Outlook for 2005

Danske Bank Group's pre-tax profit for 2005 is now expected to be higher than predicted at the publication of the Quarterly Report for the first quarter of 2005.

In 2005, Europe is still likely to see generally low economic growth and generally low interest and inflation rates. The Group expects growth in its principal markets to be higher than overall European growth, however.

Net interest income and net fee income from banking activities and mortgage finance are expected to rise from the level recorded in 2004. The increase in income from property financing in the Nordic units, among other activities, is likely to offset the decline in income from wholesale banking activities in England and the USA. The strong remortgaging activity in the first half of 2005 is unlikely to continue at the same pace. The newly acquired banks in the Republic of Ireland and Northern Ireland were consolidated in the Group's accounts from 1 March 2005.

Net trading income is expected to slightly exceed income in 2004 despite the one-off revenue from sales of unlisted shares in 2004. The strong activity in the first half of 2005 is not expected to continue at the same level in the second half. Net trading income will continue to depend greatly on the trends in the financial markets, including the level of securities prices at the end of the year.

Net income from insurance business is expected to be lower owing to the booking of DKK 445 million in the fourth quarter of 2004 for risk allowances from previous years. The possible booking of part of the risk allowance outstanding from previous years of DKK 436 million will be considered at the end of the year.

On the whole, the Group expects total income to increase around 10% from the level in 2004, although this still depends on the trend in prices on the financial markets among other factors.

Expenses, other than those incurred by the banks in the Republic of Ireland and Northern Ireland, are expected to remain stable at the level recorded in 2004. The acquisitions in the Republic of Ireland and Northern Ireland will increase total expenses, partly due to the operating expenses of the banks and partly as a result of the integration costs and related costs of some DKK 1.5 billion. A good one-third of these costs will be expensed in 2005. Moreover, nearly DKK 1.7 billion of the total acquisition price will be recognised with other intangible assets, which are amortised over a period of three years.

Consequently, the Group expects its total costs and its cost/income ratio to increase.

Credit loss expenses
On the basis of the relatively favourable economic trends and the satisfactory quality of its loan portfolio, the Group still believes that its credit loss ratio will remain low.

Pre-tax profit
Consequently, the pre-tax profit for 2005 is now expected to be about 10% higher than in 2004. However, the result will continue to depend, among other factors, on the level of activity, economic trends and the trends in prices on the financial markets.

The Group expects its tax rate to be 28%.

May 3, 2005

Last updated/revised on 11 August 2005

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