Stock and press releases

Håkon Hansen was in June 2018 appointed acting group executive vice president Wealth Management & Insurance in DNB Bank ASA. With effect from October 24th 2018 he is included as a permanent member of the group management team.

DNB’s profits in the third quarter of 2018 were NOK 5 673 million, an increase of NOK 26 million from the same quarter the year before. Low losses and strict cost control contributed positively to the result.

“We are seeing many of the same trends as Norges Bank; a strong momentum in the Norwegian economy, a higher oil price, increasing investments and wage growth and unemployment numbers pointing in the right direction. A healthy development in the economy means lower losses in the banks. At the same time, the prospect of higher interest rates has had a favourable and calming effect on housing prices," says group chief executive of DNB Rune Bjerke.

Profit growth in the personal customer market
Net interest income in the third quarter amounted to NOK 9 152 million, up NOK 146 million from the corresponding quarter last year. However, other income declined by NOK 579 million, from NOK 3 922 to NOK 3 343 million, mainly due to classification changes related to the new IFRS 9 accounting rules, as well as a significantly lower level of activity in the capital markets in the quarter. DNB’s profit for the third quarter is NOK 411 million lower than the second quarter of this year.

After three quarters, DNB’s return on equity for 2018 is 11.2 per cent, compared with 10.2 per cent in the same period last year. Earnings per share so far this year is NOK 10.42, compared with NOK 9.06 after the first three quarters of 2017.

Due to significant reversals of previous loan loss provisions in the oil and gas sector amounting to NOK 500 million, the losses for the third quarter ended at a modest NOK 11 million.

Higher speed and increased pace of innovation
DNB has in the quarter launched a number of new services, initiatives and cooperation agreements with interesting players in the market:

• The new, automated accounting solution DNB Regnskap is in a pilot phase, allowing the first corporate customers to test integrated banking and accounting services (cooperation with entrepreneurial company Luca Labs).
• DNB has hired a robot called Aino to provide customer service via chat 24 hours a day.
• Google Assistant was launched in Norway in August, with DNB as one of the first companies in Norway to develop their own customer services on the platform.
• One of Europe's leading fintech groups, 11:FS in London, has chosen to partner with DNB on its new initiative within cloud-based banking systems. DNB is both a co-owner and the first customer of the new company "Foundry".
• DNB NXT was held in 19 towns and cities across the country during the third quarter, resulting in more than 1 000 meetings between entrepreneurs and investors.
• The savings app Spare, which was launched in 2017, now has 185 000 users and has become one of Norway's most effective sales platforms for mutual funds and shares. Our customers traded funds in the app worth more than NOK 340 million in the quarter, tripling the number from the previous year.

“One year after we set up a new organisation and set new priorities, we are beginning to see proof that we are developing faster and creating good, digital customer experiences. We summed up the work so far with all employees in the last week, and gathered over 630 examples of projects or initiatives as proof that the new strategy is put into practice.

A few years ago, many people predicted that banks would become superfluous. It has been a while since I have heard that," says CEO Rune Bjerke. “On the contrary, we are seeing that new challengers and established players can complement each other and create good solutions together.”

Financial key figures for the third quarter of 2018

•  Pre-tax operating profit before impairment amounted to NOK 7.2 billion (7.4)
•  Profit for the period was NOK 5.7 billion (5.6)
•  Earnings per share were NOK 3.41 (3.34)
•  Return on equity was NOK 10.9 per cent (11.2)
•  Cost/income ratio was 42.7 per cent (42.7)
•  CET1 capital ratio (transitional rules) was 16.5 per cent (16.3)

Comparable figures for the third quarter of 2017 in parentheses. 

DNB will publish its results for the third quarter of 2018 on Thursday, 25 October 2018 at 7.30 am (Oslo time).

25 October at 9.30 am (Oslo time): press conference in English accessible via live web TV
Place: DNB’s head office in Bjørvika, Dronning Eufemias gate 30, Oslo. A live broadcast will be available on the Investor Relations pages at ir.dnb.no.
Please register your attendance in Oslo at [email protected].

The press conference will be held in English.

25 October at 1.30 pm (Oslo time): conference call for analysts and investors
To attend the conference call: +47 2156 3318 or international line: +44 (0) 20 3003 2666
Password: DNB Q3

The phonecast (listen only mode) and replay will be available on the Investor Relations pages at ir.dnb.no

26 October at 07:45 am (London time): breakfast conference for analysts in London
Place: DNB Bank ASA, 8th Floor, The Walbrook Builiding, 25 Walbrook, London EC4N 8AF
Please register your attendance in London at [email protected]

Management will present the results followed by a Q&A session.

DNB will publish its results for the third quarter of 2018 on Thursday, 25 October 2018 at 7.30 am (Oslo time).

25 October at 9.30 am (Oslo time): press conference in English accessible via live web TV
Place: DNB’s head office in Bjørvika, Dronning Eufemias gate 30, Oslo. A live broadcast will be available on the Investor Relations pages at ir.dnb.no.
Please register your attendance in Oslo at [email protected].

The press conference will be held in English.

25 October at 1.30 pm (Oslo time): conference call for analysts and investors
To attend the conference call: +47 2156 3318 or international line: +44 (0) 20 3003 2666
Password: DNB Q3

The phonecast (listen only mode) and replay will be available on the Investor Relations pages at ir.dnb.no

26 October at 07:45 am (London time): breakfast conference for analysts in London
Place: DNB Bank ASA, 8th Floor, The Walbrook Builiding, 25 Walbrook, London EC4N 8AF
Please register your attendance in London at [email protected]

Management will present the results followed by a Q&A session.

Changes to the financial calendar:

• The fourth quarter results on 7 February will be extended to include a status update on the strategy and financial targets presented at the capital markets day in 2017.

• The ex-dividend date is set to 2 May.

On 24 September, DNB and SpareBank 1 Gruppen entered into an agreement to merge their insurance operations, thus establishing one of Norway’s largest insurance companies.

The new insurance company will result from the merger of DNB Forsikring AS and SpareBank 1 Skadeforsikring AS. The merged company will have a virtually complete product portfolio within non-life insurance aimed at the personal and SME markets.

As part of the transaction, the individual personal risk insurances from DNB Livsforsikring AS and SpareBank 1 Forsikring AS (the life insurance company), as well as the company-paid personal risk insurances from SpareBank 1 Forsikring AS, will be transferred to the new company.

DNB ASA will have a holding of 35 per cent and SpareBank 1 Gruppen AS one of 65 per cent in the new company. In addition, DNB has secured an option to increase their holding to 40 per cent.

The merger agreement assumes an exchange ratio of approximately 80 per cent for SpareBank 1 Gruppen and approximately 20 per cent for DNB. This exchange ratio is based on a negotiated market value of the two non-life insurance companies, including the value of the transferred personal risk products.

In the transaction, the new non-life insurance company is valued at NOK 19.75 billion, including the value of the personal risk products to be transferred from the respective life insurance companies to the new company. An equivalent value is assumed when DNB is to increase its holding from 20 to 35 per cent. The purchase price for 15 per cent of the shares will thus be NOK 2.96 billion. The total volume of premiums on the personal risk products is approximately NOK 3 billion, generating a profit of about NOK 0.5 billion after tax. The pro-forma profit after tax for the new company for 2017 was approximately NOK 1.8 billion, out of which DNB’s operations amounted to NOK 300 million.

For DNB, this will, on completion of the transaction, mean a recorded gain of around NOK 3 billion in the group accounts, and a reduction of the common equity Tier 1 capital ratio (CET 1) for the Group of about 30 basis points.

The parties will soon establish an interim Board of Directors and appoint the head of the new company. The tentative merger date is 1 January 2019, subject to the approval of the authorities.