OSLO: DNB Bank ASA reported a second-quarter post-tax profit of NOK 10.4 billion ($980 million), down 3% from NOK 10.8 billion a year earlier, as strong growth across customer segments offset the impact of increased operating expenses and macroeconomic uncertainty.
Pre-tax operating profit before impairment stood at NOK 13.8 billion, slightly below NOK 14.1 billion in the year-ago period. Earnings per share were NOK 6.79 versus NOK 6.83 in Q2 2024, and return on equity declined to 15.4% from 16.6%. The cost/income ratio rose to 38.8%, compared with 34.8% a year earlier. DNB’s CET1 capital ratio decreased to 18.3% from 19.0%.
“I’m impressed by how well our customers are handling the global uncertainty,” said CEO Kjerstin Braathen. “The Norwegian economy is robust, with low unemployment, real wage growth and a high level of activity. This also contributes to DNB delivering a solid result with high and increasing activity across customer segments and product areas.”
Loan Growth and Strong Mortgage Demand
Loan growth was recorded across all segments. In the personal customer segment, mortgage demand remained strong, with average loans up 3.2% year-on-year and 0.8% from the prior quarter. Activity intensified following Norges Bank’s June 18 decision to cut the key policy rate by 25 basis points to 4.25%.
“Inquiries from customers wanting to move their mortgages to DNB doubled by the end of the quarter,” Braathen noted.
Corporate lending also saw continued momentum, with Norwegian corporate loans rising 1.8% from Q1 and loans to large Norwegian and international firms up 3.3%.
Impairment provisions totaled NOK 677 million in the quarter, of which only NOK 12 million was related to personal customers, underscoring the bank’s diversified and resilient portfolio.
Advisory and Fee Income Surge on Carnegie Integration
A key highlight was the jump in commission and fee income to NOK 4.4 billion, up 27.1% year-on-year, driven by expanded advisory services and capital markets activity following the integration of Carnegie.
“This is income from areas where customers seek our advice and expertise,” Braathen said. “We’ve never had such a strong quarter in this area before. With DNB Carnegie, we are well positioned for further growth.”
DNB completed its acquisition of Carnegie Holding AB in March and officially launched DNB Carnegie in May. Since then, the unit has participated in 119 capital markets transactions globally.
“The combination of products, geography, industry knowledge and experience positions us as the leading Nordic investment bank,” Braathen added.
Outlook
While macroeconomic uncertainty persists globally, DNB remains confident in the Norwegian economy’s resilience. Its strategy is centered on sustaining loan growth, expanding non-interest income and maintaining strong capital levels.
“We know many of our customers have been waiting for this rate cut,” said Braathen. “Norges Bank has done a good job managing inflation, and this signals a healthy Norwegian economy.”
DNB’s next quarterly earnings are scheduled for October 22.