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Danske Bank profits beat forecasts on interest income boost

A person rides a bicycle past a Danske Bank branch in Copenhagen

COPENHAGEN (Reuters) -Danske Bank on Friday reported a bigger than expected third-quarter profit, boosted primarily by high interest income, and narrowed its full-year earnings guidance, sending its shares up more than 6%.

Danske Bank's results mirror those of rival Nordic banks SEB and Swedbank, which also beat analysts expectations when they published third-quarter results earlier this week. Nordea, the region's biggest bank, also reported a jump in operating profits, helped by high interest rates.

Danske, Denmark's biggest bank, narrowed its 2023 guidance for full-year net profit to a range of 19.5 billion-20.5 billion crowns, from 18.5 billion-20.5 billion previously.

The bank said this was due to a "satisfying performance" for the first nine months of the year and continually strong credit quality, which resulted in lower-than-expected loan impairment charges.

"The financial results for the third quarter and the first nine months of 2023 as a whole were driven primarily by higher net interest income ... due to the improved interest rate environment," Danske said in a statement.

Danske's net interest income was up at 9.32 billion crowns from a year earlier 6.29 billion, and just above the 9.09 billion forecast by an LSEG poll of analysts.

The bank said it expects net interest income to grow further based on the announced central bank rate hikes.

Its third-quarter net profit rose to 5.31 billion Danish crowns ($751.86 million) from a 13.79 billion loss related to provisions for a money laundering scandal a year earlier. The net profit was above an estimate of 4.96 billion in an LSEG poll of analysts.

Danske Bank's shares were up 6.68% at 162.15 Danish crowns at 0847 GMT.

($1 = 7.0625 Danish crowns)

(Reporting by Louise Breusch Rasmussen, editing by Terje Solsvik and Jane Merriman)