Investing.com -- Norway's DNB posted third-quarter profit of 9.84 billion crowns, flat on the previous quarter but about 9% above analyst forecasts of 9.06 billion, as lower costs and higher fee income more than offset a one-off loss on the sale of its Luminor stake.
Net commissions and fees were 4.49 billion crowns, down 1.7% from 4.57 billion in the second quarter and up 14.6% from a year earlier, driven by corporate finance and asset management services. Analysts had forecast 4.19 billion.
Operating expenses fell 4.0% from the second quarter to 8.63 billion crowns, due to seasonally lower activity and lower pension expenses. Analysts had forecast 8.81 billion.
DNB's 19.95% stake sale in Luminor to OTP Bank Plc, announced July 20, produced a loss of 704 million crowns in the quarter. The sale of DNB Næringseiendom added a gain of 277 million crowns. Net other operating income was 6.19 billion crowns, down 13.9% from the second quarter, due to the Luminor loss and a negative currency effect on additional Tier 1 capital.
Net interest income rose 2.5% from the second quarter to 15.50 billion crowns, due to repricing effects, higher interest on equity and one additional interest day. Analysts had forecast 15.59 billion.
Earnings per share were 6.57 crowns versus 6.50 in the second quarter and a forecast of 6.11. Return on equity was 14.5% versus 14.6% in the second quarter and a forecast of 13.5%. Impairments were 529 million crowns versus a forecast of 706 million, mainly tied to company-specific events.
Customer deposits were 1,523.58 billion crowns versus a forecast of 1,609 billion.
The common equity Tier 1 capital ratio was 17.3% versus 17.4% at end-June and a forecast of 17.5%, with the decline driven mainly by the new share buyback programme. DNB completed a 1% buyback on Oct. 2 and its board approved a further 0.75% programme on Oct. 20.
Norges Bank raised its key rate to 4.50% from 4.25% on Sept. 24. DNB expects higher net interest income from the resulting repricing from Nov. 29, with full effect from the first quarter of 2027.
DNB Bank ASA received a draft decision from Norwegian tax authorities on its 2019-2023 tax assessment, implying exposure of about 3.75 billion crowns. DNB disagrees and has recognised no provision.
Original Article
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