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Danske Bank A/S (DNKEY)
OTHER OTC:DNKEY
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Danske Bank
(OTC:DNKEY)
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Rating:73Outperform
Price Target:
$30.00
â–²(22.20% Upside)
Action:ReiteratedDate:02/08/26
The score is driven by strong profitability and a positive, shareholder-friendly outlook from the latest earnings call, supported by an attractive valuation (moderate P/E and high dividend yield). Offsetting these positives are balance-sheet leverage and uneven cash-flow history, while technicals are bullish but appear overbought.
Positive Factors
Strong profitability
Danske’s 2025 net income (DKK22.2bn), ~23% net margin and low‑teens ROE show structurally improved profitability versus prior loss years. Durable margins provide a buffer to absorb cyclical shocks, fund digital investments, and support consistent shareholder distributions over the medium term.
Large, growing asset‑management franchise
AUM exceeding DKK1tn and record fee income (>DKK15bn) reflect a scalable, sticky asset‑management business. Recurring fee revenues diversify income away from interest and trading cycles, improving revenue stability, client retention and long‑term margin durability.
Strong capital position and shareholder returns
A fully phased CET1 of 17.6% with an explicit >16% target, coupled with a full dividend and a DKK4.5bn buyback, indicates robust capital generation. This regulatory cushion supports organic growth, buffers against shocks and allows disciplined capital returns without jeopardising solvency.
Negative Factors
High balance‑sheet leverage
Debt‑to‑equity near 6.3x and sizable absolute debt increase sensitivity to funding conditions and market stress. High leverage magnifies asset‑quality and interest‑rate risks, constrains strategic flexibility and elevates the impact of adverse macro or sector shocks on solvency and earnings volatility.
Revenue / top‑line volatility
Material swings in revenue (including a negative recent growth reading) reduce predictability of earnings and cash flow. Dependence on variable components (other income, trading and insurance model impacts) and slower mass retail mortgage recovery make long‑term revenue trends less reliable.
Inconsistent cash generation
Operating and free cash flow have shown large year‑to‑year swings, including a deeply negative 2024. This inconsistency complicates sustainable funding of dividends and buybacks, increases reliance on capital issuance or asset sales in weak years, and raises execution risk.
Danske Bank (DNKEY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$43.55B
Dividend Yield8.23%
Average Volume (3M)568.00
Price to Earnings (P/E)12.7
Beta (1Y)0.64
Revenue Growth-13.47%
EPS Growth1.47%
CountryUS
Employees20,046
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.61
Shares Outstanding1,669,990,200
10 Day Avg. Volume0
30 Day Avg. Volume568
Financial Highlights & Ratios
PEG Ratio-3.08
Price to Book (P/B)1.44
Price to Sales (P/S)2.75
P/FCF Ratio7.90
Enterprise Value/Market Cap27.35
Enterprise Value/Revenue12.51
Enterprise Value/Gross Profit20.94
Enterprise Value/Ebitda38.90
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Danske Bank Business Overview & Revenue Model
Company DescriptionDanske Bank A/S provides various banking products and services to corporate, institutional, and international clients. The company offers corporate finance services, investment and debt capital markets products, merger and acquisition advisory services, equity and loan capital markets services, international payments, cash management, credit transfer, and supply chain and trade finance services. It also provides solutions for sustainable finance, derivatives, fixed income, foreign exchange, equities trading, cash flow forecast, collection services, financial platform, export finance, letter of credit, liquidity management, factoring, working capital management, guarantees, and in-house bank. In addition, it offers custody, depositary, data management, post-trade, bank and middle office, collateral management, and derivatives clearing services. The company has operations in Denmark, Finland, Sweden, Norway, the United Kingdom, and internationally. Danske Bank A/S was founded in 1871 and is headquartered in Copenhagen, Denmark.
How the Company Makes MoneyDanske Bank generates revenue through various streams, including interest income from loans and mortgages, fees from banking services, and income from investment activities. The primary source of revenue is net interest income, which arises from the difference between the interest earned on loans and the interest paid on deposits. Additionally, the bank earns fees and commissions from its retail and corporate banking services, such as account maintenance fees, transaction fees, and advisory services. Danske Bank also benefits from its asset management division, which charges management fees on investment funds. Strategic partnerships with fintech companies and other financial institutions enhance its service offerings, contributing to customer retention and growth in market share. Overall, the bank's diversified portfolio of products and services allows it to adapt to changing market conditions and customer needs, driving sustainable earnings.
Danske Bank Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: record fee income, strong asset management performance, robust commercial momentum across corporate and institutional segments, stable NII despite rate cuts, low impairments and disciplined costs in line with guidance. Challenges were noted but largely manageable: a small YoY net profit dip, some one-off Q4 effects (tax and insurance model recalibration), seasonal cost pressures and remaining PMA buffers. Management provided constructive 2026 guidance and clear capital and capital distribution plans, while emphasizing continued investments in digital and GenAI for productivity gains.Q4-2025 Updates
Positive Updates
Record Profit Before Impairments and Strong Full-Year Net Profit
Profit before impairment charges was the best ever for Danske Bank in 2025. Net profit for the year was DKK 23.0 billion (down from DKK 23.6 billion in 2024), delivering a robust return on equity of 13.3%.
Full Distribution of 2025 Earnings and Shareholder Returns
Management proposed to distribute the full 2025 net profit: ordinary dividend equal to 60% of earnings, an extraordinary dividend equal to 20%, total dividend per share of DKK 22.7, plus a new DKK 4.5 billion share buyback program (total payout ratio of 100%).
Net Interest Income (NII) Stability and Quarter-on-Quarter Improvement
NII for the full year was unchanged versus 2024 (mitigated lower rates via higher volumes, improved lending margins and structural hedge). Relative to the prior quarter, NII increased more than 4% (driven in part by a DKK 200 million tax-related effect; excluding that effect NII was up ~2% QoQ).
Record Fee Income and Asset Management Outperformance
Fee income reached a record high of over DKK 15 billion in 2025, up 3% year-on-year. Q4 fee income rose 39% quarter-on-quarter, led by record-high performance fees. Performance fees were DKK 0.9 billion (up 27% year-on-year) and performance fees in Q4 were ~40% higher than Q4 2024.
Assets Under Management and Investment Momentum
AUM ended the year at an all-time high of over DKK 1 trillion. In LC&I, assets under management grew 16% year-on-year, supported by strong net inflows and new institutional mandates.
Commercial Momentum and Lending Growth Across Segments
Large Corporate & Institutions (LC&I) corporate lending grew ~14% year-on-year (supporting a 15% increase in NII in that business). Business customers saw lending and deposit volumes up 5% year-on-year and total income up 8% YoY. Personal customers saw lending up 1% and deposits up 5% YoY; Danske Bolig Fri lending grew 44% YoY to >DKK 70 billion.
Controlled Costs in Line With Guidance
Operating expenses for 2025 were in line with guidance at DKK 25.85 billion (within the guidance of up to DKK 26 billion). Cost/income ratio improved slightly to 45.5% and management expects expenses of DKK 26.0–26.5 billion for 2026 with a target cost/income ratio around 45%.
Strong Asset Quality and Low Impairments
Full-year loan impairment charges were DKK 294 million (around 2 basis points of the loan portfolio). Q4 impairment charges were very low at DKK 35 million, and Q4 included net releases from post-model adjustments of DKK 300 million reflecting improved visibility in certain sectors.
Clear 2026 Financial Outlook
Management expects 2026 net profit between DKK 22 billion and DKK 24 billion, total income around DKK 58 billion (driven by growing core banking income), expenses DKK 26–26.5 billion, cost/income ratio ~45% and loan impairment charges around DKK 1 billion (below normalized level).
Negative Updates
Slight Decline in Reported Net Profit Year-on-Year
Net profit declined from DKK 23.6 billion in 2024 to DKK 23.0 billion in 2025 (approximately a 2.5% decrease), driven mainly by the absence of the net reversals in loan impairment charges seen in 2024 (2025 had a more normalized but still low level of impairment charges).
Q4 One-Offs and Volatility in Other Income
Q4 benefited from a DKK 200 million tax-related contribution to other income which is a one-off; treasury and derivative valuation effects also caused quarter-to-quarter volatility in other income. Management cautioned that the tax effect should not be assumed recurring.
Insurance Income Impacted by Model Recalibration
Income from insurance activities was negatively impacted in Q4 by a model recalibration for the health and accident business, producing a net negative effect of DKK 200 million (partly due to the Danish FSA inspection and parameter updates).
Seasonal and Transformation-Related Cost Pressure in Q4
Q4 operating expenses rose due to seasonal items including performance compensation, severance costs and elevated digital/tech transformation investments; management expects 2026 to be another investment-heavy year and provided a cost range (DKK 26.0–26.5 billion) rather than a single figure.
Trading Income Softness in Q4
Net trading income declined in Q4 compared with earlier quarters due to seasonally lower customer activity in fixed income markets, despite an overall stable trading performance for the year (headline trading up 8% for 2025).
Personal (Retail/Mortgage) Growth Lags
While higher-end personal/private banking showed strong momentum, mass retail mortgage growth remains subdued overall (total lending stable year-on-year), and management noted it may take more time to rebuild broader retail flows and margins in certain mortgage pockets.
Post-Model Adjustments (PMAs) and Remaining Buffers
Although Q4 included net PMA releases (DKK 300 million), management highlighted that PMA buffers remain in place for geopolitical and sector risks and will be reviewed sector-by-sector. PMAs have been reduced over time but remain a consideration for provisioning policy and could lead to variability in impairment outcomes.
Capital and Regulatory Considerations
Fully phased-in CET1 ratio was 17.6% at end-Q4 (including adoption of the new conglomerate directive and full deduction for distributions). While this is strong, management deferred a detailed capital glide-path update until the Q1 strategy update — leaving some near-term uncertainty on how excess capital will be managed beyond the announced 2025 distributions.
Company Guidance
Guidance for 2026: Danske expects total income of around DKK 58 billion, NII to grow (supported by structural hedge — notional ~DKK 180 billion — and a loan hedge ~DKK 200 billion), operating expenses of DKK 26.0–26.5 billion with a cost‑to‑income ratio of about 45%, loan impairment charges of around DKK 1 billion (below normalized levels and not predicated on significant PMA releases), and net profit of DKK 22–24 billion. The bank reiterates a capital target of above 16% CET1 (fully phased‑in CET1 was 17.6% at end‑Q4) and confirmed distribution of 2025 earnings: ordinary dividend 60%, extraordinary 20%, a DKK 4.5 billion buyback (total dividend per share DKK 22.7; payout ratio 100%). For context, 2025 results included net profit DKK 23 billion (RoE 13.3%), Q4 net profit DKK 6.3 billion, fee income >DKK 15 billion (performance fees DKK 0.9 billion; AUM >DKK 1 trillion), full‑year impairments DKK 294 million (2 bps), Q4 impairments DKK 35 million and Q4 PMA net releases of DKK 300 million; 2025 operating expenses were DKK 25.85 billion (cost‑to‑income 45.5%).Danske Bank Financial Statement Overview
Summary
Profitability is strong (2025 net income 22.2B, ~23% net margin, low-teens RoE), but the profile is constrained by notable revenue volatility, high leverage (debt-to-equity ~6.3x), and uneven cash flow with large swings including a deeply negative 2024.Income Statement
Profitability is strong and has improved materially versus the 2022 loss year: 2025 net income was 22.2B with a healthy ~23% net margin and ~31% EBIT margin, broadly consistent with 2023’s solid profitability profile. The main weakness is top-line volatility—revenue swung sharply (2023 rebound, then modest declines in 2024–2025), which points to a less predictable earnings backdrop despite good margins.78
Positive
Balance Sheet
The balance sheet shows solid capital generation with equity rising to 181.2B in 2025 and return on equity in the low-teens (~12–13% in 2023–2025). The key constraint is high leverage typical of banks but still notable: debt-to-equity runs ~6.3x, with total debt ~1.14T against ~3.75T of assets, leaving the company more exposed to funding conditions and asset-quality swings than a lower-leverage peer.62
Positive
Cash Flow
Cash generation is inconsistent year-to-year: operating and free cash flow were very strong in 2023 and positive again in 2025, but deeply negative in 2024 (and also negative in 2021–2022). On the positive side, when cash flow is positive it aligns well with earnings (free cash flow roughly matches net income in 2023 and 2025), but the large swings reduce confidence in the stability of underlying cash generation.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 95.17B | 56.41B | 94.17B | 68.69B | 78.26B |
| Gross Profit | 56.84B | 56.41B | 53.09B | 44.05B | 47.36B |
| EBITDA | 30.52B | 0.00 | 30.93B | 3.01B | 21.45B |
| Net Income | 23.04B | 23.63B | 21.26B | -4.58B | 12.92B |
Balance Sheet | |||||
| Total Assets | 3.75T | 3.72T | 3.73T | 3.79T | 3.94T |
| Cash, Cash Equivalents and Short-Term Investments | 225.46B | 189.02B | 277.85B | 198.46B | 326.81B |
| Total Debt | 1.14T | 1.13T | 1.10T | 1.05T | 1.17T |
| Total Liabilities | 3.57T | 3.54T | 3.55T | 3.63T | 3.76T |
| Stockholders Equity | 181.16B | 175.69B | 175.74B | 160.28B | 176.70B |
Cash Flow | |||||
| Free Cash Flow | 33.13B | -94.73B | 140.12B | -110.74B | -39.13B |
| Operating Cash Flow | 33.46B | -92.47B | 141.50B | -109.36B | -37.56B |
| Investing Cash Flow | -2.02B | -2.23B | -1.33B | 650.00M | -1.56B |
| Financing Cash Flow | -13.10B | -30.68B | -7.89B | -18.44B | -1.40B |
Danske Bank Technical Analysis
Positive
24.55
Price Trends
25.33
Positive
23.71
Positive
21.94
Positive
Market Momentum
0.49
Positive
60.76
Neutral
64.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNKEY, the sentiment is Positive. The current price of 24.55 is below the 20-day moving average (MA) of 26.32, below the 50-day MA of 25.33, and above the 200-day MA of 21.94, indicating a bullish trend. The MACD of 0.49 indicates Positive momentum. The RSI at 60.76 is Neutral, neither overbought nor oversold. The STOCH value of 64.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DNKEY.
Danske Bank Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $48.91B | 15.19 | 12.20% | 3.14% | 0.15% | 11.62% | |
74 Outperform | $35.62B | 13.63 | 9.77% | 2.76% | -0.81% | 20.34% | |
73 Outperform | $43.55B | 12.74 | 12.37% | 8.23% | -13.47% | 1.47% | |
69 Neutral | $36.31B | 12.90 | 10.03% | 3.50% | 5.73% | 38.39% | |
69 Neutral | $41.19B | 10.56 | 10.33% | 2.79% | -4.64% | 24.98% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $39.46B | 9.94 | 14.19% | 2.48% | 5.89% | 34.68% |
* Financial Sector Average
DNKEY
Danske Bank
27.15
11.51
73.63%
BBD
Banco Bradesco SA
4.19
2.27
117.66%
FITB
Fifth Third Bancorp
53.62
11.79
28.19%
HBAN
Huntington Bancshares
18.01
2.59
16.79%
KB
Kb Financial Group
117.66
60.63
106.31%
MTB
M&T Bank
232.52
45.30
24.19%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.