Stock and press releases

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.

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)

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 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

The Annual General Meeting in DnB NOR ASA on 27 April 2010 approved the Board of Directors' proposal for the 2009 annual report and accounts, including the distribution of a dividend for 2009 of NOK 1.75 per share to registered shareholders as at 27 April 2010, to be distributed as from 11 May 2010. The shares in DnB NOR ASA will be quoted ex-dividend on 28 April 2010.

The Annual General Meeting authorised the Board of Directors of DnB NOR ASA to acquire own shares for a total face value of up to NOK 1,547,358,918, corresponding to 9.5 per cent of share capital. The shares may be purchased through the stock market. Each share may be purchased at a price between NOK 10 and NOK 150. The authorisation will be valid for a period of 12 months from 27 April 2010. Acquired shares shall be sold in accordance with regulations on the reduction of capital. An agreement has been signed with the Ministry of Trade and Industry for the redemption of a proportional share of government holdings to ensure that the government's percentage ownership does not change as a result of the redemption of repurchased shares

In addition, the General Meeting endorsed the Election Committee's proposal for the election of members and a deputy to the Supervisory Board and members to the Election Committee.

The minutes of the Annual General Meeting will be published on www.dnbnor.com.

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

DnB NOR will hold a Capital Markets Day in London on 18 March 2010 at 09.00 hrs local time.

The presentations will be published on dnbnor.com and are enclosed herewith.

Group chief executive Rune Bjerke will give an account of the Group's position and ambitions in the Norwegian market. The Group's international ambitions, financial status and new target figures will also be presented.

The presentations will be broadcast on web-TV. For more information, please visit dnbnor.com.