Thursday, July 24 09:41:23
Danske Bank A/S has raised its 2014 net profit forecast after posting its best quarterly result since the start of the global financial crisis in 2008, sending its shares up 4.5 percent to a six-year high.
Denmark's largest lender said it now expected to earn between 10 billion Danish crowns ($1.8 billion) and 13 billion in net profit in 2014, against a previous forecast of hitting the higher end of a 9 to 12 billion crown range.
The bank was hit hard by the European financial crisis, especially its exposure to Ireland, the sluggish Danish economy and a collapse in its domestic housing market. Its results have been recovering, but only slowly, since 2013.
Executive Thomas Borgen said Danske Bank would invest in Norway and Sweden where it wants to grow in coming years. Its focus previously had been more on trimming costs rather than expansion and investment.
"We have a 4 percent market share in both Norway and Sweden. We can see that with some investment we can really be a challenger in those markets," Borgen told Reuters. "We will unquestionably be in those markets and develop those businesses further."
Shares in the bank rose by as much as 4.5 percent to 162.50 crowns, their highest since May 2008.
"They are doing well on cutting costs ... Costs were lower than expected and so were loan impairment charges. So the bank can really reap the benefits of its initiatives in this quarter," said Bjorn Schwartz, chief analyst at Sydbank.
"I think we could (see) another upgrade later in the year if the general development continues along the lines we have seen so far this year," Schwartz said, adding that the bank could reach a net result of between 11 and 14 billion crowns.
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