Danske Bank has today cut its 2023 profitability target, citing "significant challenges" such as compliance over the last two years.
This came despite reporting better than expected third-quarter earnings, buoyed by high client activity.
Danske, which also pointed to increased competition and margin pressure, now expects to report a return on equity (RoE) of between 8.5% and 9% in 2023.
That compares to a previous target range of 9% to 10%.
"We have had to adapt to significant challenges over the past two years," chief executive Carsten Egeriis said. Denmark's largest bank has been dogged for years by a money laundering scandal.
"We now have more line of sight of our commercial challenges within retail banking, and the prolonged investments in strengthening our compliance and remediation efforts, leading us to adjust our financial targets for 2023," Egeriis added.
In July, Danske had said it would stick to its profitability target of 9-10% RoE in 2023, prompting scepticism from analysts, who say further measures are needed, such as more cost cut initiatives or divestments.
"A smaller downward adjustment than expected, but at the same time also a plan that lacks a little more detail for how it should be fulfilled," Sydbank analyst Mikkel Jensen said.
"I still think the market will be sceptical about whether they can deliver that. If they can, it will be better than what the market expects," Jensen told Reuters.
Danske also said in a statement that it expected a cost to income ratio in the mid-50s in 2023, slightly worse than its previous target of "low 50s".
The Danish lender reported net profit of 3.3 billion Danish crowns ($517.9m) in the third quarter, above an average of 3 billion forecast by analysts in a company-compiled poll.