Cost-focused Danske Bank hikes outlook after strong quarter

By John Stonestreet

COPENHAGEN (Reuters) - Danske Bank (DANSKE.CO) is not ruling out further large-scale job cuts in its pursuit of lower costs, its finance chief said on Friday after its third quarter earnings beat forecasts and it raised its outlook for the full year.

Chief financial officer Jacob Aarup-Andersen told Reuters that June's Brexit vote in Britain has so far had less of an impact on Denmark's biggest bank by assets than it anticipated.

"But what we have seen is rates moving down post the Brexit vote ... and that is obviously hitting us as a bank. It has made the challenge of negative rates even tougher for us," he said.

The numbers extended a run of forecast-beating quarterly results this year that has helped Danske Bank's share price significantly outpace most of its European peers, some of which have wilted under the impact of volatile financial markets, high loan impairments and ultra-loose monetary conditions.

In mid-October, Danske Bank offered about 40 percent of its 19,400 employees voluntary redundancy as part of efforts to bring costs down further and deliver a return on equity of at least 12.5 percent by 2018.

Aarup-Andersen said the bank remained "incredibly diligent" towards costs, and that further major job cuts were possible.

"It's not a paradigm shift in the way we approach costs... it's part of our ongoing cost efficiency programme and you should expect us to continue that," he said.

"Whether that entails larger-scale job cuts is too early to judge. But we will constantly be adjusting our cost base in this environment."

Danske Bank earlier reported strong results driven by trading income of 2.55 billion Danish crowns (307 million pounds), well ahead of the consensus estimate of 1.66 billion crowns in a Reuters poll

Net profit of 4.9 billion crowns also beat the consensus, as the bank gained market share across much of its personal and business banking segments, the CFO said.

It forecast full-year net profit would now beat last year's pre-writedowns figure of 17.7 billion crowns.

The bank's share price has risen around 15 percent this year, compared with a fall of around 18 percent across the STOXX Euro 600 Bank Index (.SX7P).

At 0704 GMT the share traded down 0.85 percent at 210.60 crowns, while the index was down 0.35 percent.

(Editing by Alexander Smith)