Danske Bank un­veils $1.3b share buy­back pro­gram

The Pak Banker - - COMPANIES/BOSS -

Den­mark's big­gest bank said it will buy back an­other 9 bil­lion kroner ($1.3 bil­lion) in shares -- nearly dou­ble its pre­vi­ous pro­gram -- af­ter ex­ceed­ing cap­i­tal tar­gets.

The pro­gram will run un­til Fe­bru­ary next year, the Copen­hagen-based bank said on Tues­day. Danske is rec­om­mend­ing a div­i­dend of 8 kroner per share, re­sult­ing in a pay­out ra­tio of 46 per­cent of prof­its. It fore­cast 2016 net profit in line with 2015's re­sults, be­fore good­will im­pair­ments.

Danske shares rose as much as 4.6 per­cent and traded 2.7 per­cent higher at 185.20 kroner as of 10:09 a.m. in Copen­hagen. The bank now has more cap­i­tal than it needs to ful­fill reg­u­la­tory re­quire­ments, Thomas Bor­gen, chief ex­ec­u­tive of­fi­cer, said at a press con­fer­ence af­ter the re­sults were pub­lished. Danske said net in­come, be­fore good­will im­pair­ments, rose 63 per­cent to 4.64 bil­lion kroner. Af­ter im­pair­ments, it lost 129 mil­lion kroner, com­pared with a loss of 6.33 bil­lion kroner a year ear­lier, when it took good­will im­pair­ment charges of 9.1 bil­lion kroner.

Net in­ter­est in­come fell to 5.31 bil­lion kroner from 5.74 bil­lion kroner, while to­tal in­come slipped to 11.19 bil­lion kroner from 11.27 bil­lion kroner, the bank said.

De­spite the fact that bank­ing in Swe­den and Den­mark is grap­pling with the fall­out of neg­a­tive in­ter­est rates, the Nordic re­gion still has "fan­tas­tic" po­ten­tial, Bor­gen said. Among ar­eas that look promis­ing is wealth man­age­ment, as the level of cus­tomer sav­ings grows, he said.

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