Denmark's Danske Bank has reported second-quarter pretax profit above forecasts today thanks to higher trading income.
But the Danish bank said low interest rates and the impact of the UK's vote to leave the European Union were still proving a challenge.
"The second quarter continued to be with difficult market conditions with negative interest rates, low economic growth and subdued demand," Danske's chief executive Thomas Borgen said.
The Danish central bank has kept its key deposit rate below zero since September 2015 meaning the commercial banks in Denmark have to pay to keep money at the central bank.
Denmark's largest lender by market capitalisation said pre-tax profits fell 8% to 5.78 billion Danish crowns ($857m) in the three months from April to June, beating a forecast of 5.57 billion crowns.
Even though the market conditions have become more challenging due to the UK's vote to leave the EU, the bank maintained its full-year outlook of a net profit before goodwill impairments in line with last year's 17.7 billion crowns.
Dansk Bank owns Northern Bank, the largest bank in Northern Ireland, and is therefore hit by the fall in the value of sterling following the result of the EU vote on June 24.
Borgen said its business in Northern Ireland accounted for 3% of the bank's total lending.
While low growth in the export-driven Danish economy has hit Danske Bank's main business the bank has increased its business and customer base in Sweden and Norway, it said.
The Danish central bank has accused banks of being too ambitious on profits at a time of negative interest rates.
"We do not agree with the comments from the central bank. Cost of capital for Nordic banks is probably 9-10%. In other words banks are not appealing to investors if they do not deliver more than that," Borgen said.
He said the negative deposit rates at the central bank has cost the bank around 2 billion crowns in 2015 but along with Swiss banks Danske Bank has operated in markets with negative interest rates for the longest period.
Danske Bank aims to deliver a return on shareholders' equity of at least 12.5% in 2018.
On a group level loan impairment charges showed a net reversal for the fifth consecutive quarter, and Borgen said the bank's loan book was very solid.
Meanwhile, Terry Browne, Country Manager and Head of Corporate & Institutional Banking at Danske Bank Ireland, said its Corporate and Institutional division continues to perform strongly.
"With potentially challenging times ahead for the markets we are well positioned to support our clients with the expertise needed to navigate both the opportunities and challenges arising," Mr Browne added.
