DNB ASA (DNB.NO), Norway's biggest lender, on Thursday posted a 37% rise in third-quarter net profit driven by strong net-interest income and a sharp drop in loan losses.
The Oslo-based bank said net profit rose to NOK5.43 billion from NOK3.95 billion, beating the average NOK4.6 billion forecast from analysts polled by FactSet. Quarterly net-interest income rose to NOK9.01 billion from NOK8.48 billion, reflecting higher volumes, wider lending spreads and lower long-term funding costs.
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Loan losses in the three months ended Sept. 30 fell to NOK867 million from NOK2.18 billion in the same period last year.
"In many ways, DNB is a reflection of the Norwegian economy," Chief Executive Rune Bjerke said in a statement. "When Norway Ltd. performs well, so does the bank. This is exactly what is happening now. Optimism has got a sound foothold in the Norwegian economy."
DNB said it expects lending volumes to rise by around 2% in 2017 on the year and targets a 3% annual increase in commission and fee income. Total impairment losses for the period 2016 to 2018 are estimated to be up to NOK18 billion.
The bank has set a target for its common equity tier one capital ratio of 16.0% from year-end 2017.
The bank's common equity tier 1 capital ratio was 16.3% at the end of the quarter, up from 15.7% a year earlier.
Write to Dominic Chopping at email@example.com; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
October 26, 2017 03:35 ET (07:35 GMT)