continuing to focus on risk, liquidity and capital management.
Last updated on 5 May 2009