DNB recorded profits of NOK 4 654 million in the second quarter of 2014, up NOK 856 million from the second quarter of 2013. The rise in profits contributes to building up equity in the bank in accordance with the authorities’ requirements. DNB is now among the world’s best capitalised banks.

“As a result of the strong profits achieved in the second quarter, we are on schedule to fulfil the capital requirements for banks. The rise in profits from the second quarter of 2013 reflects higher lending volumes, wider lending spreads, reduced restructuring expenses and lower impairment losses on loans,” says Rune Bjerke, group chief executive.

Higher lending volumes boost interest income

Net interest income rose by NOK 387 million from the second quarter of 2013. Impairment losses on loans and guarantees came to NOK 554 million for the quarter, significantly lower than the NOK 937 million recorded in the second quarter of 2013, but higher than in the two preceding quarters. Lower impairment losses on loans to large corporates and international businesses were the main reason behind the reduction in impairment from the second quarter of 2013. The increase from the first quarter of 2014 reflected reduced reversals on both previous individual impairment losses and collective impairment losses. There was a continued positive trend in new impairment losses.

DNB’s common equity Tier 1 capital ratio was 12.1 per cent at end-June 2014, including 50 per cent of interim profits. If DNB had been able to report based on the Swedish authorities’ regulations, the Group could have reported a common equity Tier 1 capital ratio of as much as 17.3 per cent.

“DNB is now among the best capitalised banks in the world. This provides vital security for both customers, employees and shareholders. During the quarter, DNB was also classified as a systemically important bank by the Norwegian authorities, which emphasises the importance of being present for individuals, companies and local communities throughout Norway. This classification also entails an additional own funds requirement for systemically important banks, which means that we must continue to increase our equity considerably in order to reach the target,” says Bjerke.

Narrower lending spread than in the previous quarter

Average lending spreads narrowed from 2.42 per cent in the first quarter of 2014 to 2.39 per cent in
the second quarter, while deposit spreads improved somewhat, from -0.29 per cent to -0.27 per cent. Operating expenses were reduced by 7.6 per cent from the year-earlier period, mainly due to restructuring expenses in 2013, while the cost/income ratio was 43.8 per cent, well below the 45 per cent target.

“The increase in the bank’s lending volumes is a positive sign, especially with respect to small and medium-sized enterprises. This could mean that the economic downturn Norway has experienced over the past year, is more moderate than many feared. Petroleum investment will probably decline slightly in the period ahead, but is expected to remain at a high level. However, the recent rise in housing prices, along with continued income growth in the household sector and low real interest rates, will probably contribute to a new upturn in housing investment. The significant rise in public administration investment is another factor that could cause renewed growth in mainland investment next year,” says Bjerke.

Key figures for the second quarter of 2014

• Pre-tax operating profit before impairment was NOK 6.7 billion (6.1)
• Profit for the period was NOK 4.7 billion (3.8)
• Earnings per share were NOK 2.86 (2.33)
• Return on equity was 12.7 per cent (11.6)
• The ordinary cost/income ratio was 43.8 per cent (48.0)

Comparable figures for the second quarter of 2013 in parentheses.

This information is subject to the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.

Contact person:

Thomas Midteide, group executive vice president, Corporate Communications, tel.: + 47 962 32 017

The quarterly report, presentation and Fact Book can be downloaded from

www.dnb.no/investor-relations

In the third quarter of 2014, the DNB Group will record a positive effect of basis swaps connected to funding of approximately NOK 449 million.

In the third quarter of 2013, there was a negative effect of basis swaps of NOK 223 million.

Basis swaps are derivative contracts entered into in connection with long-term funding in international capital markets where the relevant currency is converted to Norwegian kroner. These swaps are hedging instruments, and over the lifetime of the derivatives the mark-to-market adjustments will have zero effect.

For further information, please contact Investor Relations in DNB:
Per Sagbakken: +47 23268400
Jan Erik Gjerland: +47 23268408

07:30 CET – result release
DNB’s 3Q 2014 results will be released at 07:30 am CET on Thursday, 23 Oct 2014, and we would like to invite you to the following presentations:

09:30 CET – press conference & live web-TV
A press conference (in Norwegian) will be held on Thursday, 23 Oct at 9:30 am CET at DNB’s head office in Bjørvika, Dronning Eufemias gate 30, Oslo. For those who are unable to attend the presentation in Bjørvika, there will be a live web-TV broadcast of the conference (in Norwegian). For further information, please visit www.dnb.no/ir. Please register your attendance in Oslo at [email protected]

14:00 CET – investors and analyst conference call & phone-cast
A conference call for analysts will be held on Thursday, 23 Oct at 2:00 pm CET. To attend the conference call we kindly ask you to dial in 10 minutes before start +47 21 56 33 18 or international: +44 (0) 20 3003 2666. Password: DNB2014. You can also attend the call by listen only mode at the phone-cast link at the following link: http://presenter.qbrick.com/?pguid=f2ac1ecd-96d9-42ce-9f3d-820bae211553. A replay of the phone-cast will be available after the call via the link above. More details on the conference call can be found on our website www.dnb.no/ir.

Friday 24 Oct 0745 for 0800 GMT – analyst breakfast meeting in London
An analyst breakfast meeting will be held in London on Friday, 24 Oct at 0745 am for 0800 am start (local time) at DNB’s new London Branch, (and please note the new address) 8th Floor, The Walbrook Building, 25 Walbrook, London EC4N 8AF. Please register your attendance in London: [email protected]

Contact
For further information, please contact:
Per Sagbakken, head of Investor Relations, phone +47 23 26 84 00 or
Jan Erik Gjerland, e-mail: [email protected], phone +47 23 26 84 08.

Third quarter 2014

DNB recorded profits of NOK 5 686 million in the third quarter of 2014, up NOK 805 million from the third quarter of 2013. Adjusted for the effect of basis swaps, there was a NOK 317 million increase in profits, reflecting higher lending volumes, reduced restructuring expenses and lower impairment losses on loans. As a result of the interest rate adjustments implemented in the second quarter of 2014, lending spreads narrowed slightly from the third quarter of 2013 relative to the short-term money market rate. Nevertheless, there was a pronounced rise in net interest income from the year-earlier period. The common equity Tier 1 capital ratio, calculated according to the transitional rules, rose from 11.0 per cent at end-September 2013 to 12.6 per cent, including 50 per cent of interim profits. DNB’s target is to achieve a common equity Tier 1 capital ratio of 13.5-14.0 per cent by year-end 2016

The DNB Bank Group has been part of the European Banking Authority (EBA) stress test based on the year-end figures for 2013.

The European Central Bank (ECB) has in addition conducted an Asset Quality Review (AQR) for banks, which will come under ECB supervision. In the DNB Bank Group, the subsidiaries in Lithuania (representing 1.6 per cent of the Group’s loan book) and the subsidiaries in Estonia (representing 0.3 per cent of the Group’s loan book) have been subject to the ECB’s AQR. The results from the AQR have been integrated in the stress test results both at group level and for the subsidiaries in Lithuania and Estonia.

The adverse scenario stress test result for the DNB Bank Group shows a CET1 ratio of 11.3 per cent, 12.7 per cent for DNB Lithuania, and 11.8 per cent for DNB Estonia. The required minimum ratio defined by the EBA and ECB was 5.5 per cent. DNB is satisfied with the stress test results.

DNB is pleased to invite you to our

CAPITAL MARKETS DAY

Date: Thursday 27 November 2014

Time: 12:30 pm – 4:30 pm including Q&A

Location: Hotel Claridge's, Brook Street, Mayfair, London W1K 4HR, England

Registration & lunch from 11:30 am – 12:30 pm

We will present important issues for DNB in today’s rapidly changing business environment. Topics will include operating environment, financial ambitions, capital management and business units’ updates from Wealth Management and SME Banking.

REGISTRATION

We encourage you to register online at https://www.deltager.no/dnbcmd2014.
The closing date for registration is 24 November 2014.
The event will also be webcasted.

We look forward to seeing you in London.

On behalf of DNB ASA,
Per Sagbakken,
Head of Investor Relations

(London, 27 Nov. 2014) DNB has delivered on the promise of reaching a return on equity (ROE) above 12 per cent, despite a strong capital build-up. Towards 2017, DNB will focus on capital and operational efficiency, asset quality and capital-light products to secure a competitive ROE and increased dividends.

“We have proven that our target of 12 per cent ROE is both ambitious and realistic. DNB’s plan is working, in terms of capital efficiency, cost control and income generation. We are now raising the bar for our cost reduction ambitions towards 2017, from a cost/income ratio below 45 per cent to approximately 40 per cent,” says CEO of DNB, Rune Bjerke.

DNB expects to reach the capital requirement of 13 per cent determined by Norwegian regulators in 2016, and DNB has set a minimum of 14 per cent as a new capital level. DNB’s ambition is to gradually increase the dividend payout ratio from the current minimum 25 per cent, starting in 2014. The new long-term ambition, once the capital level is reached, is to pay out above 50 per cent.

“The Norwegian economy has remained strong throughout the cycle and will not be dramatically hit by a prolonged period of low oil prices. Petroleum investments will remain high also in the future, but will decline from today’s unprecedented high level. Our credit portfolio is robust, as shown by the latest EBA stress test, ranking DNB as one of the most solid banks in Europe,” says Rune Bjerke.

DNB’s financial targets towards 2017:

Return on equity (ROE):         Above 12 %

CET1 capital ratio:                 Minimum 14 % as capital level from 2016

Cost/income ratio:                 Approximately 40 % for 2017

For more information:

Per Sagbakken, head of Investor Relations, mobile +47 90 66 11 59

Thomas Midteide, Group EVP Corporate Communications, mobile +47 962 32 017

See the presentation from the CMD on webcast here from 12.30 am GMT.

The presentations from the event are attached or available on www.dnb.no/ir

DNB will hold a telephone conference on Friday, 19 December 2014 at 14:00 CET (1:00 pm London time). There will be a broad presentation of exposures in the business areas: Oil & Gas, Offshore and Oilfield Services.

Please call in 10 minutes before the start of the conference on:
+47 21 56 33 18 or
+44 (0) 808 109 0700 (UK) or
+1 212 999 6659 (US based).
Password: DNB - Investor Relation

It will also be possible to listen in via the following link: http://presenter.qbrick.com/?pguid=53009e7f-e561-4ab9-853f-47be051dac92

To ask questions you must call in in advance. The conference can also be replayed via the same link.

The presentation material will be available at www.dnb.no/ir approximately 30 minutes before the start of the conference.

Contacts
Per Sagbakken, head of IR, +47 23 26 84 00
Jan Erik Gjerland, IR, +47 23 26 84 08

DNB will hold a telephone conference on Friday, 19 December 2014 at 14:00 CET (1:00 pm London time). There will be a broad presentation of exposures in the business areas: Oil & Gas, Offshore and Oilfield Services.

Please call in 10 minutes before the start of the conference on:
+47 21 56 33 18 or
+44 (0) 808 109 0700 (UK) or
+1 212 999 6659 (US based).
Password: DNB - Investor Relation

It is also possible to listen in via the following link: http://presenter.qbrick.com/?pguid=53009e7f-e561-4ab9-853f-47be051dac92

To ask questions, please call in in advance. The conference may also be replayed via the same link.

The presentation material is available at www.dnb.no/ir presentations, and attached to this mail.

Contacts
Per Sagbakken, head of IR, +47 23 26 84 00
Jan Erik Gjerland, IR, +47 23 26 84 08