DNB Bank (DNB) Pre-Close Call summary

Executive summary

• Q3 pre-close reiterates previously communicated guidance, with no new disclosures expected before results.

• Focus remains on profitable growth, with muted loan growth in H1 and expected pickup in H2.

Trading performance and revenue trends

• Net interest income (NII) to benefit from one extra interest day in Q3, adding NOK 125 million.

• Loan growth remains low, with slight recent uptick; credit growth in Norway at 3.7% over last 12 months.

• Customer deposits continue shifting to higher-yielding accounts, but at a slower pace.

• Gain of over NOK 600 million from Fremtind and Eika Insurance merger to be recognized in Q3.

• Lower activity levels in Q3 expected to reduce commission, fee, and trading revenues.

Profitability and margins

• Margins impacted by deposit mix shift from SME to lower-margin public sector deposits.

• Seasonally lower activity in Q3 typically leads to reduced costs.

• 500 FTE reduction planned over next six months, with financial impact update in Q4.

• Salary inflation for 2024 and 2025 expected at 5.2% and 4.6% respectively, with wage agreement partially effective from May.

• Normalized pension expenses slightly above NOK 400 million per quarter.