Danske Bank (Buy, TP: DKK100.00) - Set for sequentially lower loan losses
While we expect yet another weak quarter, with Q2 EPS of DKK1.0, the focus should be on comments on the cost plan and any elements with the potential to improve visibility on its 2023 roadmap. We have lowered our 2020e loan losses to reflect a gradual improvement in asset quality, and expect a material reduction in loan-loss provisions QOQ. In our view, the valuation reflects the limited belief in a profitability recovery, underpinned by the 2020e P/B of 0.5x. We reiterate our BUY and DKK100 target price.Danske Bank is a diversified financial services firm. Through its subsidiaries, Co.'s activities include the provision of banking, mortgage finance, insurance, real estate brokerage, asset masnagement and trading in fixed income products, foreign exchange and equities. Co. operates international retail bank operations in 15 countries, with an emphasis in the Nordic region. Co. divides its operations into five segments: Banking Activities, Danske Markets, Danske Capital, Danica Pension and Other Activities. As of Dec 31 2011, Co. had total assets of DKK3,424,403,000,000 and total deposits of DKK848,994,000,000.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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