The Danish bank has suspended its net profit guidance because of the virus-induced economic disruption and warned that the saga will hit its results in 2020. The bank is unlikely to be alone in taking such a step.

Copenhagen-based Danske Bank, which is rebuilding its fortunes after a major money laundering scandal, warned yesterday that the coronavirus crisis will hit its 2020 earnings. The bank has decided to suspend its net profit guidance because of the “unprecedented” situation. 

“Our preliminary assessment based on input from changes to model assumptions is that loan impairment charges are likely to increase due to more severe scenarios. Furthermore, the global financial markets are impacted by very high volatility, which may have a negative impact on trading income. We will continue to assess the impact on loan impairment charges and income as the situation develops,” the bank said in a statement. 

On a more upbeat note, the bank said its “underlying business is performing as expected”; the lender said its capital and liquidity positions remain strong with “significant buffers well above the regulatory requirements”.

The bank’s previous net profit guidance had been DKK8-10 billion for 2020. 

“We expect to be able to provide an update on guidance in connection with the interim report for the first quarter of 2020,” it said. 

Danske Bank presents its interim report for the first quarter of 2020 on 30 April. Here are its results for 2019. 

Danske has replaced its chief executive and made a number of other changes in the wake of a money laundering episode centred on the Baltic state of Estonia. The affair snowballed into a broader European money laundering saga, raising calls for tougher AML controls across the European Union.

In May last year the lender appointed former ABN AMRO senior figure Chris Vogelzang as its new chief executive. He took over from interim CEO Jesper Nielsen who had held the position after the resignation of Thomas F Borgen in 2018.