Danske Bank slides as net interest incomes disappoints
Q1 net profit meets forecasts
Net interest income weaker than expected
Danske Bank shares drop 5%
Adds CEO quotes in paragraphs 4 and 8, 10, analyst comment in paragraphs 5-6, shares in paragraph 1 and 5
COPENHAGEN, May 3 (Reuters) -Danske Bank DANSKE.CO shares fell 5% on Friday after Denmark's biggest lender reported weaker than expected net interest income in the first quarter and left its full-year guidance unchanged.
Banks' interest income has benefited as central banks have cranked up rates in the past two years, providing support for Nordic banks' earnings. But with monetary policy set to ease later this year such revenue growth is likely to fade.
Danske's net interest income rose 14% in the quarter to 9.14 billion crowns compared with the same period a year ago, but came in below the 9.25 billion expected by analysts.
"Our net interest income is exactly in line with our expectations," CEO Carsten Egeriis told Reuters.
The bank's shares, which are up some 40% over the past year based on LSEG data, were down by 5.6% at 0923 GMT on Friday as the quarterly net interest income failed to impress investors, Sydbank analyst Mikkel Jensen told Reuters.
"Some are probably also disappointed that they don't lift their outlook ... and some had hoped they would lift their share buyback programme," he said.
Danske Bank kept its forecast for 2024 net profit unchanged at between 20 billion and 22 billion Danish crowns.
"It's still a mixed picture and there's a lot of uncertainty," CEO Egeriis said when asked why the bank did not raise its 2024 outlook.
Danske Bank said in February it had started to see a slight deterioration in customer credit quality towards the end of last year, but it said on Friday that while the trend had continued to be negative it had improved in the January to March period.
"The provisions are incredibly low but it's certainly not something I dare to hope to see for the rest of the year. So we're being cautious and we're being vigilant," Egeriis said.
First-quarter net profit rose to 5.6 billion Danish crowns ($806.21 million) from 5.2 billion a year earlier compared with the 5.6 billion average forecast by analysts in a poll provided by the bank.
($1 = 6.9461 Danish crowns)
Reporting by Stine Jacobsen, editing by Terje Solsvik and Jane Merriman
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