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Lower net interest income pulls down Danske Bank Q2 result

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Lower net interest income pulls down Danske Bank Q2 result

postedsecond-quarter net profit attributable to shareholders of the parent company of4.26 billion Danish kroner, compared to 4.31 billion kroner earned in theyear-ago period.

EPSremained constant at 4.4 kroner.

Thegroup's net interest income for the quarter dropped to 8.09 billion kroner from8.63 billion kroner a year ago. Fee income declined to 3.75 billion kroner from3.94 billion kroner, while fee expenses rose to 1.76 billion kroner from 1.27billion kroner.

Thelender recorded net trading income of 1.74 billion kroner, compared to a lossof 4.92 billion kroner in the year-ago quarter. Trading saw a positiveimpact from currency inflows in Denmark in the second quarter, driven partly byuncertainty as to the outcome of the U.K. referendum. Trading income in thesecond quarter also benefited from a one-off gain on the sale of Visa Europe,the bank said.

Inthe second-quarter, the bank recorded reversals on loan impairments of 60million kroner, compared to reversals of 220 million kroner a year ago.

Returnon average tangible equity was 12.6% in the second quarter, compared to 13.3% ayear ago.

Forthe first half, net attributable profit came to 9.04 billion kroner, down year overyear from 9.14 billion kroner.

CEOThomas Borgen said the bank maintains its outlook for 2016 even though marketconditions have become "more challenging owing to the U.K.'s vote to leavethe EU."

As aresult, the bank expects a year-over-year decline in its 2016 net fee incomeand expects net profit for the full year to match its 2015 net profit beforegoodwill impairments. The bank also expects to "benefit from volume growthand somewhat lower funding costs" and slightly less pressure on margins forthe remainder of 2016.

Thegroup's common equity Tier 1 capital ratio was 15.8% as of June 30, compared to15.0% at the end of March and 16.1% as of Dec. 31, 2015.

As of July 20, US$1 wasequivalent to 6.76 Danish kroner.