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Danske Bank reported strong results, continuing its progress to levels of profitability more in-line with its Nordic peers. The beat on the results came on the back of strong revenues with the exception of trading, with costs in-line and lower loan losses than expected. The management continues to see NII tailwinds developing in subsequent quarters after the last policy rate hikes, making top-line growth easier to achieve than many of its Nordic peers with more variable rate loan books.
Companies: Danske Bank (DANSKE:CPH)Danske Bank A/S (DANSKE:CSE)
AlphaValue
Danske published a strong Q2, beating consensus excluding the impact from the provisioning related to the exit of Norwegian retail banking operations. The NII recovery continued thanks to the rise in deposit margins while there were positive surprises from the trading result and lower loan impairments. Building on the better-than-anticipated asset quality and the continued recovery of NIM, the management again upgraded its guidance for 2023, which now expects a DKK18.5-20.5bn net result vs DKK16
Danske Bank confirmed its recent earnings recovery through the disclosure of ambitious 2026 financial targets. The bank will target a 13% RoE based on a c. 2% annual top-line growth, a 45% C/I ratio, an 8bp through-the-cycle cost of risk and an above-16% CET1 ratio. This should allow for strong capital generation as the bank intends to resume dividends as early as the end of H1-23, returning to a 40-60% dividend payout policy.
Danske continued with its strong momentum observed last quarter, with earnings being driven by the strong growth in deposit margins. Recovery of the trading result and insurance income were also supportive, while the bank exhibited a strong cost discipline and mild cost of risk. The capital position continued to improve. Dividends are likely to return in 2023 now that the Estonian money-laundering case is settled and that fundamentals are improving.
Danske realised an overall healthier quarter, helped by a continued acceleration in the improvement in deposit margins. Trading and insurance results recovered from Q3 amid positive value adjustments and high customer activity. Costs were still burdened by AML but the restructuring plan continued on its way. Loan losses were disappointing. 2023 guidance was given and is above our estimates, probably due to our slightly more conservative NII.
Danske Bank again released a poor set of numbers for the Q3 with positive developments in NII more than offset by declines in fees and trading and a negative insurance result. The main outstanding element this quarter remains the DKK14bn of provisioning made in relation to a potential resolution of the Estonian money-laundering case coming before the end of 2022. This comes at the cost of dividend cancellation for part of 2021 and 2022 but still gives some visibility on the company.
Danske Bank realised a poor Q2 with strong negative surprises in trading and insurance due to rates and spreads widening. Still, interest rate hikes should benefit NIM in the coming quarters and act as a tailwind for earnings. Costs remained elevated due to remediation costs. Capital distribution is still conditioned to the settlement of the Estonian case with the US authorities with a potential fine now being expected to be up to DKK18bn. Dividend payments thus remain suspended accordingly.
Danske Bank realized a poor Q1 22, marked by misses on both total income and costs. Income suffered from poor performances in both insurance and trading result while costs increased due to higher remediation costs, larger AML and increased compliance-related and regulatory expenses. LLPs decreased despite the reallocation of some COVID-19 provisions towards a macroeconomic downside scenario while capital remained strong, although the bank stopped the payment of incoming dividends due to the pote
Danske Bank released this morning its numbers for Q4 21. Net profit was overall better than expected, mostly driven by fees/revenues offsetting higher expenses. Despite a 2022 net profit guidance, the share price is down this morning as investors are wary of the cost guidance for 2022 (above expectations but still below ours’). The dividend is in line with expectations but will be paid in instalments due to AML uncertainties. We will slightly revise our EPS expectations but keep our Sell recomme
Danske Bank released last Friday its numbers for Q3 21. The numbers and management’s guidance were overall weak. Net interest income was weaker than expected, while total costs were higher, leading to a gross operating income below expectations. Management also revised downwards its financial targets for FY2023 from 9-10% to 8.5-9% and 9-10% through the cycle. We remain comfortable with our long-time Sell/Reduce recommendation.
Danske Bank released this morning its numbers for Q2 21. The bulk of the numbers was expected following the positive profit warning on 8 July. Numbers were above expectations (pre-profit warning) as management detailed in its FY2021 guidance. Net profit was as expected at DKK12bn (8 July guidance), which comes with total income above 2020’s level, underlying expenses <DKK24.5bn and, most importantly, impairments at DKK1.5bn (vs consensus at DKK2.6bn). We will revise upwards our EPS mainly due to
Danske Bank released this morning its Q1 21 numbers. Revenues were above expectations, driven by lower loan losses and expenses and higher volatile trading and other income at the top line. Net interest income was, however, below expectations and will be the key point of focus. Management’s guidance is unchanged with profit expected in the range of DKK9–11bn with consensus at DKK10.8bn, while we expect DKK9.8bn net profit for FY2021. We are comfortable with this number following the earnings rel
Danske Bank released this morning its numbers for Q4 20. Total revenues were above expectations but driven by fees/commissions and trading income as net interest income was below expectations. With loan losses well below expectations, the profit before tax is better than expected. The CET1 ratio was solid with about 500bp capital above requirements. Guidance is rather uninspiring as expected total income, adjusted expenses, and loan losses are in line with expectations (net profit expected at D
Research Tree provides access to ongoing research coverage, media content and regulatory news on Danske Bank. We currently have 114 research reports from 4 professional analysts.
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Cavendish
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Canaccord Genuity
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Edison
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Hardman & Co
Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web
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In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.
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Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.
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Zeus Capital
In our 15 March 2023 initiation, 'Pawnbroking royalty, with strong, profitable growth', and subsequent notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities. These results reconfirmed both, with the pledge book up 28% and net pawnbroking revenue up 36%. Like many in the retail space, H&T faced the challenge of customers focusing on lower-value, lower-margin items in the key run-up to Christmas 2
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