Danske Bank is the largest Danish bank and a Nordic universal bank (Denmark plus Norway/Sweden/Finland), built on a large, low-risk Danish mortgage book. The Estonia/Baltic AML scandal is resolved (the ~DKK 15.3bn Dec-2022 settlement; the US DoJ corporate probation concluded 15 Dec 2025; residual civil claims have a 2027 hearing). FY2025 ROE was ~13.3% (Q1 2026 ~13.1%; normalized ~13%), CET1 17.7% (~280bps above requirement), with near-zero credit losses and a freshly-raised payout (60-70% of profit) plus a DKK 4.5bn buyback + a DKK 5bn extra dividend.
It trades at 1.60x book, 1.68x tangible and 11.7x earnings, with a ~6.9% total / ~5.1% ordinary dividend yield. On a normalized 13% ROE the Gordon fair P/B is ~1.43x -> ~DKK 294 (-11%); on the FY2025 ROE ~DKK 303. The re-rating from the post-AML discount has largely played out, so the stock trades ~8-11% above the Gordon anchor — high-quality and capital-generative, but no longer cheap. HOLD.
Gordon fair P/B = (ROE-g)/(COE-g) with COE 10%, g 3%: a normalized 13% ROE -> ~1.43x -> ~DKK 294 (-11%); the FY2025 13.3% ROE -> ~DKK 303. Current 1.60x book, 11.7x earnings, ~6.9% total yield.
Base DKK 300 (~normalized anchor; the re-rating has played out); bull DKK 340 if ROE holds ~13%+ + capital return continues; bear DKK 250 on NII compression / a credit cycle / civil-claim noise.
The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 14.2% vs 13.7% currently earned; at a sustained 13.7% ROE the warranted P/B is 1.53× (DKK 315/sh, -4%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | DKK 340 | 15% | +3% | 30% | ROE holds ~13%+; capital return continues |
| Base | DKK 300 | 13% | -9% | 45% | ~Normalized anchor; re-rating played out |
| Bear | DKK 250 | 12% | -24% | 25% | NII compression / credit cycle / civil-claim noise |
| Prob-weighted | DKK 300 | — | -9% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 8.50% | 262 | 412 | 561 | 711 | 861 | 1010 | 1160 |
| 9.25% | 231 | 362 | 494 | 626 | 757 | 889 | 1021 |
| 10.00% (base) | 206 | 323 | 441 | 559 | 676 | 794 | 912 |
| 10.75% | 186 | 292 | 398 | 505 | 611 | 717 | 823 |
| 11.50% | 170 | 266 | 363 | 460 | 557 | 654 | 751 |
Green = fair value above the current price of DKK 329.40. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.
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Raised payout (60-70%) + buybacks + extra dividend off a 17.7% CET1.
Probation ended Dec-2025 — overhang largely cleared.
Large, low-risk Danish mortgage book + Nordic scale.
Benign credit through the cycle.
Danske Bank is a high-quality, fortress-capitalised Nordic universal bank past its AML legacy and returning capital aggressively, but after the re-rating it trades ~8-11% above a normalized-ROE Gordon anchor at 1.60x book. HOLD; base DKK 300.
Own it for the ~6.9% capital return; the upside from here is the dividend, not multiple re-rating.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Net profit (FY2025) | 23,037 | Income statement / financial highlights | FY2025 net profit DKK 23,037m (DKK 23.0bn headline). LTM = 5,686 + 23,037 - 5,757 = 22,966. |
| Total income (FY2025) | 56,840 | Income statement (DKK m) | FY2025 total income 56,840 = NII 36,611 + fee 15,423 + trading 2,872 + insurance 1,357 + other 577. LTM total income 56,883. |
| Net interest income (FY2025) | 36,611 | Income statement (DKK m) | Core revenue line. FY2025 NII 36,611, broadly flat YoY (100 index) — resilient despite rate cuts, supported by a circa DKK 180bn structural bond hedge and volume growth. LTM NII 36,931. |
| Net fee income (FY2025) | 15,423 | Income statement (DKK m) | Record-high fee income, +3% YoY, driven by Asset Management performance fees and daily-banking fees. LTM net fee 15,683. |
| Net profit (Q1 2026) | 5,686 | Financial highlights | Q1 2026 net profit DKK 5,686m (DKK 5.7bn), -1% vs Q1 2025 (5,757), as higher NII and fee income were offset by a 56% drop in trading income. |
| Total IFRS equity (31 Mar 2026) | 167,393 | Balance sheet / Statement of capital | Latest-quarter equity is the bank invested-capital base. DKK 167,393m at 31 Mar 2026, down from 181,162m at 31 Dec 2025 on the dividend and buyback. Entirely attributable to common shareholders — AT1 is accounted for as liabilities. |
| Total IFRS equity (31 Dec 2025) | 181,162 | Statement of changes in equity | Year-end equity. Components: share capital 8,350, FX reserve -2,514, retained earnings, proposed dividends 18,537. Used with Q1 2026 equity for the average-equity denominator (174,277.5). |
| Intangible assets (goodwill + software) | 7,872 | Note G19 Intangible assets | Goodwill 4,465 + software & licences 3,407 = 7,872 (FY2025). Deducted from common equity to reach tangible common equity for ROTCE / P-TBV. Goodwill steady at DKK 4.5bn; no impairment in 2025. |
| Return on avg. total equity (FY2025) | 0.133 | Ratios and key figures | Bank return measure. Reported RoE FY2025 13.3% (Q1 2026 13.1%, Q1 2025 13.4%). Computed LTM ROE 13.18% on simple-average equity; reported figure uses quarterly-average equity (~DKK 4.4bn lower). |
| Common equity tier 1 capital ratio (CET1) | 0.177 | Ratios and key figures | Regulatory capital strength. CET1 17.7% (Q1 2026), 17.3% (FY2025 reported), 17.6% fully phased-in — circa 280bps above requirement. Total capital ratio 21.7% (Q1 2026). Surplus capital is being returned via dividends and buybacks. |
| Cost/income ratio (FY2025) | 0.455 | Ratios and key figures | C/I 45.5% FY2025 (45.8% Q1 2026), in line with the bank's ~45% 2026 target. Higher than best-in-class Nordic peers (Handelsbanken ~40%) but improving via structural cost takeouts as the financial-crime-plan spend normalises. |
| Loan impairment charges (FY2025) | 294 | Income statement / impairments slide | FY2025 loan impairments only DKK 294m = a below-cycle loan-loss ratio of 2 bps, on strong credit quality and PMA reversals. Q1 2026 was a net reversal of DKK 26m. Cost of risk is near-negligible. |
| Shares outstanding (31 Mar 2026) | 813,219,217 | Statement of capital — number of shares outstanding | 813,219,217 shares outstanding at 31 Mar 2026 (issued 834,995,125 less own/buyback shares); used for BVPS, P/B and market cap. Post-AGM the share capital was reduced to 815,815,502 issued shares (cancellation registered 27 Apr 2026). |
| Book value per share (31 Mar 2026) | 206 | Ratios and key figures | BVPS DKK 205.8 (Q1 2026) = total equity 167,393 / 813.219m shares = 205.84, confirming BVPS uses full IFRS equity (no AT1 carve-out). FY2025 BVPS 222.3. P/B 1.60x at price 329.40. |
| Total dividend per share FY2025 | 22.72 | Dividend / Board proposal | Proposed total DKK 22.72 (ordinary 16.94 + extraordinary 5.78), totalling DKK 18,537m net of buyback own shares. Recurring ordinary yield ~5.1%; total headline ~6.9%. A further DKK 6.14/share extraordinary dividend was approved with Q1 2026. |
| Earnings per share (FY2025) | 27.9 | Ratios and key figures / EPS note | FY2025 EPS DKK 27.9 (diluted 27.9), on average 824.5m shares outstanding. P/E ~11.8x on the live price. LTM EPS ~28.0. |
| Five-year ROE history | 0.133 | Ratios and key figures (5-year columns) | Return on avg total equity: 13.3 / 13.5 / 12.4 / -2.8 / 7.6% (2025-2021). The -2.8% in 2022 reflects the one-off DKK ~14bn Estonia AML settlement provision. Ex-2022, the through-cycle level supports a normalized ~13.0% for the Gordon fair-P/B. |
How the mttssn view has evolved — each prior dated note is preserved.