May 10, 2012
Danske Bank reports net profit of DKK 0.8 billion (EUR 105 million) for the first quarter of 2012
Danske Bank today announced its financial results for the first quarter of 2012. The interim report is available at www.danskebank.com/reports. Highlights are shown below.
- The Danske Bank Group posted a profit before tax of DKK 1.6 billion (EUR 213 million) for the first quarter of 2012. The net profit was DKK 0.8 billion (EUR 105 million), an 11% rise from the first-quarter 2011 net profit, and was generally in line with expectations.
- Income totalled DKK 12.4 billion (EUR 1,660 million), up 6% from the level in the first quarter of 2011, mainly because of higher net interest and net trading income.
- Net trading income was 8% higher than the year-earlier level. The rise was satisfactory and reflected favourable market conditions.
- Expenses fell 7% from the level in the first quarter of 2011, mainly because of lower expenses for the Danish Guarantee Fund for Depositors and Investors. Expenses in the period included a charge of DKK 0.5 billion (EUR 60 million) related to name rights because of the rebranding of Sampo Bank.
- The Group’s cost-savings programme adopted last year to reduce costs by about DKK 2 billion (EUR 269 million) and the headcount by about 2,000 from 2012 to 2014 is now expected to be completed by the end of 2013.
- Loan impairment charges increased significantly from the level in the first quarter of 2011. Compared with the high level in the fourth quarter of 2011, however, charges declined, partly because of lower charges at Retail Banking Denmark and Banking Activities Ireland.
- At 31 March 2012, the tier 1 capital and total capital ratios were 16.0% and 17.6%, respectively, against 14.6% and 17.4% at 31 March 2011.
- The Group expects earnings to remain low in 2012.
- The Group is creating a new organisation structured around three business units that will operate across its geographical markets: Personal Banking, Business Banking and Corporates & Institutions. The objectives are to improve the focus on customers and to lay the foundation for efficiency improvements and stronger financial performance. The organisational change will take effect on 1 June 2012, and financial reporting will reflect the new organisation from 1 January 2013.
- At National Irish Bank, the commercial and investment property loan portfolios will be transferred to a new, separate unit of the Group that will be responsible for the controlled winding-up of this part of the loan portfolio. The rest of the Irish banking activities will continue in their current form.
- The Group will use the Danske Bank brand name for all its banking operations by the end of 2012.
- The new organisation is the first step of the Group’s new strategy, which is being prepared and is expected to be completed by the end of the third quarter of 2012.
Additional information about the new organisation and other changes is available in company announcement No. 7/2012.
"The Group’s earnings initiatives and tight cost control have improved the financial results of the banking units," says Eivind Kolding, Chairman of the Executive Board. "The difficult market conditions persisted in several of our markets, though, and impairment charges remained high in the first quarter, even though they fell from the level in the fourth quarter of last year. The new organisation announced today is another step in the right direction to ensure that our business model is competitive and creates value."
Eivind Kolding, Chairman of the Executive Board, tel. +45 45 14 60 01
Henrik Ramlau-Hansen, Chief Financial Officer, tel. +45 45 14 06 66
Martin Gottlob, Head of Investor Relations, tel. +45 45 14 07 92
Danske Bank will hold a conference call on 10 May 2012 at 2.30pm CET.
You can follow a live webcast of the press conference (in Danish with English subtitles and presentation).
Danske Bank’s financial statements are available online at www.danskebank.com/reports