Danske Bank Raises Guidance After Cost Cuts, Falling Losses – BNN Bloomberg

(Bloomberg) — Danske Bank A/S, Denmark’s largest lender, raised its full-year forecast to reflect lower operating expenses and smaller impairment charges.

The Copenhagen-based bank said on Thursday that its 2024 net income is expected to be between 22.5 billion kroner and 23.5 billion kroner ($3.3 billion to $3.4 billion). The upgraded estimate beat the average analyst estimate of 22 billion kroner.

The new outlook reflects “continued strong credit quality and the reversal of impairment charges,” the bank said in a statement.

The lender’s profitability has soared in recent years following the unraveling of a money-laundering scandal that cost it more than 16 billion kroner in settlements with US authorities and customers. The latest case over suspicious money flowing through the former Estonian branch was settled in September, ending a seven-year ordeal that led to the sacking of senior officials and an exodus of customers.

Earlier this year, Danske launched its first share buyback program in six years and said it planned to distribute 5.5 billion kroner in the fourth quarter after exiting the Norwegian retail banking business. Additionally, Danske has committed to dividends of more than 50 billion crowns by 2026.

Danske had previously forecast net income to rise to 23 billion crowns this year from 21 billion crowns. In the statement made by the bank, it was stated that operating expenses for the whole year will be around 25.8 billion crowns, decreasing from 26 billion crowns to 26.5 billion crowns previously.

The bank reported net interest income of 9.17 billion kroner in the third quarter; That fell short of analysts’ expectations, who noted ahead of the earnings release that the lender may feel pressure as interest rates drop. Denmark’s central bank has cut borrowing costs three times this year, in line with the European Central Bank, leaving its key interest rate at 2.85%.

Shares of Danske Bank are up 8.7% so far this year.

©2024 Bloomberg LP