Danske Bank Expecting Huge Profit Rebound as Money Laundering Case Ends
Danske Bank expects a massive rebound in earnings this year, 2023, after the closure of the money laundering case.
Danske Bank expects a tremendous earning rebound this year after losing sums in the money laundering case of 2022. The bank will no longer be tracked for the money laundering scandal, as the case comes to an end.
According to the company compiled-poll, the largest lender in Denmark expects the net profit for 2023 in between the ranges of 15 to 17 billion Danish crowns ($2.2-2.5 Billion). The analysts have estimated the earnings to be 15.8 billion crowns on average.
In 2022, Danske Bank lost 5.1 billion crowns. ($1 = 6.7579 Danish crowns)
“To have a net loss on the bottom line is of course not satisfactory. However, it comes as a consequence of the conclusion of the Estonia matter, which marks an important turning point for Danske Bank,” the Chief Executive, Carsten Egeriis said.
The bank recorded a net profit of 4.2 billion crowns in the fourth quarter of 2022, roughly in line with the expected poll of 4.3 billion compiled by Danske.
The latest report from Danske is the first in over five years which is not overshadowed by the threats of massive fines by the US authorities over the lender’s participation in one of the world’s largest money laundering scandals.
In December 2022, Danske pleaded guilty to the bank fraud conspiracy, forfeiting $2 billion as part of the agreement with the US just to settle the investigation, involving billions of dollars in illegal payments via the Estonia branch.
Danske expects costs in 2023 to be higher than the average of 25 billion expected by the analysts.
“The costs are still too high and Danske Bank has more loss provisions than others. Danske Bank is heading in the right direction, but it is going slowly,” Nordnet analyst Per Hansen said in a note.
As a result of a weaker macroeconomic outlook, Danske expects loan impairment charges of up to $3 billion.
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