DNB Bank (DNB) Q2 2024 (Media) earnings summary

Executive summary

• Return on equity reached 16.6% for the quarter, exceeding the 13% target, with profit at NOK 10,766 million, up 13.8% year-over-year, and EPS at NOK 6.83.

• Net interest income grew by 3.8% year-over-year in Q2, with fee and commission income up 22% year-over-year, marking an all-time high.

• First half profit was NOK 20,969 million, a 5.2% increase from the prior year, with EPS at NOK 13.31 and ROE at 16.1%.

• CET1 capital ratio stood at 19.0% at end-June, providing a solid buffer above regulatory requirements.

• Earnings per share rose 5.4% from the previous quarter, supporting dividend capacity and business growth.

Financial highlights

• Q2 net interest income: NOK 15,817 million (+3.8% YoY); net other operating income: NOK 5,756 million (+15.8% YoY).

• Fee and commission income at NOK 3.4 billion, up 22% year-over-year.

• Operating expenses in Q2: NOK 7,505 million (+6.0% YoY), mainly due to higher personnel and IT costs.

• Q2 cost/income ratio: 34.8%; annualised ROE: 16.6%; EPS: NOK 6.83.

• Customer deposits to net loans ratio at 77.1% at end-June, up from 74.9% a year earlier.

Outlook and guidance

• Expectation of increased activity in the second half of the year, supported by a strong Norwegian economy, real wage growth, and positive market sentiment.

• ROE target remains above 13%, with ambitions for annual loan growth of 3–4% and net commissions/fees growth of 4–5%.

• Loan growth for 2024 may fall slightly below the 3-4% long-term target, but commission and fee growth remains robust.

• Cost/income ratio expected to stay below 40%; long-term tax rate guided at 23%, with 2024 estimated at 20%.

• CET1 capital ratio target set above 16.9%, with actual Q2 at 19.0%.