Consequently, market interest rates will fall making the
situation easier for debtors and supporting consumption
prospects and the housing market in 2024. Housing
markets will remain quieter, but the fall in rates and the
releasing of pent-up demand will result in housing mar-
kets picking up as 2024 progresses. However, housing
construction is expected to recover only in 2025.
In 2023 the Bank’s risk position has remained low and
the Bank has been within all risk limits set by the Board
of Directors. The main risks associate with the develop-
ment in the general economic environment and invest-
ment market and future changes in financial regulations.
In relation to the loan portfolio, non-performing loans
were at a low level. Non-performing loans that are
delayed for over 90 days amounted to EUR 0.3 million
(0.0 million). Impairment charges and final write-offs for
2023 totalled EUR 2.7 million (1.3 million). Allowance
account on 31 December 2023 amounted to EUR 5.9
million (31 December 2022 EUR 2.7 million).
The development of the Bank’s business volume is
dependent on the development of Danske Bank A/S, Fin-
land Branch’s stock of housing loans and the Group’s
funding demand. In the future, the Bank seeks to issue
one benchmark-size covered bond per year.
The Bank is rather well protected against changes in the
level of interest rates and the impact of interest rate risk
to net profit is limited. The development of the Finnish
economy affects mostly through credit losses and level of
new sales loan margins. The refinancing cost of the Bank
is dependent on the credit rating of Danske Bank A/S and
the development of the global and the Finnish economy.
More detailed information of risks and risk management
can be found in the Risk Management Disclosure on
page 15.
Sustainability
According to the Accounting Act, Chapter 3 a, the Bank
does not prepare sustainability report. The Parent Com-
pany, Danske Bank A/S, with its registered office in Den-
mark, prepares a sustainability report for the Group of
which Danske Mortgage Bank Plc is part of. The Group’s
sustainability report is available on Danske Bank’s web-
sites https://danskebank.com/sustainability. The Bank is
preparing for the upcoming entity level sustainability
reporting as required by regulation.
In the credit granting process, the customer’s ability to
manage their total debt has been assessed with a much
higher interest rate than the prevailing market rate. Cus-
tomers can obtain temporary concessions for their
loans, such as interest only periods, the demand of
which is expected continue in 2024. If the customer’s
ability to pay is still insufficient, the value of the collateral
protects the Bank from credit risk. By undervaluing the
value of the collateral, the Bank has prepared for
decreasing housing prices. The Bank’s housing loans are
concentrated in the capital region and other growth cen-
tres, where a functioning housing market still exists,
although prices have fallen slightly.
Events after the reporting period
Janne Lassila was appointed as CEO, starting from 2 Jan-
uary 2024. In the extraordinary general meeting held on
19 December 2023, Kasper Kirkegaard was appointed
to the Board of Directors starting from 2 January 2024.
Outlook for 2024
At the end of 2023, the Bank purchased housing loans
in anticipation of increasing the volume of covered
bonds. The Bank’s balance sheet is not expected to grow
significantly during 2024 compared to end of 2023. The
Bank’s business is expected to remain stable and the
number of personnel to remain at the current level. The
result is likely to decrease moderately in 2024 due to
decreasing interest rates and increase in new issuance
spreads. However, even in the most severe scenario,
the Bank’s result in 2024 is expected to be positive.
Finland’s economy is in recession and the economic out-
look for the near future is weak. Despite falling inflation,
the weakening of purchasing power and rising interest
rates still hold back both consumers and the invest-
ments of companies. Increased savings ratio improves
the financial security of households, but temporarily
weakens consumer demand. Stability of labour markets
is important in terms of domestic demand.
The fall in inflation combined with the increased salary
earnings and employment pensions will help improve pur-
chasing power, which is a key driver for the recovery of
private demand. Private consumption is expected to turn
upward in 2024, but the gradual increase in unemploy-
ment will keep demand moderate. Slower inflation and
weaker business cycle in the euro area turn the ECB’s
monetary policy towards a more restrictive direction.
This guidance is generally subject to uncertainty related
to future macroeconomic and business development.
Helsinki, 5 February 2024
Danske Mortgage Bank Plc Board of Directors
DANSKE MORTGAGE BANK PLC BOARD OF DIRECTORS’ REPORT 2023
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