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    DNB   NO0010031479

DNB ASA

(DNB)
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Norway's DNB profit beats expectations, shares up almost 9%

07/13/2020 | 02:16am EDT
FILE PHOTO: A view of DNB bank's local office in Riga

* Q2 net profit fell to 5.0 bln NOK vs 6.1 bln NOK yr/yr

* Loan loss provisions lower in Q2 vs Q1

* Says Norwegian economy picking up faster than anticipated

* Shares rise 8.8% (Adds analyst, share reaction, detail)

OSLO, July 13 (Reuters) - Norway's DNB shares jumped on Monday after the bank's second-quarter profit beat expectations with loan loss provisions related to the coronavirus crisis lower than in the first quarter on an improving economic outlook.

DNB's net profit fell to 5.0 billion Norwegian crowns ($533 million) for the April-June period from 6.1 billion crowns a year earlier, beating the average forecast of 2.8 billion crowns in a Refinitiv poll of analysts.

Its Oslo-listed shares were up 8.8% by 0718 GMT.

"The reopening of the Norwegian economy has picked up faster than anticipated, and DNB's activity level in the second quarter was less impacted by the COVID-19 pandemic than expected," DNB said in a statement.

Norway's biggest bank booked loan loss provisions of 2.12 billion crowns in the quarter, up from 450 million crowns a year ago, after racking up losses of 5.77 billion crowns in the first quarter when the economy came to a standstill during a country-wide lockdown to stem the spread of COVID-19.

"DNB's Q2 shows a much better impairment picture than we envisaged," Jefferies analysts said in a research note.

Oil companies were most affected, accounting for 88% of DNB's impairment losses in the quarter, the bank said, while losses in other sectors and private customers were low.

"The Norwegian economy is landing on its feet, and in a number of areas, things are looking a lot brighter than they did at the end of last quarter," Chief Executive Kjerstin Braathen said in a statement.

DNB, however, said that it was unlikely to achieve its target for return on equity above 12% this year due to the pandemic.

Norway's central bank decision to cut its key policy rate to zero in the second quarter would reduce DNB's interest income by around 5 billion crowns annually effective from the second quarter, the bank added.

($1 = 9.3886 Norwegian crowns) (Reporting by Victoria Klesty; Editing by Edmund Blair and Emelia Sithole-Matarisehot)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
LONDON BRENT OIL 1.41% 85.7 Delayed Quote.63.93%
NORWAY OSLO BORS BENCHMARK(TRG) 0.31% 1217.71 Real-time Quote.25.50%
WTI 0.00% 84.151 Delayed Quote.70.78%
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