Stock and press releases

The Extraordinary General Meeting in DNB ASA was held on 13 June 2016 in Oslo.

The minutes of the Extraordinary General Meeting are enclosed.

On 16 March 2016, the Board of Directors of DNB ASA decided to once again offer employees in DNB ASA shares with a discount of NOK 1,500.

The shares were allotted today, 20 May 2016, at a gross price of NOK 99.5856 per share.

Attached is a list of the primary insiders that availed themselves of the offer.

Shareholders in DNB ASA are hereby invited to attend the Extraordinary General Meeting to be held at 8.30 am on Monday, 13 June 2016 in DNB's premises in Dronning Eufemias gate 30, Bjørvika, Oslo, Norway.

The Notice of Extraordinary General Meeting is attached.

Today, 29 April 2016, a total of 277,876 shares in DNB ASA were acquired on behalf of certain leading employees and risk takers. The purchase was executed collectively at an average price per share of NOK 104.1498.

The shares were acquired in accordance with the regulation on remuneration in financial institutions etc., which states that at least half of annual variable remuneration shall be awarded as shares and be subject to certain lock-up mechanisms.

The employees have been given a compensation for decreased share value resulting from the lock-up at approximately 6.2%.

A list of primary insiders of DNB ASA that have increased their shareholding is attached.

DNB recorded profits of NOK 5 222 million in the first quarter of 2016, a reduction of NOK 1 315 million from the first quarter of 2015. Adjusted for the effect of basis swaps, the decline in profits was NOK 746 million, reflecting restructuring costs in connection with reorganisation processes and the closing of branch offices, as well as higher impairment losses. DNB’s common equity Tier 1 capital ratio increased from 12.7 per cent in the first quarter of 2015 to 15.2 per cent in 2016.

“This is a very strong financial performance which we are very satisfied with. For the first time, our common equity Tier 1 capital ratio has passed the 15 per cent mark. Thus, we have reached a milestone on our way to making DNB one of the world’s best capitalised banks,” says Rune Bjerke, group chief executive.

The first three months of 2015 were characterised by major changes. On 4 February, Personal Banking Norway in DNB announced its new strategy to meet tomorrow’s retail banking needs, with a large-scale reduction in the number of branch offices, and, at the same time, a clear focus on digital development and the customer service centre. Solutions for associations and companies have recently been launched in the payment app Vipps.

“We are now laying the groundwork to ensure that DNB will continue to be at the forefront with respect to customer service and digital solutions which make everyday banking easier for our customers. Nevertheless, we know that some customers still find the digital reality difficult to understand. Therefore, over the last few months, we have invited more than 50 000 customers to attend our Internet bank courses to ease the transition,” says Bjerke.

Increase in estimated impairment losses
Impairment losses on loans and guarantees totalled NOK 1 174 million for the quarter, up from NOK 575 million in the first quarter of 2015. More than 50 per cent of the impairment losses represented collective impairment, which is affected by a less positive outlook for the Norwegian economy and a negative trend in some sectors. Individual impairment losses were on a level with the year-earlier period. Non-performing and doubtful loans and guarantees increased by NOK 1 billion from 2015.

There was a negative trend in the offshore service vessel and rig markets during the quarter, which had an impact on collective impairment. In consequence of this, impairment losses are estimated to total up to NOK 6 billion in 2016. The level of impairment in 2017 is expected to be on a level with the estimate for 2016. A reduction in impairment losses is anticipated in 2018.

Net interest income increased by NOK 127 million, reflecting exchange rate movements and wider spreads. Currency-adjusted operating expenses, excluding non-recurring restructuring expenses, declined by NOK 159 million from the first quarter of 2015. The cost/income ratio for the quarter was 41.8 per cent.

Cautious slowdown in the Norwegian economy
Norwegian Mainland GDP rose by 1 per cent in 2015, which was lower than most forecasts. The trend at year-end 2015 carried on into 2016, with continued low oil prices and a slight increase in unemployment.

“We are working closely with the customers who are hardest hit by the oil price collapse. People must be able to rely on DNB, also when cash flows become strained and loans are due for repayment. The employees in DNB invest many working hours to put together sound restructuring processes for customers and to secure the bank’s values in challenging markets,” says Bjerke. “However, we are also seeing many good examples proving that it is in difficult times that new ideas are born, new companies are set up and jobs created, equipping the Norwegian economy for the future. DNB is focusing heavily on being there for entrepreneurs and innovators across the country,” concludes the group chief executive.

Key figures for the first quarter of 2016

• Pre-tax operating profits were NOK 6.8 billion (8.7)
• Profit for the period was NOK 5.2 billion (6.5)
• Earnings per share were NOK 3.14 (4.01)
• Return on equity was 11.2 per cent (16.1)
• The cost/income ratio was 41.8 per cent (37.0)
• The common equity Tier 1 capital ratio (transitional rules) was 15.2 per cent (12.7)

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

T
he quarterly report, presentation and Fact Book can be downloaded from
www.dnb.no/investor-relations

DNB recorded profits of NOK 5 222 million in the first quarter of 2016, a reduction of NOK 1 315 million from the first quarter of 2015. Adjusted for the effect of basis swaps, the decline in profits was NOK 746 million, reflecting restructuring costs in connection with reorganisation processes and the closing of branch offices, as well as higher impairment losses. DNB’s common equity Tier 1 capital ratio increased from 12.7 per cent in the first quarter of 2015 to 15.2 per cent in 2016.

“This is a very strong financial performance which we are very satisfied with. For the first time, our common equity Tier 1 capital ratio has passed the 15 per cent mark. Thus, we have reached a milestone on our way to making DNB one of the world’s best capitalised banks,” says Rune Bjerke, group chief executive.

The first three months of 2015 were characterised by major changes. On 4 February, Personal Banking Norway in DNB announced its new strategy to meet tomorrow’s retail banking needs, with a large-scale reduction in the number of branch offices, and, at the same time, a clear focus on digital development and the customer service centre. Solutions for associations and companies have recently been launched in the payment app Vipps.

“We are now laying the groundwork to ensure that DNB will continue to be at the forefront with respect to customer service and digital solutions which make everyday banking easier for our customers. Nevertheless, we know that some customers still find the digital reality difficult to understand. Therefore, over the last few months, we have invited more than 50 000 customers to attend our Internet bank courses to ease the transition,” says Bjerke.

Increase in estimated impairment losses
Impairment losses on loans and guarantees totalled NOK 1 174 million for the quarter, up from NOK 575 million in the first quarter of 2015. More than 50 per cent of the impairment losses represented collective impairment, which is affected by a less positive outlook for the Norwegian economy and a negative trend in some sectors. Individual impairment losses were on a level with the year-earlier period. Non-performing and doubtful loans and guarantees increased by NOK 1 billion from 2015.

There was a negative trend in the offshore service vessel and rig markets during the quarter, which had an impact on collective impairment. In consequence of this, impairment losses are estimated to total up to NOK 6 billion in 2016. The level of impairment in 2017 is expected to be on a level with the estimate for 2016. A reduction in impairment losses is anticipated in 2018.

Net interest income increased by NOK 127 million, reflecting exchange rate movements and wider spreads. Currency-adjusted operating expenses, excluding non-recurring restructuring expenses, declined by NOK 159 million from the first quarter of 2015. The cost/income ratio for the quarter was 41.8 per cent.

Cautious slowdown in the Norwegian economy
Norwegian Mainland GDP rose by 1 per cent in 2015, which was lower than most forecasts. The trend at year-end 2015 carried on into 2016, with continued low oil prices and a slight increase in unemployment.

“We are working closely with the customers who are hardest hit by the oil price collapse. People must be able to rely on DNB, also when cash flows become strained and loans are due for repayment. The employees in DNB invest many working hours to put together sound restructuring processes for customers and to secure the bank’s values in challenging markets,” says Bjerke. “However, we are also seeing many good examples proving that it is in difficult times that new ideas are born, new companies are set up and jobs created, equipping the Norwegian economy for the future. DNB is focusing heavily on being there for entrepreneurs and innovators across the country,” concludes the group chief executive.

Key figures for the first quarter of 2016
• Pre-tax operating profits were NOK 6.8 billion (8.7)
• Profit for the period was NOK 5.2 billion (6.5)
• Earnings per share were NOK 3.14 (4.01)
• Return on equity was 11.2 per cent (16.1)
• The cost/income ratio was 41.8 per cent (37.0)
• The common equity Tier 1 capital ratio (transitional rules) was 15.2 per cent (12.7)

Comparable figures for 2015 in parentheses.