Danske Bank Plc Group's January - June 2017:
Solid performance across businesses
Danske Bank Finland's* core business continued to perform solidly in January-June 2017. The Finnish economy grew faster than previously forecasted, and the Bank's lending increased to both personal and corporate customers. Lending to small and medium sized corporate customers increased by 6 %, with healthy demand across business sectors. Consumer interest in mortgages continued record high, and the volume of new granted mortgages grew by 13 % compared to previous year.
Total income for Danske Bank's operations in Finland for January - June 2017 amounted to EUR 324.8 million (EUR 316.9 million in H1 2016), up 3 % compared to previous year. The growth was mainly due to increase in net interest income. Operating expenses were flat, and profit before taxes increased by 6 % to EUR 138.7 million.
"During the first half of the year we saw continued solid performance across business units. Net interest income development is on a good track, driven by steady growth in lending in combination with lower funding costs" said Risto Tornivaara, CEO of Danske Bank Plc.
Mobile payments gained good traction during the period. MobilePay downloads increased with more than 50% to over 500.000. MobilePay's position as Finland's leading mobile payment solution was further strengthened by the launch of Finland's first small business mobile payment solution and new payment provider partnership agreements which brought MobilePay to over 10.000 online shops.
*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 | H1 2017 | H1 2016 | Change | YTD 2016 |
| Net interest income | 178.1 | 161.3 | 10.4% | 331.5 |
| Net fee income | 126.8 | 132.5 | -4.3% | 257.8 |
| Net trading income | 13.1 | 17.9 | -26.8% | 16.4 |
| Other income | 6.8 | 5.2 | 30.4% | 12.2 |
| Total income | 324.8 | 316.9 | 2.5% | 617.9 |
| Operating expenses | 184.1 | 183.5 | 0.3% | 375.4 |
| Profit before loan impairment charges | 140.7 | 133.4 | 5.5% | 242.5 |
| Loan impairment charges | 2.0 | 2.6 | -22.6% | 1.3 |
| Profit before tax | 138.7 | 130.8 | 6.0% | 241.2 |
| C/I-ratio, % | 56.7% | 57.9% | -1.2% | 60.8% |
| Loans | 22 102.5 | 21 552.0 | 2.6% | 21 397.3 |
| Deposits | 20 269.5 | 19 035.1 | 6.5% | 18 576.8 |
Danske Bank Plc Group's Financial Highlights
| EUR millions | H1 2017 | H1 2016 | Change | YDT 2016 |
| Net interest income | 158.1 | 145.8 | 8.4% | 296.1 |
| Net fee income | 113.8 | 116.4 | -2.2% | 230.3 |
| Net trading income | 12.0 | 16.8 | -28.6% | 14.4 |
| Other income | 11.9 | 10.1 | 17.7% | 22.4 |
| Total income | 295.8 | 289.1 | 2.3% | 563.1 |
| Operating expenses | 173.5 | 170.8 | 1.6% | 351.7 |
| Profit before loan impairment charges | 122.3 | 118.3 | 3.3% | 211.5 |
| Loan impairment charges | 2.1 | 2.6 | -19.6% | 1.2 |
| Profit before tax | 120.2 | 115.7 | 3.9% | 210.3 |
| C/I-ratio, % | 58.7% | 59.2% | -0.5% | 62.4% |
| ROE, % | 7.5% | 7.5% | 0.0% | 6.7% |
| Total capital ratio, % * | 21.8% | 19.5% | 2.3% | 20.0% |
| Common equity tier 1 capital ratio, % * | 21.8% | 18.6% | 3.2% | 19.2% |
| FTE at the end of period | 1 588 | 1 736 | -8.5% | 1 594 |
| Loans | 20 912.3 | 20 309.2 | 3.0% | 20 235.1 |
| Deposits | 17 700.8 | 17 065.2 | 3.7% | 16 635.5 |
| Total equity | 2 562.0 | 2 550.3 | 0.5% | 2 626.2 |
| Total balance sheet | 29 827.0 | 30 174.6 | -1.2% | 28 962.1 |
*Danske Bank Plc's profit after taxes for January-June is not included in Tier 1 distributable capital in solvency calculations at the end of June 2017.
Figures in this press release have not been audited.
Danske Bank Plc publishes only one interim report during 2017. The entire report for January-June 2017 is attached to this release as a PDF file. 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 H2 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 Danske Bank A/S, Helsinki branch. The merger is going according to plan, and Danske Bank has applied for the required approvals. The merger rationale is to simplify our organisation. The change will be primarily of a technical nature and would not change the way in which we serve our customers, nor would employees experience changes.
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
