Despite the prospect of some light appearing at the end of what has been a very dark tunnel; Danish banks are preparing themselves for another difficult year ahead. The country’s largest operator, Danske Bank, has recently released its accounts for last year and has predicted that 2010 will continue to be an uphill battle for the nation’s financial institutions.
While numbers for 2009 improved slightly on the disastrous performances of 2008 they still fall well behind the peak period prior to the global economic crisis. Danske Bank reported an after tax result of DKK 1.7 billion (USD 310 million) in 2009, a mild rise from the 2008 figure of DKK 1 billion (USD 180 million) but still a long way short of the DKK 15 billion (USD 2.75 billion) recorded in 2007.
“2010 is expected to be yet another challenging year for the financial sector, for Danske Bank and for the group’s customers. The latest macroeconomic development does, however, give hope for a gradual improvement in the business foundation,” the bank claimed in a press statement reported in Politiken.
Danske Bank though still anticipates ongoing major losses from bad loans. “Write-downs on loans are expected again this year to be at a high level, though lower than 2009,” the bank said. These cost Danske Bank an estimated DKK 25.7 billion (USD 4.7 billion) in 2009.
Danske Bank is expecting positive growth for Denmark’s GDP at around 1.7 percent this year tempered by a 0.5 percentage point interest rate rise. Together with anticipated ongoing unemployment, the bank predicts continued difficulties for those wishing to borrow money.