Danske Bank traders have suffered a 12% reduction in bonuses for the first half of this year and, with trading income this year unlikely to match 2009, should probably not be holding their breath for a significant improvement on this anytime soon.
Half-year and quarterly figures posted by the bank this week showed pre-tax profit within its Danske Markets division declining by DKr3.6bn to DKr4.2bn, against DKr7.8bn in the first half of 2009.
For Q2 the decline was equally marked, with pre-tax profit coming in at DKr2.5bn, from DKr3.3bn at the same point last year.
The 12% decline in expenses at the division, which employs 882 people, was primarily down to lower performance-based compensation to trading staff, it added.
“The fall in performance-based compensation was due both to lower activity and earnings and to the group’s adjustment in 2009 and 2010 of the compensation structure in accordance with international recommendations,” it said.
“Customer-driven trading activity in instruments to hedge interest rate and exchange rate risks in particular remained good, and income derived from this activity constitutes an increasing share of total net trading income,” it continued, adding that corporate finance had been involved in “a number of significant customer transactions” in the first half.
Looking forward, the bank warned that the rest of 2010 was likely to be “challenging”, adding that it did not expect net trading income this year to “to reach the same extraordinarily
high level as in 2009”.
Expenses for the group as a whole were down 14%, with staff numbers declining by 3% compared with the first half of last year. The bank in total now employs just over 22,000 people.
Overall the bank reported a net profit for the half year of DKr1.7bn, compared with DKr725m at the same point in 2009 and a pre-tax profit of DKr3.1bn, against DKr 2.4bn.
The bank’s Danske Capital asset management division saw income down 7%, to DKr804m compared with the same point a year point.