To the editor 7 February 2013 |
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Danske Bank reports net profit of DKK 4.7 billion (EUR 636.6 million) for 2012
Danske Bank has announced its financial results for 2012. The annual report is available at www.danskebank.com. Highlights are shown below:
- In 2012, Danske Bank Group posted a profit before tax of DKK 8.6 billion (EUR 1,148.5 million). The net profit was DKK 4.7 billion (EUR 636.6 million), up DKK 3.0 billion (EUR 405.6 million) from the level in 2011. The results were generally in line with expectations.
- Although interest rates were low in 2012, the Group’s earnings initiatives, improved conditions in the capital markets and cost-reduction initiatives led to improved financial results.
- Total income amounted to DKK 47.7 billion (EUR 6,391.7 million), up 10% from the year-earlier level.
- Improved conditions in the capital markets increased net trading income, which totalled DKK 8.9 billion (EUR 1,193.1 million), up 22% from the level in 2011. Trading volumes remained relatively high throughout the year.
- Expenses were up slightly from the level in 2011. The cost/income ratio improved from 59.9% in 2011 to 55.8% in 2012, however.
- Loan impairment charges were down 5%, and charges have fallen each quarter since the fourth quarter of 2011.The decline occurred mainly because of lower charges at our banking units in Denmark, Northern Ireland and Ireland (including Non-core Ireland).
- In the second quarter of 2012, Danske Bank’s credit ratings were lowered by Moody’s and Standard & Poor’s (S&P).
- In October 2012, the Group issued new shares for an amount of DKK 7.1 billion (EUR 951.69 million) to accelerate the achievement of its rating and capital targets. Shortly after the issue, S&P’s changed its credit rating outlook for Danske Bank from stable to positive.
- The core tier 1 capital and total capital ratios were solid at 14.5% and 21.3%, against 11.8% and 17.9% at the end of 2011.
- At the end of 2012, the Group’s Liquidity Coverage Ratio (LCR) was 121%, which is well above the requirement expected to take effect in 2015.
- The Board of Directors will recommend to the general meeting that no dividend be paid for 2012.
- The Group expects the net profit for 2013 to range from DKK 7.5-10.0 billion (EUR 1,005-1,340 million), corresponding to a return on equity of 5.5-7.0% after tax.
“These are our best financial results since 2007 and it is definitely a step in the right direction,” says Eivind Kolding, Chief Executive Officer.“The earnings initiatives we have implemented are starting to produce results. The earnings and cost-reduction initiatives, together with improved conditions in the capital markets, have brought about improvements in 2012. We are in full swing with the implementation of our strategy that will ensure we achieve our targets in 2015.”
Danske Bank
Contacts available on 7 February 2013 from 10am CET:
Eivind Kolding, Chief Executive Officer, tel. +45 45 14 60 01
Henrik Ramlau-Hansen, Head of Group Finance & Legal, tel. +45 45 14 06 66
Martin Gottlob, Head of Investor Relations, tel. +45 45 14 07 92
The annual report will be presented at a press conference at 10am CET. Danske Bank will hold a conference call at 3pm CET. The press conference and conference call will be webcast live at www.danskebank.com. More information about Danske Bank Group’s financial results is available at www.danskebank.com/reports.
INCOME STATEMENT | Index | ||||||
(DKK millions) | 2012 | 2011 | 12/11 | 2010 | 2009 | 2008 | |
Net interest income | 24,788 | 23,537 | 105 | 23,843 | 27,524 | 27,005 | |
Net fee income | 8,782 | 8,298 | 106 | 8,699 | 7,678 | 8,110 | |
Net trading income | 8,901 | 7,325 | 122 | 7,707 | 18,244 | 6,076 | |
Other income | 2,951 | 3,648 | 81 | 3,882 | 3,083 | 3,585 | |
Net income from insurance business | 2,263 | 569 | - | 2,146 | 2,810 | -1,733 | |
Total income | 47,685 | 43,377 | 110 | 46,277 | 59,339 | 43,043 | |
Expenses | 26,588 | 25,987 | 102 | 26,010 | 28,907 | 28,726 | |
Profit before loan impairment charges | 21,097 | 17,390 | 121 | 20,267 | 30,432 | 14,317 | |
Loan impairment charges | 12,529 | 13,185 | 95 | 13,817 | 25,677 | 12,088 | |
Profit before tax | 8,568 | 4,205 | 204 | 6,450 | 4,755 | 2,229 | |
Tax | 3,819 | 2,482 | 154 | 2,786 | 3,042 | 1,193 | |
Net profit for the year | 4,749 | 1,723 | 276 | 3,664 | 1,713 | 1,036 | |
Attributable to non-controlling interests | 4 | 11 | 36 | 3 | -14 | 25 |
BALANCE SHEET (END OF YEAR) | ||||||
(DKK millions) | ||||||
Due from credit institutions and central banks | 113,657 | 74,041 | 154 | 89,619 | 109,236 | 79,795 |
Repo loans | 307,177 | 256,027 | 120 | 306,962 | 239,183 | 369,999 |
Loans and advances | 1,674,390 | 1,698,025 | 99 | 1,679,965 | 1,669,552 | 1,785,323 |
Trading portfolio assets | 812,927 | 909,755 | 89 | 641,993 | 620,052 | 860,788 |
Investment securities | 107,724 | 109,264 | 99 | 118,556 | 118,979 | 140,793 |
Assets under insurance contracts | 241,343 | 230,668 | 105 | 217,515 | 196,944 | 181,259 |
Other assets | 227,963 | 146,623 | 155 | 159,276 | 144,531 | 126,017 |
Total assets | 3,485,181 | 3,424,403 | 102 | 3,213,886 | 3,098,477 | 3,543,974 |
Due to credit institutions and central banks | 241,241 | 177,592 | 136 | 175,825 | 184,653 | 434,334 |
Repo deposits | 359,276 | 269,515 | 133 | 202,603 | 182,164 | 202,785 |
Deposits | 788,507 | 795,275 | 99 | 800,613 | 803,932 | 800,297 |
Bonds issued by Realkredit Danmark | 614,325 | 557,699 | 110 | 555,486 | 517,055 | 479,534 |
Other issued bonds | 340,005 | 366,920 | 93 | 450,219 | 514,601 | 526,606 |
Trading portfolio liabilities | 531,860 | 697,913 | 76 | 478,386 | 380,567 | 623,290 |
Liabilities under insurance contracts | 266,938 | 248,966 | 107 | 238,132 | 223,876 | 210,988 |
Other liabilities | 137,010 | 117,340 | 117 | 130,544 | 110,968 | 110,033 |
Subordinated debt | 67,785 | 67,328 | 101 | 77,336 | 80,002 | 57,860 |
Shareholders' equity | 138,234 | 125,855 | 110 | 104,742 | 100,659 | 98,247 |
Total liabilities and equity | 3,485,181 | 3,424,403 | 102 | 3,213,886 | 3,098,477 | 3,543,974 |
RATIOS AND KEY FIGURES | |||||
Earnings per share (DKK) | 5.1 | 1.9 | 4.9 | 2.3 | 1.4 |
Diluted earnings per share (DKK) | 5.1 | 1.9 | 4.9 | 2.3 | 1.4 |
Return on average shareholders' equity (%) | 3.7 | 1.4 | 3.6 | 1.7 | 1.0 |
Cost/income ratio (%) | 55.8 | 59.9 | 56.2 | 48.7 | 66.7 |
Total capital ratio (%) | 21.3 | 17.9 | 17.7 | 17.8 | 13.0 |
Core tier 1 capital ratio (%) | 14.5 | 11.8 | 10.1 | 9.5 | 8.1 |
Share price (end of year) (DKK) | 95.7 | 73.0 | 132.3 | 109.2 | 48.1 |
Book value per share (DKK) | 137.9 | 135.7 | 140.0 | 134.8 | 131.7 |
Full-time-equivalent staff (end of year) | 20,308 | 21,320 | 21,522 | 22,093 | 23,624 |
STATEMENT OF CAPITAL | Index | |||||||||||
(DKK millions) | 2012 | 2011 | 12/11 | 2010 | 2009 | 2008 | ||||||
Capital base and total capital ratio | ||||||||||||
Shareholders' equity | 138,234 | 125,855 | 110 | 104,742 | 100,659 | 98,247 | ||||||
Revaluation of domicile property at fair value | 1,048 | 1,281 | 82 | 1,253 | 1,275 | 1,410 | ||||||
Pension obligations at fair value | -235 | 348 | - | -73 | -1,155 | 486 | ||||||
Tax effect | -57 | -58 | 98 | 2 | 262 | -163 | ||||||
Reserves in undertakings consolidated on a pro rata basis | 3,002 | 2,991 | 100 | 3,002 | 2,984 | 2,979 | ||||||
Shareholders' equity calculated in accordance with the rules of the Danish FSA | 141,992 | 130,417 | 109 | 108,926 | 104,025 | 102,959 | ||||||
Expected dividends | - | - | - | - | - | - | ||||||
Intangible assets of banking operations | -21,279 | -22,127 | 96 | -22,666 | -23,140 | -25,204 | ||||||
Deferred tax assets | -1,389 | -1,600 | 87 | -1,548 | -2,223 | -971 | ||||||
Deferred tax on intangible assets | 642 | 923 | 70 | 1,069 | 1,229 | 1,433 | ||||||
Revaluation of domicile property | -642 | -743 | 86 | -675 | -753 | -924 | ||||||
Other statutory deductions | -227 | -44 | 516 | - | - | - | ||||||
Core tier 1 capital | 119,097 | 106,826 | 111 | 85,106 | 79,138 | 77,293 | ||||||
Hybrid capital | 40,248 | 42,366 | 95 | 42,208 | 41,099 | 13,640 | ||||||
Difference between expected losses and impairment charges | - | - | - | - | - | - | ||||||
Statutory deduction for insurance subsidiaries | -4,292 | -4,175 | 103 | -2,422 | -2,308 | -2,555 | ||||||
Other statutory deductions | -19 | - | - | -55 | - | -31 | ||||||
Tier 1 capital | 155,034 | 145,017 | 107 | 124,837 | 117,929 | 88,347 | ||||||
Subordinated debt, excluding hybrid capital | 23,009 | 20,480 | 112 | 26,710 | 31,969 | 35,023 | ||||||
Revaluation of domicile property | - | - | - | - | - | 1,120 | ||||||
Difference between expected losses and impairment charges | 642 | 743 | 86 | 675 | 753 | 924 | ||||||
Statutory deduction for insurance subsidiaries | - | - | - | - | - | 2,036 | ||||||
Other statutory deductions | -4,292 | -4,175 | 103 | -2422 | -2,308 | -2,555 | ||||||
Subordinated debt, excluding hybrid capital | -19 | - | - | -55 | - | -31 | ||||||
Capital base | 174,374 | 162,065 | 108 | 149,745 | 148,343 | 124,864 | ||||||
- | ||||||||||||
Risk-weighted assets | 819,436 | 905,979 | 90 | 844,209 | 834,242 | 960,079 | ||||||
Core tier 1 capital ratio (%) | 14.5 | 11.8 | 10.1 | 9.5 | 8.1 | |||||||
Tier 1 capital ratio (%) | 18.9 | 16.0 | 14.8 | 14.1 | 9.2 | |||||||
Total capital ratio (%) | 21.3 | 17.9 | 17.7 | 17.8 | 13.0 |
INCOME STATEMENT | Q4 | Q4 | Index | Q3 | Q2 | Q1 |
(DKK millions) | 2012 | 2011 | 12/11 | 2012 | 2012 | 2012 |
Net interest income | 6,200 | 6,182 | 100 | 6,198 | 6,218 | 6,172 |
Net fee income | 2,653 | 2,218 | 120 | 2,116 | 2,026 | 1,987 |
Net trading income | 1,432 | 1,638 | 87 | 1,785 | 2,462 | 3,222 |
Other income | 628 | 849 | 74 | 689 | 846 | 788 |
Net income from insurance business | 953 | 976 | 98 | 427 | 699 | 184 |
Total income | 11,866 | 11,863 | 100 | 11,215 | 12,251 | 12,353 |
Expenses | 6,990 | 6,459 | 108 | 6,116 | 6,632 | 6,850 |
Profit before loan impairment charges | 4,876 | 5,404 | 90 | 5,099 | 5,619 | 5,503 |
Loan impairment charges | 2,619 | 4,789 | 55 | 2,879 | 3,109 | 3,922 |
Profit before tax | 2,257 | 615 | 367 | 2,220 | 2,510 | 1,581 |
Tax | 1,111 | 415 | 268 | 903 | 1,007 | 798 |
Net profit for the year | 1,146 | 200 | 573 | 1,317 | 1,503 | 783 |
Attributable to non-controlling interests | - | -1 | - | 5 | -1 | - |