* Board proposes first dividend since 2008
* The crisis is over, says CEO
* Weak trading and restructuring costs weigh on results
* Q4 pretax profit up 27 pct
* Shares up 3.7 pct
(Adds CEO, analyst, details, background, shares)
By Teis Jensen
COPENHAGEN, Feb 6 Danske Bank is to
pay its first dividend since 2008, signalling that its
accelerated restructuring is helping the bank to recover from
the financial crisis.
Burst property bubbles in Denmark and Ireland had left
Danske Bank lagging behind its Nordic peers, with results
stagnating until CEO Eivind Kolding was ousted in September and
his replacement Thomas Borgen decided to shut down a large part
of the Irish business and cut more jobs than the 3,000 planned
Though weak trading income and restructuring costs weighed
on fourth-quarter results announced on Thursday, progress in
core banking helped it to lift pretax profit by 27 percent and
announce a better than forecast dividend of 2 crowns per share.
"The financial and economic crisis is over and done with for
Danske Bank," chief executive Thomas Borgen told reporters.
He acknowledged that results remain unsatisfactory, with
customer numbers still falling after a failed advertising
campaign in the autumn of 2012, which further damaged the bank's
already bruised image after the crisis. But Borgen pointed out
that the decline had slowed in the fourth quarter.
The proposed dividend was higher than the 1.27 crown
consensus forecast in a Reuters poll, but Danske's payout ratio
of 28 percent remains lower than its long-term target of 40
percent and well short of the average of 66 percent of earnings
paid out by the largest Swedish banks.
"This is just a start of our ambition of reaching 40
percent, but it is also a signal that we are comfortable with
our current position," Borgen said.
The 27 percent rise in fourth-quarter pretax profit to 2.86
billion Danish crowns ($519 million) missed the average forecast
of 2.92 billion crowns in a Reuters poll, but net interest and
fee income were better than expected.
Loan impairment charges also beat forecasts, falling to 845
million crowns from 1.42 billion a year earlier, against
analysts' expectations of 1.09 billion crowns.
The bank said it expected net profit of between 9 billion
crowns and 12 billion crowns in 2014, largely in line with
consensus expectations, and kept its long-term guidance of a
return on equity (ROE) of 9 percent in 2015.
Its ROE rose to 5.3 percent in the fourth quarter, from 3.5
percent in the same period last year, but still only about half
of Nordic peer Nordea's 10.5 percent in the fourth
quarter of 2013.
"Danske Bank still needs to work hard on its profitability
to close the gap to its Swedish competitors," Sydbank analyst
Bjorn Schwarz said.
Danske Bank's shares have been performing almost in line
with the STXE 600 European banking index over the past
six months, while its Swedish rivals have outperformed.
Shares in Danske Bank were up 3.7 percent by 1205 GMT,
against a 1.2 percent rise for the sector index.
(Additional reporting by Ole Mikkelsen, Stine Jacobsen and
Annabella Nielsen; Editing by Tom Pfeiffer and David Goodman)