Danske Bank A/S rose the most in seven weeks in Copenhagen trading after Denmark’s biggest lender said it will use a local central bank facility to draw 15 billion kroner ($2.7 billion) for commercial gains.
Danske jumped as much as 4 percent, the biggest increase since Feb. 15. The stock rose 2.35 kroner, or 2.6 percent, to 92.35 kroner at 10:45 a.m. in the Danish capital, making it today’s second-biggest gainer in the Bloomberg Europe Banks and Financial Services Index of 43 companies.
“It’s a financially very attractive option to take this money from the central bank,” Claus Groen Therp, an equity analyst at Enskilda Securities in Copenhagen, said in an phone interview. “This is cheap money.”
Danske will use assets from its bond portfolio as collateral for the three-year loan, which it will take from a “purely commercial point of view,” the Copenhagen-based lender said. The central bank is offering the loans as of today to help lenders in the Nordic country repay 146 billion kroner in state-backed debt due next year.
Danske will probably first deploy the cash in a carry trade and later use it to reduce its funding need, according to Therp, who recommends buying Danske shares.