DNB ASA held its Annual General Meeting on 24 April 2018. In this meeting, Olaug Svarva was elected as new chair of the Board in DNB ASA, with a term of office of up two years. Tore Olaf Rimmereid was re-elected as vice chair of the Board, and Jaan Ivar Semlitsch and Berit Svendsen were re-elected as board members, all with a term of office of up to two years.

The Board of Directors in DNB ASA consists of:

Olaug Svarva (chair)
Tore Olaf Rimmereid (vice chair)
Karl-Christian Agerup
Jaan Ivar Semlitsch
Berit Svendsen

Vigdis Mathisen (employee representative)
Carl Løvvik (employee representative)

Jorunn Løvås (deputy for the employee representative)
Stian Samuelsen (deputy for the employee representative)

The shares in DNB ASA will be quoted ex-dividend on 25 April 2018. A dividend of NOK 7.10 per share will be distributed as from 4 May 2018 to registered shareholders as at 24 April 2018.

DNB recorded profits of NOK 5 653 million in the first quarter of 2018, up NOK 1 109 million from the first quarter of 2017. The bank’s strong performance can be ascribed to the bright prospects for Norwegian companies and private individuals. 

The Norwegian welfare state is dependent on an increasing number of startups, which is why
DNB is cheering on Norwegian entrepreneurs. The ripple effects of Norwegian companies' operations are boosting DNB’s financial performance. Many companies in Norway are currently on the offensive.

"We aspire to be a good adviser for those who want to start their own business and thus contribute to creating new jobs. Over the past year, loans to small and medium-sized enterprises have grown by more than 8 per cent. This demonstrates strong optimism and a willingness to invest in the Norwegian business community," says Rune Bjerke, group chief executive in DNB.

In comparison, home mortgages and other loans to private individuals increased by 5.4 per cent during the past year. There is fierce competition in this market, but the rate of growth is in line with DNB’s ambitions.

Reduction in losses 

A lower level of impairment is another positive consequence of the healthy state of the Norwegian economy. During the first quarter of 2017, impairment losses on loans came to NOK 562 million, while impairment totalled NOK 2.4 billion for the full year 2017.

The level of impairment was low in the first quarter. In addition, some of the impairment losses recorded previously were reversed. These stemmed primarily from oil-related operations, where a number of companies have been through successful restructurings. Net reversals of NOK 330 million were thus recorded in the first quarter. 

“Optimism is back in the oil sector, and losses have been strongly reduced. Consequently, Large Corporates and International shows the highest increase in profits among our business areas," says Bjerke.

Income

Net interest income was up NOK 486 million from the first quarter of 2017. As in the previous quarters, this reflected higher lending volumes. In addition, lower funding costs had a positive effect on the lending spread. Other income was down NOK 532 million, mainly due to exchange rate effects from the bank’s additional Tier 1 capital. There was a small increase in commissions and fees compared with the first quarter of 2017.

Operating expenses were NOK 285 million lower than in the first quarter of 2017. Compared with the fourth quarter of 2017, operating expenses were down NOK 863 million, though this was mainly due to certain non-recurring effects towards the end of the year.

"We are very pleased with the results and especially with the fact that we are approaching our return on equity target. We will continue to develop the best customer experiences for Norwegian consumers. To be able to deliver on this, it is also important that DNB is an attractive option for investors,” concludes group chief executive Rune Bjerke. 

Financial key figures for the first quarter of 2018

• Pre-tax operating profit before impairment was NOK 6.7 billion (6.5)
• Profit for the period was NOK 5.7 billion (4.5)
• The common equity Tier 1 capital ratio (transitional rules) was 16.6 per cent (15.8)
• Earnings per share were NOK 3.36 (2.64)
• Return on equity was 11.0 per cent (9.1)
• The cost/income ratio was 43.4 per cent (45.6)

Comparable figures for the first quarter of 2017 in parentheses.

DNB changes its tax guiding for 2018 and 2019 from 23 to 20 per cent.

On 7 March 2018, the Board of Directors of DNB ASA decided to offer employees in DNB ASA shares with a discount of NOK 1,500-3,000.

The shares were allotted today, 29 May 2018, at a gross price of NOK 153.9167 per share.

Attached is a list of the primary insiders that availed themselves of the offer.

Leading Nordic banks DNB Bank ASA, Danske Bank A/S, Nordea Bank AB (publ), Svenska Handelsbanken AB (publ) and Skandinaviska Enskilda Banken AB (publ) have decided to explore the possible establishment of a Nordic Know Your Customer (KYC) infrastructure that would, in initial phase, service large and midsize Nordic corporates.

In recent years, compliance with requirements for processing customer data has become a critical component in fighting financial crime. Bank customers are, however, struggling with time-consuming KYC information requirements, often including many banks and formats. Inefficient KYC processes also impact banks negatively, slowing down transaction processes, and increasing administration and risks.

At the same time, the banking community is continuously facing more regulations and requirements related to KYC processes. There is hence a need for a consolidated, efficient and accurate way to serve customers, banks and society.

The banks intend to set up a joint venture, Nordic KYC Utility, with a singular focus on developing an efficient, common, secure and cost-effective Nordic KYC infrastructure. The company will be owned and controlled by the founding banks, however, the plan is that the company will also offer its services to third parties. The initiative will contribute to ensuring a healthy financial environment, prevent financial crime and to protect customers and society.    

The establishment and operational start of the joint venture company is conditional upon approval of the European Commission under the EU Merger Regulation and the company is expected to be established during the second half of 2018. 

Approval of share capital reduction:

In accordance with the purpose of the buy-back programme carried out between the annual general meetings in 2017 and 2018 respectively, the annual general meeting of DNB ASA held on 24 April 2018 resolved a reduction in the company’s share capital of NOK 244,319,730, from NOK 16,287,988,610 to NOK 16,043,668,880, by deletion or redemption of a total of 24,431,973 shares.

The Norwegian FSA has now approved the capital reduction, which will be notified to the Norwegian register of business enterprises within a short time. This will trigger a six week creditor notice period, after which the capital reduction may be completed, provided that relations with creditors having made objections (if any), have been clarified.  

Approval of new share buy-back:

In the annual general meeting held 24 April 2018, it was also resolved to grant the board of directors of DNB Bank ASA with a new authorization to repurchase shares. The authorization has a limit of 4.0 per cent of the share capital calculated after completion of the already resolved capital reduction, whereof 0.5 per cent can only be used for hedging purposes in DNB Markets.

Following the general meeting, DNB applied for the Norwegian FSA’s approval to buy back own shares up to 2.5 per cent of the limit granted by the general meeting, whereof 0.5 will be reserved for hedging purposes.  The FSA has approved DNBs application to buy back shares in accordance with the request, provided that the targeted capital level is met following the repurchase. 

In order to enable an optimal level of capital in the company, DNB ASA has decided to initiate a new share buy-back programme. The buy-back programme comprises up to 1.5% of DNB ASA’s shares calculated after completion of the capital reduction resolved in connection with the share buy-back carried prior to the annual general meeting in 2018, which represents a total of approximately 24.1 million shares.

The share buy-back programme will be carried out on the basis of an authorization given by DNB ASA’s annual general meeting on 24 April 2018 and an approval given by the Financial Supervisory Authority of Norway on 4 June 2018. The general meeting authorized DNB ASA to repurchase up to 3.5% of its registered shares, calculated on the basis of the company’s share capital after completion of the resolved capital reduction. DNB ASA may at a later stage, based on the authorization from the general meeting and the approval from the Financial Supervisory Authority of Norway, decide to initiate further share buy-back programmes of up to 0.5% of its registered shares. Additional buy-back programmes, up to the maximum limit of 3.5%, may be carried out subject to the approval of the Financial Supervisory Authority of Norway.. 

Up to approximately 15.9 million of the shares comprised by the share buy-back programme may be repurchased in the open market. In addition, a proportionate amount of up to approximately 8.2 million of the shares owned by the state of Norway through the Ministry of Trade, Industry and Fisheries will be redeemed, in accordance with an agreement between DNB ASA and the state of Norway. The redemption of the shares owned by the state of Norway is subject to approval from DNB ASA’s annual general meeting in 2019. According to the agreement, the state of Norway shall redeem shares on a proportionate basis so that its current ownership interest in DNB ASA of 34.00% remains unaffected following completion of the buy-back programme.  

DNB ASA will seek approval from the annual general meeting in 2019 for cancellation of the repurchased shares and a corresponding redemption of the proportionate number of shares owned by the state of Norway. The redemption of the shares owned by the state of Norway shall be made against a payment which shall correspond to an average volume weighted price of DNB ASA’s repurchase of shares in the open market as a part of the buy-back programme, including an interest compensation and an agreed adjustment for dividend paid on the redemption shares in the buy-back period (if any).

For further information, DNB ASA refers to the minutes from DNB ASA’s annual general meeting of 24 April 2018, available at www.dnb.no. 

Group executive vice president Trond Bentestuen has been appointed CEO of the REMA 1000 supermarket chain and will thus leave DNB. He is currently head of Wealth Management & Insurance, and has previously been at the helm of Personal Banking and Marketing, Communications and eBusiness.

Håkon Hansen will become acting head of Wealth Management & Insurance, effective as of Monday 11 June 2018. Hansen is currently head of DNB Private Banking.