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DNB's profit for the third quarter of 2020 was NOK 5 546 million, which was NOK 513 million lower than in the corresponding period last year. Despite a higher level of uncertainty than normal, the bank is experiencing high activity and healthy growth.

Although COVID-19 and developments in the levels of infection in society still give cause for concern, the Norwegian economy continued to recover in the third quarter. DNB's activity level was less affected by the pandemic than expected this quarter.

"The bank's position is rock-solid and the recovery of the Norwegian economy has in a number of areas progressed at a faster pace than many had feared. This has enabled us to help many of our customers fulfil their housing dreams or invest in their businesses this quarter. The growth in lending to personal customers and small and medium-sized enterprises has been particularly good, with a quarterly growth of 1.4 and 1.8 per cent, respectively, which we didn't envisage six months ago," says CEO Kjerstin Braathen.

Lower interest rates and high activity

Net interest income ended at NOK 9 298 million in the third quarter. This was NOK 686 million less than in the corresponding quarter last year and can be ascribed to record-low interest rates in Norway and internationally.

"The low interest rate is affecting all banks, including DNB. In the months following the lockdown we have had much more customer contact than normal, and customers' needs have varied greatly. While some are still struggling, there are also many companies that have opened their doors again, and many employees who are back at work. The record-low interest rates have given our personal customers increased purchasing power, while creating opportunities and growth for a large number of our corporate customers," says Braathen.

Commission and fee income amounted to NOK 2 372 million in the third quarter, which is NOK 49 million higher than in the corresponding quarter last year. This income is closely linked to the level of activity among DNB's customers in various areas. DNB's life insurance company DNB Livsforsikring and associated companies such as Fremtind also contributed to the positive result.

"We are seeing a high level of customer activity in areas such as mutual funds savings, capital raising and real estate broking. This leads to increased revenues, which also benefit us in DNB," says Braathen.

Other income totaled NOK 4 109 million in the quarter, down NOK 449 million from the corresponding quarter last year. The decrease is mainly due to lower capital gains on financial instruments.

Lower losses

DNB's impairment provisions in the quarter amounted to NOK 776 million, which is NOK 471 million lower than in the corresponding quarter last year. The impairment provisions for oil-related industries ended at NOK 1 037 million, but were somewhat offset by NOK 360 million in reversals in the personal customers market, due to a very robust customer portfolio.

The situation remains challenging in parts of the oil-related industry. The oil, gas and offshore segment has accounted for more than 60 per cent of the Group's impairment provisions so far this year.

"There is still considerable uncertainty about how both the pandemic and the economy will develop. Our job is to support our customers by providing capital and sound advice, and we are well-equipped to do just that in the future as well," concludes Kjerstin Braathen.

DNB's capital adequacy is record high, with a common equity Tier 1 capital ratio of 18.9 per cent. The bank has called an extraordinary General Meeting to consider the authorisation of the Board of Directors to decide on the possible payment of dividends (see separate statement to Oslo Børs).

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

• Pre-tax operating profit before impairment amounted to NOK 7.7 billion (8.9)
• Profit for the quarter was NOK 5.5 billion (6.1)
• Earnings per share were NOK 3.41 (3.64)
• Return on equity was 9.5 per cent (10.9)
• Cost/income ratio was 42.5 per cent (38.8)
• Common equity Tier 1 (CET1) capital ratio was 18.9 per cent (18.3)

The expected tax rate for 2020 remains unchanged at 20 per cent, and for 2021 and 2022, the new expectation is 23 per cent.

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 / 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 third quarter of 2020 on Thursday 22 October at 7.30 a.m. CET.

9:45 a.m. 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 p.m. CET: Conference call for analysts and investors
Click here to register for the call and receive call in details.        
The phone conference (listen-only mode) and a recording of this will be available on the Investor Relations pages at ir.dnb.no.

Contacts:
Rune Helland, Head of IR, phone: +47 23 26 84 00 / mobile: +47 977 13 250
Thor Tellefsen, Long Funding, phone: +47 23 26 84 04 / mobile: +47 915 44 385

DNB will publish its results for the third quarter of 2020 on Thursday 22 October at 7:30 CET.

9:45 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.

13:30 CET: Conference call for analysts and investors
Click here to register for the call and receive call in details.        

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

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.