Positive trend in the Norwegian economy ensures strong profits for DNB

DNB recorded profits of NOK 5 648 million in the third quarter of 2017, up NOK 1 568 million
from the third quarter of 2016. A solid momentum in the Norwegian economy contributed to lower losses and higher income for the bank.

“In many ways, DNB is a reflection of the Norwegian economy. When Norway Ltd. performs well,
so does the bank. This is exactly what is happening now. Optimism has got a sound foothold in the Norwegian economy. DNB’s profit performance has improved in all customer segments, ranging from private individuals to the largest companies,” says Rune Bjerke, DNB’s group chief executive.

High level of activity

DNB’s accounts for the third quarter showed a moderate reduction of NOK 24 million in net interest income from the second quarter. Lending spreads have widened somewhat during the past year, but remain below the average level in a five-year perspective.

Net other operating income was NOK 3 922 million, down NOK 7 million from the third quarter of 2016. There was a high level of activity in many of the areas where DNB holds a leading position, such as capital market transactions, real estate broking and asset management. There was also a positive contribution from DNB Livsforsikring during a quarter with sound operations.

DNB experienced a continued strong interest in savings in the third quarter. 40,000 customers established Share Savings Accounts. The bank also launched an improved version of its BSU product (home savings scheme for young people) during the quarter, allowing savings to start from birth.

Crisis control

Impairment losses on loans and guarantees totalled NOK 867 million in the third quarter, down
NOK 1 309 million from the corresponding quarter in 2016. Improved macroeconomic prospects have resulted in lower individual impairment losses and a reduction in collective impairment in the industries which have thus far been most exposed. DNB has also contributed to the successful restructuring of companies, especially in oil-related industries and shipping.

“One of the key gauges to measure the temperature of the economy is whether small and medium-sized enterprises dare take a step further, borrow money, invest, and employ more people. More than 183 000 small enterprises across Norway are DNB customers, and the figures we present today send a clear message from the Norwegian business community that we have put the oil collapse behind us. We will now look to the future,” says Bjerke.

Operating expenses increased by NOK 476 million compared with the third quarter of 2016, but declined by NOK 95 million from the preceding quarter. The increase stemmed mainly from the introduction of financial activities tax in 2017 and higher IT investments.

Financial key figures for the third quarter of 2017

  •  Pre-tax operating profit before impairment was NOK 7.4 billion (7.4)
  •  Profit for the period was NOK 5.6 billion (4.1)
  •  Earnings per share were NOK 3.34 (2.43)
  •  Return on equity was 11.2 per cent (8.5)
  •  The cost/income ratio was 42.7 per cent (40.6)
  •  The common equity Tier 1 capital ratio (transitional rules) was 16.3 per cent (15.7)

Comparable figures for the third quarter of 2016 in parentheses.

The quarterly report, presentation and Fact Book can be downloaded from
www.ir.dnb.no

Contact persons:
Thomas Midteide, group executive vice president, Corporate Communications, tel.: + 47 962 32 017
Rune Helland, head of Investor Relations, tel: +47 977 13 250

This information is subject to the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.

About Us

DNB is Norway's largest financial services group and offers financial products and services, including loans and deposits, mutual funds and asset management, life insurance and pension savings, payment and financing services, real estate broking and services related to the money and capital markets.