By Louise Rasmussen
COPENHAGEN (Reuters) – Denmark’s biggest lender Danske Bank reported third-quarter earnings above market expectations on Thursday and raised its 2024 profit guidance for the second time this year, lifting its share price.
The bank has seen an increase in borrowing demand from corporate clients and expects retail customers to follow suit as interest rates decline, CEO Carsten Egeriis told Reuters.
“The sort of early indicators are that that will pick up next year,” Egeriis said of the outlook for retail lending.
Danske Bank’s shares were up 2.5% at 1009 GMT, outperforming a 1.3% drop in the Danish benchmark index.
On the corporate side, Danske has especially seen increasing demand in the commercial real estate sector and construction, which had been subdued as interest rates rose following the pandemic.
Denmark’s central bank has cut rates three times this year, in step with monetary easing by the European Central Bank, in a boost for the economy, but Danske Bank also warned on Thursday that other factors could have a negative impact.
“Despite the more positive macroeconomic outlook, we remain prudently aware of the downside risks stemming from the geopolitical situation and concerns about a potential slowdown in economic activity,” the bank said in a statement.
Danske said its net profit rose to 6.17 billion Danish crowns ($898 million) in the July to September quarter from 5.32 billion a year earlier, topping the 5.55 billion expected by analysts on average in a poll provided by the bank.
The bank raised its net profit guidance for the full year to a range between 22.5 billion and 23.5 billion Danish crowns, up from a previous range of 21 billion to 23 billion crowns, citing lower operating expenses and loan impairment charges.
Swedish banks Handelsbanken, SEB and Swedbank have also posted higher-than-expected earnings for the quarter.
($1 = 6.8725 Danish crowns)
(Reporting by Louise Breusch Rasmussen, editing by Terje Solsvik nd Emelia Sithole-Matarise)
