Danske Bank A/S (OMX: DANSKE) net profit of 1.2 billion DKK for Q2 2011 was in line with expectations. Higher margins and strong trading income from derivates were complemented by improving insurance results at Danica. More initiatives to improve earnings will be communicated in H2 and onward. After completing a share offering in April, Danske Bank Group’s Basel II tier 1 capital ratio and total capital ratio stood at 16.6% and 18.8% on 30th of June 2011. Core Tier 1 solvency need was 12.3%.
The bank has very limited remaining funding need for 2011. One-off impairnment charged were still elevated, particularly high in Ireland and NI. Danske Bank’s PIIGS exposure remains ‘limited’ at around 10 billion DKK, with majority of it in Italy. The main gross sovereign exposure is for Denmark (38 billion), Germany (28), Sweden (20) and the UK (18).
Danske Bank expects global economic recovery to continue in the second half but only at a moderate pace in the Western world. The group could not resist another sting towards Moody’s, saying that higher OC requirement of Realkredit Danmark is in sharp contrast to 24.8 billion DKK solvency.
The bank is guiding for increased margin in Denmark, total expenses up by 3%, lower income from Danica and saying that Danske Market´’s and Danske Capital’s results are highly dependant on market developments and relative performance. The stock is down but considerably less than market index so far.
No comments:
Post a Comment