Improving macroeconomic environment and good customer activity drive progress, supported by cost focus and strong credit quality. Net profit of DKK 17.6bn for Q1-Q3 of 2024. 2024 net profit outlook revised upwards to DKK 22.5-23.5 billion

31 Oct 2024 07:30 CET

Press release

Bernstorffsgade 40
DK - 1577 København V
Tel. +45 45 14 14 00





31 October 2024

Improving macroeconomic environment and good customer activity drive progress,
supported by cost focus and strong credit quality
Net profit of DKK 17.6 billion for the first nine months of 2024
2024 net profit outlook revised upwards. Now expects a net profit of DKK
22.5-23.5 billion, against previously 21-23 billion

Carsten Egeriis, Chief Executive Officer, comments on the financial results:

"During the first nine months of 2024, we consistently delivered satisfactory
financial results, while progressing with our strategic priorities. Stable core
income, consistent cost management, improved customer activity and continually
strong credit quality led to an increase in net profit of 14% for the first nine
months of the year relative to the same period last year.

On the back of lower inflation, central banks have started to lower policy
rates. In response to this, we lowered selected customer rates on lending and
deposits during the first nine months of the year, while ensuring our offerings
remain attractive across customer segments. This has resulted in an increase of
4% in deposit volumes for personal customers in Denmark during the period
coupled with a substantial shift towards placing excess liquidity in our wide
range of investment solutions, which contributed to a 10% increase in net fee
income year-on-year. With continued growth in customer business volumes at our
Business Customers unit and good traction during the year so far in our capital
markets business at our Large Corporates & Institutions unit, there was progress
across our business.

We continue to execute on our Forward '28 strategy, and with a return on equity
of 13.4% and a cost/income ratio of 45.5%, we remain on track to meet our
financial targets."

First nine months of 2024 vs first nine months of 2023
Total income of DKK 41.8 billion (up 8.4% against the first nine months of 2023)
Operating expenses of DKK 19.0 billion (up 1.0% against the first nine months of
2023)
Loan impairments of DKK -436 million (against DKK 294 million in the first nine
months of 2023)
Net profit of DKK 17.6 billion (up 13.8% against the first nine months of 2023)
Return on shareholders' equity of 13.4% (against 12.5% in the first nine months
of 2023)
Strong capital position, with a total capital ratio of 23% and a CET1 capital
ratio of 19.1%

Macroeconomic environment more positive
In the third quarter, the macroeconomic outlook improved, as inflation got under
control and interest rates were lowered, which all in all is paving the way for
an outlook for stable growth. Among the Nordic countries, the macroeconomic
outlook is especially positive in Denmark where the labour market remains
strong, inflation is low and economic growth is expected to be solid, even
without the significant contribution from the pharmaceutical sector. Despite the
more positive macroeconomic outlook, we remain prudently aware of the downside
risks stemming from the geopolitical situation and concerns about a potential
slowdown in economic activity.

Although geopolitical tension has unfortunately become permanent and continues
to be the global backdrop, the macroeconomic picture in the Nordic countries has
improved, and we maintain our strong focus on our customers and are delivering
according to the plan set out in our Forward '28 strategy. Our focus on
execution and our efforts to improve Danske Bank to the benefit of all
stakeholders are moving us forward as expected.

Improved commercial momentum in core banking
We continue to see improved commercial momentum and good interest in our leading
advisory solutions for customers with complex needs, and we continue to enhance
our products to make everyday banking both simpler and safer.

At our Personal Customers unit, we saw an increase in net fee income,
particularly from everyday banking and investment fees, higher net interest
income from deposits and a net loan impairment reversal. Good growth in customer
business volumes across our Business Customers unit supported an increase in
bank lending volumes in local currency across our Nordic markets, except for
Denmark. And at our Large Corporates & Institutions unit, the positive momentum
continued, among other things with good activity in Loan Capital Markets, where
we in the third quarter supported the financing of some of the largest
transactions in Europe.

The improved momentum shows that Danske Bank's underlying business is strong,
our treasury asset and liability management is prudent, and our capital and
liquidity positions continue to be strong, with significant buffers well above
regulatory requirements.

"Supported by the improving macroeconomic environment, our diversified business
model and core activities continued to ensure commercial progress. Net interest
income increased 6% in the first nine months of the year and net fee income was
up 10% for the period as a result of both solid customer activity and our
ongoing development of customer offerings across the business. We continued our
consistent focus on costs and on creating further efficiency improvements in our
processes, allowing us to keep operating expenses on par while still developing
according to plan. Our sustained commercial momentum and focus on operational
efficiency thus resulted in a cost/income ratio of 45.5% and a return on equity
of 13.4%, with credit quality remaining strong, as reflected in a net loan
impairment reversal across all countries. The continued cost focus and strong
credit quality is furthermore the basis for our second upward revision this
year, which is a testament to the robustness of the bank and our customers,"
says Stephan Engels, CFO.

Personal Customers
During the first nine months of 2024, we continued to support our customers in
managing their finances in a market environment characterised by falling
interest rate levels. Our Danske Bolig Fri home finance products were in high
demand and were named 'Best in Test' by the Danish Consumer Council. The same
was the case for our loans targeting first-time home buyers. We also saw an
increased flow of customers into our Private Banking unit. Profit before tax
amounted to DKK 7.48 billion in the first nine months of 2024, representing an
increase of 21% from the year-earlier period. The result was fuelled primarily
by an increase in net fee income, particularly from everyday banking and
investment fees, and a net loan impairment reversal.

Business Customers
In the first nine months of 2024, the economic landscape in which we operate
continued to improve, due primarily to a stabilisation of interest rates in the
first part of the period, followed by interest rate cuts by the central banks
towards the latter part of the period. We continued to expand the customer base
in our focus segments. In addition, we took strategic repricing actions and
continued to enhance support for our customers by providing the best possible
advice tailored to their needs. Profit before tax for the first nine months of
2024 amounted to DKK 6.69 billion, a decrease of 6% from the same period last
year. Net fee income rose as a result of our subscription-based fee service
model as well as repricing actions. However, we saw an increase in operating
expenses attributable to investments made under our Forward '28 strategy.

Large Corporates & Institutions
In the first nine months of 2024, we continued to see a positive underlying
momentum, particularly in our fee business as higher fees from assets under
management, everyday banking products and capital markets activities mitigated
the decline in net trading income, thus demonstrating the value of our
diversified business model. Furthermore, we continued to leverage our strategic
commercial strengths as reflected in growth in our corporate customer portfolio
outside Denmark, an increased market share of cash management services and the
maintaining of our leading position in sustainable finance. Profit before tax
increased to DKK 7.03 billion, an increase of 6% from the same period last year.
The increase was driven by higher net fee income and loan impairment reversals,
although the increase was partly offset by lower net trading income.

Danica Pension
Through high levels of volatility, the global markets continued their positive
trend in the third quarter of 2024. The investment return on our pension
customers' savings in the first nine months of the year profited from the
favourable trend in the global financial markets. We have thus had a prolonged
period throughout 2023 and 2024 during which we have been able to deliver
significant returns for our customers. However, we continued to see challenges
in the health and accident business due to a rise in new health and accident
claims. This reflects the general trend in society. Net income at Danica Pension
increased to DKK 1.41 billion in the first nine months of 2024, up 53% from the
level in the first nine months of 2023, due to an increase in the net financial
result.

Northern Ireland
The strong underlying financial performance reflects business growth in a higher
interest rate environment. Profit before loan impairments was 7% higher than in
the first nine months of 2023, while profit before tax of DKK 1.51 billion
represented an increase of 3% year-on-year.

Outlook for 2024
The outlook for 2023 is revised upwards to a net profit in the range of DKK
22.5-23.5 billion. At the release of our upward adjustment on 26 June 2024, we
guided for a full-year 2024 net profit in the range of DKK 21-23 billion. The
change in outlook is based on better cost trajectory as well as lower than
expected loan impairments.

The outlook is subject to uncertainty and depends on economic conditions.

Danske Bank

Contact: Stefan Singh Kailay, Head of Media Relations, tel. +45 45 14 14 00

More information about Danske Bank's financial results is available at
danskebank.com/reports.

More information:
Access the news on Oslo Bors NewsWeb site

630831_Danske Bank press release 31 October 2024.pdf
630831_Danske Bank Interim Report - first nine months 2024.pdf