Best bank: Danske Bank
For Danske Bank, Denmark’s best bank, 2023 was a year of rehabilitation after a difficult period that culminated in the settlement in late 2022 of historic money laundering issues. With a strong financial performance that saw profits nearly double even after adjusting for the regulatory charges in 2022, the bank has come roaring back to life.
Year-on-year revenues rose 30% and expenses fell 4%, even on an adjusted basis. Customer loans were flat, but deposits rose 2% and book value was up 9%. Reflecting the changed sentiment towards the bank was the share price, which rose 31% over the year.
Putting the past behind it has provided the bank with an opportunity to reset in many ways. Chief executive Carsten Egeriis, who took the helm in 2021, led a strategic review during 2023 that resulted in the bank’s Forward ’28 strategy, which replaces the Better Bank programme that had begun in 2019 as Danske sought to turn itself around after the money laundering scandal involving its Estonia branch had emerged.
Forward ’28 involves refocusing the scope of Danske’s retail and private banking businesses. Its objective in Denmark is to be the leading bank. In Finland it will be mainly urban-focused; in Sweden it will target owners of businesses and other clients with sophisticated needs; while in Norway it is exiting personal banking altogether, focusing only on the large corporate and institutional client segment that it targets throughout the Nordic region.
While dealing with its historic issues in the last few years, the bank has also been making root-and-branch changes to how it operates and the way that it views risk – not least through its Compliance Under Control programme. The bank is more conservative now and all the stronger for it.
And the improvement is paying off: return on equity of 12.7% blew away its 8.5% to 9.0% target, while its common equity tier-1 ratio of 18.8% is comfortably above the 16% level it was aiming for, giving it plenty of room to invest.
A lot of that investment will be focused on the bank’s digital offering, its advisory services and its various efforts in all aspects of sustainability – already a considerable priority for the bank. The bank launched its Climate Action Plan in 2023, mapping its entire carbon emissions.
Best investment bank: Danske Bank
It was an active second half of the year in Danish capital markets, helping to take annual bond issuance to new records and syndicated loans to above pre-pandemic levels. And a string of accelerated bookbuilds drove equity capital markets volumes to a surging recovery after 2022’s trough.
Domestic and Nordic firms face strong competition from the likes of Citi, which was a strong contender for this award, and JPMorgan. But it was impossible to look past the dominance across the markets of this year’s winner, Danske Bank.
The bank’s large corporates and institutions segment has been led since August 2023 by Joachim Alpen, who jumped from the same role at SEB to take over from veteran Berit Behring, who retired after 16 years at the bank and 32 years in banking. Behring, who opened her retirement announcement with the words “I really love Danske Bank”, certainly left on a high: revenues at the unit rose 23% to DKr15.8 billion ($2.3 billion) in 2023.
The bank was on all of the sizeable equity capital market tranactions, including the biggest, the $1.3 billion accelerated bookbuild of primary shares in Coloplast, the Danish medical instrument maker, which was financing its acquisition of Icelandic wound care company Kerecis. Danske topped the ECM rankings both by volume and number of deals.
Advisory work for big public M&A deals involving a Danish buyer or target was led – as usual – by the international banks, although no one firm was dominant. But with six deals to their names, Danske and two other Nordic firms worked on the most completed deals in the period.
But it was in debt capital markets that the bank’s prowess shone through. Even stripping out self-led deals – which removes many Danske deals, including a €2 billion two-trancher that was the biggest deal in Denmark in 2023 – the bank still easily tops the rankings by both dollar value and number of deals.
Danske was on nine of the 10 biggest deals in what was a significant year: dollar-equivalent volumes of Danish bond issuance were up 35% and the number of deals was up 16%.
As well as helping to lead its own extensive issuance in a number of different formats, Danske was also a lead on the $1.5 billion two-year for Denmark and the biggest corporate bond of the year, the €700 million five-year and €600 million 10-year deal for Carlsberg. The bank also makes a virtue of its commitment to the green bond market and helped bring more than 150 sustainable issues to market in 2023 as well as advising on more framework structurings than ever.
Syndicated loans were also up versus 2022, and Danske was on practically all of the most important deals, including the biggest – a €2 billion sustainability-linked loan for renewable energy company Orsted. It also stepped up as one of two banks to provide short-term financing to back the Kerecis acquisition by Coloplast, which was later taken out by the ECM deal.
The bank tweaked the organizational structure of its large corporate and institutions division at the end of 2023, which it thinks will equip it better for the overall group’s Forward ’28 strategy and will help it to grow its advisory business, a key element of its ambition to be the leading Nordic wholesale bank. On the strength of its 2023 performance, it is well on the way.
Best international investment bank: Citi
Citi worked on many of the key transactions in Denmark last year, including KommuneKredit’s €500 million benchmark deal, WS Audiology’s loan and Maersk’s green bond.
In equity capital markets, Citi acted as the global coordinator for DSV’s $1.1 billion secondary accelerated equity offering. This transaction was part of an equity collar hedge for Kuwait’s Agility.
In debt capital markets, the US bank served as joint lead manager for KommuneKredit’s €500 million 12-year benchmark transaction. It was joint bookrunner for Maersk’s $750 million green bond and tender offer, which marked Maersk’s debut green bond in the US market and its first US transaction since 2019.
Citi’s work in investment grade loans saw it act as mandated lead arranger for WS Audiology’s $2.8 billion term loan B amend-and-extend transaction.
Additionally, the US bank was exclusive financial adviser to Shell in its $2 billion acquisition of Nature Energy.
