Danske Bank has reported first quarter pre-tax profit above forecast and raised its full-year profit guidance thanks to cost cuts and lower writedowns on loans.

Denmark's largest lender reported profit before tax of €570m while net profits for the three months came in at €376.5m.  

Total income rose by 3% to €1.384 billion and the group said it now expects 2014 net profit to be at the higher end of its previous expections.

The Danish banking group announced last year that it was leaving Ireland. It had decided that Ireland was not a profitable market and made plans to exit its retail business here this year.

The bank said today that it expects impairments in Ireland to be below its previous guidance as the property market here is recovering, especially in Dublin where most of its loan portfolio is located.

The group's chief executive Thomas F Borgen said the bank's financial performance in the first quarter of 2014 was "encouraging".

"Although our income is challenged by the subdued economic activity, our financial results show a number of positives. Our cost programme is driving the fall in expenses, and impairments continue to decline," he added.