Danske Bank profit hit by higher costs, low rates

Tallinn: Danske Bank’s second quarter pre-tax profit came in below expectations on Thursday, hit by low interest rates and higher costs associated with compliance following a money-laundering scandal at its Estonian branch.

Second quarter pre-tax profits fell to 4.76 billion Danish crowns ($716.6 million) from 5.49 billions the previous year, missing a mean forecast of 5.06 billion by analysts according to Refinitiv data.

“In the first half of 2019, we faced a challenging rates and margin environment as well as increased costs for compliance measures. But we also saw continued growth in lending and solid credit quality,” Danske’s newly-appointed chief executive Chris Vogelzang said on Thursday.

Danske Bank, whose shares have dropped more than 40 per cent over the last year, cut its profit outlook on July 8. — Reuters