Danske Bank expects a one billion kroner fall in profits for 2019. The Danish bank confirmed the expected loss on July 8 in a stock exchange announcement.
An anticipated drop
The fall in profits does not come as a surprise due to the bank’s involvement in what is probably the biggest scandal in Danish banking history.
“Many of the reasons for this downward adjustment are well-known: pressure on the interest margin, low activity, reduced earnings on trade, and high costs. They have been pushed more than they had expected,” explained Mikkel Emil Jensen, a stock analyst at Sydbank.
Heavy investments and compensation costs
Meanwhile, the bank had to inject significant capital into the areas of IT, digitalisation and recruitment.
The bank was well aware of the costs that would be incurred, but the pressure is now more severe than expected, explained a DR analysis.
Following last month’s Flexinvest scandal, Danske Bank had promised to pay 87,000 people the necessary compensation, which is an additional burden.
“Despite downward adjustments and market challenges, the bank is still well-run,” contended the DR analysis.
Sweetdeal reprimanded for misleading marketing
The consumer ombudsman has accused the deal website Sweetdeal of misleading its customers by showcasing a lower initial price for hotel stays and then raising it at the checkout page. Various add-ons, which are previously not disclosed, raise the price significantly. “Marketing a price without revealing the various supplements is misleading marketing,” ruled the consumer ombudsman. The practice is also unfair to other competitors in the market who project the correct prices.
Danish Crown lays off 175 in Horsens
The Danish Crown meat processing company laid off 175 employees at its Horsens slaughterhouse in June due to a decrease in its pig supply – from 100,000 to 85,000 per week. “We have experienced a decrease of about 5 percent [in pigs] compared to last year. It is now necessary to adapt to the capacity,” confirmed the Danish Crown production director. Fewer pigs are available to be slaughtered due to last year’s summer drought.
Total fined for polluting the North Sea
Denmark has fined the French energy giant Total 500,000 kroner for releasing harmful chemicals into the North Sea from the oil platforms of Maersk Oil, a company it bought in 2017, reports DR. The news has been confirmed by Total and the Danish police. “The lack of compliance is both regrettable and unacceptable,” said a Total representative. Maersk Oil was also held liable in 2019 for illegally discharging chemicals into the sea, confirmed the Danish Environmental Protection Agency.
Falck settles to pay 152.5 million in compensation
The emergency and healthcare assistance giant Falck has entered into a settlement with the Dutch ambulance company Bios relating to how it in 2014 exploited its position in the market to push the competitor into bankruptcy. A compensation sum of 1.1525 billion kroner has been calculated by Region Syddanmark. “Falck acted in 2014-15 in a way that was unacceptable and which we will never repeat. We have accepted the authorities’ order,” said Jakob Riis, the chief executive of Falck.
Denmark becomes the only developed country to have negative bond yields
In 2019, Denmark has become the first developed country to face below zero yields for all of its government’s bonds. At an auction on July 3, the Nordic nation sold 10-year-old bonds worth 1.72 billion kroner at a -0.32 percent interest rate, European Central Bank informed. Moreover, the government’s 20-year-old bonds yielded down at -0.03 percent in the same week. Many other European nations were also subjected to the sharp fall in bond yields. “This certainly shows the continuing global economic challenges. It’s Danish milestone on a slightly sad background,” tweeted Thorsten Larsen, the head of government debt management at the central bank. “It also shows how Denmark is a very attractive investor destination.”
Ice cream giant Mejerigaarden appoints a new CEO
A new CEO, Kim Gade Pedersen, is set to manage the ice cream giant Mejerigaarden, replacing Christian Brink, who stepped down at the end of June. Pedersen previously served as the company’s CFO and partner to Brink. “The six years at Mejerigaarden end now. I am very pleased to deliver a business that is in a much better condition than it was when I arrived in September 2013,” Brink wrote on LinkedIn.
DK stocks slash down
Stocks in Denmark crashed on Monday as healthcare, financial and real estate sectors suffered significant losses. The OMX Copenhagen 20 fell by 0.29 percent – with Lundbeck, Danske Bank and Genmab the worst performers. However, Pandora, Carlsberg and Oersted experienced a rise in share prices.