Stock and press releases

In the third quarter of 2020, the DNB Group will recognise a negative effect of NOK 363 million from basis swaps connected to funding. Furthermore, a negative effect of NOK 391 million from the Additional Tier 1 capital will also be recognised.

At the Annual General Meeting of DNB ASA on 30 June 2020, it was decided that the company's share capital was to be reduced by NOK 299 363 640, from NOK 15 803 013 850 to NOK 15 503 650 210, through the cancellation or redemption of a total of 29 936 364 shares. The reduction in capital is in line with the share buy-back programmes implemented by the company in the period between the Annual General Meetings in 2019 and 2020. The Register of Business Enterprises was notified of the capital reduction on 14 July 2020, the subsequent six-week creditor deadline has passed, and the reduction in capital has been implemented in line with the decision made at the Annual General Meeting. The share capital of DNB ASA is now NOK 15 503 650 210, divided into 1 550 365 021 shares of NOK 10 each.

For further information, please contact Rune Helland, Head of Investor Relations, tel. (+47) 23 26 84 00 / (+47) 97 71 32 50

This information is subject to the disclosure requirements set out in section 5-8 of the Securities Trading Act.

Today, 14 July 2020, a total of 6,150 shares in DNB ASA were acquired on behalf of certain senior executives in DNB. The share purchase was executed collectively at an average price per share of NOK 145.845.

The shares were purchased in accordance with the share programme that was approved by the Annual General Meeting on 30 June 2020. Shares that are acquired through the programme have a holding period which lasts for as long as the person holding the shares is part of the Group Management team. Upon leaving the Group Management team, the shares are released in stages over a period of three years.

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

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

DNB's profits for the second quarter of 2020 were NOK 5 019 million, a decrease of NOK 1 115 million from the second quarter of 2019. The result is nonetheless significantly better than that of this year's first quarter, and the economic outlook is now less uncertain.

After a very demanding start to the year, we are again seeing some bright spots for the Norwegian economy. The level of activity is higher, and this has affected DNB's results for the second quarter.

"The situation is still challenging for many, not least for people who have been temporarily laid off and for businesses struggling to make ends meet. But the Norwegian economy is landing on its feet, and in a number of areas, things are looking a lot brighter than they did at the end of last quarter. This is the case, among other things, for consumer confidence, the property market, personal consumption levels, employment rates and the oil price," says Group Chief Executive Officer Kjerstin Braathen.

Oil companies are most affected

The impairment losses in DNB's financial statements are still higher than normal, but they are 63 per cent lower than in the first quarter. This is mainly due to impairment losses associated with the oil-related industries, which amounted to around NOK 1.9 billion for the quarter. Compared with the first quarter, impairment losses for these industries were NOK 742 million lower in this quarter.

Oil, gas and offshore account for 88 per cent of the Group's impairment losses, while losses for personal customers and other corporate customers are low.

"Market conditions will continue to be challenging for some industries, such as the offshore industry, in the time ahead," says Kjerstin Braathen.

She emphasises that there is still a higher level of uncertainty than normal, both as regards the development of COVID-19 infection levels and how the economy will recover after the crisis.

Increasing income

Net interest income was NOK 9 451 million in the second quarter, which was NOK 130 million lower than in the same quarter last year.

This was offset by other income being higher than at the same time last year. This income ended at NOK 4 673 million, up NOK 201 million compared with the same quarter last year. DNB's brokerage house DNB Markets had a good quarter, with solid income both from customer and risk management activities. The level of activity was high in asset management and real estate broking as well, with June seeing a record turnover for the latter. In some other areas, reduced activity led to lower commission and fee income, for instance from payment services linked to travel and tourism.

"Many of our customers have had a difficult quarter, and I'm impressed by the business community's ability to adjust. We're doing everything we can to help our customers and are now finding that the focus of activity has gradually shifted from dealing with deferrals to buying housing and financing new projects. Fortunately, many industries have got the wheels turning again faster than we thought. In a survey of our corporate customers, two out of three companies stated that they are now operating as normal. Three months ago, 60 per cent of them were either running reduced operations or were completely closed," Braathen says.

"For our part, the fact that we were able to close the coronavirus phone line for companies was also a bright spot," she adds.

DNB's financial strength was boosted by a common equity Tier 1 capital ratio of 18.2 per cent, a comfortable 2.5 percentage points above the requirement. The bank has maintained its historically high credit rating.

Financial key figures for the second quarter of 2020 (compared with figures for the corresponding quarter in 2019):

• Pre-tax operating profit before impairment losses amounted to NOK 8.4 billion (8.2)
• Profit for the period was NOK 5.0 billion (6.1)
• Earnings per share were NOK 3.06 (3.71)
• Return on equity was 8.7 per cent (11.3)
• Cost/income ratio ended at 40.4 per cent (41.9)
• Common equity Tier 1 (CET1) capital ratio was 18.2 per cent (17.3)

Details concerning DNB's results can be found on ir.dnb.no.

For further information:

Rune Helland, Head of Investor Relations, tel.: (+47) 23 26 84 00 / (+47) 97 71 32 50

Thomas Midteide, Group Executive Vice President of Communications, tel.: (+47) 96 23 20 17

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

DNB will publish its results for the second quarter of 2020 on Monday 13 July at 7.30 am CET. 

9:30 am CET: Presentation
CEO Kjerstin Braathen and CFO Ottar Ertzeid present the results at a live streamed press conference. A broadcast will be available on the Investor Relations pages at ir.dnb.no.

1:30 pm CET: Conference call for analysts and investors
Call in details:
From Norway: +47 21 56 33 19
From other countries: +44 (0) 20 3003 2701
Conference ID: 9352011#

The phone conference (listen-only mode) and a recording of this will be available on the Investor Relations pages at ir.dnb.no.

For further information:

Investor contact: Rune Helland, head of Investor Relations, tel. (+47) 23 26 84 00 / (+47) 977 13 250
Media contact: Thomas Midteide, Group EVP Communications, tel. (+47) 962 32 017

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

Reference is made to the stock exchange notice published on 23 December 2019, in which DNB ASA's minimum requirement for own funds and eligible liabilities (the MREL requirement) was announced. It was also announced that DNB, subject to permission from the Norwegian Ministry of Finance, had initiated a process to merge DNB ASA and DNB Bank ASA, which would make DNB Bank ASA the ultimate parent company of the DNB Group. The merger will enable the DNB Group to issue non-preferred senior debt from DNB Bank ASA.

Today, the Ministry of Finance has announced the approval of the new structure. Following the upcoming merger process, DNB Bank ASA will be the holding company in the Group, with DNB Livsforsikring AS and DNB Asset Management Holding AS as subsidiaries. Further regulatory permissions are required before we can proceed with the merger. The merger process will take place at the earliest in 2021.