Denmark's largest bank reported profit growth but a fall in income for its personal banking arm, which covers private banking.

Profit before tax and goodwill impairments at Danske Bank's personal banking arm grew 11 per cent year-on-year to DKK5.1 billion ($746 million) in 2015.

However, negative interest rates in Denmark, Finland and Sweden hit the division's net interest income. This was only partially offset by higher net fee income and lower loan impairment charges as total income fell from DKK16.7 billion in 2014 to DKK15.9 billion last year.

For the bank as a whole, net profit before goodwill impairments rose 36 per cent to DKK17.7 billion, against DKK13.0 billion in 2014. Total income remained steady at DKK44.2 billion. After exceeding capital targets, Danske announced it will buy back DKK9 billion ($1.3 billion) in shares in 2016 – almost double its previous share buyback programme. 

Its common equity tier one capital ratio and total capital ratio were 16.1 per cent and 21.0 per cent, respectively, compared to 15.1 per cent and 19.3 per cent at the end of 2014. The board proposed a dividend of DKK8 per share, corresponding to 46 per cent of net profit before goodwill impairments.

“In 2015, Danske Bank continued to progress and delivered strong results despite a challenging environment. The results are testament to the strength of our diversified business model as a Nordic universal bank and reflect our firm focus on executing our strategy of becoming a more customercentric, simple and efficient bank,” said Thomas Borgen, chief executive at Danske Bank, in the results statement.

He highlighted wealth management as a promising growth area in light of rising customer savings.

The Copenhagen-headquartered bank is establishing a new wealth management unit, as announced last year, to encompass its Danica Pension, Danske Capital and private banking businesses. The unit will be officially launched in April, with financial reporting effective from the interim report for the first quarter of 2016.