DNB Bank (DNB) Q2 2024 earnings summary

Executive summary

• Q2 2024 profit reached NOK 10,766 million, up 13.8% year-over-year and 5.5% sequentially, with H1 2024 profit at NOK 20,969 million, up 5.2% from H1 2023.

• Return on equity was 16.6% in Q2 2024, reflecting solid profitability and strong activity across customer segments and product areas.

• Net interest income increased by 3.8% year-over-year in Q2, supported by customer repricing and higher equity interest.

• Net commissions and fees hit an all-time high in Q2, up 22% year-over-year, with strong performance in investment banking, debt capital markets, equity capital markets, and M&A.

• Share buyback program of 1% of outstanding shares initiated, impacting CET1 capital ratio by -29 bps and supporting capital allocation strategy.

Financial highlights

• Q2 total income was NOK 21,572 million, up from NOK 20,203 million in Q2 2023; H1 total income was NOK 41,970 million.

• Operating expenses in Q2 were NOK 7,505 million, up 6% year-over-year, with cost/income ratio at 34.8%.

• Q2 impairment provisions totaled NOK 560 million, mainly due to customer-specific events in SMEs and large corporates.

• Loans to customers at end-June were NOK 2,011.6 billion; customer deposits were NOK 1,565.3 billion.

• Net interest margin remained strong at 1.81%.

Outlook and guidance

• Norwegian economy remains resilient, with low unemployment, improving purchasing power, and growth in mainland GDP expected to pick up.

• Loan growth is anticipated to accelerate in the second half of 2024, supported by increased optimism among individuals and corporates.

• Norges Bank is expected to keep the key policy rate at 4.5% until March 2025, with gradual reductions to 3.25% by 2027.

• ROE target remains above 13%, and cost/income ratio is to stay below 40%.

• Net commissions and fees are targeted to grow 4–5% annually.