UPDATE 1-Danish banks miss forecast, Sydbank to cut 200 jobs

Wed Apr 30, 2014 6:10am EDT

Related Topics

* Denmark's Jyske Bank and Sydbank's Q1 below analyst forecasts

* Sydbank plans to cut workforce by 9 percent (Adds details, analyst comments)

By Ole Mikkelsen

COPENHAGEN, April 30 (Reuters) - Denmark's Jyske Bank and Sydbank missed analyst forecasts on Wednesday and Sydbank announced a cost cutting programme that included a nine percent reduction in its workforce.

Danish banks have been hit by bad loans since a property bubble burst in 2009 and problems in they key farming sector that left Denmark on the edge of recession in 2012 and 2013.

While some Danish banks have since reported lower impairment charges, Jyske Bank and Sydbank - Denmark's second and third largest banks by market capitalisation - have lagged the sector.

"This is what stands out as the common denominator of the two banks," analyst Jesper Christensen from Alm. Brand Markets said.

Jyske Bank fell 4.3 percent to 295.90 crowns underperforming the main Copenhagen blue-chips index, while Sydbank rose 3.6 percent to 141.80 Danish crowns by 1001 GMT, buoyed by news of a recovery plan.

Sydbank said it would increase profitability and reduce costs by cutting 200 of its 2,201 staff, which would lower annual costs by 200 million Danish crowns by the start of 2016.

Sydbank's pretax profit in the first quarter rose 80 percent year on year to 331 million Danish crowns ($61.3 million), below analysts' forecast of 345 million crowns.

"The new plan is a little weak on income but very aggressive on costs," analyst Christian Hede from Nordea wrote in a note to clients.

Profits were boosted by the 147 million Danish crowns it received for its stake in payment cart services company Nets, which was sold to Advent International, Bain Capital and ATP for 17 billion Danish crowns in March.

Jyske Bank also missed first-quarter pretax profit forecasts due to falling revenues and higher loan writedowns.

Unlike rival Sydbank, Jyske Bank has yet to present a plan to restore earnings, which were hit by higher losses in the small Spar Lolland bank that it took over in 2013.

Pretax profit dropped 25 percent to 418 million Danish crowns ($77.4 million), far short of analysts' forecast of 763 million crowns.

Profits fell despite booking around 200 million crowns from the sale of its stake in Nets, Chief Executive Anders Dam saying low interest rates had put net interest income under pressure.

($1 = 5.4020 Danish Crowns) (Additional reporting by Shida Chayesteh Editing by Jon Boyle)

FILED UNDER: