Danske Bank A/S expects its net profit for 2018 to be in the range of 18 billion Danish kroner to 20 billion kroner, as its full-year 2017 net profit rose year over year to 20.90 billion kroner from 19.86 billion kroner.
EPS for the year was 22.2 kroner, up from 20.2 kroner a year earlier. The S&P Capital IQ normalized EPS estimate for the year was 21.42 kroner.
The bank's net interest income totaled 23.43 billion kroner in 2017, up from the year-ago 22.03 billion kroner, while net fee income rose year over year to 15.30 billion kroner from 14.18 billion kroner. Net trading income came in at 7.82 billion kroner in 2017, down from 8.61 billion kroner a year ago.
Danske Bank said one-off gains, including those from the sale of its domicile properties, benefited its total income, which rose on a yearly basis to 48.15 billion kroner from 47.96 billion kroner. In 2023, the bank will relocate to new offices next to the Copenhagen central station from Holmens Kanal in the Danish capital. Danske said the relocation is part of a strategy to create "a more simple, efficient and customer-centric bank."
The lender expects net fee income to remain "strong" in 2018 and for expenses to be "slightly higher" than in 2017. The bank's operating expenses amounted to 22.72 billion kroner in 2017, compared to the year-ago 22.64 billion kroner.
The bank's loan impairment charges stood at 873 million kroner in 2017, an increase from 3 million kroner in 2016.
The return on shareholders' equity after tax was 13.6% in 2017, compared to 13.1% in 2016.
For the fourth quarter of 2017, Danske Bank reported a net profit of 5.65 billion kroner, up from 4.93 billion kroner in the third quarter. Net interest income rose quarter over quarter to 6.04 billion kroner from 5.96 billion kroner, while net fee income totaled 4.22 billion kroner in the period, an increase from 3.49 billion kroner on a quarterly basis.
The bank also said that its board of directors approved a 10 billion kroner share buyback program involving a maximum of 85 million shares. The program, which will run from Feb. 5, 2018, to Feb. 1, 2019, at the latest, pending approval at the company's March 16 annual general meeting, is part of the lender's efforts to adjust its share capital to better reflect its capital targets.
At the end of December 2017, the bank's common equity Tier 1 ratio stood at 17.6%, compared to 16.3% a year earlier. On a fully phased-in basis, the CET1 ratio was 17.5% in the period.
The bank's board of directors is proposing a dividend of 10.0 kroner per share for 2017, up from 9.0 kroner in 2016. Danske's dividend policy was revised, with the payout ratio range increasing to 40% to 60% of net profits from 40% to 50%.
As of Feb. 1, US$1 was equivalent to 5.97 Danish kroner.
