Norway’s DNB posts Q4 profit rise as end to lockdown boosts business

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Net profit rose to 6.16 billion crowns ($698 million) for the October-December quarter from 5.27 billion a year earlier, in line with the 6.15 billion expected by analysts in a poll compiled by the bank.

“Once again large parts of the business sector are going at full speed,” CEO Kjerstin Braathen said in a statement.

DNB proposed a dividend of 9.75 crowns per share for 2021, up from 9 crowns the previous year but below the 9.94 crowns expected by analysts.

Net interest income rose 8.5% to 806 million crowns, and while its return on equity of 10.7% in 2021 fell short of its target of above 12%, it said it was to deliver this by end-2023 helped partly by rising interest rates.

Norway’s central bank started raising its key policy rate in September last year after a series of cuts in 2020 had left it at an unprecedented zero percent.

Low rates contributed to a boom in housing prices as borrowers took advantage of cheap credit, boosting banks’ lending volumes while weighing on net interest income.

Currently at 0.5%, the central bank said it aims to raise the rate a further three times in 2022.

($1 = 8.8271 Norwegian crowns)