* Q1 earnings lifted by fall in costs and writedowns
* Pretax 3.63 bln Danish crowns vs f'cast 3.5 billion
* 2014 net seen at higher end of 9 bln-12 bln guidance
(Adds details, comments from CEO, share movement)
By Ole Mikkelsen
COPENHAGEN, May 1 Danske Bank raised
its full-year profit guidance on Thursday after it posted its
highest quarterly earnings since the global financial crisis,
beating expectations thanks to cost cuts and lower writedowns on
The first-quarter results contrasted with figures released
the day before from domestic rivals Jyske Bank and
Sydbank which missed analyst forecasts.
Danske, Denmark's biggest listed bank, said it expected 2014
net profit to be at the higher end of a previously forecast
range of between 9 billion crowns and 12 billion crowns, the
guidance given in February.
Its pretax profit for the first three months of 2014 rose 64
percent to 3.63 billion Danish crowns ($674.3 million),
year-on-year, beating the average forecast of 3.5 billion in a
Reuters poll of analysts.
It was the best quarterly total since the second quarter of
2008, just before the bank was hit by the financial and economic
crisis that began in the third quarter that year.
It marks a promising start to the year for Danske, which
lost around 110,000 customers in Denmark in 2013 after it was
widely pilloried on social media over an advertising campaign
which used the image of an "Occupy" anti-capitalist protester to
promote the bank.
The lender managed to cut its total costs by 6 percent from
a year ago - while Sydbank reported a 7 percent increase and
Jyske Bank's costs were largely flat.
Danske's costs fell 18 percent to 5.4 billion crowns in the
first quarter following a savings drive launched in the fourth
quarter of 2013 which aims to reduce costs to about 23 billion
crowns for 2014 from 24.3 billion last year.
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.
However Danske's loan impairment charges fell 55 per cent in
the first quarter compared with the same period last year and
were 30 percent lower than the fourth quarter of 2013.
Analyst Jesper Christensen at Alm. Brand also noted an
improvement in the bank's Irish unit.
"Danske Bank's core division is improving, but their
non-core division in Ireland is also better than expected. It is
a result of a generally better Irish economy, and better
conditions for selling Danske Bank's Irish (property)
portfolio," he said.
After 13 years with huge losses on its Irish unit the bank
decided last November to close down the parts of the business
dealing with retail customers and small and medium size
The bank stuck to its 2015 target for a return of equity
after tax of 9 percent.
Danske said limited growth in the Danish economy - the
central banks and most economists expect it to grow by 1.4
percent this year - meant it would be tough to increase revenue.
"That's why it's crucial for us to continue to be diligent
on costs and continue to develop alternative products and
solutions for clients," Chief Executive Thomas F. Borgen told
Reuters in a phone interview.
With a market share of around 30 percent the bank is the
sector leader. "We are very comfortable with that market share.
We do not see a need to grow it," Borgen said.
He added Danske had a good platform for further growth in
Norway and Sweden. He dismissed media speculation of a
divestment of its units in the two countries.
The bank's shares were up 1.0 percent at 153.50 Danish
crowns at 1040 GMT, outperforming the main Copenhagen blue-chip
($1 = 5.3831 Danish Crowns)
(Additional reporting by Annabella Pultz Nielsen; Editing by