Stock and press releases

DNB recorded profits of NOK 20 617 million in 2014, an increase of NOK 3 105 million from 2013. The increase largely reflected a positive development in the bank’s basis swaps. Increased net interest income, reduced costs and low impairment losses on loans also contributed to the rise in profits.

“Our strong profit performance enables us to continue to build up equity and further improve the bank’s financial strength. It also demonstrates that there is a continued positive development for Norwegian companies and private individuals, who enjoy a strong financial position. This is good news for our customers, shareholders, employees and not least society at large,” says Rune Bjerke, group chief executive.

High level of customer activity pays off
The reason for the healthy profits is the high level of customer activity in DNB over the past year. Interest rate cuts and strong competition led to considerable activity in the housing market. In 2014, the bank entered into more than 150 000 residential mortgage contracts (including refinancings) and sold close to 23 000 homes in Norway after holding a total of 42 854 showings.

“We find that there is fierce competition for each and every customer and this puts more pressure on us to constantly improve. Our goal is to be the most accessible bank in Norway, and last year we were in direct dialogue with our customers close to six million times over the telephone, in branch offices, through chat and Facebook. That is a new record,” says Bjerke.

The bank increased its focus on business start-ups last year and helped more than 1 600 entrepreneurs start their own business. “We need innovation and new ventures in Norway. Many of our customers want to start their own business. We have established a separate department with special advisers who can answer all the different questions people have when starting up their own business,” says Bjerke.

Financial results for the full year 2014: Increase in volumes and equity
Net interest income increased by 7.6 per cent from 2013, partly due to higher deposit and lending volumes. There was an average increase of NOK 50.8 billion in the healthy loan portfolio, while average deposits rose by NOK 100.4 billion compared with 2013. The rise in volumes was exacerbated by exchange rate volatility towards the end of the year. DNB’s common equity Tier 1 capital increased by NOK 14 billion in 2014, and the common equity Tier 1 capital ratio rose from 11.8 to 12.7 per cent. The Board of Directors has been committed to continuing to build up equity quickly to meet the authorities’ requirements and thus proposes a dividend of NOK 3.80 per share, which corresponds to approximately 30 per cent of profits.

Total operating expenses were down 5.5 per cent from 2013. Adjusted for non-recurring effects, there was a 1.3 per cent rise in costs, which was significantly lower than wage inflation and clearly proves that the measures that have been initiated have been very effective. DNB aims to keep ongoing operating expenses flat.

Fourth quarter 2014: Marked by volatility
DNB recorded profits of NOK 4 965 million in the fourth quarter of 2014, down NOK 735 million from the fourth quarter of 2013. Adjusted for the effect of basis swaps, there was a NOK 1 696 million reduction in profits. A reduction in net other operating income and an increase in impair­ment losses on loans contributed to the decline in profits. Higher lending and deposit volumes and lower funding costs helped raise profits. There was an unusually high level of income in the fourth quarter of 2013 due to an increase in value of the Nets shares of NOK 705 million.

No economic crisis in Norway
“DNB’s most recent sentiment survey among Norwegian companies shows that although they are a bit less optimistic, only one out of ten companies expects their profitability to be weaker in 2015 than in 2014. We know that oil industry investments will decline, and low oil prices will naturally have negative consequences for some companies. At the same time, the depreciation of the Norwegian krone will give a long-awaited boost to large parts of the Norwegian manufacturing industry and to the travel industry. Record-low interest rates and continued strong purchasing power mean that Norwegians can afford to save more without reducing the current high level of demand for goods and services”, says Bjerke. “There is no reason to use the C-word to describe the Norwegian economy,” he concludes.

Key figures for the fourth quarter of 2014 (2013 figures in parentheses)

• Pre-tax operating profits before impairment were NOK 7.0 billion (6.8)
• Profit for the period was NOK 5.0 billion (5.7)
• Earnings per share were NOK 3.05 (3.50)
• Return on equity was 12.6 per cent (16.3)
• The ordinary cost/income ratio was 42.2 per cent (40.4)

Key figures for the full year 2014:

• Pre-tax operating profits before impairment were NOK 28.7 billion (24.7)
• Profit for the year was NOK 20.6 billion (17.5)
• The common equity Tier 1 capital ratio was 12.7 per cent (11.8)
• Earnings per share were NOK 12.67 (10.75)
• Return on equity was 13.8 per cent (13.1)
• The ordinary cost/income ratio was 41.9 per cent (45.7)
• The proposed dividend is NOK 3.80 per share (2.70)

Comparable figures for 2013 in parentheses.

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

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

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

07:30 CET – result release
DNB’s 4Q 2014 results and preliminary results for 2014 will be released at 07:30 am CET on Thursday, 5 Feb 2015, 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, 5 Feb at 9:30 am CET at DNB’s head office in Bjørvika, Dronning Eufemias gate 30, 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). 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 analysts will be held on Thursday, 5 Feb at 2:00 pm CET. To attend the conference call we kindly ask you to dial in 10 minutes before start +47 21 56 33 18 or international: +44 (0) 20 3003 2666 or US+1 212 999 6659. Password: DNB Q4. You can also attend the call by listen only mode at the phone-cast link: http://presenter.qbrick.com/?pguid=f13e010d-e539-4bda-be92-e982cdabd1ba. A replay of the phone-cast will be available after the call (same link as above).

Friday 6 Feb 0730 for 0745 GMT – analyst breakfast meeting in London
An analyst breakfast meeting will be held in London on Friday, 6 Feb at 0730 am for 0745 am (local time) at London Executive Offices, No. 1 Cornhill., London EC3V 3ND. Please register your attendance in London at: [email protected]

For further information, please contact:
Per Sagbakken, head of Investor Relations, phone +47 23 26 84 00 or
Jan Erik Gjerland, IR, e-mail: [email protected], phone +47 23 26 84 08.

In the fourth quarter of 2014, the DNB Group will record a positive effect of basis swaps connected to funding of approximately NOK 508 million. For the full year 2014, there will be a positive effect of NOK 394 million.

In the fourth quarter of 2013, there was a negative effect of basis swaps of NOK 819 million, while there was a negative effect of approximately NOK 1 364 million for the full year 2013.

Basis swaps are derivative contracts entered into in connection with long-term funding in international capital markets where the relevant currency is converted to Norwegian kroner. These swaps are hedging instruments, and over the lifetime of the derivatives the mark-to-market adjustments will have zero effect.

For further information, please contact Investor Relations in DNB:
Per Sagbakken: +47 23268400
Jan Erik Gjerland: +47 23268408

DNB will hold a telephone conference on Friday, 19 December 2014 at 14:00 CET (1:00 pm London time). There will be a broad presentation of exposures in the business areas: Oil & Gas, Offshore and Oilfield Services.

Please call in 10 minutes before the start of the conference on:
+47 21 56 33 18 or
+44 (0) 808 109 0700 (UK) or
+1 212 999 6659 (US based).
Password: DNB - Investor Relation

It is also possible to listen in via the following link: http://presenter.qbrick.com/?pguid=53009e7f-e561-4ab9-853f-47be051dac92

To ask questions, please call in in advance. The conference may also be replayed via the same link.

The presentation material is available at www.dnb.no/ir presentations, and attached to this mail.

Contacts
Per Sagbakken, head of IR, +47 23 26 84 00
Jan Erik Gjerland, IR, +47 23 26 84 08

DNB will hold a telephone conference on Friday, 19 December 2014 at 14:00 CET (1:00 pm London time). There will be a broad presentation of exposures in the business areas: Oil & Gas, Offshore and Oilfield Services.

Please call in 10 minutes before the start of the conference on:
+47 21 56 33 18 or
+44 (0) 808 109 0700 (UK) or
+1 212 999 6659 (US based).
Password: DNB - Investor Relation

It will also be possible to listen in via the following link: http://presenter.qbrick.com/?pguid=53009e7f-e561-4ab9-853f-47be051dac92

To ask questions you must call in in advance. The conference can also be replayed via the same link.

The presentation material will be available at www.dnb.no/ir approximately 30 minutes before the start of the conference.

Contacts
Per Sagbakken, head of IR, +47 23 26 84 00
Jan Erik Gjerland, IR, +47 23 26 84 08

(London, 27 Nov. 2014) DNB has delivered on the promise of reaching a return on equity (ROE) above 12 per cent, despite a strong capital build-up. Towards 2017, DNB will focus on capital and operational efficiency, asset quality and capital-light products to secure a competitive ROE and increased dividends.

“We have proven that our target of 12 per cent ROE is both ambitious and realistic. DNB’s plan is working, in terms of capital efficiency, cost control and income generation. We are now raising the bar for our cost reduction ambitions towards 2017, from a cost/income ratio below 45 per cent to approximately 40 per cent,” says CEO of DNB, Rune Bjerke.

DNB expects to reach the capital requirement of 13 per cent determined by Norwegian regulators in 2016, and DNB has set a minimum of 14 per cent as a new capital level. DNB’s ambition is to gradually increase the dividend payout ratio from the current minimum 25 per cent, starting in 2014. The new long-term ambition, once the capital level is reached, is to pay out above 50 per cent.

“The Norwegian economy has remained strong throughout the cycle and will not be dramatically hit by a prolonged period of low oil prices. Petroleum investments will remain high also in the future, but will decline from today’s unprecedented high level. Our credit portfolio is robust, as shown by the latest EBA stress test, ranking DNB as one of the most solid banks in Europe,” says Rune Bjerke.

DNB’s financial targets towards 2017:

Return on equity (ROE):         Above 12 %

CET1 capital ratio:                 Minimum 14 % as capital level from 2016

Cost/income ratio:                 Approximately 40 % for 2017

For more information:

Per Sagbakken, head of Investor Relations, mobile +47 90 66 11 59

Thomas Midteide, Group EVP Corporate Communications, mobile +47 962 32 017

See the presentation from the CMD on webcast here from 12.30 am GMT.

The presentations from the event are attached or available on www.dnb.no/ir