Denmark's biggest bank, Danske Bank, on Thursday raised its full-year net profit guidance citing rising income as it posted its strongest quarterly result since the country's housing market
collapsed in 2008.
"Our progress thus far in 2014 shows that we are on track to create a more customer-focused, cost-effective and competitive bank," chief executive Thomas Borgen said in a statement.
The bank expects annual net profit to be between 10 billion and 13 billion kroner ($1.8-$2.3 billion) rather than a previous estimate at the higher end of a range of 9-12 billion kroner.
Net profit in the three months ending 30 June rose 85 percent to 4.05 billion kroner, driven by a three-percent rise in net interest income, falling loan impairment charges, and a 1.0-billion kroner gain from the sale of the group's stake in payment services provider Nets.
"The stronger outlook is owing mainly to positive developments in expenses and impairments as well as the positive effect relating to Nets," Danske Bank said in a statement.
The group said a pre-tax loss of 800 million kroner from non-core activities — mainly its operations in Ireland, where it is winding down operations after being hit by a burst property bubble — was in line with expectations.
"Interest and fee income is clearly better than expected, and shows that the economy is doing better," Sydbank analyst Bjoern Schwarz told news agency Ritzau.
Cost reductions were also "going really well," he added.
Shares in Danske Bank were up by 5.2 percent in late morning trading on the Copenhagen bourse, where the main index was 0.5 percent higher. Share prices reached their highest level since May 2008.
Speaking to TV2, Borgen said that Danske Bank’s strong results were a good sign for Denmark.
“Danske Bank is a mirror image of the Danish economy, so the report is a reflection of the fact that both households and businesses are doing better. We are seeing an increase in new activity that is grabbing ahold of the Danish economy,” he said.
The bank’s positive results came just one day after Statistics Denmark’s consumer expectations survey showed that Danes’ level of consumer confidence was at its highest point since before the financial crisis.