The corona crisis led to a sharp drop in bank profits in 2020, according to

The decline is due to write-downs on loans, while interest income continues to be depressed by low interest rates. But banks are still well equipped to help customers and support the Danish economy. This is shown by Finans Danmark’s examination of the accounts of the 17 largest banks and mortgage banks for 2020. The profits of the 17 largest banking and mortgage groups fell in 2020 by just over 11.9 billion euros. DKK. Compared to 2019, this is a decrease of almost 33%. One important reason is a marked increase in loan impairment losses to DKK 12.2 billion in 2020, which is the expression of provisions for future losses on loans to customers affected by the corona crisis. In addition, the costs of combating economic crime such as money laundering and implementing and enforcing regulations, known as compliance, continue to rise. In addition, banks’ net interest income is broadly at the same level as in the past two years.

Although several banks lowered the limit for which private customers must pay negative interest on deposit accounts in 2020, this interest income has fallen far short of offsetting the decline in interest income from loans. However, the decline in interest income is offset by lower interest charges for bank financing. The sector continued to build up capital in 2020 and by the end of 2020 the total capital stood at almost DKK 430 billion.

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