DnB NOR recorded profits of NOK 2 917 million in the first quarter of 2010, roughly on a level with the year-earlier period. Write-downs on loans have shown a positive trend, with a reduction of approximately 40 per cent from the first quarter of 2009.

"We are very pleased with the Group's sound first quarter performance, achieved in spite of somewhat lower-than-normal activity levels. It is good news for us all that write-downs on loans are lower than expected. Our daily contact with small and large customers throughout Norway confirms that the Norwegian economy is far stronger than in the rest of Europe," says Rune Bjerke, group chief executive.

Key figures for the first quarter of 2010:
· Pre-tax operating profits before write-downs were NOK 4.9 billion (6.1)
· Profit for the period was NOK 2.9 billion (2.9)
· Profit after minority interests was NOK 3.1 billion (3.1)
· Earnings per share were NOK 1.92 (2.32)
· Return on equity was 12.5 per cent (15.8)
· The ordinary cost/income ratio was 49.5 per cent (43.6)
· The Tier 1 capital ratio, including 50 per cent of interim profits, was 9.4 per cent (7.0)
(Comparable figures for the first quarter of 2009 in parentheses)

Lower-than-expected write-downs
Write-downs on loans came to NOK 947 million, which is significantly lower than in the corresponding period last year, when write-downs totalled NOK 1 598 million.

"It is very rewarding that we have been able to reduce the level of write-downs to such an extent compared with last year. We believe that this trend will continue over the next quarters," says Bjerke.

Future prospects
DnB NOR aims to achieve pre-tax operating profits before write-downs of NOK 20 billion in 2010.

"The global economy appears to be emerging from the recession. We expect renewed economic growth to lead to increased credit demand. Due to rising demand combined with lower write-downs and an effective cost programme, our NOK 20 billion target remains firm, though it will be challenging to reach," says Bjerke.

DnB NOR will continue to develop efficient technological solutions which save time and costs for customers and the bank.

"More than 6 000 customer loans were approved electronically in the first quarter, with no paper involved. So far, we are the only Norwegian bank offering this service, and we find that our customers clearly appreciate these efficient services," says Bjerke.

Contact persons:
Trond Bentestuen, group executive vice president, Corporate Communications,
tel.: +47 950 28 448
Thomas Midteide, vice president Media Relations, tel.: + 47 962 32 017

The quarterly report, presentation and Supplementary Information for Investors and Analysts can be downloaded from www.dnbnor.com

DnB NOR has strengthened its position as a leading shipping, offshore and logistics (SOL) bank in China with the gaining of a Renminbi (RMB) currency licence.

The license enables the bank to provide finance to customers in China in RMB across the country. DnB NOR believes the move could be attractive to Chinese customers, in particular state-run shipping lines, as around 95% of all China's domestic ship finance is carried out in RMB.

 The bank has built up a significant presence in China over the years and today has client relationships with many of the country's leading owners. This new licence builds upon the range of products it offers from its Shanghai branch.

China is undergoing a major expansion and renewal of its domestic shipping fleet. The ability to lend in RMB to the growing number of Chinese owners is seen as an important step forward in its China strategy by DnB NOR.

Espen Lund, DnB NOR's country manager in China and head of the Shanghai branch, said: "This is a historic move for the bank and something we have been working towards since we opened in Shanghai in the Autumn of 2006.

"We now have the capacity to lend to owners with vessels flying the People's Republic of China flag. It is a significant milestone for the bank.

"As far as I am aware, DnB NOR is the only foreign specialist ship finance bank with the combination of RMB capabilities and shipping expertise on the ground in China. We look forward to increasing our lending portfolio in this area," he added.

DnB NOR's Shanghai branch has already started lending in RMB to Nordic companies based in China who require a local currency bank.

The bank is also now able to offer deposit facilities in RMB to international companies, plus a range of payment transfer facilities and foreign exchange transactions.

Espen Lund added: "Estimates show that in the next decade, China's domestic shipping fleet will expand significantly. There is a need for Chinese owners to have long-term relationships with lenders who precisely understand the shipping business and are able to support their expansion strategies.

 "We believe DnB NOR can fulfil this role as we progress in China," he said.

ENDS

 

DnB Nor Bank ASA
Singapore Branch
Tel: +65 6220 6144
Fax: +65 6224 9743
Andrew Chiang
Regional Head of Asia Corporate Banking Department Shipping, Offshore & Logistics
DID: +65 6212 0686
Email: [email protected] ([email protected]) 
www.dnbnor.com (http://www.dnbnor.com)

DnB NOR recorded a profit of NOK 2 823 million in the second quarter of 2010, a significant improvement from the year-earlier period. Write-downs on loans were more than halved compared with the second quarter of 2009, and there are signs of rising credit growth in the corporate market.

"This quarter was characterised by considerable volatility in the European financial markets. On the whole, our domestic customers have escaped the tumult, and we are experiencing a strong reduction in write-downs on loans. We must now be able to say that write-downs have settled at a level which is considerably lower than last year," says Rune Bjerke, group chief executive. 

Rune Bjerke is very satisfied with the quarterly results, which show a clear improvement compared with the year-earlier period, when profits totalled NOK 643 million. Non-recurring items reinforce the underlying positive trend. 

Key figures for the second quarter of 2010:

Adjusted for exchange rate movements, lending volumes rose by NOK 7 billion compared with the year-earlier period, and there was moderate lending growth towards the end of the second quarter. Net interest income rose by 1.6 per cent from the second quarter of 2009, while funding costs were higher in the quarter. 

Increase in other operating income
Other operating income includes a gain of NOK 1.2 billion resulting from the merger between the payment services company Nordito and the Danish PBS Holding. Even adjusted for this gain, other operating income rose by 34.6 per cent from the second quarter of 2009, partly on account of the highly volatile financial markets. 

Costs increased by 2.5 per cent from the second quarter of 2009, adjusted for non-recurring items. The Group's cost reduction programme is ahead of schedule and compensates for higher wage and price inflation. 

Lower write-downs than expected
Write-downs on loans came to NOK 878 million in the April through June period, a significant decline from NOK 2 318 million in the second quarter last year. 

"We are very pleased that we have more than halved our write-downs compared with the year-earlier period, which is positive for both us and our customers. The Norwegian economy continues to be in a class of its own in Europe, which is also reflected in DnB NOR's reduced write-downs," says Bjerke. 

DnB NOR still believes that uncertainty will prevail in the international financial markets over the coming period, but that the bank's most important markets will experience an upturn. 

"Europe will still face major challenges, but we believe that we will see healthy economic developments in the Asian markets and also a cautious improvement in the US. In Norway, we are experiencing increasing credit demand, both from people who wish to take out mortgages and from our largest clients," says Bjerke. 

Contact persons:
Trond Bentestuen, group executive vice president, Corporate Communications, tel.: +47 950 28 448
Thomas Midteide, vice president External Communication, tel.: + 47 962 32 017

The quarterly report, presentation and Supplementary Information for Investors and Analysts can be downloaded from www.dnbnor.com (http://www.dnbnor.com)

Since 2005, DnB NOR Bank ASA (DnB NOR) and Norddeutsche Landesbank Girozentrale (NORD L/B) have owned 51 per cent and 49 per cent, respectively, of Bank DnB NORD A/S. Bank DnB NORD A/S has subsidiary banks in Latvia, Lithuania and Poland.
DnB NOR has today, on 14 July 2010, pursuant to the shareholder agreement, notified NORD L/B that DnB NOR reserves the right to exercise its option to acquire NORD L/B's 49 per cent ownership interest in Bank DnB NORD A/S. If DnB NOR chooses to exercise its option, this must take place between 1 and 30 August 2010. After DnB NOR has exercised its option, NORD L/B may require to take over the Polish subsidiary bank.
If DnB NOR chooses not to exercise its option, NORD L/B may require that DnB NOR takes over its 49 per cent share minus the Polish bank. Alternatively, NORD L/B may require to take over DnB NOR's 51 per cent share.
If the parties do not reach agreement on price, this must be determined in accordance with an agreed arbitration mechanism.

Since 2005, DnB NOR Bank ASA (DnB NOR) and Norddeutsche Landesbank Girozentrale (NORD/LB) have owned 51 per cent and 49 per cent, respectively, of Bank DnB NORD A/S. Bank DnB NORD A/S has subsidiary banks in Latvia, Lithuania and Poland. 

In a statement to Oslo Børs on 14 July 2010, it was announced that DnB NOR, pursuant to the shareholder agreement, had notified NORD/LB that the bank reserved the right to exercise its option to acquire NORD/LB's 49 per cent ownership interest in Bank DnB NORD A/S. 

In a statement to NORD/LB today, DnB NOR has exercised its option to acquire NORD/LB's ownership interest in Bank DnB NORD A/S. 

If the parties do not reach agreement on price, this must be determined in accordance with an agreed arbitration mechanism. 

DnB NOR considers DnB NORD's geographic area of operation to be a region with a good future earnings potential, and that this is a good time to strengthen its position in the Baltic region.

 

DnB NOR achieved a profit of NOK 3 038 million in the third quarter of 2010, a significant improvement from the year-earlier period. Lower write-downs on loans were the main factor behind the rise in profits, though there was also a rise in interest income.  

"The Norwegian economy is continuing to show clear signs of improvement, and we are experiencing an increase in credit demand from both private individuals and companies. Parallel to this, we have a gratifying and pronounced decline in write-downs on loans," says Rune Bjerke, group chief executive. 

Rune Bjerke is very satisfied with the quarterly results, which show a clear improvement compared with the year-earlier period, when profits totalled NOK 1 760 million. 

Key figures for the third quarter of 2010:

Average lending volumes were NOK 8.1 billion lower in the third quarter of 2010 than in the year-earlier period and rose by NOK 12.8 billion from the second quarter of 2010. Net interest income was just under NOK 240 million higher than in both the third quarter of 2009 and the second quarter of 2010.

Lower write-downs
"We are very pleased to note the significant reduction in write-downs on loans compared with the year-earlier period, which is positive for both us and our customers. This showns that DnB NOR has emerged stronger from the financial crisis and that the Norwegian economy remains robust," says Bjerke. 

Write-downs on loans totalled NOK 643 million in the third quarter, down from NOK 2 277 million in the year-earlier period. There was a downward trend in write-downs towards the end of 2009, and this has continued in 2010. 

Among the global top 10 per cent
For the second consecutive year, DnB NOR has qualified for inclusion in the Dow Jones World Sustainability Index (DJSI World). This means that the Group is regarded as being among the top 10 per cent within its industry worldwide in terms of sustainability.  

"We are under an obligation to show responsibility and accountability in relation to the society we are a part of. The fact that we once again qualified for inclusion in the world's most prestigious sustainability index is a recognition of our long-term commitment to environmental and social issues," says Bjerke. 

Contact persons:
Trond Bentestuen, group executive vice president, Corporate Communications,
tel.: +47 950 28 448
Thomas Midteide, vice president External Communication, tel.: +47 962 32 017
 

The quarterly report, presentation and Supplementary Information for Investors and Analysts can be downloaded from www.dnbnor.com (http://www.dnbnor.com) 

DnB NOR has concluded an agreement to acquire the German bank NORD/LB's 49 per cent ownership interest in DnB NORD for a consideration of EUR 160 million in cash.

Since year-end 2005, DnB NOR ASA (DnB NOR) and Norddeutsche Landesbank Girozentrale (NORD/LB) have jointly owned Bank DnB NORD A/S (DnB NORD). On 2 August 2010, DnB NOR exercised its option to acquire NORD/LB's 49 per cent ownership interest in DnB NORD. Since then, the parties have been in negotiations to agree on the consideration for the shares. An agreement has now been reached whereby DnB NOR pays a cash consideration of EUR 160 million to NORD/LB. After the completion of the transaction, DnB NOR will own 100 per cent of the shares in DnB NORD. 

"The Baltic states and Poland have higher growth potential than Western Europe, and DnB NOR wishes to grow within the retail banking segment in these countries to realise its general growth ambitions. We are also seeing clear signs that the macroeconomic situation in the Baltic states is improving, and the Polish economy has been among the strongest in Europe throughout the financial crisis," says Rune Bjerke, group chief executive of DnB NOR. 

As of 30 September 2010, DnB NORD had approximately EUR 10 billion in total assets, 155 branch offices across the four countries where it is present (Estonia, Latvia, Lithuania and Poland), around 960 000 customers and 3 100 employees. 

DnB NORD will be organised as a division in the business area Large Corporates and International, which is headed by Leif Teksum, group executive vice president. 

"We have already drawn up concrete plans of action to implement a good and efficient integration process. DnB NORD has highly qualified employees in all four markets and we will further strengthen the organisation with competent employees from DnB NOR," says Rune Bjerke. 

The transaction is subject to the approval of the two banks' supervisory boards and the respective national regulatory authorities. 

DnB NOR was advised by J.P. Morgan on this transaction.