Our guidance for 2014 is based on expectations of a continuation of slow and fragile macroeconomic growth and a continuation of low interest rate levels in our core markets.
Furthermore, the guidance is based on accounting figures adjusted for the transfer of Personal Banking and Business Banking activities in Ireland to the Non-core unit effective from 1 January 2014.
We expect total income above the 2013 level, despite weaker Market Making income, with the increase driven by improvements in most income items. We expect low demand for loans, and lending volumes are thus likely to remain flat.
Expenses are expected to be reduced to below DKK 23 billion.
Impairments in our core activities are expected to be below the 2013 level as macroeconomic conditions continue to improve, although growth will remain fragile.
We maintain our guidance for Non-core Ireland impairments of up to DKK 1.5 billion in 2014.
We expect net profit for 2014 to be in the range of DKK 10-13 billion. Our previous guidance was net profit at the higher end of a range of DKK 9-12 billion. The stronger outlook is owing mainly to positive developments in expenses and impairments as well as the positive effect relating to Nets.
This guidance is generally subject to uncertainty and depends on economic conditions. Our trading income and insurance business income are particularly uncertain. The 2014 results for trading and insurance will depend greatly on developments in the financial markets and on whether Danica Pension can book the risk allowance and part of the balance on the shadow account to income.