UK Car Lending

Solid progress continues, thanks to an increase in customer base

Press release Holmen Canal 2 – 12
DK-1092 København K
Phone. +45 45 14 14 00

July 23, 2021

Solid progress continues, driven by highuh customer activity,
a strong capital market performance, focus on costs and strong credit quality
net teacherIt of DKK 5.9 billion for the first half from 2021

Carsten Egeriis, Managing Director, comments on the financial results:

In the first half of 2021, we saw highuh customer activity, principally of our big business and institutional customers, As the Nordic economies recovered in the latter part of the period, with who mostly our strong capital markets performance resulted in a positive development in our total income. As the increasede in customer activity, the macroeconomic recovery and the positive commercial dynamic are all should continue, and as our credit quality remains strong, we recently revised upwards our outlook for net income. We have progressed with the execution of our project to become a a better and more efficient bank, digitization customer journey, strengthen our compliance and further away improve our cost development. In the second half of the year, we will step up our efforts on the implementation of commercial initiatives to ensure the continuation of our current momentum. The result for the first half of 2021 represents a return on equity oF 7.0%, which is an improvement. HHowever, we still need to work with determination to achieve our financial ambitions..

1st semester 2021 vs 1st semester 2020
Total income of DKK 21.3 billion (up 5%)
Operating expenses of DKK 12.8 billion (down 2%)
Depreciation of DKK 737 million (compared to DKK 5.3 billion in the first half of 2020)
Net profit of DKK 5.9 billion (vs. DKK 1.0 billion in the first half of 2020)
Return on equity of 7.0% (vs. 0.9% in the first half of 2020)
Strong capital position, with a total capital ratio of 23.3% and a CET1 capital ratio of 18.0%

Suite rrecovery in the Nordic economies
In the first half of 2021, the Nordic economies began to recover thanks to the deployment of the vaccine and the gradual reopening of Nordic companies. Labor markets have improved faster than in previous crises and consumer spending is approaching or even exceeding normal levels. The continued rebound in economic activity in Denmark as well as in the other Nordic countries should have a positive effect on customer activity and credit demand for the remainder of the year, enabling a favorable operating environment.

While there are many reasons to be optimistic about the ongoing economic recovery, it is too early to conclude on the long-term macroeconomic implications of the corona crisis. In particular, it remains to be seen how the roll-out of government support programs and the withdrawal of central banks, as well as the timing of these, could affect companies in the most affected sectors and overall economies.

Credit quality remained strong, with a low level of actual credit deterioration and more normalized levels of depreciation than in the first half of 2020. Coupled with strong liquidity buffers, this means we remain well equipped to meet needs. of our customers during the ongoing economic recovery period.

Highuh customer activity drives revenue growth
In general, our diversified business model has continued to prove valuable in the current context.
the credit and interest rate environment which, combined with strong customer activity, ensured a positive trend in revenues up 5%. As costs also fell by 2%, our profitability strengthened and return on equity improved from 0.9% in the first half of 2020 to 7.0% in the first half of this year.

In the first half of 2021, net interest income was positively impacted by deposit revaluation initiatives that came into effect in early 2021, however, the positive effect was offset by pressure on margins in the Nordic countries, while the positive inflow of deposits continued.

The increase in client activity of our large corporate and institutional clients and an increase in consumer spending compared to the same period last year contributed to the increase in net fee revenue as we continued to support and assist our clients, including in their transition to sustainability. Our capital markets strategy is performing well with record commission income across all our businesses, and Danske Bank is the leading Nordic bank in equity capital markets as well as European issues in debt capital markets , and at the same time, assets under management have increased. In addition, net trading income performed better than the same period last year due to improving market conditions.

Expenses were lower in the first half of 2021 compared to the same period last year, with costs continuing their downward trend, driven by cost initiatives launched in the past year, and the level of expenses under -jacent improvement, despite exceptional items mainly related to the period.

We have a solid foundation to become a better bank for all of our stakeholders and we are seeing good momentum in our efforts, and we are also making progress in continuing to execute all planned business initiatives in our markets.

We have significantly improved our compliance IT systems and processes, and we have completed an update to Know Your Customer information for a significant portion of our customer base. We have improved our customer journeys by digitizing processes and ensuring better adoption of digital solutions already launched. In Sweden, for example, 95% of home loan applications now go digitally, and we recently launched a new digital car loan process in Norway. We have played a leading role in sustainable finance and have set ourselves an ambitious new target for 2023 of delivering DKK 300 billion in sustainable finance driven by strong customer demand. And we have continued to implement our strategy of becoming a simpler and more efficient bank by focusing on our main markets, most recently with the divestiture of our international private banking activities in Luxembourg.

In the first semester, our activity recorded good growth in many of our Nordic markets, driven by high big company customer activity. While net interest income holds up well despite pressure on margins, our capital markets performance assured strong report costs Income and report commercial income. Cost measures have had a tangible effect, and it remains a priority for us at make sure that we are competitive. Wwith commercial momentum and solid credit quality, we are on track to continue the progress we have made do in the first six months from 2021, says Stephan Engels, CFO.

Individual & Business Customers
With our new fully operational agile development organization, we continued to improve the customer experience on our digital platforms. We have launched navigation enhancements both in our “one-click remortgage process” for retail customers and in District, our financial platform for business customers. In Norway we introduced a digital car loan application process and in Finland we launched a new digital tool for home loan applicants. We have also increased our sustainability offerings by introducing a permanent car loan offer for electric cars and plug-in hybrid cars in Denmark, GreenFleet70 in Sweden – a tool to map and advise companies on their fleet emissions, and a new service to help our clients make more sustainable housing choices in Finland. Profit before tax was DKK 3.9 billion, up DKK 1 billion from the same period last year, mainly due to lower loan impairment charges and spending on loans. ‘exploitation.

Large Companies & Institutions
In the first half of 2021, clients used their credit facilities less as vaccine rollout accelerated and companies reopened. Instead, clients were back in force in the capital markets, where, through a number of historic transactions, we supported high volumes and secured Danske Bank the position of the leading Nordic bank in the capital markets. debt and equity. Likewise, we have supported issuers and investors in a large number of transactions, affirming our position as the leading Nordic bank in sustainable finance. We are also ranked number one in the Nordic countries for both sustainability loan issuance and sustainable bond issuance, and the first social bond issuance with a built-in guarantee by the Swedish International Development Agency, AIDS, once again demonstrates our commitment to sustainable progress. . Profit before tax for the first half of 2021 reached DKK 3.5 billion, compared to a loss of DKK 548 million in the same period last year.

Danica Pension
Danica Pension generated strong returns for our clients and assets under management increased by 12% due to favorable financial market developments. Danica Pension recorded a 30% increase in its premiums compared to the level of the same period last year, reflecting our strong market position and the fact that more professional clients have chosen Danica Pension. The net result from the insurance business increased by 9% to 982 million DKK, mainly due to a slightly higher result from the life insurance business.

North Ireland
Our business in Northern Ireland continues to strive to become more efficient, geographically diverse and digitally oriented. Profit before tax increased to DKK 293 million from DKK 76 million in the same period last year due to lower loan impairment charges as total income was affected by a strong lower UK interest rates and very low activity levels due to restrictions related to the corona crisis.

Operspective for 2021
As reported in the company announcement of July 8, 2021, the net profit outlook has been revised upwards as we now forecast a net profit of over DKK 12 billion.

Danske Bank

More information on Danske Bank’s financial results is available at

  • Danske Bank Interim report first half of 2021

  • Danske Bank press release July 23, 2021

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