Danske Bank plans signficant investment in digital platforms
“We have decided to significantly increase our investments in our digital platforms, expert advisory services and sustainability, focusing on the areas where we see the best opportunities for profitable growth.”
Danske Bank has set new financial targets for 2026, reflecting its ambition to deliver a solid return on equity and reduce the cost to income. Denmark, Finland, Sweden, and Norway are the bank’s key markets.
The capital distribution policy remains unchanged, with a dividend pay-out of 40-60% of net profit. From 2023-2026, Danske Bank sees a total dividend potential of at least DKK 50 billion.
The bank highlighted two key targets for 2026:
- Return on equity: 13% with a CET1 ratio of above 16%
- Cost/income ratio: around 45%
Changing gears and increasing strategic and financial ambitions
To support the execution of the strategy, Danske Bank is significantly increasing its annual investments in its core capabilities within digital platforms, expert advisory services, and sustainability from DKK 3 billion to DKK 4 billion.
Combined with the reprioritization of other investments, this means that we more than double our investments in the strategic development of the bank.
Carsten Egeriis, CEO of Danske Bank, commented: “Danske Bank has during recent years made fundamental changes to refocus the bank, reduce our risk exposure, develop our organisation and accelerate our commercial momentum. We can see that the changes work and we are on a clear trajectory to exceed the original financial targets we set for 2023.
“We are changing gears and substantially increasing our strategic and financial ambitions. We continue to accelerate our commercial momentum in all parts of the business, underpinned by clear growth and profitability targets. At the same time, we have decided to significantly increase our investments in our digital platforms, expert advisory services and sustainability, focusing on the areas where we see the best opportunities for profitable growth.”
“With our new strategy, we set clear ambitions for Danske Bank to be a leading bank in a digital age. Serving a quarter of the personal customers in our home market, we will work hard to continue to earn their trust and to affirm our position as the bank of choice in Denmark.”
Stephan Engels, CFO of Danske Bank, said: “Danske Bank is determined to deliver shareholder value and with the good momentum we have in our business, we expect to have substantial future distribution potential for dividends. We intend to restart dividend payments when we announce our results for the first half of 2023, and from 2023 to 2026, we see a potential for a total dividend equivalent to the upper level of our dividend policy range, which remains unchanged at 40-60%.”