Danske Bank has today beaten second-quarter net profit expectations, helped by strong credit quality and higher net interest income, and announced an interim dividend for shareholders, boosting its shares.
Denmark's biggest lender said net profit rose 17% from a year earlier to 5.84 billion Danish crowns ($852.37 million), topping the 5.57 billion expected by analysts in a poll provided by the bank and building on a strong first quarter.
A combination of strong net interest income, higher fees, driven by high customer activity, and strong credit quality led to an increase in net profit, CEO Carsten Egeriis said.
While benefiting from higher interest rates, Danske has kept loan losses marginal despite an economic slump.
Egeriis said the start of rate cuts by the ECB was "a positive step that is likely to benefit economic activity".
Danske's shares traded 6% higher at the market opening today. The stock has more than doubled in value over the last two years based on LSEG data, as it regained customer and investor confidence after its involvement in a money laundering scandal.
Swedish banks Handelsbanken, SEBSEBa and Swedbank also reported higher-than-expected net earnings this week.
Danske said it would pay an interim dividend for the first half of the year of 7.5 crowns per share, equivalent to 56% of net profit for the period.
Following interim dividend payments in 2023 and 2024, the bank said it will return to annual dividend payments next year.
Danske's net fee income jumped 23% to 3.70 billion in the second quarter, above the 3.28 billion expected by analysts. Net interest income rose 7% to 9.15 billion crowns, below the expected 9.23 billion.
The bank kept its full-year guidance unchanged after it said last month that strong credit quality and a net loan impairment reversal in the second quarter had prompted it to raise its net profit forecast for the year to a range of 21 billion to 23 billion crowns from 20-22 billion seen previously.
