Danske Bank Finland's* core business performed well in January-September 2017. Growth in Finnish economy strengthened, and the Bank's lending increased to both corporate and personal customers. Total lending increased by 4%. Volume of granted new mortgages showed good development, with volume of granted mortgages for first homes growing by 28% compared to previous year.
Total income for Danske Bank's operations in Finland for January-September 2017 amounted to EUR 481.2 million (EUR 449.9 million in 1-9 2016), up 7% compared to previous year. The growth was driven by increases in net interest income and net trading income. Operating expenses decreased by 2%, and profit before taxes increased by 20% to EUR 214.5 million.
"Our solid performance continued during the third quarter, and I am glad to note good development in lending across business units. Net interest income remains on a good track, driven by continued growth in lending in combination with lower funding costs," said Risto Tornivaara, CEO of Danske Bank Plc.
Strong traction in mobile payments continued during the period and MobilePay further strengthened its position as the most popular and comprehensive solution in Finland. During the 9 month period, MobilePay was downloaded 153% more often than in January-September 2016, and the amount of transactions conducted through MobilePay increased by 168%. Now already 650.000 Finns have MobilePay in their smartphone and it is expected that the number of transactions conducted through MobilePay will exceed 4 million during 2017.
*Includes Danske Bank Plc Group and the Helsinki Branch of Danske Bank A/S.
Financial Highlights of Danske Bank's operations in Finland
In addition to Danske Bank Plc, Danske Bank's operations in Finland include the Helsinki branch of Danske Bank A/S.
| EUR millions | Q1-Q3 2017 | Q1-Q3 2016 | change | YTD 2016 |
| Net interest income | 267.3 | 242.7 | 10.1% | 331.5 |
| Net fee income | 185.3 | 194.3 | -4.7% | 257.8 |
| Net trading income | 16.6 | 4.8 | 246.0% | 16.4 |
| Other income | 12.1 | 8.0 | 49.9% | 12.2 |
| Total income | 481.2 | 449.9 | 7.0% | 617.9 |
| Operating expenses | 265.5 | 271.1 | -2.1% | 375.4 |
| Profit before loan impairment charges | 215.7 | 178.8 | 20.6% | 242.5 |
| Loan impairment charges | 1.2 | 0.0 | - | 1.3 |
| Profit before tax | 214.5 | 178.8 | 20.0% | 241.2 |
| C/I-ratio, % | 55.2% | 60.3% | -5.1% | 60.8% |
| Loans | 22,265.4 | 21,415.9 | 4.0% | 21,397.3 |
| Deposits | 20,627.2 | 20,189.3 | 2.2% | 18,576.8 |
Danske Bank Plc Group's Financial Highlights
| EUR millions | Q1-Q3 2017 | Q1-Q3 2016 | change | YTD 2016 |
| Net interest income | 238.6 | 218.0 | 9.5% | 296.1 |
| Net fee income | 168.7 | 172.9 | -2.4% | 230.3 |
| Net trading income | 15.0 | 3.0 | 400.8% | 14.4 |
| Other income | 18.9 | 15.5 | 22.4% | 22.4 |
| Total income | 441.2 | 409.3 | 7.8% | 563.1 |
| Operating expenses | 251.8 | 254.7 | -1.1% | 351.7 |
| Profit before loan impairment charges | 189.3 | 154.6 | 22.4% | 211.5 |
| Loan impairment charges | 1.2 | 0.0 | - | 1.2 |
| Profit before tax | 188.1 | 154.6 | 21.7% | 210.3 |
| C/I-ratio, % | 57.1% | 62.2% | -5.1% | 62.4% |
| ROE, % | 6.7% | |||
| Total capital ratio, % * | 20.0% | |||
| Common equity tier 1 capital ratio, % * | 19.2% | |||
| FTE | 1,474 | 1,733 | -14.9% | 1,594 |
| Loans | 21,149.9 | 20,261.5 | 4.4% | 20,235.1 |
| Deposits | 17,987.7 | 17,916.5 | 0.4% | 16,635.5 |
| Total equity | 2,616.4 | 2,581.5 | 1.4% | 2,626.2 |
| Total balance sheet | 29,302.5 | 30,747.6 | -4.7% | 28,962.1 |
* Danske Bank Plc's profit after taxes for January-December is not included in Tier 1 distributable capital in solvency calculations at the end of December 2016.
**Figures in this press release have not been audited.
Danske Bank Plc publishes only one interim report during 2017. The Group's financial statement for January-December 2017 will be released on 2 February 2018.
Outlook for 2017
Growth in Finnish economy is expected to remain moderate in 2017-2018 and the interest environment, especially short-term interest rates, is expected to remain at low level also during the rest of 2017.
We expect our lending to personal and corporate customers to continue growing in 2017 and thus we anticipate that our net interest income and total income will be higher compared to 2016.
Operating expenses are expected to be slightly lower than previous year since the Bank continues to have a strong focus on improving our cost efficiency and operational processes. Overall, we expect that profit before tax for 2017 will be slightly higher than 2016.
Merging of activities in Finland
As described in Annual Report 2016, Danske Bank is taking steps to merge its Finnish banking activities into a single branch. The merger is going according to plan, and Danske Bank plans to execute the merger at year end 2017. As a part of Danske Bank's efforts to simplify its organization and legal structure, Danske Mortgage Bank Plc, a wholly owned subsidiary of Danske Bank A/S, was incorporated as of October 31, 2017, and the demerger of Danske Bank Plc's mortgage banking activities in accordance with the demerger plan first communicated on March 23, 2017 was implemented.
The merging of activities will be primarily of a technical nature and would not change how Danske Bank serves its customers, nor would employees experience changes.
Changes in management
Leena Vainiomäki, head of Business Banking in Finland, has been appointed as head of sales in Danske Bank Group's Transaction Banking business as of November 1, 2017. Matti Vainionpää, head of Business Banking's Large Customer Unit in Finland has been appointed as acting head of Business Banking in Finland.
Risto Tornivaara, CEO of Danske Bank Plc, has announced that he will retire in line with terms of his employment contract during 2018. Search for new country manager for Danske Bank in Finland has been initiated.
For further information:
Risto Tornivaara, CEO of Danske Bank Plc, tel. +358 (0)10 546 6675
Danske Bank is Finland's third largest bank, which serves around a million Finnish personal, business and institutional customers. Danske Bank Plc is a part of the Nordic Danske Bank Group.
Danske Bank is a Nordic universal bank with strong regional roots and bridges to the rest of the world. We serve more than 3.4 million personal, business and institutional customers, and in addition to banking services, we offer life insurance and pension, mortgage credit, wealth management, real estate and leasing services and products.
Our vision is to be recognised as the most trusted financial partner. We are driven by a desire to make important financial decisions and daily banking easy, and our aim is to create long-term value for our customers and investors and the societies we are a part of.
Danske Bank is headquartered in Copenhagen and is listed on Nasdaq Copenhagen.
www.danskebank.com