Danske Bank Plc Group’s January – December 2016


Satisfactory result and progress in partnership strategy

Finland’s GDP growth strengthened in 2016, but the GDP still fell short of the previous business cycle peak by almost 5 per cent. Interest rates continue on a record low level. Total income for Danske Bank’s operations in Finland  for the full financial year amounted to EUR 617.9 million (EUR 632.2 million).
Net interest income for the financial year was at previous year’s levels despite the low interest environment and challenging deposit rates. Net fee income decreased by 4 %, reflecting among other things, the effect of challenging market movements on asset management fees. Net trading income was negatively affected by valuation adjustments on derivatives (xVA), due to model improvements.
As a result of continuous focus on cost efficiency and operational processes, operating expenses decreased slightly. Profit before taxes was around previous year’s levels at EUR 241.2 million (EUR 243.2 million).
“Danske Bank Finland achieved a satisfactory result and increased its customer satisfaction across segments in 2016. We have a strong aspiration to grow in Finland in all our business segments by becoming a more customer-centric, simple and efficient bank. An important part of our growth strategy are partnerships that support our ambition of offering an outstanding customer experience and innovative solutions. During 2016 we made strong progress in our partnering strategy,” says Risto Tornivaara, CEO of Danske Bank Plc.
At the end of the year, we reached an important milestone when we publicised a research and service cooperation with Akava, the Confederation of Unions for Professional and Managerial Staff in Finland. At first, the cooperation will focus on young people who have recently graduated and on offering them tailored banking services. Within a month, 16 Akava affiliate unions had joined the co-operations.
Danske Bank’s MobilePay application partnered with over 100 retailers during the year, offering payment solutions online and through application in addition to physical retail solutions.
To support our small and medium sized business customers, we continued to work on our ownership change service together with a strong partner network. With our partners, we are able to support an entrepreneur comprehensively to achieve a successful ownership change. By continuously expanding our service range, we want to support Finnish businesses and improve their ability to grow and innovate.
Financial Highlights of Danske Bank’s operations in Finland
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 ​YTD 2016 YTD 2015​2015​ ​Change
Net interest income ​331,5 332,7 -0,3 %​
​Net fee income ​257,8 268,7 ​-4,1 %
​Net trading income ​16,4 ​19,3 ​-14,9 %
Other income ​12,1 ​11,6 ​ 5,3%
​Total income ​617,9 ​632,2 ​-2,3 %
​Operating expenses ​375,4 ​376,1 ​-0,2 %
​Profit before loan impairment changes ​242,5 ​256,1 ​-5,3 %
​Loan impairment changes ​1,3 ​12,8 ​-90,0 %
​Profit before tax ​241,2 ​243,2 ​-0,8 %
C/I-ratio, % ​60,8 % ​59,5 % ​1,3 %
​Loans ​21 397,3 ​20 882,8 ​2,5 %
​Deposits ​18 576,8 ​19 830,6 ​- 6,3 %
​Danske Bank Oyj -konsernin avainluvut
​Milj. € 1-12 2016​ 1-12 2015​ Muutos​
Net interest income ​296,1 304,4 -2,7 %
Net fee income ​230,3 ​234,5 ​-1,8 %
​Net trading income ​14,4 ​14,3 ​ 0,8 %
​Other income ​22,4 ​21,6 ​ 3,5 %
​Total income ​563,1 ​574,7 ​-2,0 %
​Operating expenses ​351,7 ​352,5 ​-0,2 %
​Profit before loan impairment changes ​211,5 ​222,2 ​-4,8 %
​Loan impairment changes ​1,2 ​12,6 ​-90,5 %
​Profit before tax ​210,3 ​209,5 ​ 0,3 %
C/I-ratio, % ​62,4 % ​61,4 % ​1,0 %
​ROE, % ​6,7 % ​6,6 % ​0,1 %
​Total Capital Ratio, %* ​20,0 % ​18,4 % 1,6 %​
​Common equity tier 1 capital ratio, %* ​19,2 % ​17,5 5 ​1,7 %
​FTE at the end of period ​1 594 1 730​ ​-7,9 %
​Loans ​20 235,1 ​19 818,8 ​ 2,1 %
​Deposits ​16 635,5 ​18 115,3 ​ - 8,2 %
​Total equity ​2 626,2 ​2 515,4 ​ 4,4 %
​Total balance sheet ​28 962,1 30 312,9 ​- 4,5 %
 *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.
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 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 our net profit for 2017 will be slightly higher than 2016.
Possible merging of activities in Finland
As part of its efforts to simplify the organisation and improve efficiency, the Danske Bank Group is looking into the possibilities of merging its activities in Finland – Danske Bank Plc and Danske Bank A/S, Helsinki branch – into a single branch. In doing so, the Danske Bank Group would achieve a uniform organisational structure across the Nordic markets.
The change would be primarily of a technical nature and would not change the way in which we serve our customers, nor would employees experience changes.
As part of our preparations, we have initiated a dialogue with a broad range of stakeholders – including e.g. supervisors, and during 2017, we expect to take initiatives that may lead to branchification.

Full Annual Report
The Danske Bank Plc Group’s full Annual Report for January – December 2016 is attached to this release as a pdf-file and is available at the Bank’s website www.danskebank.fi. Danske Bank Plc Group publishes only one interim report during 2017. The Interim Report January – June 2017 will be released on 20 July 2017.
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.