DNB attracts more customers through digital initiatives
DNB recorded profits of NOK 6 374 million in the fourth quarter of 2017, up NOK 994 million
from the fourth quarter of 2016. An increasing number of customers in both the personal and corporate customer markets show trust in DNB. The Board of Directors has proposed a dividend of NOK 7.10 per share.
2017 was a good year for the Norwegian economy and a good year for DNB.
For DNB, this was the year when home mortgage customers could apply for loans and get an answer in less than two minutes – all on their mobile phones. More than 135 000 home mortgages were granted in the course of the year. 2017 was also the year when the mobile app ‘Spare’ (Save) helped change our customers' savings habits. Spare was a major contributor to the more than 300 000 savings schemes established by DNB customers during the year.
“In DNB, it is our job to create the best customer experiences. We meet the customer where the customer is. We have closed a large number of branch offices, but our home mortgage portfolio is nevertheless growing. This is possible because we have the best and most customer-friendly digital solutions. It is inspiring to see the efforts made to automate the home mortgage process. Now we are also focusing strongly on simplifying the loan process for our corporate customers. We are going to make everyday life easier for entrepreneurs and business managers,” says Rune Bjerke, group chief executive in DNB.
Improved prospects, lower losses
Profits for the year totalled NOK 21.8 billion, an increase from NOK 19.3 billion in 2016, mainly due to lower impairment losses on loans. The Norwegian economy has picked up speed, and future prospects look good.
DNB can also report a healthy influx of new customers, both private individuals and businesses. Home mortgages and other loans to personal customers were up 5.8 per cent during 2017. Loans to small and medium-sized enterprises increased by 9.5 per cent during the same period. This trend is also good for Norway – and good for DNB.
“It is easy to forget the important role small and medium-sized enterprises play in society. Looking just at the taxes paid by these companies, they can cover the salaries of all teachers, the entire police force and all nursing home places in Norway for a whole year – and there will still be NOK 83 billion left. These ripple effects are absolutely essential to our welfare, and that is why we are cheering for entrepreneurs in DNB. The more entrepreneurs, the larger the ripple effects," says Bjerke.
Higher dividends
Interest income for the fourth quarter increased by NOK 491 million compared with the fourth quarter of 2016, reflecting higher lending volumes. In addition, lower funding costs had a positive effect on lending spreads.
Net other operating income increased by NOK 185 million. Among other things, there was a high level of activity in DNB Markets’ Investment Banking Division throughout the year, mainly driven by a strong demand for bond issues and other debt instruments.
Impairment losses on loans and guarantees totalled NOK 402 million in the fourth quarter, down
NOK 1 352 million from the corresponding quarter in 2016. Operating expenses increased by
NOK 825 million, reflecting certain non-recurring effects and costs related to digitalisation and
IT projects.
“In order to stay ahead and offer the best solutions, it is both right and important to spend money on development, especially during the stage we are in now. The banking industry is opening up, and we are being challenged by new competitors. We expect to capitalise on our current initiatives in the future," says Rune Bjerke.
DNB’s Board of Directors has proposed a dividend of NOK 7.10 per share. This represents 55 per cent of profits for the 2017 accounting year. Including the repurchase of own shares, the total distribution to shareholders represents 73 per cent of profits.
DNB’s long-term ambition is to distribute a minimum of 50 per cent of profits as dividends to its shareholders.
Financial key figures for the fourth quarter of 2017
- Pre-tax operating profit before impairment was NOK 7.3 billion (7.4)
- Profit for the period was NOK 6.4 billion (5.4)
- The common equity Tier 1 capital ratio (transitional rules) was 16.4 per cent (16.0)
- Earnings per share were NOK 3.79 (3.16)
- Return on equity was 12.3 per cent (10.9)
- The cost/income ratio was 45.3 per cent (41.2)
Financial key figures for the full year 2017
- Pre-tax operating profit before impairment was NOK 28.5 billion (30.8)
- Profit for the year was NOK 21.8 billion (19.3)
- The common equity Tier 1 capital ratio (transitional rules) was 16.4 per cent (16.0)
- Earnings per share were NOK 12.84 (11.46)
- Return on equity was 10.8 per cent (10.1)
- The cost/income ratio was 44.2 per cent (40.9)
- The proposed dividend is NOK 7.10 per share (5.70)
Comparable figures for 2016 in parentheses.
This information is subject to the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.
Contact persons:
Thomas Midteide, group executive vice president, Media & Marketing, tel.: + 47 962 32 017
Rune Helland, head of Investor Relations, tel: +47 977 13 250
The quarterly report, presentation and Fact Book can be downloaded from ir.dnb.no
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