ROE continues to fall at Danish banks

Return on equity (ROE) at Denmark’s leading banks continued its general downward trajectory last year, as Covid-19 took its toll on the country’s economy, despite generous government support. The country’s banks have had to contend with negative interest rates for almost a decade, as well as various compliance requirements that have had an impact on lenders’ operations.  

Danske Bank, the country’s largest lender by assets and Tier 1 capital, saw ROE drop to 2.7% in 2020 from 8.8% in 2019 (and down from 12.4% in 2017). Danske Bank has been embroiled in a money laundering scandal over the past few years, which in 2018 led to the departure of its then CEO, Thomas Borgen.

Nykredit, the second-largest bank, saw ROE fall from 8.8% in 2019 to 6.3% in 2020. The bank’s ROE was as high as 10.2% in 2017.

The country’s third-largest bank, Jyske Bank, saw ROE fall from 6.8% in 2019 to 4.4% in 2020, while Sydbank, the fourth-largest bank, saw ROE fall from 7.3% in 2019 to 5.4% in 2020, according to The Banker Database.

Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.