Danske Bank misses profit estimate after troubled 12 months
Danske Bank’s pre-tax profits for the second quarter of 2019 fell below expectations, as low interest rates and costs from an Estonian money laundering scandal dented its balance sheet.
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The European banking giant posted pre-tax profits of 4.76bn Danish crowns (£576m) during the three months to the end of June, falling 13 per cent from the same period last year and missing Refinitiv forecasts of 5.06bn Danish crowns.
Chief executive Chris Vogelzang, who was appointed to lead the troubled bank in May, said the group faced “a challenging rates and margin environment as well as increased costs for compliance measures” during the first half of this year.
However, he also said the firm was boosted by continued growth in lending and solid credit quality.
In a note published this morning, analysts at Jeffries wrote: “Whilst management have been keen to point out weakness in trading income, the trend in customer revenue is also poor.”
Shares in the embattled bank have plunged by over 40 per cent during the last 12 months.
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Danske’s performance in recent months has been mired by a money-laundering investigation into €200bn (£180bn) payments made within the firm’s Estonian branch from 2007 to 2015.
In December shares hit their lowest level in almost five years after the firm warned that profits for the year would be lower than originally expected.