OREANDA-NEWS. May 14, 2013. Net profit: EUR 13.4 million (2012: EUR 21.3 million)

Profit before loan impairment charges: EUR 9.0 million (EUR 9.1 million)

Reversals of loan impairment charges: EUR 4.4 million (EUR 12.2 million)

Cost/income ratio: 43.1% (42.1%)

Quarterly change in deposits: EUR +26 million

Quarterly change in loans: EUR -27 million

Loan/deposit ratio: 0.66 (0.83)

Customer base: 119,500

In addition to banking, Danske Bank operates in Estonia in the areas of asset management (Danske Capital) and financial markets (Danske Bank Markets).

Aivar Rehe, the CEO of Danske Bank, comments on the financial results for Q1 2013 as follows:
“The outlook and growth forecasts for the Estonian economy provide assur-ance that employment will remain stable. I expect the growth trend to continue.

“Both companies and people prefer to save and take a modest approach to risk-taking.

“Danske Bank will continue to carry out its strategy, whose key words are first-class customer service, high liquidity, thoroughly considered risk management and stable financial activities.

“The Bank managed to keep its operating income and expenses at the same levels as in the same period of the preceding year. Danske Bank manages its allocated capital very efficiently: ROE in Q1 before loan impairment charges was 54.1% (2012: 45.5%).

“Danske Bank’s liquidity is very strong. The surplus of deposits to loans re-mains strong. Deposits exceeded loans by EUR 578 million at the end of Q1 2013. The loan/deposit ratio was 66% (83%). Danske Bank has the best deposit/loan ratio of all large banks operating in Estonia.
“The efficiency of the Bank’s activities remained high. The cost/income ratio in Q1 2013 was 43.1% (42.1%).

“Total income for Q1 was EUR 15.8 million (EUR 15.7 million ), and expenses amounted to EUR 6.8 million (EUR 6.6 million).

“The total loan portfolio decreased, but the speed of the decline slowed. The total amount of loans and leasing at the end of Q1 was EUR 1.14 billion (EUR 1.31 billion).

“Danske Bank holds a strong position on the deposit market. Deposits in-creased about 10% to EUR 1.7 billion (EUR 1.58 billion).

“Danske Bank Estonia observes the conservative loan portfolio assessment policy of the Danske Bank Group but did not create additional provisions dur-ing the reporting period, and the quality of the loan portfolio improved signifi-cantly.

“The ratio of the loan impairment reserve to the loan portfolio at the end of Q1 2013 was 5.5% (7.5%), which is the most conservative among large banks in Estonia.

“Customers used the bank’s settlement services actively. In Q1 2013, they made 8.9% more international payments than during the same period in 2012.

“Danske Bank introduced new standards in corporate banking in the first quarter of this year. One of them is Danske Navigator, an analytical tool that helps entrepreneurs forecast the success of their company’s strategy. Another is our capital deposit, which changes the current standards on the market and clearly shows that the ordinary rules of the business world – that higher returns can be earned only at higher risk – are no longer valid. Our new standard for card payments entails determining charges according to the size of the company.

“Danske Bank introduced an innovative application for its private banking clients in Q1. Danske Bank and Tetralog Solutions AG are offering a techno-logical solution for investment portfolio optimisation and risk management that is unique in Estonia. This software combines the advice of a specialist with technical analysis, and it is based on the methodology of the Nobel Prize winner Harry Markowitz.

“At the end of 2012, the market research company Dive conducted its latest Dive Top3 survey of customer service at Baltic banks and their compliance with generally accepted service standards. It used the mystery shopping method on seven of the largest banks in Estonia, nine in Latvia and ten in Lithuania. Danske Bank was named the bank with the best service in all three countries. It is the first time that one banking group came out on top in all three Baltic states at the same time.”