DNB Bank : Presentation 2Q24

Results DNB Group

Second quarter 2024

Kjerstin R. Braathen (CEO)	Q2
Ida Lerner (CFO)

11 July 2024

Strong performance - all-time high net commissions and fees

Return on equity

Per cent, trailing 12-month figures

12.3 12.9 14.6 15.6 15.9 16.6 15.9 15.5 15.8

2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24

Return on equity of 16.6 per cent in the quarter

Solid result with high and increasing activity across customer segments and product areas.

Net interest income up 1.9 per cent from 1Q24

Driven by growth and customer activity.

Net commissions and fees up 22.0 per cent from 2Q23 Strong performance across all product areas.

All-time high result within investment banking services.

Profit for	CET1
the period	capital ratio
NOK billion	Per cent
10.8	19.0

Solid asset quality and low impairment provisions 99.2 per cent of portfolio in stages 1 and 2.

Impairment provisions of NOK 560 million in the quarter.

Robust capital position

Share buy-back programme of 1.0 per cent initiated.

Earnings per share of NOK 6.83 in the quarter (YTD NOK 13.31).

Due to the implementation of IFRS 17, comparative figures for 2022 have been restated where relevant.

2

Norwegian economy remains resilient - likely to further delay key policy rate cuts

• Growth in mainland economy expected to pick up through the forecasting period
• Continued gradual reduction in inflation levels
• Markets expect first cut in key policy rate in March 2025

Mainland GDP growth		Inflation		Key policy rate
Actual and Norges Bank forecast		Actual and Norges Bank forecast		Actual and DNB Markets forecast
	Per cent		Per cent		Per cent
4.2	3.8			4.50

2.4					3.25
				1.6
1.1	0.8	1.3	1.2
		3.4
				2.2	1.50
				2.6

(2.3)

2019	2020	2021	2022	2023	2024F	2025F	2026F	2027F	2019	2020	2021	2022	2023	2024F	2025F	2026F	2027F	2019	2020	2021	2022	2023	2024F	2025F	2026F	2027F
												Core inflation (CPI-ATE)		Headline inflation (CPI)									3
Sources: Statistics Norway, DNB Markets, Norges Bank (Norwegian central bank).

Purchasing power strengthening during the year

• Robust economic activity expected to support low unemployment rates
• Increased household real wages expected to enhance spending capacity
• Residential property prices expected to show strong positive development, driven by increased purchasing power and shortage of new builds

Unemployment rate		Wage growth		Growth in residential property prices
Actual and Norges Bank forecast		Actual and Norges Bank forecast		Actual and Norges Bank forecast
Per cent		Per cent		Per cent

5.0

5.2 5.2

1.8

2.2

1.5

(0.3)

	6.9	7.9
3.4	6.6
1.1	3.3
	0.2

2019

2020

2021

2022

2023

2024F

2025F

2026F

2027F

2019	2020	2021	2022	2023	2024F
			Nominal wages

2025F	2026F	2027F	2019	2020	2021	2022	2023	2024F	2025F	2026F	2027F
Real wages

Sources: Statistics Norway, DNB Markets, Norges Bank (Norwegian central bank), NAV (Norwegian Labour and Welfare Administration).

4

Personal customers - increasing activity during the quarter

Pre-tax operating profit

NOK million

3 822	4 005	3 979

Highlights of the quarter

• Stable loan volumes and 2.9 per cent growth in deposits
• Other income up 15.7 per cent from 1Q24, mainly driven by DNB Eiendom - increasing activity in residential property market
• Continued strong momentum in savings, net inflow of ~NOK 5 billion in 2Q24
• DNB's Private Banking segment market leader in Norway

Private Banking

Volumes at end-period, NOK billion

426

233

2Q23

1Q24

2Q24

4Q18

4Q19

4Q20

4Q21

4Q22

4Q23

2Q24

Before impairment provisions

Deposits

Investments

Loans and securities financing

VPS securities account1

1 Estimate 2018-2020.

5

Corporate customers - high activity level and strong performance

Pre-tax operating profit

NOK million

	7 414	7 756
	7 282

Highlights of the quarter

• Loans up 1.1 per cent and deposits down 1.2 per cent, currency-adjusted (YoY loans up 1.7 and YoY deposit up 5.7 per cent)
• Strong performance in other income, up 35.4 per cent from 1Q24
• Solid asset quality and well-diversified portfolio
• All-timehigh income from Markets products, up 31.0 per cent from 2Q23

Income from Markets products

NOK million

2 029

1 452	1 548

2Q23

1Q24

2Q24

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

Before impairment provisions

6

Volumes affected by increased customer activity

• Currency-adjustedloan growth of 0.6 per cent in the quarter
• • up 1.1 per cent in Corporate customers and stable in Personal customers
• Currency-adjusteddeposit growth of 0.4 per cent in the quarter
• • up 2.9 per cent in Personal customers and down 1.2 per cent in Corporate customers

Loans by customer segment		Deposits by customer segment
NOK billion		NOK billion

964	942	942	964	970	976
	Personal customers	Corporate customers
	30 June 2023	31 March 2024	30 June 2024

				843	905	889
602	573	589
	Personal customers		Corporate customers
	30 June 2023	31 March 2024		30 June 2024

7

Net interest margin remains strong

			Net interest margin1						Spreads in customer segments
				Per cent									Per cent
									2.14		2.05
					1.70	1.81	1.90	1.89					1.67			1.50	1.67
														1.40
1.42			1.42	1.48
1.39	1.36													1.40
											1.37	1.42
									1.25		1.18		1.20		1.34	1.31	1.042
													0.58
									(0.07)		0.02
2Q20	4Q20	2Q21	4Q21	2Q22	4Q22	2Q23	4Q23	2Q24	2Q20	4Q20	2Q21	4Q21	2Q22	4Q22	2Q23	4Q23	2Q24
											Lending spreads

Deposit spreads

Combined spreads - weighted average

1	Total net interest income relative to average loans and deposits in the customer segments.
2	The principles relating to calculation of margins on short-term deposits were revised in the second quarter. Adjusted for this change, combined spreads	8
	were stable from 1Q24.

Net interest income up 1.9 per cent from 1Q24

Net interest income

NOK million

1

1 Effects of repricings, portfolio development and change in product mix.

9

All-time high commissions and fees - up 22.0 per cent from 2Q23

		3 439
2 819		344
2 702
326	220	1 017
636	551
572	636	690
245	258	271

Commissions and fees

NOK million / Change in per cent from 2Q23

+5.3	Real estate broking
	Solid quarter driven by higher activity level in the market.
+60.0	Investment banking services
	All-time high result. Strong performance in DCM1 and increased activity in ECM1.
+20.6	Asset management and custodial services
Continued growth in AUM1 - up NOK 165 billion. Positive net in-flow of NOK 37 billion
	from both retail and institutional customers.
+10.4	Guarantee commissions
	Increased demand for Trade Finance products.

684	718	767
356	319	351
2Q23	1Q24	2Q24

+12.1

-1.4

Money transfer and banking services

Mainly driven by increased volumes within corporate payments.

Sale of insurance products

Continued positive development in non-guaranteed pensions.

1 DCM: debt capital market - ECM: equity capital market - AUM: assets under management.

10