Danske Bank shares up 7% on earnings beat, dividend

By Louise Rasmussen

COPENHAGEN (Reuters) -Danske Bank beat forecasts for fourth-quarter profit on Friday, closing out a record year, and announced a share buyback plan and extraordinary dividends, sending its shares up 7%.

Rising customer activity and low loan losses helped Denmark's largest lender achieve an annual net profit of 23.63 billion Danish crowns ($3.29 billion), up 11% from 21.26 billion in 2023.

Danske's net profit for October-December rose to 6.0 billion Danish crowns from a year-ago 5.77 billion, beating the 5.05 billion predicted by analysts in a poll provided by the bank.

It proposed a total dividend of 28.7 crowns per share for 2024, beating analyst expectations of 23.5 crowns thanks to an extraordinary payout announced on Friday of 5.35 crowns.

Danske's share price soared to 234.8 crowns, its highest level since the first half of 2018. The stock is up 15% year-to-date.

Analysts at JP Morgan pointed to the fourth-quarter beat and what they called a generous dividend payout as drivers for the share price rise, and said the bank's outlook guidance for 2025 was positive.

The bank forecast its total income for 2025 to be slightly lower than in 2024, primarily due to lower net interest income from lower market rates, predicting a net profit for the year of between 21 billion and 23 billion crowns.

CEO Carsten Egeriis said he was cautiously optimistic about the outlook for 2025.

"We believe that as inflation and interest rates come down, that will support consumer demand and consumer spending, which should in turn also flow through into the real economy and business activity," he told Reuters.

Danske Bank said economic conditions were better than the market had expected, adding that the outlook for inflation and growth had improved during the year, especially in Denmark.

In addition to its dividend, the bank also announced share buybacks of 5 billion crowns.

($1 = 7.1879 Danish crowns)

(Reporting by Louise Breusch Rasmussen, editing by Terje Solsvik)