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Is Danske Bank’s DKK 5 Billion Buy‑Back Altering The Investment Case For Danske Bank (CPSE:DANSKE)?

Simply Wall St · 5d ago
  • In February 2025, Danske Bank A/S launched a share buy-back programme of DKK 5.00 billion, authorising repurchases of up to 45,000,000 shares through to 30 January 2026 under European market regulations.
  • In the first week alone, Danske Bank bought back 204,715 shares, an early signal that management is actively using its capital return authorisation.
  • We’ll now examine how this sizeable buy-back programme, and its potential impact on share count, may influence Danske Bank’s investment narrative.

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Danske Bank Investment Narrative Recap

To own Danske Bank, I think you have to believe in a relatively stable Nordic banking franchise that can keep translating solid capital and disciplined costs into consistent earnings, while managing credit quality and funding risks. The DKK 5,000,000,000 buy-back programme reinforces the focus on capital returns, but in my view it does not materially change the near term earnings catalyst or the key risk around funding mix and asset quality.

The buy-back sits alongside management’s guidance for 2025 net profit of DKK 21,000,000,000 to DKK 23,000,000,000, where net interest income remains an important driver and loan impairment charges are guided at no more than DKK 600,000,000. I see this announcement as most relevant here, because the pace and scale of repurchases will be judged against the bank’s ability to sustain that earnings range while keeping its CET1 ratio comfortably above regulatory requirements.

Yet investors should not ignore the risk that a less conservative funding profile could quickly matter if...

Read the full narrative on Danske Bank (it's free!)

Danske Bank's narrative projects DKK55.9 billion revenue and DKK22.1 billion earnings by 2028. This implies a 0.3% yearly revenue decline and an earnings decrease of DKK1.3 billion from DKK23.4 billion today.

Uncover how Danske Bank's forecasts yield a DKK308.00 fair value, a 5% downside to its current price.

Exploring Other Perspectives

CPSE:DANSKE 1-Year Stock Price Chart
CPSE:DANSKE 1-Year Stock Price Chart

The Simply Wall St Community’s 7 fair value estimates for Danske Bank span about DKK 101.83 to DKK 550.60, reflecting very different views on upside. Against this wide range, the current DKK 5,000,000,000 buy-back and focus on maintaining strong capital ratios highlight how future returns could hinge on the balance between capital returns and funding or credit risks, so it is worth comparing several of these perspectives before deciding what you believe.

Explore 7 other fair value estimates on Danske Bank - why the stock might be worth as much as 70% more than the current price!

Build Your Own Danske Bank Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.