DNB recorded profits of NOK 4 544 million in the first quarter of 2017, a reduction of NOK 678 million from the first quarter of 2016, reflecting negative effects from the bank's basis swaps. The bank is further increasing its lending to private individuals and small and medium-sized enterprises and is strongly committed to developing new digital services. Impairment losses on loans to large corporates were somewhat lower in the first quarter.

Home mortgages and other loans to private individuals constitute the largest business area in DNB. This trend has become even more evident over the past year. While lending to large corporates has been gradually reduced, there is an increase in lending to private individuals and small and medium-sized enterprises. Loans to private individuals now total more than NOK 700 billion.

DNB's interest income was up in the first quarter compared with the previous quarter, in spite of two fewer interest days. The trend of declining spreads now appears to have been reversed.

'We are pleased that we have succeeded in increasing interest income in a market characterised by fierce competition and very low interest rates. We helped some 37 000 customers realise their dream of a new home during the quarter, and volumes were up for both private individuals and small and medium-sized enterprises, just as we planned,' says Rune Bjerke, group chief executive.

Leading the digital race
One of the highlights of the quarter was the news that DNB entered into an alliance with 105 Norwegian savings banks to join forces over the Vipps payment app. Together, they will ensure that Vipps will deliver the most user-friendly and innovative payment services to Norwegian private individuals and companies.

Vipps is also an example proving that DNB is launching new products and services on digital platforms at a high speed.

'The bank is undergoing extensive changes as it both renews its competencies and develops many new digital services. We are among the first banks in the world to fully automate the processing of home mortgages. Additional Vipps services will soon be launched, and we will also introduce a number of new apps which will make banking even easier for our customers,' says Bjerke.

From bank to adviser
DNB's interest income increased by NOK 149 million from the fourth quarter of 2016. Compared with the first quarter of 2016, there was a NOK 192 million decline in interest income.

Other income from large corporates rose by NOK 174 million in the first quarter compared with the year-earlier period. Among other things, DNB has acted as adviser in an increasing number of syndications, debt capital issues and other investment banking services under the auspices of the brokerage house DNB Markets.

Operating expenses were reduced by NOK 270 million compared with the first quarter of 2016. However, there were significant restructuring costs in 2016 after DNB decided in February to close 59 branch offices.

Significant reduction in losses
Impairment losses on loans and guarantees totalled NOK 562 million for the first quarter, down NOK 612 million from the corresponding quarter in 2016. The outlook for the Norwegian economy is generally more positive.

'We have remained optimistic all along with respect to Norway's ability to adjust to the changes. Even though some are still struggling, we are now seeing an increasing number of bright spots in the Norwegian economy. Investment is picking up, consumer confidence has risen, and the labour market has improved further. Norway is quite simply faring well through a demanding period of restructuring,' concludes Bjerke.

Financial key figures for the first quarter of 2017

  • Pre-tax operating profit before impairment was NOK 6.5 billion (7.9)
  • Profit for the period was NOK 4.5 billion (5.2)
  • The common equity Tier 1 capital ratio (transitional rules) was 15.8 per cent (15.2)
  • Earnings per share were NOK 2.64 (3.14)
  • Return on equity was 9.1 per cent (11.2)
  • The cost/income ratio was 45.6 per cent (41.8)

Comparable figures for the first quarter of 2016 in parentheses.

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

Contact persons:
Thomas Midteide, group executive vice president, Corporate Communications, tel.: + 47 962 32 017
Rune Helland, head of Investor Relations, tel: +47 977 13 250

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

DnB ASA published this content on 28 April 2017 and is solely responsible for the information contained herein.
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