DNB BANK ASA Equity story
December 2022
Continued high activity in the Norwegian economy
- Mainland GDP expected to decrease temporarily as efforts to combat inflation are implemented
- Growing corporate investments expected to keep unemployment at low level
Gross domestic product (GDP) and inflation | Corporate investments in Norway expected to | |||
Unemployment | ||||
Actual and DNB Markets forecast | increase | Actual and DNB Markets forecast | ||
Year-on-year growth (YOY), per cent | Index, 2015=100 | Per cent | ||
4.1 | 4.3 | 136 | 5.0 |
3.7 | |||
127 | |||
3.3 | |||
2.8 | |||
2.4 | |||
3.0 | 3.0 | ||
90 | 1.8 | ||
78 |
(2.3) | |||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022F | 2023F | 2024F | 2025F | |||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022F | 2023F | 2024F | 2025F | |||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022F | 2023F | 2024F | 2025F | |||||||||||||||||||||||||||
Mainland GDP | Core inflation | Petroleum | Mainland | Unemployment rate | |||||||||||||||||||||||||||||||||
80% of DNB group's revenue comes from the Norwegian units
Sources: Statistics Norway, Norges Bank (Norwegian central bank), DNB Markets forecast, Norwegian Labour and Welfare Administration | 2 |
Robust Norwegian households
- Norwegian households have built more than NOK 260 billion in excess savings in the past three years
- Leverage towards house prices remains modest
- Norwegians have proven strong ability and habit to amortize on their mortgage loans
Housing prices and disposable income | Debt-servicing ratio |
Actual and DNB Markets forecast | of Norwegian households |
Per cent growth | Per cent of disposable income |
9.10 |
7.20
5.24
2.51
4.5
(0.02)
16.2
14.9
9.4
6.8
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022F | 2023F | 2024F | 2025F | 1980 | 1985 | 1990 | 1995 | 2000 | 2005 | 2010 | 2015 | 2020 | 2025F | |
Debt-servicing ratio | Interest burden | ||||||||||||||||||||
Housing prices | Real disposable income | Debt.. Forecast | Interest..Forecast | ||||||||||||||||||
Sources: DNB Markets, Statistics Norway, Norwegian Labour and Welfare Administration, forecast from Norges Bank (Norwegian central bank), OECD Data.
Three stabilisers in Norwegian economy
- The Norwegian central bank has proactively utilised monetary policy to mitigate pressure
- An independent and floating currency serves as a natural hedge
- The Norwegian Government Pension Fund Global provides ample fiscal flexibility to manoeuvre if necessary
Monetary policy
Key policy rate, actual and DNB Markets forecast
Per cent
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023F |
Floating currency
Development in USD/NOK
0.20
0.17
0.18
0.16
0.14
0.12
0.10
0.08 | 0.09 |
0.06
0.04
0.02
0.00
2011 | 2012 | 2013 | 2014 | 2015 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
Strong Government Pension Fund Global
NOK billion
12,000
10,000
8,000
6,000
4,000
2,000
0
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022F |
Inflows | Financial return | ||||||||||
Currency | Transfers from the Fund 1) | ||||||||||
1) Fiscal rule: Transfers from Government Pension Fund Global should not be higher than expected real return, estimated at 3 per cent p.a. (reduced from 4 per cent in 2017).
Sources: Norges Bank (Norwegian central bank), DNB Markets forecast, NBIM (Norges Bank Investment Management), proposed national budget for 2023 (Norwegian Government).
4
DNB is a broad-based financial institution and by far the largest in Norway
A full-service financial institution and market leader in Norway
Market shares in Norway
24% mortgage loans | 37% SME loans |
32% retail deposits | 38% corporate deposits |
38% retail mutual funds | 21% sustainable bond market |
30% Defined contribution
Partnership
The dominant mobile wallet in Norway
- 91% of Norwegians 13 years and older have the app
- More than 80% are active users
- Expansion through Vipps and MobilePay merger (approved October 2022):
- From 4 to 11 million consumers
- From 120 000 to 400 000 shops and e- commerce outlets
- Active in Norway, Denmark and Finland
- DNB owns 45% of Vipps
Leading non-life insurance provider
- Joint venture with SpareBank 1 alliance
- Third largest insurance provider in Norway
- DNB owns 35% of Fremtind
Sources: Norwegian Fund and Asset Management Association, Real Estate Norway, Finance Norway | 5 |
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DnB Bank ASA published this content on 06 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 December 2022 08:21:03 UTC.
