Stock and press releases

The DNB group’s annual report and Pillar 3-report for 2015 is published today, 17th of March 2016, at DNB’s website www.dnb.no/en/ir.

Reference is made to the stock exchange announcement made on November 6th 2015. DNB has during the last month conducted a review of the strategic alternatives available related to the bank’s credit card operations that are provided through external distribution channels.

The operations that have been reviewed are organized in a separate unit in DNB Finans called Cards External Channels, which distributes credit cards under the Cresco brand, along with other credit and loyalty cards. One of the potential outcomes was a sale of all or parts of the operations to an external party. The assessment has been carried out, and DNB has concluded to keep the operations within the group. As an extension of the initial assessment, additional efforts will be initiated to further develop the business under its current DNB ownership.

-----------

Contact persons:

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

Rune Helland, Head of Investor Relations, tel: +47 977 13 250

Amra Koluder, IR, tel: +47 977 35 378

Dividend amount:                            4.50 per share        
Declared currency:                          Norwegian Krone
Last day including right:                  26. April
Ex-date:                                           27. April
Record date:                                   28. April
Payment date:                                 as of 4. May
Date of approval:                             26. April

This information is published in accordance with the requirements of the Continuing Obligations.

DNB recorded profits of NOK 24 762 million in 2015, up NOK 4 145 million from 2014. The increase partly reflected the effect of basis swaps, while a rise in income and reduced costs also contributed to the high profit level. DNB’s common equity Tier 1 capital increased by NOK 20.9 billion through 2015, which makes the bank even more robust to cope with uncertain times.

“This is a strong financial performance by DNB and shows that parts of the Norwegian business community are still expanding in spite of the sharp drop in oil prices. It also demonstrates that we are
an attractive bank for Norwegian personal customers. The number of new home mortgage contracts increased by more than 170 000 in 2015, which is a significant rise from the previous year. Overall, we are very pleased with our returns and cost performance,” says Rune Bjerke, group chief executive.

Tier 1 capital approaching the target
Most of the annual profits is retained in the Group in order to reach the statutory capital requirements. Calculated according to the transitional rules, the common equity Tier 1 capital ratio rose from 12.7 per cent in 2014 to 14.4 per cent in 2015.
“A strong level of profits, a number of capital efficiency measures and the sale of certain loans and properties helped raise Tier 1 capital. DNB is already one of the world’s best capitalised banks, but we will continue to build capital organically until we have fulfilled the capital requirements,” says Bjerke.

Impairment losses on loans and guarantees increased by NOK 631 million in 2015 compared with 2014. The rise referred primarily to the shipping and offshore segments, while there was a significant reduction in the personal customer segment as a consequence of the sale of portfolios of non-performing loans to Lindorff last autumn.

There was a rise in net interest income through 2015, reflecting higher volumes and wider deposit spreads. Lending spreads narrowed by 0.18 percentage points while deposit spreads widened by 0.23 percentage points compared with 2014. Net interest income increased by 8.8 per cent from 2014. The weakening of the Norwegian krone had a positive effect on income and a negative impact on costs.

Growth in the fourth quarter
DNB recorded profits of NOK 6 804 million in the fourth quarter of 2015, up NOK 1 839 million from the fourth quarter of 2014. Adjusted for basis swaps, there was a NOK 2 213 million increase in profits.

DNB experienced a rise in both deposits and loans throughout the quarter. Adjusted for exchange rate movements, deposit and lending volumes were up 3.2 per cent and 2.8 per cent, respectively. Higher volumes and wider deposit spreads helped raise net interest income by 4.2 per cent from the fourth quarter of 2014. Impairment losses on loans rose somewhat during the quarter. However, this was compensated for by lower taxes. 

Expecting continued growth in 2016
In spite of challenging times for oil-related activities, we still expect moderate growth in the Norwegian economy. Nevertheless, reduced petroleum activity will dampen investment in a number of mainland companies, make households more cautious and contribute to moderate wage settlements.

“DNB is planning for lending growth of between 2 and 3 per cent in 2016 and anticipates stable volume-weighted spreads. Moreover, the year will be characterised by intense competition for customers and continued extensive digitalisation of our services and products. Our payment app Vipps did not exist a year ago and has now been downloaded 1.4 million times. This is amost unbelievable and demonstrates the importance of being on the platforms where customers wish to meet us. We will add a lot of new functionality to Vipps this year,” says Bjerke.

Key figures for the fourth quarter of 2015

• Pre-tax operating profits before impairment were NOK 9.3 billion (7.0)

• Profit for the period was NOK 6.8 billion (5.0)

• Earnings per share were NOK 4.11 (3.05)

• Return on equity was 15.0 per cent (12.6)

• The cost/income ratio was 28.1 per cent (42.2)

• The common equity Tier 1 capital ratio (transitional rules) was 14.4 per cent (12.7)

  Comparable figures for 2014 in parentheses.
  
  
  This information is subject to the disclosure requirements pursuant to section 5-12 of the
  Norwegian Securities Trading Act.

Contact persons:
Thomas Midteide, group executive vice president, Corporate Communications, tel.: + 47 962 32 017
Rune Helland, head of Investor Relations, tel: +47 977 13 250

The quarterly report, presentation and Fact Book can be downloaded from
www.dnb.no/investor-relations

Almost all of DNB’s customers have become digital. The bank is now implementing extensive measures to adjust branches and staff numbers to the new banking reality. Parallel to this, additional resources are being allocated to the customer service centre and to the innovation of new digital services, such as Vipps.

"When customers change their banking habits, we must follow suit. Developments over the last two years have shown that customers have more contact with us than before, but in completely different ways. They would like their bank to be available all the time, and use their mobile phones for everything from paying bills to applying for a mortgage," says group executive vice president Trond Bentestuen, head of Personal Banking Norway in DNB.

The pace of the digital banking revolution is much faster than many envisaged just two years ago:

• 85 per cent of Norwegian banking customers no longer use a bank branch for everyday banking.[1]

• Nine of ten Norwegians do their banking online, and an increasing number use their mobile phones or tablets.[2]

• In 2015, DNB had as many as 156 million visits to its mobile bank and 91 million visits to its Internet bank.

• Over-the-counter services in branches have been reduced by 82 per cent in the last two years.

• Four of five DNB customers who entered into savings schemes last year, did this online.

• Vipps, DNB’s payment app, is now used by more than 1 million Norwegians and has changed the way we send money to each other.

• Corporate customers use the bank in different ways than before. Nine of ten companies that establish a new customer relationship with the bank do so digitally.

"Customers make extensive use of our self-service channels, and therefore it is a logical consequence to adjust our physical distribution network. Consequently, we will reduce the number of branches serving our personal customers from 116 to 57 during the first six months of this year," says Bentestuen. Changes are also being made in the corporate market, from 63 to 46 locations. DNB Eiendom will retain their presence in current locations.

DNB will still have branches in all counties in Norway and most customers who live close to a branch which will be closed, will have less than thirty minutes to drive to their nearest DNB branch.

"We will retain a physical presence in many places in Norway. When customers wish to meet with the bank in person, we will offer the right expertise and high-quality advisory services. We are also increasing the number of employees at our customer service centre, where everyone who contacts us receives personal service 24/7, both on the phone and via our chat services," says Bentestuen.

As communicated in DNB’s presentation at the Capital Markets Day on 25 November 2015, the reduction in the number of branch offices will entail that fewer employees are needed. In 2015, staff at the branch offices was reduced by 200 full-time positions, mainly by natural attrition. The changes announced today entail a further reduction of some 600 full-time positions at our branches during 2016.

"This is a challenging day for the employees affected, and it is regretful that so many competent employees will have to leave the bank. We will do what we can to implement the staff reductions through voluntary measures," says Bentestuen.

"For most of our customers, both personal and corporate, little will change. They can solve their everyday banking needs digitally. They can call us 24/7, every day, 365 days a year. They can also meet us via our chat and social media channels. Straightforward banking services can be carried out in in-store postal and banking outlets and in post offices at more than 2,400 locations across the country," concludes the group executive vice president.

[1 and 2] Dagligbankundersøkelsen 2015 (Finans Norge)

For further information, please contact:

Group executive vice president, Personal Banking Norway, Trond Bentestuen: tel: (+47) 95028448

Executive vice president, Corporate Communications, Even Westerveld: tel: (+47) 400 16 744

07:30 CET – result release
DNB’s Q4 2015 results will be released at 07:30 am CET on Thursday, 04 February 2016, 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, 04 February at 09:30 am CET at DNB’s head office in Bjørvika, Dronning Eufemias gate 30, 0191 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); http://presenter.qbrick.com/?pguid=c5c13f66-8a85-4a0d-aa8c-f25bde6c8256. 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 investors and analysts will be held on Thursday, 04 February at 14:00 CET. To attend the conference call we kindly ask you to dial in 10 minutes before start at +47 21 56 33 18 or international: +44 (0)20 3003 2666 or US: +1 646 843 4608. Password: DNB Q4.
You can also attend the call by listen only mode at the phone-cast link http://presenter.qbrick.com/?pguid=06dd8548-a8b5-4afe-8cd2-485bbc8b0c14.  A replay of the phone-cast will be available after the call (at the same link as above).

Friday 05 February 07:15 for 07:30 GMT – analyst and investor breakfast in London
An analyst and investor breakfast will be held in London on Friday, 05 February at 07:15 am for 07:30 am (local time/GMT) at DNB Bank ASA London Branch, 8th Floor, The Walbrook Building, 25 Walbrook London EC4N8AF (please note the address). Please register your attendance in London at [email protected].

For further information, please contact:
Rune Helland, Head of IR: phone: +47 23 26 84 00 / mobile: +47 977 13 250
Amra Koluder, phone: +47 23 26 84 08 / mobile: +47 977 35 378
Thor Tellefsen, phone: +47 23 26 84 04 / mobile:+47 915 44 385

***