Stock and press releases

DnB NOR achieved a profit of NOK 2 493 million in the third quarter of 2011, compared with NOK 3 038 million in the third quarter of 2010. Total income rose by NOK 803 million from the year-earlier period.

 
"The Group's financial performance in the third quarter reflects the turbulence in the financial markets, which had a particularly negative impact on profits in Vital. On the other hand, the turmoil has also ensured significant mark-to-market adjustments in other areas of operations, offsetting the decline in profits in Vital. There is also a positive trend in the Group's banking operations," says Rune Bjerke, group chief executive.

DnB NOR is continuing to take market share. Average lending volumes rose by 7.1 per cent from the third quarter of 2010. Lending spreads contracted by 0.02 percentage points from the year-earlier period, reflecting continued strong competition.

Increase in write-downs
There was a generally low level of write-downs in the Group's Norwegian-based operations in the third quarter. Write-downs in Retail Banking were reduced by NOK 100 million from the third quarter of 2010. Write-downs in other segments, including shipping, remained at a low level. Nevertheless, total write-downs on loans and guarantees increased by NOK 527 million from the third quarter of 2010, which largely represents write-downs on the home mortgage portfolio in Latvia.

"Latvia accounted for 90 per cent of write-downs on loans in DnB NORD, our Baltic operations, due to a reassessment of collateral values and rising costs associated with the repossession of residential properties. We intend to monitor the operations in Latvia more closely and expect a reduction in write-downs on loans," says Bjerke. 

The Group's write-downs totalled NOK 1 170 million in the third quarter.

Sound performance in the first three quarters
DnB NOR recorded a profit of NOK 8 890 million in the first three quarters of 2011, an increase from NOK 8 778 million in the corresponding period of 2010. Average lending volumes increased by NOK 63.5 billion or 5.7 per cent from the first three quarters of 2010.

Strategy and long-term targets remain unchanged
"DnB NOR has more than 80 per cent of its operations in Norway, and we expect a continued strong trend in our home market and a healthy economic situation in Norway. Internationally, we anticipate more selective growth in our priority areas, which are shipping, energy and seafood," says Bjerke. 

The European economy is going through a challenging period, and there is great uncertainy as to whether the most heavily indebted countries will be able to serve their debt. Even though most of DnB NOR's operations are concentrated in Norway, the bank is also affected by the serious situation in Europe. Overall, DnB NOR expects a positive future financial trend for the Group. Though it may be more demanding to reach its financial targets in the short term, the Group's strategy and long-term targets remain unchanged.

Key figures for the third quarter of 2011
· Pre-tax operating profits before write-downs were NOK 5.2 billion (4.8)
· Profit for the period was NOK 2.5 billion (3.0)
· Earnings per share were NOK 1.53 (1.90)
· Return on equity was 8.8 per cent (11.8)
· The ordinary cost/income ratio was 48.2 per cent (48.2)

Comparable figures for the third quarter of 2010 in parentheses.

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

Contact persons:
Trond Bentestuen, group executive vice president, Corporate Communications,
tel.: +47 950 28 448
Thomas Midteide, executive 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.no (http://www.dnbnor.no)

Preliminary results 2011 and fourth quarter 2011:  9 February

Annual General Meeting:  25 April

Ex-dividend date:  26 April

First quarter 2012:  27 April

Second quarter 2012:  12 July

Third quarter 2012:  25 October

DnB NOR Bank ASA will present its results on the same dates.

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

DnB NOR Bank passes the EU-wide stress test with good margin. The solid performance is due to a robust Norwegian economy, a strong capital position, a low risk profile and no exposure to debt-ridden sovereigns in the Euro-zone.

DnB NOR Bank was subject to the 2011 EU-wide stress test conducted by the European Banking Authority (EBA), in cooperation with the Norwegian FSA (Finanstilsynet), the European Central Bank (ECB), the European Commission (EC) and the European Systemic Risk Board (ESRB).

DnB NOR Bank notes the announcements made today by the EBA and Finanstilsynet on the EU-wide stress test and fully acknowledges the outcomes of this exercise.
The EU-wide stress test, carried out across 91 banks covering over 65% of the EU banking system total assets, seeks to assess the resilience of European banks to severe shocks and their specific solvency to hypothetical stress events under certain restrictive conditions.

The assumptions and methodology were established to assess banks' capital adequacy against a 5% Core Tier 1 capital benchmark and are intended to restore confidence in the resilience of the banks tested. The adverse stress test scenario was set by the ECB and covers a two-year time horizon (2011-2012). The stress test has been carried out using a static balance sheet assumption as at December 2010. The stress test does not take into account future business strategies and management actions and is not a forecast of DnB NOR Bank profits.

As a result of the assumed shock, the estimated consolidated Core Tier 1 capital ratio of DnB NOR Bank would change to 9.0% under the adverse scenario in 2012 compared to 8.3% as of end of 2010. DnB NOR Bank will produce significant positive results even under the adverse scenario, and combined with the static balance sheet assumption, this explains why DnB NOR shows a strengthening of the Core Tier 1 ratio. 

Details on the results observed for DnB NOR Bank is available at www.dnbnor.no (http://www.dnbnor.no/).

The EU-wide stress test requires that the results and weaknesses identified, which will be disclosed to the market, are acted on to improve the resilience of the financial system. Following completion of the EU-wide stress test, the results determine that DnB NOR Bank meets the capital benchmark set out for the purpose of the stress test. The bank will continue to ensure that appropriate capital levels will be maintained.

Contact persons for analysts:
Per Sagbakken, head of IR/Long-term Funding, tel.: +47 90 66 11 59
Thor Tellefsen, IR/Long-term Funding, tel.: +47 91 54 43 85

Contact persons for the press:
Bjørn Erik Næss, CFO, tel.: +47 41 50 52 01
Trond Bentestuen, group executive vice president, Corporate Communications, tel.: +47 95 02 84 48

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

DnB NOR achieved a profit of NOK 3 546 million in the second quarter of 2011, an increase of NOK 723 million from the second quarter of 2010. 

"We are very pleased with these profit figures. This is our second best quarterly performance since the financial crisis, surpassed only by the particularly healthy profits recorded in the fourth quarter of 2010. Rising interest rate levels and low write-downs had a positive impact on the quarter, though there is still intense competition for both loans and deposits in the Norwegian market," says Rune Bjerke, group chief executive.

DnB NOR is in the process of reversing the falling trend in its market shares of lending. There was a NOK 47.5 billion increase in lending volumes from end-June 2010. Lending spreads contracted by 0.05 percentage points from the second quarter of 2010, while deposit spreads remained relatively unchanged.

Write-downs remain low
There was a generally low level of write-downs in the second quarter, with a further reduction in write-downs in DnB NORD. Write-downs on loans and guarantees totalled NOK 457 million for the quarter, down NOK 421 million from the second quarter of 2010.

"The low level of write-downs once again demonstrates the sound quality of our loan portfolio. In addition, the Norwegian economy is generally in good shape. There is a continued decline in the level of individual write-downs, which is lower than normalised losses for the Group as a whole," says Bjerke.

Individual write-downs in DnB NORD were reduced by close to 72 per cent, from NOK 653 million in the second quarter of 2010 to NOK 184 million in the corresponding period in 2011.

Good first half year
DnB NOR recorded a profit of NOK 6 397 million in the first half of 2011, an increase from NOK 5 740 million in the first half of 2010.

There was a NOK 47.5 billion increase in lending from end-June 2010. Lending spreads were stable measured against the 3-month money market rate. Net interest income increased by NOK 761 million during the period, mainly due to rising volumes.

Further growth expected
"Norway is doing well, with low unemployment and strong growth, both in GDP and in the population. This provides a sound basis for our growth ambitions, as we are influenced by increased investment willingness among our customers. In the personal customer market, intense competition and pressure on home mortgage margins will continue," says Bjerke.

DnB NOR anticipates rising growth both in Norway and internationally over the next six months and expects greater financial market activity to compensate for pressure on margins and ensure a continued high level of income in DnB NOR Markets. In the longer term, it is expected that growth in the Baltic States will again surpass average European levels.

Key figures for the second quarter of 2011
· Pre-tax operating profits before write-downs were NOK 5.1 billion (5.2)
· Profit for the period was NOK 3.5 billion (2.8)
· Earnings per share were NOK 2.18 (2.01)
· Return on equity was 12.6 per cent (12.8)
· The ordinary cost/income ratio was 49.2 per cent (50.3)

Comparable figures for the second quarter of 2010 in parentheses.

Contact persons:
Trond Bentestuen, group executive vice president, Corporate Communications, tel.: +47 950 28 448
Thomas Midteide, executive 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.no (http://www.dnbnor.no/)

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On 16 June 2011, the Supervisory Board elected Jarle Bergo as a new member of the Board of Directors of DnB NOR ASA. Sverre Finstad and Carl A. Løvvik were elected as new board members to represent the employees, with Hans-Kristian Sætrum and Jørn O. Kvilhaug as new deputies.

All with a term of office of up to two years.

The Board of Directors in DnB NOR ASA now has the following composition:

Members representing the shareholders (term):
Jarle Bergo (2013)
Bente Brevik (2012)
Tore Olaf Rimmereid (2012)
Bjørn Sund, vice-chairman (2012)
Anne Carine Tanum, chairman (2012)

Members representing the employees (term):
Ingjerd Skjeldrum (2012)
Sverre Finstad (2013)
Carl A. Løvvik (2013)

Deputies representing the employees (term):
Hans-Kristian Sætrum (2013)
Jorunn Løvås (2012)
Jørn O. Kvilhaug (2013)

 

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

DnB NOR is arranging a Capital Markets Day in Oslo on 15 June 2011 at 9.00 am CET.

The presentations are enclosed and are available on dnbnor.no (https://www.dnbnor.no/about-us/investor-relations.html/?LA=EN).

On the Capital Markets Day, an account will be given of the Group's current position and its future ambitions and opportunities. In addition, the Group's financial status and new target figures will be presented, along with a more detailed description of its ambitions in Norway and internationally. The current status of the integration process with DnB NORD and the Group's future strategy in the Baltic States and Poland will also be explained.

The presentations will be shown on Web TV. More information is available on dnbnor.no (https://www.dnbnor.no/about-us/investor-relations.html/?LA=EN). Press release is enclosed.