Danske Bank flies in Copenhagen after 2023 accounts in line and buy back

(Il Sole 24 Ore Radiocor) - Danske Bank shines on Nasdaq Copenhagen after announcing its 2023 results, guidance for 2024 and a share buyback plan. Denmark's largest bank, which also has a strong presence in the rest of the Nordic region, reported a fourth-quarter net profit of Danish kroner5.77 billion compared to DKK 5.32 billion a year earlier, perfectly in line with analysts' average estimates based on a survey provided by the bank. The year ended with a net profit of DKK 21.3bn compared to a loss of DKK 4.6bn in 2022, which was linked to the very heavy impact of the money laundering scandal in the Estonian subsidiary.

Last December, Danske Bank raised its net profit forecast for the full year, citing improved macroeconomic conditions and lower impairment charges in the fourth quarter. Based on the 'satisfactory performance in 2023 and the strong capital position, the board of directors proposes a dividend for the second half of the financial year of 7.5 kronor per share', which added to the interim dividend of 7 kronor paid for the first half brings the total dividend for 2023 to 14.5 kronor, or 59% of the year's net profit, although slightly below the consensus of 14.6 kronor. For 2024, the bank said it expects a profit of between DKK 20 and 22 billion, roughly the same level as last year. Analysts expect an average net profit for the current year of DKK 20.8 billion.

"The strong credit quality of our portfolio is reflected in the low impairment charges, however, this does not change our expectations in the near future as impairment charges are subject to a high level of uncertainty in 2024," said CEO Stephan Engels. Looking ahead to this year, he added: 'there is now hope that inflation has already peaked, that interest rates will start to fall and that the global economy will have a soft landing. However, uncertainty remains and at a time when one crisis follows another, it is essential to see crises and uncertainty not as exceptions, but as a crucial part of the way we live and do business'.

At the same time Danske Bank announced the launch of a buy back plan for 5.5 billion kroner 'to reduce share capital'. The purchases will begin on 5 February and end on 31 January 2025, but 'may be suspended and terminated at any time', at the bank's decision.