Danske Bank shares tank over 4% Friday after the distressed lender said its annual profit would come in at the low end of estimations, and revealed plans to get costs and compliance under control by 2023.
Denmark’s biggest bank has seen thousands of customers leave and its chief executive depart since reports came in 2017 of its involvement in one of the world’s greatest money-laundering cases through its Estonia department.
The bank now expects annual net revenue to come in at the lower end of its previously declared 13 billion to 15 billion Danish crown ($1.9-$2.2 billion) range.
That followed a declaration earlier this month it had started a hiring freeze to cope with rising compliance costs and a robust business setting, which has further prompted two cuts to its annual scope this year.
The softer guidance got here regardless of a 21% rise in third-quarter profits declared Friday, above analysts’ forecasts.
The lender will spend 1.5-2 billion crowns in 2020 on cost management and digitalization, which it expects will lead to a return on shareholders’ equity of 5-6% in 2020.
The measure tanked to 9.8% in 2018 from 13.6% in 2017, and Danske stated it’s targeting a move back toward 9-10% by 2023.
Danske stocks were trading 4.1% lower. Shares have lost about two-thirds of their worth since money-laundering accusations against the lender gained pace in March 2018 and are trading near a 7-year low.
Danske stated it could aim for a cost to income ratio in “the low 50s” by 2023.