The economic recession and the financial turbulence have led to more difficult earnings conditions for the financial sector.
In 2009, the Group will focus on serving the large existing customer base across all its markets.
Danish GDP is likely to contract by around 0.7% in 2009 as is the weighted GDP of the Group’s markets. The outlook for Ireland and the Baltic countries is particularly bleak.
Danish interest rates are expected to fall by around one percentage point in the first half of 2009, in line with the average estimates for the Group’s other markets.
In recent years, the labour market in Denmark has been very tight. As demand for goods and services slows down, unemployment is likely to rise, although it will probably remain at a relatively low level.
The Group expects the level of loan impairment charges to remain high in 2009, reflecting the general economic climate, although it believes that the turbulent conditions in the fourth quarter of 2008 were extraordinary.
Expenses for the Danish state guarantee scheme and the expected capital injection 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 is likely to be a very challenging year for the financial sector. The Group’s robust banking activities, the needed widening of interest margins in 2008, tight cost control and a continuing, strong focus on risk, liquidity and capital management give the Group a good foundation for the future.
Last updated on 5 February 2009