Interim report for the
first nine months of 2013
Interim report for the first nine months of 2013

October 31, 2013

Danske Bank reports net profit of DKK 5.2 billion (EUR 696.2 million) for the first nine months of 2013
Guidance for full-year 2013 net profit lowered

Danske Bank has announced its financial results for the first nine months of 2013.

"While our third-quarter result showed some progress, we continue to operate in a challenging environment. To stay competitive and deliver long-term value to customers and shareholders, we need to pay more attention to our customers, to simplify our operations and to become much more efficient," says Thomas F. Borgen, CEO.

"The best way to sustainable profitability is through satisfied customers. Therefore, we will continue to invest in developing market-leading products and services for our customers while taking the necessary steps towards significantly reducing costs related to non-customer facing activities. We will also refocus our business in Ireland. Going forward, we will focus on customers within Corporates & Institutions where our international reach and solid experience provide a strong competitive edge. I am confident that these initiatives will take us one step further towards realising Danske Bank’s full potential. We are fully committed to our longer-term target of a return on equity after tax above 12%. We are lowering our target for 2015 from above 12% to 9%, however, on the basis of an assumed prolonged period of subdued market conditions and low interest rate levels."

The interim report is available at www.danskebank.com/reports. Highlights are shown below.

Q1-Q3 2013 vs Q1-Q3 2012
  • Profit before tax from core activities amounted to DKK 8.3 billion (EUR 1,110.2 million). Profit after tax was DKK 5.2 billion (EUR 696.2 million), an increase of 45%.

  • Total income amounted to DKK 29 billion (EUR 3,899.8 million), down 15%, mainly because of lower trading income caused by difficult market conditions and lower insurance business income.

  • Expenses fell 3% and amounted to DKK 17.5 billion (EUR 2,341.5 million).

  • Impairments from core activities fell 47% to DKK 3.3 billion (EUR 448.1 million). All three banking units booked lower impairments than in the first nine months of 2012.

  • Impairments at Non-core activities fell from DKK 3.7 billion (EUR 489.6 million) to DKK 1.0 billion (EUR 131.1 million).

  • The core tier 1 capital and total capital ratios were 14.2% and 19.1%, against 14.5% and 21.3% at the end of 2012.


Q3 2013 vs Q2 2013
  • In the third quarter of 2013, Danske Bank posted a profit before tax from core activities of DKK 2.6 billion (EUR 345.7 million). The net profit was DKK 1.5 billion (EUR 206 million). This result does not live up to our ambitions.

  • Total income amounted to DKK 9.1 billion (EUR 1,217.8 million), down 8% from the second-quarter level. Net interest income rose 2%, whereas net trading income was affected by the erratic market conditions for most of the period.

  • Expenses fell 8% and amounted to DKK 5.5 billion (EUR 743.5 million).

  • Impairments in our core markets were largely unchanged at DKK 1.0 billion (EUR 128.6 million), reflecting an improving macroeconomic environment in our core markets.

Expenses
We will continue to invest in developing market-leading products and services for our customers while taking the necessary steps towards significantly reducing costs related primarily to non-customer facing activities. We have set a target of DKK 1 billion (EUR 134.1 million) in annual cost savings with full effect in 2014. We will achieve the cost savings by making internal functions leaner and more efficient and by reducing external expenses.

Republic of Ireland
We will refocus our business in the Republic of Ireland on Corporates & Institutions customers. With immediate effect, the rendering of Personal Banking and Business Banking services to new customers in Ireland will be discontinued. Existing Personal Banking and Business Banking customers will be transferred to the Non-core unit for servicing and winding down. We will take the steps necessary to support our customers in this process. Our activities in Northern Ireland are not affected by this decision and will remain part of our core business.

Outlook
We lower our guidance for full-year 2013 net profit from DKK 6.5-9 billion (EUR 871.5-1,206.6 million) to DKK 6-8 billion (EUR 804.5-1,072.7 million). We do so on the basis of the profit for the third quarter but also because of restructuring charges relating to our operations in Ireland and the acceleration of cost initiatives.

Danske Bank


Contacts:
Thomas F. Borgen, CEO, tel. +45 45 14 60 01
Henrik Ramlau-Hansen, CFO, tel. +45 45 14 06 66
Julie Quist, Head of Investor Relations, tel. +45 45 14 07 92

Conference call
Danske Bank will hold a conference call at 2.30pm CET.
You can follow a live webcast of the conference call.

Online reports
View Danske Bank’s online reports at: www.danskebank.com/onlinereport.