Danske Bank Finland’s January – March 2017


Good start to the year

The Finnish economy continued to improve in the first months of 2017, and positive signals could be seen in the latest economic indicators. The uptick in economic confidence was reflected in increased demand for lending among personal customers as well as in signs of improved economic activity among corporate customers. Total income for Danske Bank’s operations in Finland  for January – March 2017 amounted to EUR 169.4 million (EUR 154.1 million in Q1 2016), up 10% compared to previous year.

Despite continued low interest rate environment, net interest income for the period increased 10%, driven by lower funding costs, increase in lending and adjustments in deposit rates. Net fee income decreased by 3%. Net trading income was positively affected by valuation adjustments on derivatives (xVA). Operating expenses were flat, and profit before taxes increased by 31% to EUR 81.8 million.

“In the first quarter of 2017, we saw a positive effect from valuation adjustments and lower funding costs. Our core business continued to perform solidly, however, and lending to small and medium sized corporate customers increased by 5%. We saw an especially strong demand for asset finance solutions, which seems to indicate a recovery in companies’ willingness to invest. Consumer interest in mortgages was record high, and the volume of new granted mortgages grew by 13% compared to previous year. I am especially happy that our efforts to encourage first home buyers were reflected in a 29% growth in new first home mortgages,” says Risto Tornivaara, CEO of Danske Bank Plc.
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 2017 Q1 2016​ ​Change
Net interest income ​87.0 79.0 10.1%​
​Net fee income ​65.5 67.4 ​-2.9%
​Net trading income ​13.1 ​5.3 ​146.5%
Other income ​3.9 ​2.4 61.6%
​Total income 169.4 ​154.1 9.9%
​Operating expenses ​90.2 ​89.5 ​0.8%
​Profit before loan impairment changes ​79.1 ​64.6 22.5%
​Loan impairment changes ​-2.7 ​2.2 -222.4%
​Profit before tax ​81.8 ​62.4 31.1%
C/I-ratio, % ​53.3% ​59,5 % -4.8%
​Loans ​21,981.7 ​21,363.7 ​2.9%
​Deposits ​19,214.5 ​19,167.5 ​0.2%
​Danske Bank Plc Group's Financial Highlights
​EUR millions Q1 2017​ Q 2016​ Muutos​
Net interest income ​77.6 71.4 8.6%
Net fee income ​57.8 ​56.8 ​1.7%
​Net trading income ​12.6 ​4.4 ​ 187.3%
​Other income ​6.4 ​4.8 ​ 32.5%
​Total income ​154.4 ​137.4 ​12.3%
​Operating expenses ​84.6 ​83.4 ​1.5%
​Profit before loan impairment changes ​69.7 ​54.0 ​29.1%
​Loan impairment changes ​-2.7 ​2.0 ​-234.8%
​Profit before tax ​72.4 ​52.0 ​ 39.2%
C/I-ratio, % ​54.8% ​60.7% ​-5.9%
​FTE at the end of period ​1,553 1,683​ ​-7,8%
​Loans ​20,671.4 ​20,215.6 ​ 2.3%
​Deposits ​17,241.4 ​17,452.3 ​ -1.2%
​Total equity ​2,523.1 ​2,499.3 1.0%
​Total balance sheet ​29,975.0 30,380.6 ​-1.3%
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 announced on February 2, 2017, 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 a part of this process, the Board of Directors of Danske Bank Plc approved on March 23, 2017 a plan aiming at separating the bank’s mortgage credit banking business by way of a partial demerger. The planned de-merger has no effects on Danske Bank Plc’s customers.
The demerger is subject to approval by the general meeting of Danske Bank Plc and the acquiring company obtaining necessary licenses to operate as a Finnish credit institution and mortgage credit bank. Application for such licenses has been filed with the Finnish Financial Supervisory Authority.
Interim report for January–June 2017
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