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After the Panama Papers case, the Board of Directors of DNB ASA decided to carry out an independent survey of all aspects of DNB’s involvement in the case. The law firm Hjort has now presented its final report, which has been considered by the Board of Directors.

The investigation team in Hjort has been headed by Kristin Veierød, attorney-at-law, and the process has taken four months. Hjort received technical assistance to copy DNB’s data servers in Norway and Luxembourg, and has reviewed a very extensive pool of documents. In addition, Hjort has interviewed more than 30 current and former DNB employees.

Complete overview
"The concern of the Board of Directors has been to gain the best possible insight into what has happened. Hjort has done a thorough job, and made independent evaluations of their findings. The review presented in the board meeting has given us a complete overview of the matter and forms a sound basis for learning,” says Anne Carine Tanum, board chairman in DNB ASA.

In its report, Hjort states that DNB Luxembourg facilitated the establishment of 42 companies in the Seychelles for customers during the period 2006 to 2008, and that all these companies are dissolved. Hjort has not uncovered any violations of the law associated with the establishment of this service offering.

Violation of two guidelines
Hjort points to the fact that the establishment of the service offering was not approved in accordance with the standard procedure for new products. In addition, they stress that the DNB Group’s code of ethics was not followed given that the business area with responsibility for DNB Luxembourg did not suspend the service offering pending an assessment of its reputational consequences.  

According to the report, knowledge about the service offering did not, at any time, reach the former or current group chief executive or the Group’s Boards of Directors until it became an issue in the media in the spring of 2016.

Hjort points out that DNB’s Group Audit had the opportunity to gain knowledge of the service offering based on the information they received during the 2008 to 2009 period.

Additional measures from the Board of Directors
"Over the past few days, the Board of Directors has considered Hjort’s report in two board meetings. In connection with the Panama Papers case, the Board of Directors approved extensive measures in May. In the opinion of the Board, the measures that are being implemented are well-suited to ensure compliance with the Group’s code of ethics and prevent the establishment of objectionable products and services in DNB,” says Tanum.

The measures include:

•  Stricter control of operations in Luxembourg
•  Enhanced customer due diligence in Private Banking
•  The introduction of an external notification channel in DNB in addition to the existing notification channel
•  The introduction of new and comprehensive guidelines for the approval of new products
•  New guidelines and measures for the management of international subsidiaries
•  An external review of competencies and priorities in Group Audit

Contact information:
Thomas Midteide, group executive vice president, Corporate Communications, tel.: (+ 47) 962 32 017
Even Westerveld, EVP Corporate Communications, tel. (+47) 400 16 744

Nordea and DNB have entered into an agreement to combine their operations in Estonia, Latvia and Lithuania to create a leading main bank in the Baltics with strong Nordic roots.

“Combining knowledge of the Baltic market, close cooperation with our customers and developments in digital banking, Nordea has over the years built a solid and successful bank in the Baltic region with a strong position as number three in the Baltics. Now it is time to take the next step and build for the future. Together we will have the scale, stronger geographic presence and broader product offering enabling us to become the main bank for customers in the Baltics,” says Inga Skisaker, Head of Banking Baltic Countries, Nordea.

Nordea’s and DNB’s operations in the Baltics are a great match, with complementary lines of business. Nordea has built a strong position within the large corporate segment whereas DNB is strong in the SME segment. Together, the banks will also have an even larger and more competitive retail business. Furthermore, the combined bank will have a strong geographic presence, with Nordea’s strong Estonian, DNB’s strong Lithuanian and jointly strong Latvian footprints. Nordea’s and DNB’s Baltic operations have 1.300 and 1.800 employees and EUR 8 billion and EUR 5 billion in assets[1], respectively.

“With over 70 branches in the Baltics, DNB have created a dynamic and customer-centric operations. Scale is key in banking today, with larger banks having more efficient use of resources. The new bank will be better equipped to counter increasing competition in the region and capitalise on scale in order to become the main bank for more businesses, customers and partners in the Baltics,” says Mats Wermelin, Head of Baltic Division, DNB.

Nordea and DNB will have equal voting rights over the combined bank, while having different economic ownership levels that reflect the relative equity value of their contribution to the combined bank at the time of closing. The transaction is conditional upon regulatory approvals and conditions, and is expected to close around Q2 2017. The banks will operate independently until all necessary approvals have been received. 

J.P. Morgan acts as financial advisor and BA-HR as legal advisor to DNB in connection with the transaction.

With regard to the announcement we invite you to a press meeting in Riga which also will be webcasted. Inga Skisaker, Head of Banking Baltic Countries, Nordea and Mats Wermelin, Head of Baltic Division, DNB will participate. The press conference will be conducted in English.

Time: Thursday 25 August 11.30 CET (12.30EET). For security reasons, a valid identity card is required. To attend the press conference, please e-mail Signe Lonerte, [email protected], +371 2911 6146.

Place: The Radisson Blu Hotel Latvija, Elizabetes 55, Riga, Latvia.
 

[1] Based on loans and receivables to the public 

For further information:
Thomas Midteide, Group Executive Vice President, Corporate Communications, DNB, +47 962 32 017, [email protected] 

About DNB 
DNB is Norway's largest financial services group and one of the largest in the Nordic region in terms of market capitalization. The Group offers a full range of financial services, including loans, savings, advisory services, insurance and pension products for retail and corporate customers. DNB is a major operator in a number of industries, for which we also have a Nordic or international strategy. DNB is one of the world’s leading shipping banks and has a strong position in the energy sector, and the fisheries and seafood industry.

EBA stress test 2016 – unchanged CET1 ratio of 14.3 per cent for the DNB Bank Group.

The DNB Bank Group has been part of the European Banking Authority (EBA) stress test based on the year-end figures for 2015.
The adverse scenario stress test result for the DNB Bank Group shows an unchanged CET1 ratio of 14.3 per cent. DNB maintains positive results before dividend during the stress test period (2016 – 2018) which according to the EBA methodology gives a stable capital base. The risk exposure amount is also unchanged due to the effects of the unique Norwegian transitional rule based on the no risk sensitive Basel I system. DNB is satisfied with the stress test results which demonstrate the resilience of the bank’s earnings capacity and capital position.

Contact:
Rune Helland
Director Investor Relations
+47 97713250
[email protected]

DNB recorded profits of NOK 4 569 million in the second quarter of 2016, a reduction of
NOK 512 million from the second quarter of 2015. The decline in profits was primarily a result
of higher impairment losses on loans and guarantees, though basis swaps also had a negative effect on profits.

“We are satisfied with these figures, in spite of the effects of historically low interest rates and a
rise in losses. The Norwegian economy is sound, even though oil-related industries are still under restructuring,” says Rune Bjerke, group chief executive.

The common equity Tier 1 capital ratio, calculated according to the transitional rules, was 15.2 per cent, up from 13.0 per cent a year earlier. DNB is thus one of the best capitalised banks in the world.

Net interest income was reduced by NOK 185 million from the second quarter of 2015, reflecting lower lending volumes, adjusted for exchange rate effects, and higher long-term funding costs.

Net other operating income increased by NOK 732 million. A positive effect from the completion of the sale of DNB’s holding in Visa Europe, announced in November 2015, was partly offset by the negative effect from fair value adjustments of derivatives.

Reduced costs and increased digitalisation
Operating expenses were reduced by 2.6 per cent or NOK 142 million from the second quarter of 2015.

“The first half of the year was characterised by an acceleration in the digitalisation of DNB. Thus far this year, we have closed down 59 branch offices parallel to achieving higher home mortgage volumes. In addition, the number of downloads of the payment app Vipps now exceeds two million – an incredible figure. Both these facts show that Norwegian bank customers are global frontrunners when it comes to adopting new digital services,” says Bjerke.

Vipps is now being launched as a means of payment in shops and online stores. In addition, Vipps has been introduced as a payment option for public transport in the RuterBillett app and has been taken into use by thousands of sports clubs and associations.

Increase in estimated impairment losses for 2016
Impairment losses on loans and guarantees totalled NOK 2 321 million, rising by NOK 1 654 million from the second quarter of 2015. There was an increase in both individual and collective impairment losses on loans, reflecting a challenging situation for a number of oil-related companies.

“We are maintaining our guiding that total impairment losses for 2016, 2017 and 2018 will be below
NOK 18 billion. We have previously stated that total impairment losses will be below NOK 6 billion in 2016. The way things look now, however, the level of impairment will probably be higher, as some of the losses related to the downturn in the petroleum industry are materialising earlier than we expected,” says Bjerke.

DNB is continuing to work closely with customers who are affected by the oil price collapse. A number of these companies are operating under challenging market conditions, but DNB is still not experiencing any material secondary effects in the Norwegian economy.

Key figures for the second quarter of 2016
• Pre-tax operating profits were NOK 5.8 billion (6.8)
• Profit for the period was NOK 4.6 billion (5.1)
• Earnings per share were NOK 2.74 (3.04)
• Return on equity was 9.9 per cent (12.1)
• The cost/income ratio was 39.9 per cent (42.8)
• The common equity Tier 1 capital ratio (transitional rules) was 15.2 per cent (13.0)

Comparable figures for 2015 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, Corporate Communications, 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 www.dnb.no/en/ir

DNB will publish its results for the second quarter of 2016 on Tuesday, 12 July 2016 at 7.30 am CEST.

12 July at 9.30 am CEST: press conference accessible via live web TV
Place: DNB’s head office in Bjørvika, Dronning Eufemias gate 30, Oslo.
A live broadcast will be available at www.dnb.no/en/ir.
Please register your attendance in Oslo at [email protected].
The press conference will be held in Norwegian.

12 July at 1.30 pm CEST: conference call for analysts and investors
To attend the conference call: dial (+47) 21 56 33 18 or from outside Norway: +44 (0) 20 3003 2666 or from the US: +1 646 843 4608. Password: DNB Q2.
The conference call and replay will be available at www.dnb.no/en/ir.

13 July at 7.30 am BST: breakfast conference for analysts in London
Place: DNB Bank ASA London Branch, 8th Floor, The Walbrook Building, 25 Walbrook London EC4N8AF.
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 second quarter of 2016 on Tuesday, 12 July 2016 at 7.30 am CEST.

12 July at 9.30 am CEST: press conference accessible via live web TV
Place: DNB’s head office in Bjørvika, Dronning Eufemias gate 30, Oslo.
A live broadcast will be available at www.dnb.no/en/ir.
Please register your attendance in Oslo at [email protected].
The press conference will be held in Norwegian.

12 July at 1.30 pm CEST: conference call for analysts and investors
To attend the conference call: dial (+47) 21 56 33 18 or from outside Norway: +44 (0) 20 3003 2666 or from the US: +1 646 843 4608. Password: DNB Q2.
The phonecast (listen only mode) and replay will be available at www.dnb.no/en/ir.

13 July at 7.30 am BST: breakfast conference for analysts in London
Place: DNB Bank ASA London Branch, 8th Floor, The Walbrook Building, 25 Walbrook London EC4N8AF.
Please register your attendance in London at [email protected].

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