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.

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.

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.

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.

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.

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'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.

On 21 October 2020 the Board of Directors of DNB ASA decided, in a board meeting, to call an Extraordinary General Meeting on 30 November 2020 for the consideration of the following items:

1) Approval of merger plan

On 23 December 2019, the company announced that the DNB Group had initiated a merger process between DNB ASA and DNB Bank ASA. On 2 July 2020, it was announced that the Ministry of Finance had given its approval to change the group structure in order for DNB Bank ASA to be the new parent company.

The Board of Directors of DNB ASA and DNB Bank ASA have signed a joint merger plan, in which it is proposed that the companies' extraordinary General Meetings approve a merger of the two companies through a reverse subsidiary merger, involving the transfer of all DNB ASA's assets, rights and obligations to DNB Bank ASA. Once the merger has been implemented, DNB ASA will be dissolved. At the same time, the shareholders of DNB ASA will receive one share in DNB Bank ASA for each share they own in DNB ASA, meaning that they will collectively hold all the shares in DNB Bank ASA. The implementation of the merger is, among other things, conditional on obtaining the necessary approvals from relevant authorities. The merger plan with annexes, including the Boards of Directors' joint report on the merger, will soon be made available here. The merger is scheduled to be completed mid-2021, with accounting and tax effect from 1 January 2021.

2) Authorisation to the Board of Directors to decide the distribution of dividends for the accounting year of 2019

The Board of Directors of DNB ASA proposes that the Extraordinary General Meeting authorises the Board of Directors to decide the distribution of dividends for the accounting year of 2019, with an upper limit of NOK 9 per share. This dividend limit is in accordance with the allocation of the annual profit for 2019, which was approved by the company's Annual General Meeting earlier this year. It is proposed that the authorisation shall apply from 1 January 2021 until the Annual General Meeting in 2021. During this period, the Board of Directors will consider the basis for the payment of dividends for 2019, including the company's financial position, the economic outlook and any new expectations from the authorities relating to the payment of dividends. 

3) Authorisation to the Board of Directors to buy back shares

The Board of Directors of DNB ASA proposes that the Extraordinary General Meeting authorises the Board of Directors to buy back shares representing up to 4.0 per cent of the company's share capital. The shares shall be purchased in the open market, except for shares that are repurchased from the Ministry of Trade, Industry and Fisheries. It is proposed that the authorisation shall apply from 1 January 2021 until the Annual General Meeting in 2021. The authorisation cannot be used until it has been approved by the Financial Supervisory Authority of Norway.

DNB ASA will, within the statutory time limit, send a notice of the Extraordinary General Meeting to the company's shareholders, and announce a more detailed description of the items for consideration and the proposed resolutions.

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

The information in this statement is subject to the disclosure requirements pursuant to section 5-12 of the Securities Trading Act.

Shareholders in DNB ASA are invited to attend the Extraordinary General Meeting to be held on Monday 30 November 2020 at 15:00. 

Due to the corona situation, the Extraordinary General Meeting will be held digitally, using electronic voting. 

Agenda: Proposals to merge with DNB Bank ASA, authorisation to the Board of Directors to decide a dividend for 2019 of up to NOK 9 per share, and authorisation to the Board of Directors to buy back shares.

The notice of the Extraordinary General Meeting is attached. 

Company information 
This information is subject to the disclosure requirements according to section 5-12 of the Norwegian Securities Trading Act. 
This email was sent to you by DNB. Visit our website dnb.no (https://www.dnb.no/) for more information. 

Contact information 
For further information, please contact:
Investor contact: Rune Helland, Head of Investor Relations, tel. (+47) 23 26 84 00 / (+47) 97 71 32 50 
Media contact: Thomas Midteide, Group Executive Vice President, Communications, tel.: (+47) 96 23 20 17