Danske Bank expects income growth as interest rates rise

By Nikolaj Skydsgaard

COPENHAGEN (Reuters) -Danske Bank reported a sharp rise in first-quarter results on Friday helped by rising interest rates and said it expected growth in core income streams this year despite turmoil in global financial markets.

"Global uncertainty remains high with new events adding to the haze in the first quarter," Chief Executive Carsten Egeriis said in a statement, referring to the failure of U.S. Silicon Valley Bank and the shotgun merger of Swiss banks UBS and Credit Suisse last month.

"In this environment, our sound credit quality, ample liquidity buffers and a well-capitalised balance sheet become a clear benefit for our stakeholders," Egeriis added.

The results were in line with the bank's preliminary earnings.

Danske's net profit for the January-March quarter rose to 5.2 billion Danish crowns ($768.05 million) from 2.8 billion a year earlier, broadly in line with the 5.1 billion it had reported in a preliminary filing on April 13.

"We continue to expect core income lines to grow, driven mainly by higher net interest income following further normalisation of interest rates," the bank said.

Denmark's largest lender joins the ranks of rival Nordic lenders Swedbank, Nordea, DNB and others, which all beat first-quarter profit forecasts on the back of higher interest rates.

Danske raised its full-year profit outlook earlier this month.

It is set to turn its largest annual profit in half a decade after making a 5.1 billion crown loss in 2022, mostly due to a $2 billion dollar settlement it paid to the United States and Denmark over its involvement in a major money-laundering scandal.

Shares in Danske were flat on Friday, tracking Copenhagen's broader market.

The shares shed nearly three-quarters of their value from an all-time high of 260 crowns in late 2017 in the wake of the money laundering scandal. They have since recovered some losses and are now down 43% since late 2017.

($1 = 6.7704 Danish crowns)

(Reporting by Nikolaj Skydsgaard, editing by Terje Solsvik and Susan Fenton)