DNB Net Profit Boosted by Net Interest Income, Loan Losses Fall

By Dominic ChoppingFeaturesDow Jones Newswires

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.

Continue Reading Below

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 dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

October 26, 2017 03:35 ET (07:35 GMT)