Stock and press releases

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:

• Pre-tax operating profits before impairment were NOK 6.8 billion (5.7)
• Profit for the period was NOK 5.7 billion (3.8)
• Earnings per share were NOK 3.48 (2.36)
• Return on equity was 16.2 per cent (12.3)
• The ordinary cost/income ratio was 40.4 per cent (47.1)

Comparable figures for the fourth quarter of 2012 in parentheses.

Key figures for the full year 2013:

• Pre-tax operating profits before impairment were NOK 24.7 billion (21.0)
• Profit for the year was NOK 17.5 billion (13.8)
• The common equity Tier 1 capital ratio was 11.8 per cent (10.7)
• Earnings per share were NOK 10.76 (8.48)
• Return on equity was 13.2 per cent (11.7)
• The ordinary cost/income ratio was 45.7 per cent (49.1)
• The proposed dividend is NOK 2.70 per share (2.10)

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

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

07:30 CET – result release
DNB’s 4Q 2013 results will be released at 07:30 am CET on Thursday, 6 February 2014. 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, 6 February 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].

13:30 CET – investors and analyst conference call & phone-cast
A conference call for investors and analysts will be held on Thursday, 6 February at 1:30 pm CET.
To attend the conference call we kindly ask you to dial in 10 minutes before start at: +44 (0) 20 3003 2666 or local +4721563318. Password: DNB2013. 
Phonecast: You can also attend the call in a listen-only-mode at the phone-cast link at www.dnb.no/ir.

A replay of the phone-cast will be available after the call. More details on the conference call can be found on our website www.dnb.no/ir.

Friday 7 February 0730 for 0745 GMT – analyst breakfast meeting in London
An analyst breakfast meeting will be held in London on Friday, 7 February at 0730am for 0745am start (local time) at DNB’s London Branch, 20, St. Dunstan's Hill, London EC3R 8HY.
Please register your attendance in London: [email protected]
 

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

In the fourth quarter of 2013, the DNB Group will record a negative effect of basis swaps connected to funding of approximately NOK 819 million. For the full year 2013, there will be a negative effect of NOK 1 364 million.

In the fourth quarter of 2012, there was a positive effect of basis swaps of approximately NOK 235 million, while there was a negative effect of approximately NOK 1 687 million for the full year 2012.

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. Over time, the accounting effects will thus be reversed, and the balance at year-end 2013 was NOK 1 250 million.

Contact persons, Investor Relations:
Per Sagbakken: +47 23268400
Jan Erik Gjerland: +47 23268408

(London, 21 Nov. 2013) DNB has set itself ambitious, but realistic financial targets towards 2016. At the Capital Markets Day in London today, DNB is presenting its plan for how the bank can reach its target of a return on equity above 12 per cent while adapting to the regulatory requirements.

“Due to the new banking reality and regulatory environment, every manager and employee in DNB is working to optimise our use of capital and increase our profitability. We raise our expected common equity Tier 1 capital ratio from 12–12.5 per cent to 13.5–14 per cent due to signals we have received from the Norwegian regulatory authorities. DNB is on track to meet these new capital requirements, and is already among the best capitalised banks globally. Although there is still some regulatory uncertainty, we have several measures to ensure organic capital growth,” says Rune Bjerke, CEO of the DNB Group.

At the Capital Markets Day in London today, DNB’s CEO can report to the market that the bank is on track to meet previously announced cost initiatives and sees even further potential for cost savings. He states that DNB is among the most cost-efficient banks in the Nordic region, and aims to maintain this position. DNB is also raising the bar when it comes to increasing sales of capital-light products. According to the CEO, DNB has an untapped potential in covering a broader range of customer needs across the different customer segments, from debt capital market activity in the large corporate segment to non-life insurance in the retail market.

During the capital build-up phase till 2016, DNB will do its utmost to keep a dividend payout ratio above 25 per cent, while maintaining its long-term policy of 50 per cent payout.

 “In a rapidly changing banking reality, it is all about flexibility and adaptability. DNB is well positioned to meet customer demands and comply with regulatory requirements in a time when the rate of change is extremely high,” says Rune Bjerke.

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 9.00 am GMT.

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

DNB is arranging its Capital Markets Day in London today, 21 November, at 09.00 a.m. local time.

The presentations for the event are enclosed and are available on www.dnb.no/ir 

DNB is targeting a return on equity above 12 per cent towards 2016 based on a 13.5-14.0 per cent core equity Tier 1 capital ratio requirement. DNB will build higher capital through its retained earnings capacity of well above 100 basis points per year.

DNB is reducing its guiding for impairments on loans and guarantees to below NOK 3 billion for the full year 2013, and below the 2013 level for the full year 2014. DNB will keep its dividend payout ratio at approximately 25 per cent during the capital build-up phase until 2016, and is maintaining its long-term policy of 50 per cent payout.

Presenters today will be the CEO, the CFO, the head of Personal Banking Norway and the head of Large Corporates and International.

The presentations will be shown on live web-TV from 09.00 a.m. GMT. More information is available on www.dnb.no/ir

For more information:
Per Sagbakken, Head of Investor Relations, mobile +47 90 66 11 59