The chief executive officer of Danske, Denmark’s biggest bank, is urging shareholders not to read too much into a surge in trading and fee income, warning that the conditions that enabled the boom can’t be expected to persist.

“I am cautious that this quarter was extraordinary, particularly in the trading income,” Thomas Borgen, chief executive of Danske, said on Thursday.

The bank reiterated its profit forecast for the full year even after net income in the first quarter soared 73 per cent.

In the Republic, where Danske withdrew from the personal market in 2013 to focus on corporate business, the bank reported an uptick linked to an expanding economy.

“In Ireland our corporate and institutions business is benefiting from improving economic conditions domestically and strongly performing Irish clients operating in international markets,” said Terry Browne, Danske country manager

“ Our continued focus on our corporate and institutions business reflects the wider Danske Bank Group’s proven ability to deliver differentiated solutions for clients in this segment,” Mr Browne continued.

Danske’s stock sank as much as 4.4 per cent and traded 2.6 per cent lower as of lunchtime in Copenhagen.

With record-low interest rates eroding lending income, banks have increasingly generated revenue from fees as clients demand services to protect them from volatility and as they convert into cheaper loans. Lower rates are also making it easier for borrowers to repay their creditors, bringing down impairments.

Danske booked loan impairment charges of 502 million kroner (€67m) in the quarter, compared with 641 million kroner a year earlier.

“It’s no doubt that we had a very good quarter and exceeded our expectations,” Mr Borgen said.

“But due to the uncertainty of future interest rate movements, the economic growth and customer activity - and we are just in the first quarter - we think it’s prudent to keep the guidance.”

Danske still sees a net profit for the full year of more than 14 billion kroner.

Bloomberg