DNSKF - Danske Bank A/S (DNSKF) Q4 2023 Earnings Call Transcript

2024-02-02 12:59:10 ET

Danske Bank A/S (DNSKF)

Q4 2023 Earnings Conference Call

February 2, 2024 02:30 ET

Company Participants

Claus Jensen - Investor Relations

Carsten Egeriis - Chief Executive Officer

Stephan Engels - Chief Financial Officer

Conference Call Participants

Sofie Peterzens - JPMorgan

Jakob Brink - Nordea

Johannes Thormann - HSBC

Jan Erik Gjerland - ABG

Johan Ekblom - UBS

Geoff Dawes - SG

Riccardo Rovere - Mediobanca

Martin Gregers Birk - SEB

Shrey Srivastava - Citi

Jacob Kruse - Autonomous

Presentation

Claus Jensen

Good morning, everyone. Welcome to the Conference Call for Danske Bank’s Financial Results for 2023. My name is Claus Ingar Jensen, and I’m Head of Danske Bank’s Investor Relations. With me today, I have our CEO, Carsten Egeriis; and our CFO, Stephan Engels. We aim to keep this presentation to around 25 minutes. And after the presentation, we will open up for a Q&A session, as usual. Afterwards, feel free to contact the Investor Relations department if you have any more questions.

I will now hand over to Carsten.

Carsten Egeriis

Thanks, Claus. And I would also like to welcome you to our conference call for the financial report for 2023. 2023 turned out to be an eventful year for Danske Bank. Firstly, our operating environment continued to be impacted by a high level of geopolitical risk and the associated effects for the economies and our customers. Secondly, we succeeded in making significant strategic progress. We have now completed our financial crime plan and most of our legacy cases are therefore behind us. And this is an important achievement that allows us to put an even greater focus on driving the commercial performance in the years to come. This was very clearly expressed through our Forward ‘28 strategy, which my colleagues in the executive leadership team and I presented in June at our Capital Markets Day. This strategy includes clear financial targets for 2026, where we aim to deliver a return on shareholders’ equity of 13%.

Financially, 2023 also turned out to be a year with a strong improvement in performance. Net profit came in at DKK21.3 billion, equivalent to an ROE of 12.7%, significantly above our outlook from the beginning of the year and in line with our most recently revised outlook from December. The result is supported by a strong trend for NII that was underpinned by margin expansion, strong credit quality and improved cost efficiency. The nominal cost level of DKK25.4 billion is as expected and in line with our guidance from the beginning of 2023.

We maintained a strong capital and liquidity position throughout the year. Earnings in the second half of 2023 contributed to an increase in our core capital ratio that stood at 18.8% by the end of the year. Against this background, the Board of Directors is proposing a dividend payment of DKK7.5 per share based on earnings in the second half of the year. Added to the dividend of DKK7 paid out for the first half of 2023, this is equivalent to a full year dividend payout ratio of 59%....

For further details see: