In This Article:
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Net Profit: DKK5.8 billion, 2% higher year-on-year.
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Return on Shareholders' Equity: 13.3%.
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Total Income: DKK13.9 billion, stable year-on-year.
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Operating Expenses: DKK6.3 billion, 1% lower year-on-year.
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Cost/Income Ratio: 45.2%.
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Loan Impairment Charges: DKK50 million, maintained at a low level.
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Net Interest Income: Stable, with expectations of above DKK35 billion for 2025.
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Fee Income: Increased 8% year-on-year.
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Net Trading Income: Increased 15% year-on-year and 58% quarter-over-quarter.
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Assets Under Management: Grew 7% year-on-year.
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CET1 Ratio: 18.4%, up from 17.8% in Q4.
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2025 Net Profit Outlook: DKK21 billion to DKK23 billion.
Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Danske Bank AS (DNKEY) reported a solid net profit of DKK5.8 billion for Q1 2025, reflecting a return on shareholders' equity of 13.3%.
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The macroeconomic backdrop in Denmark remains strong, with GDP growth of 3.7% in 2024 continuing into 2025.
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Credit quality is robust, with low loan impairment charges and a diversified credit exposure.
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The bank's capital position is strong, with a CET1 ratio of 18.4%, supported by healthy capital generation.
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Fee income increased by 8% year-over-year, driven by strong customer activity across various segments.
Negative Points
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Operating expenses, while stable, remain a focus area, with a cost/income ratio target of 45% yet to be fully achieved.
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The geopolitical environment, including trade wars, poses uncertainties that could impact future financial performance.
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Net interest income is expected to decline slightly quarter-on-quarter due to lower rates, despite volume growth.
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The insurance business has faced challenges with negative impacts from legacy pension plan provisions.
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Market share losses in Denmark during the AML crisis period are still being addressed, with ongoing initiatives to regain customers.
Q & A Highlights
Q: With the end of the probation period with the US Department of Justice approaching, what strategic or operational flexibility does this unlock for Danske Bank? How will you utilize the excess capital that will be freed up? A: Carsten Rasch Egeriis, CEO: The end of the probation period opens up several options, including growing our business, improving profitability, and exploring inorganic opportunities in the Nordics. We are also considering capital distribution, and we will update on these options as we approach 2026.
Q: Given the uncertainty around trade wars, would Danske Bank have considered upgrading its 2025 guidance lines, particularly regarding loan impairment charges? A: Carsten Rasch Egeriis, CEO: It's too early to say, but we maintain our guidance of around DKK1 billion for impairments. Despite uncertainties, we have a solid asset quality and feel comfortable with our guidance.