DNB Bank ASA — Earnings Release 2014

Jul 10, 2014

Healthy profits strengthen DNB's capital adequacy

Healthy profits strengthen DNB's capital adequacy

DNB recorded profits of NOK 4 654 million in the second quarter of 2014,

up NOK 856 million from the second quarter of 2013. The rise in profits

contributes to building up equity in the bank in accordance with the

authorities' requirements. DNB is now among the world's best capitalised

banks.

"As a result of the strong profits achieved in the second quarter, we

are on schedule to fulfil the capital requirements for banks. The rise

in profits from the second quarter of 2013 reflects higher lending

volumes, wider lending spreads, reduced restructuring expenses and lower

impairment losses on loans," says Rune Bjerke, group chief executive.

Higher lending volumes boost interest income

Net interest income rose by NOK 387 million from the second quarter of

2013. Impairment losses on loans and guarantees came to NOK 554 million

for the quarter, significantly lower than the NOK 937 million recorded

in the second quarter of 2013, but higher than in the two preceding

quarters. Lower impairment losses on loans to large corporates and

international businesses were the main reason behind the reduction in

impairment from the second quarter of 2013. The increase from the first

quarter of 2014 reflected reduced reversals on both previous individual

impairment losses and collective impairment losses. There was a

continued positive trend in new impairment losses.

DNB's common equity Tier 1 capital ratio was 12.1 per cent at end-June

2014, including 50 per cent of interim profits. If DNB had been able to

report based on the Swedish authorities' regulations, the Group could

have reported a common equity Tier 1 capital ratio of as much as 17.3

per cent.

"DNB is now among the best capitalised banks in the world. This provides

vital security for both customers, employees and shareholders. During

the quarter, DNB was also classified as a systemically important bank by

the Norwegian authorities, which emphasises the importance of being

present for individuals, companies and local communities throughout

Norway. This classification also entails an additional own funds

requirement for systemically important banks, which means that we must

continue to increase our equity considerably in order to reach the

target," says Bjerke.

Narrower lending spread than in the previous quarter

Average lending spreads narrowed from 2.42 per cent in the first quarter

of 2014 to 2.39 per cent in

the second quarter, while deposit spreads improved somewhat, from -0.29

per cent to -0.27 per cent. Operating expenses were reduced by 7.6 per

cent from the year-earlier period, mainly due to restructuring expenses

in 2013, while the cost/income ratio was 43.8 per cent, well below the

45 per cent target.

"The increase in the bank's lending volumes is a positive sign,

especially with respect to small and medium-sized enterprises. This

could mean that the economic downturn Norway has experienced over the

past year, is more moderate than many feared. Petroleum investment will

probably decline slightly in the period ahead, but is expected to remain

at a high level. However, the recent rise in housing prices, along with

continued income growth in the household sector and low real interest

rates, will probably contribute to a new upturn in housing investment.

The significant rise in public administration investment is another

factor that could cause renewed growth in mainland investment next

year," says Bjerke.

Key figures for the second quarter of 2014

· Pre-tax operating profit before impairment was NOK 6.7 billion (6.1)

· Profit for the period was NOK 4.7 billion (3.8)

· Earnings per share were NOK 2.86 (2.33)

· Return on equity was 12.7 per cent (11.6)

· The ordinary cost/income ratio was 43.8 per cent (48.0)

Comparable figures for the second quarter of 2013 in parentheses.

This information is subject to the disclosure requirements pursuant to

section 5-12 of the

Norwegian Securities Trading Act.

Contact person:

Thomas Midteide, group executive vice president, Corporate

Communications, tel.: + 47 962 32 017

The quarterly report, presentation and Fact Book can be downloaded from

www.dnb.no/investor-relations