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Danske Says Virus Will Hit Profits as Bank Abandons Guidance

Danske Says Virus Will Hit Profits as Bank Abandons Guidance

(Bloomberg) --

Danske Bank A/S became the latest firm to abandon its financial guidance for the year as the extreme uncertainty caused by the spread of the coronavirus threatens to pummel economic growth.

“Due to a significant worsening of the macroeconomic outlook as a result of the Covid-19 situation, Danske Bank expects a negative impact on its financial results for 2020,” Denmark’s biggest bank said in a statement after the market closed on Monday.

Denmark has shut its borders, closed down schools and told everyone to stay home as the whole country goes into lockdown to stem the contagion. To help businesses cope with the economic freeze, the government has pledged about $20 billion to cover deferred tax payments, and eased bank capital rules to free up an additional $30 billion for loans, among other measures.

Over the weekend, Danske said it was easing terms for many of its clients to help them through the crisis. But the bank’s own business is set to suffer as the economy grinds to a halt and markets sink into a panic.

“The global financial markets are impacted by very high volatility, which may have a negative impact on trading income,” Danske said. “We will continue to assess the impact on loan impairment charges and income as the situation develops.”

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To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net

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