March 1 (Bloomberg) -- Danske Bank A/S rose the most in three weeks in Copenhagen trading after Citigroup Inc. said Denmark’s largest lender will offer investors the best return among the Nordic banks.
Danske rose as much as 1.8 percent, the most since Feb. 8. The stock added 1.7 percent to 108.10 kroner at 9:43 a.m. in the Danish capital with trading volume at 22 percent of the three-month daily average.
Danske, which is cutting 3,000 jobs and raising prices to compensate for loan losses caused by burst housing bubbles in Ireland and Denmark, said last month 2013 profits may double as impairments drop “slightly.” Citi today raised its recommendation to buy from hold and said the stock could double in value by 2015 if the Copenhagen-based bank succeeds in reaching its return on equity target of more than 12 percent.
“The market isn’t giving Danske the benefit of an improving provision cycle, potential for capital returns, tightening credit spreads, and the positive risk premium impact that should follow,” Citi analysts, led by Henrik Christiansson, said in the note. “Of the Nordic banks we believe Danske offers the most upside from current levels.”
Danske said on Feb. 7 that profit after tax will be as high as 10 billion kroner this year, compared with a reported 2012 profit by the same measure of 4.7 billion kroner.
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