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UPDATE 1-Danske Bank cuts 2019 outlook as funding costs rise

Jacob Gronholt-Pedersen

(Adds detail on 2019 outlook, costs, company quote)

COPENHAGEN, April 30 (Reuters) - Danske Bank, caught up in one of the world's biggest money laundering scandals, reported first-quarter pretax profit below expectations and lowered its outlook for 2019 in part due to higher funding costs.

Denmark's biggest lender said the considerable investments it is making in compliance to repair its image had pushed up costs.

Danske now expects net interest income for the full year to be lower than last year's level. It had previously said it expected net interest income to be around the 2018 level.

Danske kept its forecast for full-year net profit in the range of 14 billion to 16 billion Danish crowns ($2.10-$2.40 billion), but said that would now include an expected gain of 1.3 billion crowns on the sale of its Danica Pension unit in Sweden.

Profit before tax fell 35 percent to 4.01 billion Danish crowns ($600.49 million) in the period, compared with the 4.47 billion forecast by analysts in a Reuters poll.

"The Estonia case continues to require considerable management attention, including the ongoing investigations and our efforts to restore trust in us," interim Chief Executive Jesper Nielsen said in a statement.

The bank is attempting to restore trust among investors and clients after it said last year it had channeled 200 billion euros ($223 billion) of suspicious payments through its Estonian branch between 2007 and 2015.

Danske is under investigation by authorities in several countries, including the United States.

"It is not yet possible to reliably estimate the timing or amount of any potential settlement or fines, which could be material," it said in a statement.

Danske's Nordic rival Nordea on Tuesday reported a bigger-than-expected drop in first-quarter operating profit and said it had booked a 95 million euro provision for a possible fine in Denmark for alleged money-laundering.

($1 = 0.8961 euros) ($1 = 6.6779 Danish crowns) (Reporting by Jacob Gronholt-Pedersen, additional reporting by Stine Jacobsen, editing by Louise Heavens)