Belfast Telegraph

Danske Bank announces £11.4m pre-tax profit

Danske Bank in Northern Ireland made a pre-tax profit of £11.4m in 2013, following a loss of more than £58m in 2012.

It is the bank's first annual profit since the start of the financial crisis in 2008.

 

The Danish-owned bank is also set to issue its first dividend since the financial crisis.

 

"Our financial results improved, but they were still unsatisfactory," Chief Executive Thomas Borgen said in a full-year report.

 

The proposed dividend of two crowns per share, the first since its pay-out for 2007, is higher than the 1.27 crown average forecast from analysts in a Reuters poll.

 

"It is definitely a turning point," said analyst Bjorn Schwarz at Sydbank, who expected Danske Bank shares to open higher on Thursday.

 

The proposed dividend implies a payout ratio of 28pc, which is lower than the bank's long-term goal of 40pc and far below the average payment for 2013 from the largest Swedish banks of 66pc.

 

Danske Bank reported fourth-quarter pretax profit of 2.86bn Danish crowns ($51.86 billion), up from 2.26bn a year earlier, but missing an average forecast of 2.92bn in a Reuters poll.

 

Loan impairment charges fell to 845m crowns from 1.42bn a year earlier, less than the 1.09 billion expected in the poll.

 

The bank, Denmark's largest, said it expected net profit of between 9 and 12bn crowns in 2014.

 

Danske Bank's return on equity (ROE) rose to 5.3pc in the fourth quarter from 3.5pc in the same quarter last year, but still only around half of Nordic peer Nordea's ROE of 10.5 percent in the fourth quarter 2013.

 

Chief Executive Eivind Kolding was ousted in September after only 19 months in the job, during which profits stagnated. Seven weeks into the job, his successor Borgen decided to shut down a large part of the Irish business and cut more jobs than the 3,000 already flagged by 2015.

 

Danske Bank's shares have been performing almost in line with a European banks index in the latest six months, unlike its Swedish rivals which have outperformed it.

Belfast Telegraph Digital

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