COPENHAGEN (AFP) - The leading Danish banking group, Danske Bank, reported second-quarter losses on Tuesday, saying write-offs from bad loans could hamper profitability for the rest of the year.

"The level of loan impairment charges is expected to remain high, reflecting the general economic climate," the Copenhagen-based bank said in its earnings statement.

For the April to June period, Danske Bank said it made a net loss of 827 million kroner (110 million euros, 157 million dollars), down from 3.24 billion kroner a year earlier.

Danske Bank said it expected the rest of the 2009 to be "very challenging" owing to the ongoing global economic turmoil.

"Negative developments in macroeconomic conditions continue to create a difficult business environment, and the second half of 2009 will also be a very challenging period for the financial sector," it said in its earnings statement.

"It will take time before an improvement in macroeconomic conditions translates into improved customer creditworthiness."

The Danish government has said unemployment figures for June showed that 3.8 percent of the active population were out of work, compared to 1.6 percent last September.

Copenhagen expects that figure to rise throughout 2009, increasing the risk of borrowers defaulting on their bank loans.

The Danish central bank, meanwhile, forecasts that the economy will shrink by 2.5 percent by the end of the year and Danske Bank played down the possibility of any pick-up in results.

Following its announcement, Danske Bank's share price was down 2.11 percent to 115.75 kroner a share in morning trading on a Copenhagen stock exchange up by 0.19 percent.