Morgan Stanley Expects 'Broadly In Line' Q2 Net Interest Income for Danske Bank
Morgan Stanley anticipates Danske Bank's (DANSKE.CO) second-quarter net interest income will largely align with market expectations, even with an anticipated increase in funding expenses. "We are broadly in line with consensus on NII for Q2, expecting marginal growth of ~1% QoQ. The bank has guided to a negligible impact from the 11 June rate hike, while higher 3M CIBOR (+13bps QoQ), 3M NIBOR (+32bps QoQ) and 3M STIBOR (+5bps QoQ) are likely to result in higher funding costs. In addition, we estimate a tailwind from the extra interest day of around DKK 75m," analysts said in a July 10 earnings preview report. The research firm added that its fee income projections are 2% below consensus, reflecting management warnings that market volatility and muted capital markets activity are suppressing client investment appetite. "On capital, we note that the DKK 5bn extraordinary dividend will be accrued in Q2, with an estimated [common equity tier 1] impact of approximately 60 [basis points]. Furthermore, following the revision of the dividend payout policy from around 60% to around 70%, Q2 results should also include a catch-up accrual reflecting the additional c.10% payout ratio,".
Morgan Stanley anticipates Danske Bank's (DANSKE.CO) second-quarter net interest income will largely align with market expectations, even with an anticipated increase in funding expenses. "We are broadly in line with consensus on NII for Q2, expecting marginal growth of ~1% QoQ.
The bank has guided to a negligible impact from the 11 June rate hike, while higher 3M CIBOR (+13bps QoQ), 3M NIBOR (+32bps QoQ) and 3M STIBOR (+5bps QoQ) are likely to result in higher funding costs.
In addition, we estimate a tailwind from the extra interest day of around DKK 75m," analysts said in a July 10 earnings preview report.
The research firm added that its fee income projections are 2% below consensus, reflecting management warnings that market volatility and muted capital markets activity are suppressing client investment appetite. "On capital, we note that the DKK 5bn extraordinary dividend will be accrued in Q2, with an estimated [common equity tier 1] impact of approximately 60 [basis points].
Furthermore, following the revision of the dividend payout policy from around 60% to around 70%, Q2 results should also include a catch-up accrual reflecting the additional c.10% payout ratio,".