Danske Bank A/S

Danske Bank said Q2 net profit was DKK 6.2 billion and return on equity was 14.8%. Core income was up 7% year over year, fee income was up 13% year over year, and first-half NII was up 3% year over year. The Q2 cost-income ratio was 43%, first-half cost-income ratio was 44.4%, and impairment charges were below cycle at DKK 0.3 billion in Q2. CET1 ratio ended Q2 at 17%, with quarterly risk exposure amounts up DKK 11 billion to DKK 848 billion. For 2026, management raised net profit guidance to DKK 23 billion-DKK 25 billion from DKK 22 billion-DKK 24 billion, expects total income somewhat above DKK 59 billion, NII slightly above DKK 38 billion, costs of DKK 26 billion-DKK 26.5 billion, a cost-income ratio below 45%, and loan impairment charges around DKK 1 billion.

Carsten Egeriis framed the quarter as another strong period with broad-based commercial momentum across the Nordic franchise, led by solid lending growth, deposits, and asset management inflows. He emphasized that corporate lending grew 6% year over year and that asset management was up 24% since last year with nearly DKK 15 billion of Q2 net inflows. His tone was constructive and confident, stressing profitable growth, disciplined costs, strong credit quality, and continued investment in Forward 2028, including AI and technology.

Cecile Hillary highlighted resilient core income, with NII up 3% year over year in the first half and fee income up 13% year over year in Q2. She said the NII upgrade reflects stronger volume growth, recent and expected rate hikes, and a structural hedge that remained broadly stable at around DKK 190 billion, while full-year NII is now expected to be slightly above DKK 38 billion. She also reiterated 2026 operating expense guidance of DKK 26 billion-DKK 26.5 billion, said the Q2 cost-income ratio was 43% and expected full-year C/I below 45%, and noted Q2 impairment charges of DKK 0.3 billion with full-year impairments still around DKK 1 billion. On capital, she pointed to CET1 of 17%, about 240 bps of headroom, and expected DKK 3.5 billion of Pillar 2 relief before year-end 2026.

Analysts focused on what is driving the guidance upgrade, NII sustainability, margin pressure, the structural hedge, trading income, and M&A priorities. Management said the higher 2026 income outlook is driven by core banking income, specifically both NII and fee income, and that NII should trend gradually higher through the second half with Q4 slightly above Q3. They also said margins are relatively stable despite a competitive Nordic market, that the hedge still provides a lift versus 2025 even if it tails off versus current rates, and that any M&A interest would be Nordic-only with no concrete deals to announce. On trading income, management said the business is now focused on supporting customer activity rather than pursuing higher-risk inventory returns, which makes an annualized DKK 3 billion still directionally right but likely a bit high.