DNB Bank : Quarterly Report DNB Group 2Q24

Second quarter and first half report

2024

2Unaudited

DNB Group

3

Financial highlights

Income statement	2nd quarter	2nd quarter	Jan.-June	Jan.-June	Full year
Amounts in NOK million	2024	2023	2024	2023	2023
Net interest income	15 817	15 232	31 343	29 832	61 547
Net commissions and fees	3 439	2 819	6 141	5 453	11 115
Net gains on financial instruments at fair value	1 010	1 277	2 193	3 741	5 283
Net insurance result	433	338	636	493	1 183
Other operating income	873	536	1 656	1 221	2 569
Net other operating income	5 756	4 971	10 627	10 907	20 150
Total income	21 572	20 203	41 970	40 739	81 697
Operating expenses	(7 503)	(7 044)	(14 809)	(13 907)	(28 395)
Restructuring costs and non-recurring effects	(3)	(40)	19	(153)	(225)
Pre-tax operating profit before impairment	14 067	13 120	27 180	26 679	53 077
Net gains on fixed and intangible assets	(3)	15	(5)	15	11
Impairment of financial instruments	(560)	(871)	(882)	(792)	(2 649)
Pre-tax operating profit	13 504	12 263	26 294	25 902	50 440
Tax expense	(2 701)	(2 821)	(5 259)	(5 958)	(10 811)
Profit from operations held for sale, after taxes	(37)	19	(66)	(11)	(149)
Profit for the period	10 766	9 462	20 969	19 934	39 479
Balance sheet			30 June	31 Dec.	30 June
Amounts in NOK million			2024	2023	2023
Total assets			3 677 388	3 439 724	3 559 000
Loans to customers			2 011 602	1 997 363	2 025 481
Deposits from customers			1 565 330	1 422 941	1 472 869
Total equity			269 425	269 296	254 065
Average total assets			4 000 010	3 687 312	3 696 693
Total combined assets1			4 344 006	4 034 568	4 111 179
Key figures and alternative performance measures	2nd quarter	2nd quarter	Jan.-June	Jan.-June	Full year
	2024	2023	2024	2023	2023
Return on equity, annualised (per cent)1	16.6	15.6	16.1	16.4	15.9
Earnings per share (NOK)	6.83	5.93	13.31	12.51	24.83
Combined weighted total average spreads for lending and deposits
(per cent)1	1.40	1.37	1.41	1.39	1.39
Average spreads for ordinary lending to customers (per cent)1	1.67	1.40	1.65	1.50	1.45
Average spreads for deposits from customers (per cent)1	1.04	1.34	1.11	1.24	1.32
Cost/income ratio (per cent)1	34.8	35.1	35.2	34.5	35.0
Ratio of customer deposits to net loans to customers at end of period,
customer segments (per cent)1	77.1	74.9	77.1	74.9	74.9
Net loans at amortised cost and financial commitments in stage 2, per
cent of net loans at amortised cost1	9.32	9.16	9.32	9.16	9.35
Net loans at amortised cost and financial commitments in stage 3, per
cent of net loans at amortised cost1	1.07	1.09	1.07	1.09	1.17
Impairment relative to average net loans to customers at amortised
cost, annualised (per cent)1	(0.11)	(0.18)	(0.09)	(0.08)	(0.13)
Common equity Tier 1 capital ratio at end of period (per cent)	19.0	18.9	19.0	18.9	18.2
Leverage ratio at end of peroid (per cent)	6.5	6.6	6.5	6.6	6.8
Share price at end of period (NOK)	209.70	200.70	209.70	200.70	216.00
Book value per share at end of period (NOK)	160.35	152.43	160.35	152.43	162.92
Price/book value1	1.31	1.32	1.31	1.32	1.33
Dividend per share (NOK)					16.00
Sustainability:
Finance and facilitate sustainable activities (NOK billion, accumulated)	645.2	456.8	645.2	456.8	561.8
Total assets invested in mutual funds with a sustainability
profile at end of period (NOK billion)	113.6	110.5	113.6	110.5	124.3
Score from Traction's reputation survey in Norway (points)	58	61	58	61	57
Customer satisfaction index, CSI, personal customers in Norway (score)	69.7	72.7	69.5	73.2	71.4
Female representation at management levels 1-4 (per cent)	38.0	40.0	38.0	40.0	38.8

1 Defined as alternative performance measure (APM). APMs are described on ir.dnb.no.

For additional key figures and definitions, please see the Factbook on ir.dnb.no.

Contents
Directors' report	4
Accounts for the DNB Group
Income statement	10
Comprehensive income statement	10
Balance sheet	11
Statement of changes in equity	12
Cash flow statement	13
Note G1	Basis for preparation	14
Note G2	Segments	14
Note G3	Capital adequacy	15
Note G4	Development in gross carrying amount and maximum exposure	17
Note G5	Development in accumulated impairment of financial instruments	18
Note G6	Loans and financial commitments to customers by industry segment	19
Note G7	Financial instruments at fair value	21
Note G8	Debt securities issued, senior non-preferred bonds and subordinated loan capital	22
Note G9	Contingencies	23
Accounts for DNB Bank ASA (parent company)
Income statement	24
Comprehensive income statement	24
Balance sheet	25
Statement of changes in equity	26
Note P1	Basis for preparation	27
Note P2	Capital adequacy	27
Note P3	Development in accumulated impairment of financial instruments	28
Note P4	Financial instruments at fair value	29
Note P5	Information on related parties	29
Statement pursuant to the Securities Trading Act	30
Information about DNB	31

There has been no full or partial external audit of the quarterly directors' report and accounts, though the report has been reviewed by the Audit Committee.

DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED) / 3

Directors' report

The Norwegian economy continued to show sound activity during the second quarter, supported by low unemployment rates. As inflationary pressure alleviates, strengthening of households' purchasing power continues, and the first lowering of the key policy rate is now expected in the first half of 2025. DNB mirrors the Norwegian economy, and the results in the quarter remained strong with a solid capital position. The portfolio is well-diversified and robust.

Second quarter financial performance

The Group delivered profits of NOK 10 766 million in the quarter, an increase of NOK 1 305 million, or 13.8 per cent, from the corresponding quarter of last year. Compared with the first quarter of 2024, profits increased by NOK 564 million or 5.5 per cent.

Earnings per share were NOK 6.83, compared with NOK 5.93 in the year-earlier period, and NOK 6.48 in the first quarter.

The common equity Tier 1 (CET1) capital ratio was 19.0 per cent at end-June, up from 18.9 per cent a year earlier and at the same level as in the previous quarter.

The leverage ratio was 6.5 per cent at end-June, compared with

1. per cent in the year-earlier period and 6.2 per cent at end- March.
   Annualised return on equity (ROE) came in at 16.6 per cent in the second quarter, driven by strong results across the Group. The corresponding figures were 15.6 per cent in the second quarter of 2023, and in the first quarter of 2024.
   Net interest income was up NOK 585 million, or 3.8 per cent, from the second quarter of 2023, due to customer repricing effects and higher interest on equity. Compared with the previous quarter, net interest income increased by NOK 290 million, or 1.9 per cent. The increase was driven by growth and customer activity.
   Net other operating income amounted to NOK 5 756 million, up NOK 785 million or 15.8 per cent from the corresponding period in 2023. Net commissions and fees had an all-time high performance, with strong deliveries across product areas, and increased by

1. per cent. Compared with the previous quarter, net operating income increased by NOK 884 million or 18.1 per cent.
   Operating expenses amounted to NOK 7 505 million in the
   second quarter, up NOK 422 million from the corresponding period a year earlier, due to an increase in both personnel costs and IT expenses. Compared with the previous quarter, operating expenses were up NOK 221 million, reflecting seasonally higher activity.
   Impairment of financial instruments amounted to NOK
   560 million in the second quarter, mainly driven by impairment provisions in stage 3. The corresponding figure for 2023 was NOK 871 million.

Sustainability

In the second quarter, DNB announced its first transition loan, an instrument targeted at helping hard-to-abate sectors in their transition efforts. The loan was announced as part of DNB's transition loan pilot project, and DNB is currently working to establish a framework for loans of this kind. Also in the second quarter, DNB continued the work with energy efficiency in its property portfolios. Energy efficiency is essential for achieving the goals in DNB's transition plan, and work is well underway on exploring how energy efficiency can be promoted among both personal and corporate customers.

In June, legislative amendments to the Norwegian Accounting Act were passed by the Storting (the Norwegian parliament), with a view to implementing the Corporate Sustainability Directive (CSRD) in Norwegian law, aiming to follow the same timeline as in the EU.

The CSRD comes with extensive reporting requirements, and as part of the process of implementing the new requirements, DNB is

currently updating its double materiality analysis to identify which material topics the Group is to report on going forward.

During the second quarter, DNB Asset Management (DAM) published its statement on the principal adverse impacts (PAI) of investment decisions on sustainability factors. The disclosure is required under the Sustainable Finance Disclosure Regulation (SFDR), and describes how the PAIs of investment decisions are considered under SFDR. DAM is also in the process of updating two of its expectation documents on the topics climate change and human capital.

As of end-June, DNB had facilitated a cumulative total of NOK

645 billion in sustainable financing volumes and was on track to reach the target of NOK 1 500 billion by 2030. With regard to the target of NOK 200 billion in assets in mutual funds with a sustainability profile by 2025, NOK 114 billion had been invested as at the end of the second quarter.

Other events in the second quarter

At the Annual General Meeting (AGM) on 29 April, a resolution was made to reduce the share capital through the cancellation of own shares and the redemption of shares belonging to the Norwegian government. The transaction was completed on 21 June, and the total number of shares issued was reduced by 3.25 per cent to

1 492 530 286. The AGM also gave the Board of Directors an authorisation for a new share buy-back programme of 3.5 per cent of the company's share capital, as well as an authorisation to DNB Markets to repurchase 0.5 per cent of the shares for hedging purposes. The authorisation is valid until the AGM in 2025. On

17 June, a buy-back programme of 1.0 per cent was announced. As at 30 June, DNB had purchased 1 499 699 shares in the open market. In addition, a proportion of the government's holding will be redeemed after the AGM in 2025, bringing total buy-backs to 0.15 per cent as at end-June.

In May, DNB adjusted its organisational structure to meet changes in the market, and this also involved changes to the Group Management team.

On 27 June, the Financial Supervisory Authority of Norway (Finanstilsynet) approved the business combination between Fremtind Forsikring AS and Eika Forsikring AS. The business combination took place on 1 July, after which DNB owns 28.46 per cent of the combined entity.

For the second year in a row, DNB's internal chatbot, Juno, was given the annual Agent Assist Excellence Award by boost.ai.

DNB is collaborating with the European Investment Fund (EIF) on offering a new range of loans to small and medium-sized enterprises in Norway. The goal is to stimulate sustainability and digitalisation. In the second quarter, DNB signed a new guarantee, InvestEU, which will mobilise loans with a value of up to NOK

2.5 billion. This makes DNB the first Norwegian bank in the InvestEU programme.

In June, DNB was voted the best pension provider in the annual quality survey of the Norwegian Association of Insurance Brokers. The award is voted on by the members of the Association and is given to the company that delivers the highest quality in several different areas. DNB won for the sixth year in a row.

Every year, Universum ranks Norway's most attractive employers among students at Norwegian universities and university colleges. This year, around 11 000 students participated. DNB continues to hold the top position in business. The Group has also retained its title as the financial industry's best employer in banking and finance. In addition, DNB is ranked number 5 in IT and number 13 in law.

DNB was the main partner of Oslo Pride 2024, which took place in June. Several hundred DNB employees and their families and friends took part in the parade.

4 / DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED)

In Traction's reputation survey for the second quarter, DNB scored 58 points, up from 55 in the previous quarter. The goal is a score over 65 points, indicating that DNB is a well-liked bank.

Half-year financial performance

DNB recorded profits of NOK 20 969 million in the first half of 2024, up NOK 1 035 million, or 5.2 per cent, from the previous year. Annualised return on equity was 16.1 per cent, compared with 16.4 per cent in the year-earlier period, and earnings per share were NOK 13.31, up from NOK 12.51 in the first half of 2023.

Net interest income increased by NOK 1 511 million, or 5.1 per cent, from the corresponding period last year, driven by customer repricing effects and higher interest on equity. There was an average increase in the healthy loan portfolio of 0.4 per cent, and a

1. per cent decrease in average deposit volumes from the first half of 2023. The combined spreads widened by 3 basis points, compared with the year-earlier period. Average lending spreads for the customer segments widened by 14 basis points, and deposit spreads narrowed by 13 basis points.
   Net other operating income decreased by NOK 280 million, or

1. per cent, from the first half of 2023. This was mainly due to negative effects on basis swaps and other mark-to-market adjust- ments. Net commissions and fees showed a strong development and increased by NOK 689 million, or 12.6 per cent, compared with the prior year period.
   Total operating expenses were up NOK 730 million or 5.2 per cent from the first half of 2023, due to higher activity.
   There were impairment provisions of NOK 882 million in the first half of 2024, compared with impairment provisions of NOK
   792 million in the corresponding period last year. For the personal customers industry segment there were impairment provisions of NOK 222 million in the first half of 2024, which were mainly in stage 3 and driven by consumer finance. The corporate industry segments saw impairment provisions of NOK 660 million in the first half of 2024. The impairment provisions can primarily be ascribed to specific customers in stage 3.

Second quarter income statement - main items

Net interest income

Amounts in NOK million	2Q24	1Q24	2Q23
Lending spreads, customer segments	7 826	7 598	6 595
Deposit spreads, customer segments	3 775	4 169	4 819
Amortisation effects and fees	1 141	1 055	1 066
Operational leasing	793	800	739
Contributions to the deposit guarantee
and resolution funds	(372)	(344)	(266)
Other net interest income	2 653	2 248	2 278
Net interest income	15 817	15 526	15 232

Net interest income increased by NOK 585 million, or 3.8 per cent, from the second quarter of 2023. This was mainly due to customer repricing effects and higher interest on equity. The repricings implemented in February had full effect in the quarter. There was an average decrease of NOK 8 billion, or 0.4 per cent, in the healthy loan portfolio compared with the second quarter of 2023. During the same period, deposits were up NOK 10 billion, or 0.7 per cent. Adjusted for exchange rate effects, there was an increase of NOK 9 billion, or 0.6 per cent. Average lending spreads widened by

27 basis points, and average deposit spreads narrowed by 29 basis points compared with the second quarter of 2023. Volume-weighted spreads for the customer segments widened by 3 basis points.

Compared with the first quarter of 2024, net interest income increased by NOK 290 million, or 1.9 per cent, driven by growth and customer activity. There was an average increase of NOK 5 billion, or 0.3 per cent, in the healthy loan portfolio, and deposits were up NOK 30 billion, or 2.1 per cent. Average lending spreads widened by 4 basis points, and average deposit spreads narrowed by

13 basis points compared with the previous quarter. Volume- weighted spreads for the customer segments narrowed by 3 basis points.

The principles relating to the calculation of margins on short- term deposits were revised in the second quarter. Adjusted for this change, combined spreads were stable.

Net other operating income

Amounts in NOK million	2Q24	1Q24	2Q23
Net commissions and fees	3 439	2 702	2 819
Basis swaps	(290)	(240)	53
Exchange rate effects related to additional
Tier 1 capital	(79)	543	209
Net gains on other financial instruments
at fair value	1 379	880	1 016
Net insurance result	433	203	338
Net profit from associated companies	258	188	76
Other operating income	615	595	460
Net other operating income	5 756	4 872	4 971

Net other operating income increased by NOK 785 million, or

15.8 per cent, compared with the second quarter of 2023. Net commissions and fees reached an all-time high result with an increase of NOK 621 million, or 22.0 per cent. The increase was mainly driven by a solid result from investment banking services.

Compared with the previous quarter, net other operating income increased by NOK 884 million, or 18.1 per cent, mainly due to strong net commissions and fees, as a result of a robust fee platform. This was partly offset by negative exchange rate effects related to additional Tier 1 (AT1) capital and basis swaps.

Operating expenses

Amounts in NOK million	2Q24	1Q24	2Q23
Salaries and other personnel expenses	(4 316)	(4 251)	(4 010)
Restructuring expenses	(3)	(10)	(1)
Other expenses	(2 288)	(2 148)	(2 136)
Depreciation of fixed and intangible assets	(898)	(908)	(899)
Impairment of fixed and intangible assets		32	(37)
Total operating expenses	(7 505)	(7 284)	(7 083)

Operating expenses were up NOK 422 million, or 6.0 per cent, compared with the second quarter of 2023. This was due to a higher number of full-time employees, relating to a further strengthening of core competence, as well as an increase in IT expenses. In addition, there were higher pension expenses, due to the increased return on the closed defined-benefit pension scheme. The scheme is partly hedged, and a corresponding gain was recognised in net gains on financial instruments.

Compared with the first quarter of 2024, operating expenses were up NOK 221 million, or 3.0 per cent, reflecting seasonally higher activity.

The cost/income ratio was 34.8 per cent in the second quarter.

Impairment of financial instruments by industry segment

Amounts in NOK million	2Q24	1Q24	2Q23
Personal customers	(111)	(111)	(3)
Commercial real estate	(141)	64	(66)
Residential property	(29)	(79)	(24)
Power and renewables	(21)	(18)	(196)
Oil, gas and offshore	(20)	(14)	606
Other	(238)	(165)	(1 188)
Total impairment of financial instruments	(560)	(323)	(871)

Impairment of financial instruments amounted to NOK 560 million in the quarter. In the personal customers industry segment, impairment provisions ended at NOK 111 million, while the corporate customers industry segments saw impairment provisions of NOK 449 million. The impairment provisions for the quarter could primarily be ascribed to specific customers in stage 3, spread across various industry segments. Net stage 3 loans and financial

DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED) / 5

commitments amounted to NOK 21.2 billion at end-June, which was an increase of NOK 0.1 billion from the previous quarter and NOK 0.4 billion lower than the corresponding period of 2023.

Taxes

The DNB Group's tax expense for the second quarter is estimated at NOK 2 701 million, or 20.0 per cent of the pre-tax operating profit. The tax expense is affected by the estimated debt interest distribution, which is expected to reduce the tax expense for the Group in 2024.

Financial performance - segments

Financial governance in DNB is adapted to the different customer segments. Reported figures reflect total sales of products and services to the relevant segments.

DNB's organisational structure, including the Group Management team, was changed on 6 May. The organisational changes will be reflected in the segment reporting as of the third quarter.

Personal customers

Income statement in NOK million	2Q24	1Q24	2Q23
Net interest income	5 521	5 526	5 203
Net other operating income	1 570	1 358	1 467
Total income	7 091	6 884	6 670
Operating expenses	(3 029)	(2 811)	(2 744)
Pre-tax operating profit before impairment	4 062	4 072	3 926
Net gains on fixed and intangible assets	(3)	0	0
Impairment of financial instruments	(81)	(67)	(104)
Pre-tax operating profit	3 979	4 005	3 822
Tax expense	(995)	(1 001)	(955)
Profit for the period	2 984	3 004	2 866
Average balance sheet items in NOK billion
Loans to customers	938.6	948.1	960.1
Deposits from customers	575.8	573.2	586.6
Key figures in per cent
Lending spreads1	1.04	0.96	0.57
Deposit spreads1	1.82	1.91	2.18
Return on allocated capital	19.5	19.6	18.2
Cost/income ratio	42.7	40.8	41.1
Ratio of deposits to loans	61.3	60.5	61.1

1 Calculated relative to the corresponding money market rate. See ir.dnb.no for additional information on alternative performance measures (APMs).

The personal customers segment delivered strong profits and an increase in return on allocated capital of 1.3 percentage points from the corresponding quarter of last year. From the previous quarter, return on allocated capital decreased by 0.1 percentage points.

Average loans to customers decreased by 2.2 per cent from the second quarter of 2023, and of this decrease, 2.1 per cent was in the mortgage portfolio. Compared with the previous quarter, average lending was down 1.0 per cent. Deposits from customers decreased by 1.8 per cent from the corresponding period last year and increased by 0.5 per cent from the previous quarter. The ratio of deposits to loans was 61.3 per cent for the quarter, an increase from both the corresponding quarter of last year and the previous quarter. Combined spreads on loans and deposits widened by 15 basis points from the second quarter of last year and by 1 basis points from the previous quarter.

Net other operating income increased by 7.0 per cent and 15.6 per cent, compared with the corresponding quarter of last year and the previous quarter, respectively. This was mainly due to higher income from payment services and real estate broking.

Operating expenses was up 10.4 per cent, from the corresponding quarter of last year. The development from the second quarter of 2023 was affected by factors such as price and wage inflation as well as increased activity. Compared with the previous

quarter, operating expenses were up 7.8 per cent. This was mainly due to high activity within real estate broking and IT.

Impairment provisions amounted to NOK 81 million in the personal customers segment in the quarter, compared with impairment provisions of NOK 104 million and NOK 67 million in the corresponding quarter of 2023 and the first quarter of 2024, respectively. The impairment provisions were mainly in stage 3. Overall, the credit portfolio remained robust.

DNB's market share of credit to households in Norway was

22.9 per cent at end-May 2024. The market share of total house- hold savings was 29.3 per cent at the same point in time, while the market share of savings in mutual funds amounted to 34.8 per cent. DNB Eiendom had a market share of 14.4 per cent in the second quarter.

Corporate customers

Income statement in NOK million	2Q24	1Q24	2Q23
Net interest income	9 238	9 247	9 507
Net other operating income	3 463	2 558	2 725
Total income	12 700	11 805	12 232
Operating expenses	(4 411)	(4 226)	(4 067)
Pre-tax operating profit before impairment	8 289	7 579	8 165
Net gains on fixed and intangible assets	0	0	1
Impairment of financial instruments	(479)	(254)	(765)
Profit from repossessed operations	(54)	(43)	14
Pre-tax operating profit	7 756	7 282	7 414
Tax expense	(1 939)	(1 821)	(1 853)
Profit for the period	5 817	5 462	5 560
Average balance sheet items in NOK billion
Loans to customers	968.9	956.4	955.4
Deposits from customers	890.5	857.4	864.4
Key figures in per cent
Lending spreads1	2.28	2.29	2.24
Deposit spreads1	0.55	0.69	0.77
Return on allocated capital	20.9	19.7	20.8
Cost/income ratio	34.7	35.8	33.3
Ratio of deposits to loans	91.9	89.6	90.5

1 Calculated relative to the corresponding money market rate. See ir.dnb.no for additional information on alternative performance measures (APMs).

The corporate customers segment delivered a return on allocated capital of 20.9 per cent in the second quarter, up from 20.8 per cent in the corresponding quarter of 2023, and from 19.7 per cent in the previous quarter.

Net interest income decreased by NOK 269 million compared with the second quarter of 2023 and was at the same level compared with the previous quarter. Lending volumes were up

1. per cent compared with the corresponding quarter of last year. Adjusted for exchange rate effects, volumes increased by 1.4 per cent. Compared with the previous quarter, lending volumes were up

1. per cent or 0.6 per cent adjusted for exchange rate effects. Lending spreads widened by 4 basis points compared with the corresponding quarter of last year. Compared with the previous quarter, lending spreads narrowed by 1 basis point. Deposit volumes were up by 3.0 per cent compared with the corresponding quarter of 2023. Compared with the previous quarter, deposits from customers were up 3.9 per cent, or 3.0 per cent adjusted for exchange rate effects. Deposit spreads narrowed by 14 basis points from the first quarter of 2024, due to the revised principles relating to the calculation of margins on short-term deposits. The ratio of deposits to loans has remained high for some time, but is expected to gradually decrease.
   Net other operating income amounted to NOK 3 463 million in the second quarter, an increase of NOK 738 million compared with the second quarter of 2023, and NOK 905 million from the previous quarter. Income from net commissions and fees increased by NOK 481 million from the corresponding quarter of last year and by

6 / DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED)

NOK 631 million from the previous quarter. Income from Markets activities was up NOK 176 million from the corresponding quarter of last year and NOK 326 million from the previous quarter, mainly due to income from investment banking services.

Operating expenses were up 8.5 per cent from the second quarter of last year, primarily driven by higher fees and IT expenses and costs related to Markets activities. Compared with the previous quarter, operating expenses were up 4.4 per cent, mainly driven by higher fees and IT expenses.

There were impairment provisions of NOK 479 million in the

corporate customers segment, which were mainly driven by specific customers in stage 3, spread across various industry segments.

DNB is well-positioned for continued profitable growth in the large corporate customers segment and for building further on its market-leading position in the SME segment. The corporate customers segment has embedded DNB's net-zero ambition into key sectoral strategies, and through a wide range of advisory services and sustainable finance products the Group assists its customers in their transition to a low carbon economy and more sustainable value creation.

Other operations

This segment includes the results from risk management in DNB Markets and from traditional pension products with a guaranteed rate of return. In addition, the other operations segment includes Group items not allocated to the customer segments.

Income statement in NOK million	2Q24	1Q24	2Q23
Net interest income	1 058	753	523
Net other operating income	880	998	515
Total income	1 938	1 750	1 038
Operating expenses	(222)	(288)	(8)

virtually unchanged in the quarter and had a minor effect on the solvency margin. At the current interest rate level, the transitional rules for technical insurance provisions have no effect, and the solvency margins with and without transitional rules are equal.

DNB's share of the profit in associated companies (most

importantly Luminor, Vipps and Fremtind) is included in this seg- ment. There was an increase in profit from these companies of NOK 181 million compared with the second quarter of 2023, and of NOK 70 million compared with the previous quarter, mainly due to higher profit in Fremtind.

Funding, liquidity and balance sheet

The bank's short-term funding programmes have for a long time been a highly stable and reliable source of funding, even in turbulent markets. Higher interest rates in Europe have contributed to the bank focusing more on Europe for its commercial paper issues. In Europe, activity is significantly higher for EUR, GBP and USD. This is a valuable source of diversification from the reliable US Commercial Paper (USCP) programme. It also gives the bank the opportunity to further refine its pricing. In the second quarter, the volume issued in Europe under the European Commercial Paper/ Certificates of Deposit (ECP/ECD) programmes exceeded the volume issued under the USCP programme for the first time.

The conditions for obtaining long-term funding for financial institutions were favourable throughout much of the second quarter. A positive risk sentiment and good liquidity in the credit markets led to a significant reduction in credit risk premiums in the first two months of the quarter, and the risk sentiment was largely driven by

developments in government bond yields and expectations relating to the future levels of the key policy rates. A poorer risk sentiment towards the end of the quarter also resulted in significantly lower activity in the market with very few new issues. DNB issued long-

Pre-tax operating profit before impairment	1 716	1 462	1 030		term debt instruments totalling NOK 22.8 billion in the quarter,
Net gains on fixed and intangible assets	(1)	(2)	14
	divided between covered bonds in EUR, senior debt in CHF and
Impairment of financial instruments	1	(1)	(1)
	NOK, and AT1 capital in USD.
Profit from repossessed operations	54	43	(14)
	The total nominal value of long-term debt securities issued by
Pre-tax operating profit	1 770	1 501	1 028
Tax expense	233	264	(12)		the Group was NOK 518 billion at end-June, compared with NOK
Profit from operations held for sale, after taxes	(37)	(29)	19		549 billion a year earlier. The average remaining term to maturity for
Profit for the period	1 966	1 737	1 035		long-term debt securities issued was 3.6 years, compared with 3.4
Average balance sheet items in NOK billion					years a year earlier.
				The short-term liquidity requirement, the Liquidity Coverage
Loans to customers	107.0	104.7	112.4
	Ratio (LCR), remained stable at above 100 per cent throughout the
Deposits from customers	202.5	131.0	68.5
	quarter and was 135 per cent at the end of June. The net long-term
The profit for the other operations segment was NOK 1 966 million	stable funding ratio, NSFR, was 115 per cent, which was well above
the minimum requirement of 100 per cent for stable and long-term
in the second quarter.
				funding.
Risk management income was down from NOK 705 million to
Total combined assets in the DNB Group were NOK
NOK 463 million in the second quarter of 2024, compared with the
4 344 billion at the end of June, up from NOK 4 111 billion a year
corresponding period last year. The reduction was mainly due to
earlier. Total assets in the Group's balance sheet were NOK
lower volatility in counterparty risk (XVA) and somewhat lower
		3 677 billion at end-June 2024, compared with NOK 3 559 billion at
income relating to liquidity management. Compared with the
		end-June 2023.
previous quarter, risk management income decreased by NOK
Loans to customers decreased by NOK 14 billion, or 0.7 per
108 million. Interest trading income was at approximately the same
cent, from the second quarter of 2023. Customer deposits were up
level as in the first quarter, but still at a historically high level due to
NOK 92 billion, or 6.3 per cent, during the same period. The ratio of
high interest volatility and flow of deals. Returns in the bond port-
customer deposits to net loans to customers was 77.1 per cent, up
folio were slightly lower than in the previous quarter, as the portfolio
from 74.9 per cent a year earlier.
did not achieve the same benefit of narrowing spreads that was
seen in the first quarter.					Capital position
The pre-tax profit for guaranteed pension products was NOK
475 million in the second quarter, compared with NOK 383 million in	The common equity Tier 1 (CET1) capital ratio was 19.0 per cent at
the corresponding period of last year, and NOK 483 million in the	end-June, up from 18.9 per cent a year earlier and at the same
first quarter. The increase in profit compared with the previous year	level as at end-March.
can primarily be ascribed to improved return on the company's own	Retained earnings in the period contributed to a 33 basis-point
funds.					increase in the CET1 capital ratio, while the announced share buy-
The solvency margin without transitional rules was 263 per cent	back programme of 1.0 per cent reduced the ratio by 29 basis
as of 30 June an increase from 257 per cent at the end of the first	points.
quarter, mainly due to decreased market risk and the contribution	The CET1 capital ratio requirement for DNB at end-June was
from return on assets in the common portfolio. Interest rates were	15.6 per cent, while the expectation from the supervisory authorities

DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED) / 7

was 16.9 per cent including Pillar 2 Guidance. The Group thus had a solid 2.1 percentage-point headroom above the current supervisory authorities' capital level expectation.

The risk exposure amount was stable from end-March and amounted to NOK 1 090 billion at end-June. Volume growth was offset by exchange rate effects and positive migration.

The leverage ratio was 6.5 per cent at end-June, down from 6.6 per cent in the year-earlier period, and up from 6.2 per cent at end- March.

Capital adequacy

The capital adequacy regulations specify a minimum requirement for own funds based on a risk exposure amount that includes credit risk, market risk and operational risk. In addition to meeting the Pillar 1 minimum requirement, DNB must meet the Pillar 2 requirements and the combined buffer requirements under Pillar 1.

Capital and risk

	2Q24	1Q24	2Q23
CET1 capital ratio, per cent	19.0	19.0	18.9
Tier 1 capital ratio, per cent	20.8	21.1	20.4
Capital ratio, per cent	23.3	23.6	23.0
Risk exposure amount, NOK billion	1 090	1 089	1 095
Leverage ratio, per cent	6.5	6.2	6.6

As the DNB Group consists of both a credit institution and a life insurance company, DNB has to satisfy a cross-sectoral calculation test to demonstrate that it complies with sectoral requirements: the capital adequacy requirement, in accordance with the CRR/CRD, and the Solvency II requirement. At end-June, DNB complied with these requirements by a good margin, with excess capital of NOK 47.9 billion.

New regulatory framework

New Norwegian Financial Supervision Act - Proposition to the Storting no. 75L (2023-2024)

On 11 June, the Storting adopted a new Financial Supervision Act in accordance with the proposal from the Norwegian government. The Act will replace the current Financial Supervision Act from 1956, and follows the recommendations from the legal committee for the Financial Supervision Act in Official Norwegian Report 2023:

6. The bill takes consideration of changes that have affected Finanstilsynet over time, both in terms of the scope of its activities and the rules and legislation it manages, as well as changes to supervisory practice and supervisory instruments.

Amendments to the Norwegian Financial Contracts Act relating to compulsory means of payment (cash)

On 7 June, the Storting adopted amendments to the Financial Contracts Act that entail that consumers must have the right to pay with cash in any retail premises where a business owner sells goods or services, as long as payment is received for the goods or services in the retail premises. The amendments were applied to Section 2-1 of the Financial Contracts Act. The rules regarding the right to pay with cash will enter into force on 1 October 2024.

Norges Bank's advice on the systemic risk buffer

The Monetary Policy and Financial Stability Committee of the Norwegian central bank, Norges Bank, sent a letter to the Norwegian Ministry of Finance on 8 May, recommending that the systemic risk buffer requirement for the banks should be kept unchanged at 4.5 per cent. The Ministry of Finance sets the systemic risk buffer requirement. Norges Bank is responsible for preparing the decision-making basis and for advising the Ministry of Finance on the buffer requirement at least every two years.

Countercyclical capital buffer remains unchanged

Under Section 34 of the Norwegian Regulations on capital requirements and national adaptation of CRR/CRD IV, Norges Bank must determine the level of the countercyclical capital buffer rate for Norwegian exposures every quarter. At its meeting on 2 May, the Monetary Policy and Financial Stability Committee of Norges Bank decided to maintain the countercyclical capital buffer requirement at 2.5 per cent.

Basel IV - CRR III/CRD VI and postponement of the Fundamental Review of the Trading Book

On 24 April, the European Parliament adopted amendments to the EU's capital requirements regulations through the CRD VI Directive and the CRR III Regulation. On 31 May 2024, the Council also adopted the amendments, and the legislation was published in the Official Journal of the European Union as Regulation (EU) 2024/1623 and Directive (EU) 2024/1619, respectively.

The CRR III Regulation will enter into force (with a few exceptions) on 1 January 2025, while the member states are expected to introduce measures that implement the CRD VI 18 months and one day after its entry into force. The implementation date in Norway will depend on when the CRR III Regulation is implemented in the EEA Agreement, and the Norwegian authorities have signalled that they are aiming to follow the same timeline as in the EU.

On 18 June, the European Commission announced that it would postpone the Fundamental Review of the Trading Book (FRTB) to 1 January 2026. The postponement will not formally become part of the EU legislation until the Commission adopts a delegated act with the amendment. This process normally takes at least three months.

Macroeconomic developments

Among Norway's trading partners, the main situation for the first half of the year is that unemployment has remained low, and there has been clear growth in employment in several countries. As price growth is falling and wage growth is increasing, real wage growth is about to pick up. Price growth for consumer products among Norway's trading partners continued to decline in the first quarter of 2024 and into the second quarter. Price growth relating to services for households has remained at the same level, however, and contributed to inflation not declining as quickly as expected by the central banks earlier this year. The central banks have found that their monetary policies have had a tightening effect, but the key figures that have been published so far this year indicate that economies are tolerating the interest rate levels well.

Norges Bank kept the key policy rate unchanged at its monetary policy meeting in June. The forecasts in the June monetary policy report indicated that the key policy rate will remain at 4.50 per cent until the end of the year, before being gradually reduced. This clearly shifted expectations of an interest rate cut further into the future. It can partly be ascribed to changes in interest rate expectations and the estimates for growth and inflation outside Norway having been revised upwards.

The Norwegian economy has been through a period of low growth, but there are prospects of growth increasing in the second half of the year. Mainland GDP growth was 0.2 per cent from the fourth quarter of 2023 to the first quarter of 2024. Registered unemployment rose to 2.0 per cent in the second quarter of 2024, but is still at a low level. Norges Bank's regional network estimated economic growth in the second and third quarters of 2024 of, 0.2 and 0.3 per cent, respectively (quarter-on-quarter). Capacity utilisation in the economy appeared to be somewhat higher than previously assumed, among other things, as a result of higher net exports and greater public demand. The improved prospects for economic growth were an important reason why Norges Bank

8 / DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED)

revised its interest rate path upwards in June. The projections for price and wage growth were also revised upwards, despite core inflation as measured by the CPI-ATE index having declined to 4.1 per cent year-on-year in May. This was slightly lower than Norges Bank's estimate in its March report. However, higher salaries and prospects of increased price growth for imported goods gave reason to adjust the estimates for price growth upwards, which also contributed to a higher interest rate path.

Future prospects

The Group's overriding financial target is a return on equity (ROE) above 13 per cent.

Norges Bank's stepwise increase of the key policy rate, from

2.75 per cent to 4.50 per cent during 2023, followed by DNB's repricing announcements, had full effect in the second quarter.

The following factors will also contribute to the Group reaching its ROE target: growth in loans and in commissions and fees from capital-light products, combined with cost-control measures. The annual organic loan growth for the Group is expected to be between 3 and 4 per cent over time, but could be lower or higher in certain years. After muted loan growth in first half of 2024, some pick-up in growth in the second half of the year is expected.

DNB has an ambition to increase net commissions and fees by between 4 and 5 per cent annually over time, and to maintain a cost/income ratio below 40 per cent.

The long-term tax rate is expected to be 23 per cent. Due to debt interest distribution in Norwegian taxation, the tax rate is estimated at 20 per cent for 2024.

The supervisory expectation for the common equity Tier 1 (CET1) capital ratio for DNB is above 16.9 per cent. In its capital planning, DNB has set the supervisory expectation plus some headroom as its target capital level. The headroom will reflect market-driven fluctuations, including in foreign exchange, and potential minor regulatory changes. The actual ratio achieved in the second quarter was 19.0 per cent.

The Group's dividend policy remains unchanged, with a payout ratio of more than 50 per cent in cash dividends and an ambition to increase the nominal dividend per share each year. In addition to dividend payments, repurchases of own shares are being used as a flexible tool for allocating excess capital to DNB's owners.

	Oslo, 10 July 2024
	The Board of Directors of DNB Bank ASA
Olaug Svarva	Lillian Hattrem
(Chair of the Board)
Jens Petter Olsen	Haakon Christopher Sandven
(Vice Chair of the Board)
Gro Bakstad	Eli Solhaug
Christine Bosse	Kim Wahl
Petter-Børre Furberg
	Kjerstin R. Braathen
	(Group Chief Executive Officer, CEO)

DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED) / 9

Accounts for the DNB Group

G - INCOME STATEMENT

	2nd quarter	2nd quarter	Jan.-June	Jan.-June	Full year
Amounts in NOK million	2024	2023	2024	2023	2023
Interest income, effective interest method	47 571	36 641	93 839	69 058	153 550
Other interest income	1 594	1 826	3 667	3 563	7 095
Interest expenses, effective interest method	(33 203)	(24 231)	(66 365)	(44 137)	(101 757)
Other interest expenses	(146)	996	203	1 347	2 658
Net interest income	15 817	15 232	31 343	29 832	61 547
Commission and fee income	4 354	3 765	7 991	7 306	14 772
Commission and fee expenses	(915)	(946)	(1 849)	(1 853)	(3 658)
Net gains on financial instruments at fair value	1 010	1 277	2 193	3 741	5 283
Net insurance result	433	338	636	493	1 183
Profit from investments accounted for by the equity method	258	76	446	241	449
Net gains on investment properties	(7)	(1)	(3)	(2)	43
Other income	622	461	1 214	982	2 077
Net other operating income	5 756	4 971	10 627	10 907	20 150
Total income	21 572	20 203	41 970	40 739	81 697
Salaries and other personnel expenses	(4 319)	(4 011)	(8 580)	(7 952)	(16 320)
Other expenses	(2 288)	(2 136)	(4 436)	(4 191)	(8 506)
Depreciation and impairment of fixed and intangible assets	(898)	(937)	(1 774)	(1 916)	(3 794)
Total operating expenses	(7 505)	(7 083)	(14 790)	(14 059)	(28 620)
Pre-tax operating profit before impairment	14 067	13 120	27 180	26 679	53 077
Net gains on fixed and intangible assets	(3)	15	(5)	15	11
Impairment of financial instruments	(560)	(871)	(882)	(792)	(2 649)
Pre-tax operating profit	13 504	12 263	26 294	25 902	50 440
Tax expense	(2 701)	(2 821)	(5 259)	(5 958)	(10 811)
Profit from operations held for sale, after taxes	(37)	19	(66)	(11)	(149)
Profit for the period	10 766	9 462	20 969	19 934	39 479
Portion attributable to shareholders	10 271	9 149	20 060	19 341	38 166
Portion attributable to non-controlling interests	6	11	6	11	2
Portion attributable to additional Tier 1 capital holders	489	302	903	581	1 312
Profit for the period	10 766	9 462	20 969	19 934	39 479
Earnings/diluted earnings per share (NOK)	6.83	5.93	13.31	12.51	24.83
Earnings per share excluding operations held for sale (NOK)	6.86	5.91	13.36	12.52	24.93

G - COMPREHENSIVE INCOME STATEMENT

	2nd quarter	2nd quarter	Jan.-June	Jan.-June	Full year
Amounts in NOK million	2024	2023	2024	2023	2023
Profit for the period	10 766	9 462	20 969	19 934	39 479
Actuarial gains and losses					(291)
Property revaluation	(16)	(1)	(16)	(1)	2
Financial liabilities designated at FVTPL, changes in credit risk	(37)	21	(67)	58	(102)
Tax	9	(5)	17	(15)	99
Items that will not be reclassified to the income statement	(44)	15	(67)	43	(292)
Currency translation of foreign operations	(1 328)	1 956	2 663	8 074	4 950
Currency translation reserve reclassified to the income statement	(29)		(29)
Hedging of net investment	1 016	(1 529)	(2 171)	(6 585)	(3 845)
Financial assets at fair value through OCI	88	(124)	537	(109)	(147)
Tax	(276)	416	409	1 673	998
Items that may subsequently be reclassified to the income statement	(529)	719	1 408	3 053	1 955
Other comprehensive income for the period	(573)	734	1 342	3 096	1 663
Comprehensive income for the period	10 194	10 196	22 311	23 030	41 142

10 / DNB GROUP - SECOND QUARTER AND FIRST HALF REPORT 2024 (UNAUDITED)