By Dominic Chopping

DNB ASA on Thursday posted a larger-than-expected rise in first-quarter net profit as earnings were boosted by impairment reversals.

Norway's largest lender made a profit attributable to shareholders of 5.67 billion Norwegian kroner ($692.7 million) compared with NOK3.57 billion a year earlier, while net interest income slipped 11% to NOK9.23 billion.

Analysts polled by FactSet had expected net profit of NOK4.78 billion with net interest income of NOK9.31 billion.

The bank posted a reversal in impairments of financial instruments of NOK110 million in the quarter versus expectations for a loss NOK879 million, thanks to reversals from corporate customers within the shipping and offshore oil-and-gas industry.

DNB's common equity Tier 1 capital ratio--a measure of a bank's financial strength--rose to 19.2% from 17.7%.

The bank is targeting a return on equity above 12% for the period 2021 to 2023, but said that due to Covid-19 and the subsequent macroeconomic developments, the target is unlikely to be achieved in 2021.

Between 2021 and 2023, the annual increase in lending and deposit volumes is still expected to be around 3%-4%, and during the same period, DNB still targets an increase in net commissions and fees by 4%-5% annually and a cost/income ratio below 40%.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

04-29-21 0216ET