Denmark's biggest lender, Danske Bank, today reported much better than expected first quarter results, as it weathered negative interest rates by snatching market share and cutting costs.
The results sent the bank's shares higher as it easily beat analysts' forecasts for both net profit and trading income.
This is despite the fact that turmoil in financial markets resulted in trading income falling by nearly half from last year.
Danske's relative resilience in the face of negative interest rates, low oil prices and widespread market turmoil stands in contrast to most banks in Europe.
Denmark and Sweden have introduced negative interest rates to spur their economies and inflation, making it more difficult for banks to make a profit.
Danske Bank's first-quarter net profit of 4.9 billion Danish crowns ($749m), however, was virtually flat compared to last year and well above analysts' forecasts for 4.3 billion crowns.
That contrasted with Swedish banks Nordea and SEB, which both reported weaker than expected first-quarter operating profits earlier this week.
Danske's market value is now on a par with several of the region's big lenders including Deutsche Bank and Standard Chartered and above Italy's largest lender UniCredit.
The Danish bank said lending growth of 2% from a year earlier and lower funding costs enabled it to offset pressure on margins in the first quarter, but did not elaborate.
It increased lending in Denmark, Finland and Norway and said it had cut costs.
"We've worked hard towards becoming simpler and taking away bureaucracy," the bank's chief executive Thomas Borgen told Reuters.
He also warned of the risks of negative interest rates. "Negative rates can always create asset bubbles", he said, adding that the housing market in some areas such as Stockholm "looks slightly inflated."
As volatile financial markets early this year hit banks, Danske's trading income slumped 47% in the first quarter to 1.6 billion crowns, but beat forecasts for 1.4 billion crowns.
The bank's results were also bolstered by the sale of its historic head office buildings in the centre of Copenhagen to Britain's Standard Life for 1.4 billion Danish crowns.
Meanwhile, Terry Browne, Country Manager and Head of Corporate & Institutional Banking at Danske Bank Ireland, said the bank's strong performance in Corporate & Institutional Banking was in line with its expectations.
Mr Browne said that a number of new business wins and continued work with some of the country's biggest corporate and institutional organisations underpins Danske Bank Ireland's continued growth here.
"This growth is being driven by our C&I division's ever increasing financial advisory expertise and high quality technology based products," he added.
