6 Feb 2014: Q4 2013 and preliminary results for 2013
13 Mar 2014: Annual Report 2013 publish date
24 Apr 2014: Annual General Meeting 2014
25 Apr 2014: Ex-dividend date
8 May 2014: Results for Q1 2014
10 Jul 2014: Results for Q2 2014
23 Oct 2014: Results for Q3 2014
DNB recorded profits of NOK 17 526 million in 2013, up NOK 3 734 million from 2012. The healthy profits contributed to an increase in the Group’s common equity Tier 1 capital ratio from 10.7 per cent at year-end 2012 to 11.8 per cent at end-December 2013, calculated according to the transitional rules. A rise in net interest income, low impairment losses on loans and strict cost control were the main factors behind the positive profit trend.
“We are pleased with the results we managed to achieve in 2013. All business areas recorded a rise in profits. Parallel to this, we succeeded in reducing operating expenses adjusted for non-recurring effects. During the year, the banks were presented with a number of new requirements to increase their equity, and the profits recorded in 2013 thus contribute to a very necessary increase in the bank’s Tier 1 capital. DNB is well capitalised, but we need to build additional capital organically in order to meet the authorities’ requirements,” says Rune Bjerke, group chief executive.
Over the past twelve months, DNB has increased Tier 1 capital by NOK 12.4 billion. A futher increase
of more than NOK 40 billion will be required towards 2016.
Lower lending growth and an increase in other operating income
Adjusted for exchange rate movements, there was an average increase of NOK 11.6 billion in DNB’s healthy loan portfolio compared with 2012. Impairment losses on loans were at a very low level and were reduced by approximately NOK 1 billion from 2012 to 2013.
Other operating income increased by NOK 1 926 million from 2012, mainly in consequence of the rise in value of DNB’s shareholding in Nets and healthy profits from insurance operations.
“Impressive efforts were made throughout the Group to ensure positive experiences for both customers and employees in 2013. The year was characterised by extensive internal restructuring, new requirements from the authorities and tough competition in the market. DNB is still one of Norway’s best liked banks, and our recent employee survey shows that the employees enjoy their work and are highly dedicated. I am extremely proud of the efforts underlying the results achieved during the past year,” says Bjerke.
Continued progress in the fourth quarter
DNB recorded profits of NOK 5 665 million in the fourth quarter of 2013, up NOK 1 822 million from the fourth quarter of 2012. The improved profit performance reflected an increase in net interest income and lower impairment losses on loans.
Ordinary operating expenses, excluding non-recurring effects, declined by 1.1 per cent from the fourth quarter of 2012.
Future prospects
“While the global economy seems to be experiencing a cautious recovery, there are many indications
of a somewhat lower growth rate in the Norwegian economy. Activity levels remain high, and the weaker Norwegian krone rate gives a hard-tested export industry renewed belief in the future. Nevertheless, credit demand appears to be somewhat lower than in 2013, enabling us to both continue to finance sound business projects and to build up sufficient capital to reach the new requirements,” says Bjerke.
“However, due to the large differences in banking regulations between the Scandinavian countries, competitors that are not subject to the same Norwegian capital requirements may be in a better position to increase their market shares at the expense of Norwegian banks. This applies to international banks, but also to Norwegian government-backed institutions that offer home mortgages. We therefore appreciate the Norwegian government’s signals that the process of harmonising the rules across the Scandinavian countries is given high priority,” says Bjerke.
DNB expects impairment losses on loans to remain low in 2014, with individual impairment in the range of NOK 2-3 billion.
Key figures for the fourth quarter of 2013:
Comparable figures for the fourth quarter of 2012 in parentheses.
Key figures for the full year 2013:
Comparable figures for 2012 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
Also Attached
The annual report for the DNB Group for 2013 will be published on the Group’s website at www.dnb.no/ir today.
For further information, please contact:
Thomas Midteide, Corporate Communication, mobile: +47 962 32 017
Per Sagbakken, Investor Relations, direct line: +47 23 26 84 00
DNB has signed an agreement to sell its shares in Nets Holding A/S to a consortium consisting of Advent International, ATP and Bain Capital. The cash consideration will increase the value of DNB’s holding by approximately NOK 900 million in the first quarter of 2014. The transaction is subject to approval by the authorities and is expected to be completed in the second quarter of 2014. Once the transaction has been completed, DNB’s Common Equity Tier 1 capital ratio (CET 1-ratio), calculated according to the transitional rules, will increase by approximately 0.1 percentage points. See the press release from Nets Holding A/S for more information.
For further information, please contact:
Thomas Midteide, Corporate Communications, tel. (+47) 96 23 20 17
Jan Erik Gjerland, Investor Relations, tel. (+47) 23 26 84 08
Finanstilsynet (the Financial Supervisory Authority of Norway) received a letter from the Ministry of Finance Thursday 27 March 2014 in the evening issued guidelines for the escalation plans for reserve strengthening for higher life expectancy.
The letter contained information that surplus return in one contract cannot be used to strengthen reserves on other contracts (“non-solidarity-principal"). Likewise it said that life insurance companies should contribute at least 20 percent of the increased reserve strengthening. The Ministry said that the escalation plans for the life companies shall be determined so that the contribution from shareholders is reasonable, i.e. assumptions about at least 20 percent shareholder contribution and that the length of the escalation plans must increase for the shareholders contribution to remain unchanged.
With respect to provisions for higher life expectancy, DNB Livsforsikring has applied for a 15-year escalation period if the solidarity principle was not approved. A 15-year escalation period is expected to result in a shareholder contribution of approximately 20 per cent, which is roughly the same as if a 5-year escalation period and the solidarity principle had been applied.
DNB Livsforsikring’s total reserve strengthening requirement is NOK 13.3 billion, of of which approx. NOK 5.5bn is reserved as of 31.12.2013. DNB Livsforsikring will come with further information when the escalation plans from Finanstilsynet are available.
For further information, please contact:
Anders Skjævestad, CEO, DNB Livsforsikring ASA, tel. (+47) 934 07403
Jan Erik Gjerland, Investor Relations, tel: (+47) 23 26 84 08
In the first quarter of 2014, the DNB Group will record a negative effect of basis swaps connected to funding of approximately NOK 596 million.
In the first quarter of 2013, there was a negative effect of basis swaps of NOK 233 million.
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
On 2 April 2014, DNB Livsforsikring ASA received a letter from Finanstilsynet (the Financial Supervisory Authority of Norway) regarding "Guidelines for the strengthening of reserves and the use of surplus returns to cover higher provisions within group pension insurance".
According to the letter, DNB Livsforsikring can use surplus returns above the guaranteed rate of return to finance the required increase in reserves to reflect higher life expectancy for a period of seven years starting in 2014, which is two years longer than in Finanstilsynet’s original plan.
Based on DNB Livsforsikring’s current capital management strategy, expected returns over the next three years will be in the range of 4.5-5.0 per cent for paid-up policies and just over 4.0 per cent for defined-benefit pensions. Customers’ share of provisions for higher life expectancy in the public sector occupational pension market was almost fully financed at year-end 2013.
Thus, only the shareholder contribution remains. If the expected returns are achieved throughout the escalation period, the shareholder contribution will represent approximately 36 per cent of the total required increase in reserves of NOK 13.3 billion. This is higher than the 20 per cent shareholder contribution which the Norwegian Ministry of Finance found to be reasonable and which has been used in DNB Livsforsikring’s investor communication. 36 per cent represents approximately NOK 4.8 billion (or approximately NOK 0.7 billion per year), while 20 per cent represented approximately NOK 2.6 billion. Thus, the shareholder contribution will increase by some NOK 2.2 billion (or by approximately NOK 0.3 billion per year).
The table below shows estimated shareholder contributions based on various levels of return. As a result of the decision to wind up public sector occupational pension operations, a shareholder contribution totalling approximately NOK 0.3 billion will be charged to the accounts before year-end 2015, of which NOK 0.1 billion will be charged to the income statement for the first quarter of 2014. With respect to paid-up policies and defined-benefit pensions, the shareholder contribution will be charged to the income statement on a straight-line basis during the seven-year period, provided that annual returns are stable.
Future returns determine the size of the shareholder contribution. The table below shows sensitivities based on different levels of return for paid-up policies and defined-benefit pensions in the corporate market, taking account of the NOK 0.3 billion shareholder contribution for public market operations, but not the former shareholder contribution of NOK 0.3 billion for paid-up policies.
| Return | Shareholder contribution in NOK billion over seven years 1) |
Shareholder contribution in NOK billion per year 1) |
Shareholder contribution in per cent 1) |
| 4.0% | 6.8 | 1.0 | 51% |
| Average return | 4.8 | 0.7 | 36% |
| 4.5% | 4.3 | 0.6 | 32% |
| 5.0% | 3.2 | 0.5 | 24% |
| 5.5% | 2.8 | 0.4 | 21% |
1) Including loss of profitsharing in Paid-ups.
In light of Solvency II, DNB Livsforsikring will remain a well capitalised company and be on schedule to reaching a solvency ratio in excess of 100 per cent once Solvency II is implemented on 1 January 2016.
Further details about the sub-portfolios will be available on DNB’s IR-website www.dnb.no/ir.
For further information, please contact:
Anders Skjævestad, CEO, DNB Livsforsikring AS, tel. (+47) 934 07403
Jan Erik Gjerland, Investor Relations, tel: (+47) 23 26 84 08
DNB has decided to decrease its deposit and lending rates.
The decrease encompasses floating rate loans and deposits, for the retail sector. Lending rates will be decreased by up to 0.25 percentage points and by up to 0.40 percentage points for deposits. The new prices will be effective immediately for new loans and mid-June for existing loans and deposits.
The financial effect of the rate decrease is expected to be neutral.
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For further information for investors: Jan Erik Gjerland (+47 23 26 84 08).
For further information for media: GEPV Corporate Communications Thomas Midteide (+47 962 32 017)
