DNB Bank (DNB) Q3 2024 (Media) earnings summary

Executive summary

• Third quarter profit reached NOK 12.2 billion, up 19.9% year-over-year, with EPS at NOK 7.83 and annualised ROE at 18.9% (18% adjusted for a NOK 716 million insurance merger gain), reflecting strong customer activity and asset quality.

• Net interest income rose 2.6% year-over-year and 2% sequentially, supported by lending growth of 1.6% across segments, especially in large corporates and personal customers.

• All-time high third quarter in fees and commissions, up 11.1% year-over-year, driven by asset management and investment banking.

• Operating expenses were NOK 7,431 million, stable quarter-on-quarter but up 8.4% year-over-year, mainly due to higher personnel costs.

• Recognized NOK 716 million gain from Fremtind and Eika insurance merger.

Financial highlights

• Net interest margin increased to 1.90%, with customer segment spreads down 1 bp due to higher money market rates and competition.

• Net commission and fees reached NOK 3.04 billion, up 11.1% year-over-year; investment banking services up 19.1%, asset management up 27.6%.

• Cost/income ratio at 32.5%, improved from 34.8% in Q3 2023; costs stable quarter-on-quarter.

• CET1 capital ratio at 19.0%, leverage ratio at 6.3%–7.5%, both well above regulatory requirements.

• Impairment of financial instruments dropped to NOK 170 million from NOK 937 million a year earlier.

Outlook and guidance

• Macroeconomic outlook remains positive, with expectations of a soft landing for the Norwegian economy and low unemployment rates.

• Lending growth target remains at 3–4% annually, with continued focus on Nordic expansion and fee-based revenue growth.

• Key policy rate anticipated to stay at current levels until March 2025.

• Cost/income ratio to be maintained below 40%; dividend policy unchanged with payout ratio above 50%.