DNB Bank ASA

Earnings Release • Jul 13, 2020

Several bright spots and lower losses

Several bright spots and lower losses

DNB's profits for the second quarter of 2020 were NOK 5 019 million, a decrease

of NOK 1 115 million from the second quarter of 2019. The result is nonetheless

significantly better than that of this year's first quarter, and the economic

outlook is now less uncertain.

After a very demanding start to the year, we are again seeing some bright spots

for the Norwegian economy. The level of activity is higher, and this has

affected DNB's results for the second quarter.

"The situation is still challenging for many, not least for people who have been

temporarily laid off and for businesses struggling to make ends meet. But the

Norwegian economy is landing on its feet, and in a number of areas, things are

looking a lot brighter than they did at the end of last quarter. This is the

case, among other things, for consumer confidence, the property market, personal

consumption levels, employment rates and the oil price," says Group Chief

Executive Officer Kjerstin Braathen.

Oil companies are most affected

The impairment losses in DNB's financial statements are still higher than

normal, but they are 63 per cent lower than in the first quarter. This is mainly

due to impairment losses associated with the oil-related industries, which

amounted to around NOK 1.9 billion for the quarter. Compared with the first

quarter, impairment losses for these industries were NOK 742 million lower in

this quarter.

Oil, gas and offshore account for 88 per cent of the Group's impairment losses,

while losses for personal customers and other corporate customers are low.

"Market conditions will continue to be challenging for some industries, such as

the offshore industry, in the time ahead," says Kjerstin Braathen.

She emphasises that there is still a higher level of uncertainty than normal,

both as regards the development of COVID-19 infection levels and how the economy

will recover after the crisis.

Increasing income

Net interest income was NOK 9 451 million in the second quarter, which was NOK

130 million lower than in the same quarter last year.

This was offset by other income being higher than at the same time last year.

This income ended at NOK 4 673 million, up NOK 201 million compared with the

same quarter last year. DNB's brokerage house DNB Markets had a good quarter,

with solid income both from customer and risk management activities. The level

of activity was high in asset management and real estate broking as well, with

June seeing a record turnover for the latter. In some other areas, reduced

activity led to lower commission and fee income, for instance from payment

services linked to travel and tourism.

"Many of our customers have had a difficult quarter, and I'm impressed by the

business community's ability to adjust. We're doing everything we can to help

our customers and are now finding that the focus of activity has gradually

shifted from dealing with deferrals to buying housing and financing new

projects. Fortunately, many industries have got the wheels turning again faster

than we thought. In a survey of our corporate customers, two out of three

companies stated that they are now operating as normal. Three months ago, 60 per

cent of them were either running reduced operations or were completely closed,"

Braathen says.

"For our part, the fact that we were able to close the coronavirus phone line

for companies was also a bright spot," she adds.

DNB's financial strength was boosted by a common equity Tier 1 capital ratio of

18.2 per cent, a comfortable 2.5 percentage points above the requirement. The

bank has maintained its historically high credit rating.

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

the corresponding quarter in 2019):

· Pre-tax operating profit before impairment losses amounted to NOK 8.4

billion (8.2)

· Profit for the period was NOK 5.0 billion (6.1)

· Earnings per share were NOK 3.06 (3.71)

· Return on equity was 8.7 per cent (11.3)

· Cost/income ratio ended at 40.4 per cent (41.9)

· Common equity Tier 1 (CET1) capital ratio was 18.2 per cent (17.3)

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 / (+47) 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.