Danske Bank has raised its long-term earnings target and said it plans to divest its Norwegian retail business. The plan is part of a strategy to catch up with more profitable Nordic rivals.
Denmark’s largest lender now aims for a return on equity by 2026 of 13%. The previous goal was 8.5% to 9%, and a cost-income ratio of approximately 45%.
Shares in Danske Bank was up 4.5% in early trade on Wednesday, June 7. The shares are up nearly 13% this year overall.
“Danske Bank has during recent years made fundamental changes to refocus the bank, reduce our risk exposure, develop our organization and accelerate our commercial momentum,” said CEO Carsten Egeriis.
Over the last few years, Danske Bank has poured money into anti-money laundering measures and digital systems. Investments which left the lender lacking behind its Nordic competitors on earnings.
Rival Nordic banks Nordea and DNB both have long-term return on equity targets of more than 13%, while Swedbank has a goal of at least 15%.