Danske Bank A/S (DANSKE) said net income rose less than estimated last quarter as Denmark’s biggest bank reported a decline in net interest income.
Net income rose to 1.47 billion kroner ($260 million) in the three months through March from 778 million kroner a year earlier, Danske said in a statement to the stock exchange today. That trailed the 1.57 billion-krone estimate in a Bloomberg survey of analysts. Net interest income slipped to 5.45 billion kroner from 5.65 billion kroner a year earlier.
“Income is not satisfactory,” Chief Executive Officer Eivind Kolding said in the statement. “The net profit for the first quarter therefore does not live up to our expectations.”
Danske has been struggling to turn its business around after losing money through property bubbles in Ireland and Denmark. The Copenhagen-based bank reported a fivefold increase in profit in the fourth quarter, its best result since 2007, amid plans to cut 3,000 jobs, restructure business units and institute a new pricing structure for customers.
“Our strategy and implementation is progressing and being executed throughout the organization,” Kolding said.
Loan losses improved to 1.46 billion kroner from 2.91 billion kroner a year earlier, the bank said today.
Danske’s expansion into Ireland before the financial crisis and a recession in its home market have left it the worst performing bank of the Nordic region’s six biggest lenders. Danske hasn’t paid dividends since 2007, a trend the bank says it’s trying to reverse once reserves are big enough.
Denmark is on the verge of its third recession since the global financial crisis erupted as government stimulus measures fail to spur consumer and businesses spending. The government cut its forecast earlier this week, saying the economy will grow 0.7 percent. That compares with an earlier outlook for growth of 0.5 percent to 1 percent.
Prime Minister Helle Thorning-Schmidt won lawmaker backing last week for more stimulus measures, including corporate tax cuts and subsidies for home improvements. That may not be enough to wrench Denmark free from its crisis, according to economists at Danske Bank and Svenska Handelsbanken AB.
To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at email@example.com