Danske Bank on Monday cut its 2019 earnings forecast for the second time as a tough trading environment and higher costs to combat money laundering weighed on the troubled bank.
The profit warning comes as Danske Bank tries to restore trust among investors and customers after last year disclosing a major money laundering scandal at its tiny Estonian branch.
The bank said it expects full-year net profit of 13-15 billion Danish crowns ($1.95 billion-$2.25 billion), down from a previous range of 14-16 billion Danish crowns.
"This development is driven mainly by margin pressure and conditions in the financial markets, as evidenced by the weak trading income in the second quarter," Chief Financial Officer Christian Baltzer said in a statement.
"In addition, we have higher costs for compliance and anti-money laundering activities," he said, adding that the bank would give an update later this year on initiatives to improve long-term performance.
A low interest rate environment combined with uncertainty about global economic growth has made it difficult for banks to make profits on lending money.
Last week, Denmark became the first developed economy in this year's global plunge in bond yields to have negative yields on all its government bonds.
In a scandal that has sent ripples across the Nordic banking sector, Danske said last year it had channeled 200 billion euros of suspicious payments through its Estonian branch between 2007 and 2015.
Danske also said net profit for the second quarter would be around 4.0 billion Danish crowns ($601.22 million).
It expects total income for the quarter of around 11.5 billion crowns, including net trading income of about 800 million and expenses of 6.7 billion.
The final figures for the April to June period will be released on July 18.
Comments
Comments are closed.