Danske Bank (Buy, TP: DKK233.00) - Closing in on excess capital release
Supported by solid core revenues, cost-cutting initiatives, and low loan losses, we expect Danske Bank to report a Q3 ROE of 12.0%. We have lowered our 2025–2026e EPS by ~3%, driven by lower NII, and cut our target price to DKK233 (240). That said, we continue to expect generous capital distributions, and with the stock trading at a 2025e P/E of 7.4x and a ~12% discount to 2024e BV, we continue to find the valuation attractive. Thus, we reiterate our BUY.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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