Danske Bank UK financial results - nine months to end September 2017

Danske Bank UK financial results – Delivering for customers
  • Lending balances 8% higher year-on-year
  • Total income reduced year-on-year, driven by lower interest rates
  • Expenses up 9% year-on-year, including increased investment
  • Profit before tax of £77.4m, down from £98.1m in Q3 2016
​(GBP millions)
H1,2017 H1,2016 Index
Total income
Profit before loan impairment charges
Loan impairment net recovery /(charges)
Profit before tax 77.4 98.1 79
Loans (end of period)
Deposits (end of period)

Danske Bank in Northern Ireland reports a profit before tax of £77.4m for the 9 months to the end of September 2017.

Customer activity levels are high and the business continues to perform well as evidenced by strong growth in both customer lending, up 8% year-on-year, and deposit volumes.

The reduction in profit reflects the adverse impact of the lower Bank of England Base Rate on our income, as well as higher expenses given operational restructuring, increased pension costs and the implementation of our investment programme - driving competitiveness, efficiency and the delivery of new solutions for customers.

Danske Bank reports a net credit in loan impairments of £18.1m, down from £23.4m for the same period in 2016. The credit reflects a continuing trend of improvement in property values and in the trading results of the Bank’s business customers.

Danske Bank continues to have a strong capacity to support new lending as demonstrated by a loan to deposit ratio of 73% at 30 September 2017.

Commenting on the results, Danske Bank UK CEO Kevin Kingston, said:

“We continue to make good progress, resulting in a £77.4 million profit before tax for the first nine months of 2017. Despite lower interest rates, the underlying performance of the Bank is strong, with lending up 8% year-on-year.
“With regards to support for our corporate customers, lending is significantly up - 30% higher than over the same period in 2016. In general terms, we are seeing importing companies managing their risk in the face of rising inflation, while exporting companies are continuing to take advantage of current exchange rates.
“We backed a number of significant investments by our corporate customers in quarter three, including the provision of a major refinancing deal with the Herbert Group, facilitating their acquisition of 27 new KFC restaurant outlets, which is set to create around 100 new local jobs. Other significant corporate investments in the quarter, included our support for the commercial redevelopment of The Weaving Works site in Belfast, which is being transformed into a five storey Grade A office building, and also our backing of Toomebridge-based kitchen component manufacturer Uform with the multi-million pound expansion of its premises.
“In Personal Banking it has been a record nine months for our mortgage business, with new mortgage lending also up 30% year-on-year. Our mortgage market share continues to markedly improve, and our offering has been further enhanced through the provision of a new Danske Bank digital system for the third party broker network. This investment has made brokers’ online interactions with our products slicker, reducing their workload and in turn improving customer experience. We have also expanded our own mortgage consultant team, making this service more readily available – face to face in our branch network, over the phone or via video link if customers prefer.
“Another example of ongoing investment has been our focus on upgrading key branches, making them more digitally interactive and conducive to good customer experiences. In recent weeks, significant upgrades have been completed at our Portadown and Dungannon branches – with renovations at our Coleraine, Lisburn and Newtownards branches set to be complete by the end of the year”.

After a strategic review, in July 2017 Danske Bank announced the sale of its discretionary portfolio management wealth business to Davy Private Clients UK (Davy). The deal involved the transfer of the management of more than 1,100 Danske Bank customer investment portfolios. The management of these investment portfolios moved on 31 October 2017. The change in approach to wealth management allows Danske Bank to direct more investment into its core personal and business banking operations, whilst offering a wealth management proposition to customers through external partners. Proceeds from the sale will be reflected in Danske Bank’s quarter four financial results.

A number of enhancements to Danske Bank’s digital services for both business and personal customers are in plan for the next quarter, with work in this area having been strengthened through the recent appointment of a Chief Digital Officer.

For more information about Danske Bank Group’s financial statements, please go to Danske Bank Financial reports.


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