DNB Bank ASA

Earnings Release • Oct 22, 2020

Growth and record-high capital adequacy in uncertain times

Growth and record-high capital adequacy in uncertain times

DNB's profit for the third quarter of 2020 was NOK 5 546 million, which was NOK

513 million lower than in the corresponding period last year. Despite a higher

level of uncertainty than normal, the bank is experiencing high activity and

healthy growth.

Although COVID-19 and developments in the levels of infection in society still

give cause for concern, the Norwegian economy continued to recover in the third

quarter. DNB's activity level was less affected by the pandemic than expected

this quarter.

"The bank's position is rock-solid and the recovery of the Norwegian economy has

in a number of areas progressed at a faster pace than many had feared. This has

enabled us to help many of our customers fulfil their housing dreams or invest

in their businesses this quarter. The growth in lending to personal customers

and small and medium-sized enterprises has been particularly good, with a

quarterly growth of 1.4 and 1.8 per cent, respectively, which we didn't envisage

six months ago," says CEO Kjerstin Braathen.

Lower interest rates and high activity

Net interest income ended at NOK 9 298 million in the third quarter. This was

NOK 686 million less than in the corresponding quarter last year and can be

ascribed to record-low interest rates in Norway and internationally.

"The low interest rate is affecting all banks, including DNB. In the months

following the lockdown we have had much more customer contact than normal, and

customers' needs have varied greatly. While some are still struggling, there are

also many companies that have opened their doors again, and many employees who

are back at work. The record-low interest rates have given our personal

customers increased purchasing power, while creating opportunities and growth

for a large number of our corporate customers," says Braathen.

Commission and fee income amounted to NOK 2 372 million in the third quarter,

which is NOK 49 million higher than in the corresponding quarter last year. This

income is closely linked to the level of activity among DNB's customers in

various areas. DNB's life insurance company DNB Livsforsikring and associated

companies such as Fremtind also contributed to the positive result.

"We are seeing a high level of customer activity in areas such as mutual funds

savings, capital raising and real estate broking. This leads to increased

revenues, which also benefit us in DNB," says Braathen.

Other income totaled NOK 4 109 million in the quarter, down NOK 449 million from

the corresponding quarter last year. The decrease is mainly due to lower capital

gains on financial instruments.

Lower losses

DNB's impairment provisions in the quarter amounted to NOK 776 million, which is

NOK 471 million lower than in the corresponding quarter last year. The

impairment provisions for oil-related industries ended at NOK 1 037 million, but

were somewhat offset by NOK 360 million in reversals in the personal customers

market, due to a very robust customer portfolio.

The situation remains challenging in parts of the oil-related industry. The oil,

gas and offshore segment has accounted for more than 60 per cent of the Group's

impairment provisions so far this year.

"There is still considerable uncertainty about how both the pandemic and the

economy will develop. Our job is to support our customers by providing capital

and sound advice, and we are well-equipped to do just that in the future as

well," concludes Kjerstin Braathen.

DNB's capital adequacy is record high, with a common equity Tier 1 capital ratio

of 18.9 per cent. The bank has called an extraordinary General Meeting to

consider the authorisation of the Board of Directors to decide on the possible

payment of dividends (see separate statement to Oslo Børs).

Financial key figures for the third quarter of 2020 (compared with figures for

the corresponding quarter in 2019):

· Pre-tax operating profit before impairment amounted to NOK 7.7 billion (8.9)

· Profit for the quarter was NOK 5.5 billion (6.1)

· Earnings per share were NOK 3.41 (3.64)

· Return on equity was 9.5 per cent (10.9)

· Cost/income ratio was 42.5 per cent (38.8)

· Common equity Tier 1 (CET1) capital ratio was 18.9 per cent (18.3)

The expected tax rate for 2020 remains unchanged at 20 per cent, and for 2021

and 2022, the new expectation is 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, tel.: (+47)

96 23 20 17

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

-12 of the Securities Trading Act.