By Scott Kanowsky
Investing.com -- Shares in Danske Bank A/S (CSE: DANSKE ) fell toward the bottom of the pan-European STOXX 600 on Monday after the Danish lender lowered its full-year profit guidance due to "challenging" market conditions.
In a weekend statement, Danske Bank said it now expects to post annual net profit of between DKK 10B - DKK 12B, down from its initial guidance of DKK 13B - DKK 15B. The company cited a negative impact from a recent spike in interest rates and "extraordinary high volatility and lower liquidity" in Nordic fixed income markets.
Danske Bank also marginally revised its annual cost guidance upward to DKK 25.5B from DKK 25B, saying it has seen "sustained elevated" expenses related to compliance and anti-money laundering activities. Denmark's biggest bank has faced a spike in legal costs in the wake of a money laundering scandal at its now-shuttered Estonian branch in 2018.
"Despite this revision, I remain confident that on the basis of our strong franchise and diversified business model, we will continue to service customers effectively, while we continue to execute on our better bank agenda," said Danske Bank CEO Carsten Egeriis.
Meanwhile, second quarter net profit is expected to slide to DKK 1.7B from DKK 2.8B in the previous quarter, as strength at Danske Bank's core banking unit failed to offset both weakness at its insurance business and high costs related to the Estonia case.
Danske Bank said it will provide further comments on its outlook when its half-year results are released on July 22.
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