DNB Bank ASA

Earnings Release • Feb 10, 2021

Rock-solid capital adequacy and high level of customer activity

Rock-solid capital adequacy and high level of customer activity

DNB's profit for the fourth quarter of 2020 was NOK 5 274 million, which is NOK

671 million lower than the corresponding period in 2019. However, high levels of

activity and growth in the personal customer market and SME corporate customer

market - as well as in the savings and capital markets - contributed to DNB

emerging strengthened from the highly unusual year.

Despite the fact that the economic climate is still affected by uncertainty

relating to the coronavirus pandemic, the Norwegian economy has begun a gradual

recovery that is expected to speed up as the vaccination programme progresses.

"2020 was a challenging year for Norway and for DNB, but the Norwegian economy

has fared relatively well during the pandemic. Unlike many other European banks,

DNB is emerging strengthened from the pandemic, with healthy growth, good

results and a record-high level of customer satisfaction. DNB enters 2021 as one

of the world's best capitalised banks," says CEO Kjerstin Braathen.

DNB's capitalisation is at an all-time high, with a common equity Tier 1 (CET1)

capital ratio of 18.7 per cent. DNB is following the recommendations from the

Ministry of Finance concerning the payment of dividends for 2019. The Board of

Directors has therefore decided to pay a dividend per share of NOK 8.40 for

2019, with payment to take place in March.

The Board of Directors will ask the Annual General Meeting for an authorisation

to pay up to NOK 9.00 per share in dividends for 2020, applicable from September

2021 until the Annual General Meeting next year.

High earnings and lending growth

The annual result was NOK 19 840 million, which is NOK 5 881 million lower than

in 2019, mainly due to higher impairment provisions as a result of the

coronavirus pandemic and the fall in oil prices.

The low interest rate affects DNB's income, in the same way as it does for other

banks. Net interest income in the fourth quarter was NOK 9 479 million, which is

NOK 868 million, or 8.4 per cent, lower than in the corresponding quarter last

year. However, lending growth and increased customer deposits contributed to a

1.9 per cent increase in net interest income from the third quarter to the

fourth quarter. Total income in the fourth quarter was NOK 13 326 million, which

is NOK 127 million, or 1 per cent, more than in the corresponding quarter last

year.

"The level of customer activity has remained high despite the year being a

challenging one for many people. Zero interest rates along with government

support schemes have given personal customers increased purchasing power, while

private consumption has shifted towards increased investment in homes and

increased mortgage lending. This increased purchasing power has also created

positive ripple effects for many of our small and medium-sized corporate

customers. The growth in loans to personal customers and small and medium-sized

enterprises has been particularly strong in 2020 - 2.8 per cent and 8.3 per

cent, respectively," says Kjerstin Braathen.

At the same time, there has been pronounced growth in deposits for the year,

with an increase of 19.5 and 8.1 per cent for corporate and personal customers,

respectively.

"It is particularly pleasing to see that our personal customers have really

embraced long-term saving, and increased their savings in both shares and mutual

funds. DNB is taking market shares within mutual fund savings, and 97 per cent

of all new savings agreements were sold through our digital solutions, which

means that we are well positioned in the market for long-term savings and

pensions in the time ahead," says Braathen.

Net commission and fee income increased by NOK 122 million, or 5.1 per cent,

from the third quarter. This shows that we have, together with our customers,

maintained a high level of activity throughout the quarter. Activity has been

particularly high in areas such as capital raising, initial public offerings

(IPOs) and real estate broking in the quarter.

Limited impairment provisions and strong capitalisation

DNB's impairment provisions in the quarter amounted to NOK 1 250 million, which

was NOK 1 072 million higher than in the corresponding quarter last year.

The situation is still demanding in the offshore sector. To a large extent, the

impairment provisions associated with this sector accounted for the total net

impairment provisions in the quarter. These impairment provisions were partly

offset by reversals in most other industry segments, and NOK 139 million in

reversals for personal customers.

Financial key figures for the fourth quarter of 2020 (figures for corresponding

quarter in 2019):

·

Pre-tax operating profit before impairment amounted to NOK 6.8 billion (7.1)

· Profit for the quarter was NOK 5.3 billion (5.9)

· Earnings per share were NOK 3.28 (3.57)

· Return on equity was 8.9 per cent (10.4)

· Cost/income ratio was 48.8 per cent (46.3)

· Common equity Tier 1 (CET 1) capital ratio was 18.7 per cent (18.6)

Financial key figures for 2020 (corresponding figures for 2019):

·

Pre-tax operating profit before impairment amounted to NOK 33 billion (31.7)

· Profit for the year was NOK 19.8 billion (25.7)

· Earnings per share were NOK 12.04 (15.54)

· Return on equity was 8.4 per cent (11.7)

· Cost/income ratio was 41.5 per cent (42.2)

DNB's long-term financial ambitions for 2021-2023 remain unchanged: return on

equity (ROE) of more than 12 per cent, cost/income ratio (C/I) of less than 40

per cent and a CET1 capital ratio of more than 17.1 per cent.

The expected tax rate for 2021 and 2022 is 22 per cent, down from 23 per cent.

Details concerning DNB's results can be found on ir.dnb.no.

For further information:

Rune Helland, Head of Investor Relations, tel.: (+47) 23 26 84 00 / 97 71 32 50

Thomas Midteide, Group Executive Vice President of Communications &

Sustainability, tel.: (+47) 96 23 20 17

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Securities Trading Act.