December 2, 2022

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Danske Bank with earnings forecast - E24

Danske Bank with earnings forecast – E24

Danske Bank notes “difficult conditions in the financial market,” and now expects a much weaker outcome for 2022 than previously expected.

CEO Carsten Egeriis at Danske Bank.
Posted:

come out in one message from the big bank.

The bank now expects an after-tax profit of between 10 billion and 12 billion NOK in 2022.

Previously, Danske Bank had forecast a profit of 13 billion-15 billion DKK in 2022, given that the situation in the financial markets has returned to normal.

“Due to challenging financial market conditions, Danske Bank A/S lowers after-tax earnings estimate, despite positive outlook for core activity within banks,” the bank wrote.

The Bank expects higher income from core business within banking in 2022 compared to the previous year, but expects income from insurance business and business to be weaker than usual in the second half of the year, depending on the market situation.

Affected by high interest rates

– We saw good commercial development in our core business within banking in the first half of the year, according to the announcement.

He says the bank has volume growth and strong customer activity, and core cost development is progressing well.

“But due to unfavorable financial market conditions, and particularly the unfavorable effect of rapidly rising interest rates, we are adjusting our after-tax earnings forecast for this year, based on significantly lower expectations for trading income and income from our insurance business,” he says.

Egeriis notes that the fixed income market in the Nordic region has seen unusually high volatility and lower than usual liquidity, which has created challenges for the business.

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Expected double the second quarter

The bank expects an after-tax profit of DKK 1.7 billion in the second quarter of 2022, down from a profit of DKK 2.8 billion in the previous year. First Quarter.

The bank wrote that the banks’ revenues will be around NOK 9 billion, while the total revenue will be NOK 8.7 billion.

Trading revenue and results from the insurance business will result in a total loss of half a billion DKK in the second quarter, Danske Bank writes. This includes gains from the sale of Danica Norway.

The costs in the second quarter are expected to be 6.4 billion DKK, which is among other things related to the investigation of the bank’s transactions in Estonia, which may be linked to Russian criminal activity.

Bank pay otherwise no profits For the first quarter, because he was in discussions with the Danish and American authorities on the Estonia issue, which can cause fines.

In total, Danske Bank expects costs of DKK 25.5 billion this year.

The bank states that the final quarterly figures will be presented on July 22.

Read the message from Danske Bank