Earnings call transcript: DNB Q4 2025 reports strong growth in fees

DNB ASA, with a market capitalization of $4 billion, reported robust financial performance in its Q4 2025 earnings call, with a notable increase in earnings per share (EPS) and record-high net fees and commissions. The company’s stock saw a modest increase of 0.61% to $8.97, reflecting investor confidence in its strategic initiatives and market position. According to InvestingPro analysis, DNB currently appears undervalued compared to its Fair Value, suggesting potential upside opportunity.

Key Takeaways

• DNB’s EPS rose by 8.6% year-over-year, reaching 7.04.
• Net fees and commissions hit an all-time high, increasing nearly 30% from the previous year.
• The company completed the Carnegie transaction, launching DNB Carnegie investment bank.
• DNB’s cost-to-income ratio was reported at 36.1%, indicating efficient operations.
• The company maintains a strong capital position with a Core Tier One Capital Ratio of 18.5%.

Company Performance

DNB’s financial results for Q4 2025 showcased strong operational performance, with revenue reaching $2.397 billion and an impressive gross profit margin of 62.31%. The company’s growth was driven by significant increases in net fees and commissions and a strategic focus on investment banking and real estate brokerage. Despite a quarter-on-quarter decline in net interest income, the company achieved a return on equity of 15.9%, surpassing its target of 14%. InvestingPro data reveals the company maintains a FAIR financial health score, with particularly strong marks in growth and cash flow metrics. For deeper insights, subscribers can access over 30 additional financial health indicators.

Financial Highlights

• Revenue: Not specified
• Earnings per share: 7.04, up 8.6% year-over-year
• Net interest income: Down 1.8% quarter-on-quarter, up 5.7% year-over-year
• Cost-to-income ratio: 36.1%
• Core Tier One Capital Ratio: 18.5%

Outlook & Guidance

Looking ahead, DNB anticipates continued growth in fees and commissions, expecting an annual increase of over 9%. The company is also preparing for regulatory changes in residential real estate risk weights and plans to apply for a share buyback of up to 1%. DNB’s strategic initiatives, including the launch of the DNB Carnegie investment bank, are expected to yield revenue synergies of SEK 800 million over the next 2-3 years.

Executive Commentary

Gersten Brotten, CEO of DNB, emphasized the bank’s robust capital position and resilience, stating, "We are one of the most robust and best capitalized banks operating in one of the most resilient economies in the world." CFO Ida Lerner highlighted customer loyalty, remarking, "We continue to see that the majority of our customers stick to their long-term savings schemes." Brotten also reiterated the company’s commitment to its dividend policy.

Risks and Challenges

• Potential regulatory changes in residential real estate risk weights could impact DNB’s operations.
• Macroeconomic factors, such as central bank policy rates and inflation, may affect market conditions.
• The company’s limited exposure to the oil and gas sector could pose risks if energy markets fluctuate.
• The estimated one-off costs of approximately $250 million related to the Carnegie transaction could impact short-term financials.
• Tax code changes could alter the financial landscape and affect profitability.

Q&A

During the Q&A session, analysts inquired about DNB’s Nordic expansion strategy and potential tax code changes. The company confirmed its limited exposure to the oil and gas sector and discussed its commitment to maintaining a consistent dividend policy. These discussions provided insights into DNB’s strategic priorities and risk management approaches.

Full transcript - DnB ASA CFD (DNB) Q1 2025:

Evan, Moderator/Host, DNB: Good morning, everyone. Good morning to everyone watching the stream and to everyone here in Oslo. We are going to present the results from DNB’s first quarter, a quarter that will be remembered for lots of different reasons, but above all for the fine results of DNB Group. We will take questions after this session and there will be a possibility for journalists to ask questions to management after this session as well. Our CEO, Gersten Brotten and CFO, Ida Lerner, are ready to present the numbers.

So Gersten, please go ahead.

Gersten Brotten, CEO, DNB: Thank you so much, Evan, and a warm welcome to all of you who are here and also you following us online. We are delivering today a set of numbers that demonstrates a strong start to the year, reflecting a robust active Norwegian economy with a high activity level across all our customer segments. Among the many key events in this quarter were the legal close of the Carnegie transaction that happened in March And the March number for Carnegie is also included in the numbers that we report today. Last week, the General Assembly approved the dividend for 2024. So this Friday, SEK25 billion will be paid out to our shareholders and we are always motivated to see that close to half of this SEK12 billion will go back to the Norwegian society through the Sparmer Stiftlessen DNB and the Minister of Affairs.

No doubt, the uncertainty towards the end of the quarter related to the world economy increased substantially and impacted the markets through a higher volatility through the end of the quarter and the beginning of the second quarter. We are well equipped to handle and maneuver in a more uncertain environment. We are one of the most robust and best capitalized banks operating in one of the most resilient economies in the world. We are furthermore humbled to see that these numbers reflect that an increasing number of customers trust us with their business. And I would like to give a big shout out to the team who work relentlessly every day to create value and support these customers and earn their trust.

In terms of numbers, return on equity for the quarter comes in at 15.9%. This is well above the targeted level of minimum 14%. This reflects increased earnings across all all key revenue lines and a cost control and robust quality across the business. NII is down 1.8% compared to the fourth quarter, where a volume growth is more than offset by two fewer interest days in the quarter. It’s, however, up by 5.7% compared to the same quarter last year.

We see volume growth both in loans and deposits for this quarter. Net fees and commissions, we deliver an all time high first quarter result, up close to 30% compared to the same quarter last year. And it’s a broad representation of strong performance across product areas, but investment banking and real estate broking are the two strongest areas this quarter. Carnegie revenue came in with the March numbers and represents SEK $398,000,000 across net fees and commissions in total. But even without the Carnegie numbers, it’s still an all time high fee and commission income in a first quarter ever.

The portfolio remains very robust and well diversified, 99.3% in low risk, and we book impairment provisions of SEK $410,000,000 for the quarter. Very strong capital generation from these results has offset parts of the Carnegie transaction, which has been deducted with 120 basis points in our core capital ratio, but capital remains strong at 18.5% for the core equity Tier one ratio. This is a headroom by 180 basis points down to the expected and required level by the Norwegian FSA. The strong capitalization enables us to amply support and work with our customers in the time ahead, And we further also plan to send an application to the Norwegian FSA this week to apply for an approval to buy back up to 1% of the outstanding shares. 1% of the outstanding shares would represent 40 basis points on our capital ratio.

The strong start to the year is visible also in the earnings per share, which are 7.04 for the quarter, up by 8.6% from the same quarter last year. The outlook for the Norwegian economy remains robust. And the estimate for the GDP growth this year is 1.5%, which is up from the 0.6% last year. Main drivers for increased economic growth are related to increased consumption and increased construction activity. Unemployment remains, however, the most important factor for financial and social health in the economy.

And unemployment has remained low throughout the previous years and is also expected to remain low around 2% in the coming period. Core inflation has come down but has proven to be stickier than most economists have expected, and the Central Bank chose to keep the policy rate unchanged at 4.5% during their meeting in March. Wage settlement and wage growth is expected in the area of 4.4%, four point five % this year, representing yet another year where we expect real wage growth and increased disposable income for consumers. No doubt, the level of uncertainty in the world economy and the outlook has increased throughout the quarter. And again, we saw increased volatility across markets.

Despite this and the fact that the base case for the Norwegian economy remains very sound economic growth, there are also built in stabilizers in the Norwegian economy that enables this economy to offset and take initiatives if the development should prove to be somewhat weaker. First of all, the rate policy already mentioned with the key policy rate of 4.5. No rate hike in March, but we do expect there to be two rate cuts, apologies. We do expect there to be two rate cuts during the second half of this year, but rates to remain at a higher level than surrounding countries. The currency has weakened, but the weakening of the currency also represents an increased competitiveness for our manufacturing industries and in some ways then representing a natural hedge in more turbulent periods.

And last but not least, the Norwegian economy is one of the wealthiest in the world with more than SEK 18,000 billion in the Norwegian sovereign wealth fund. And both the central bank and the government has proven has a proven ability but has also proven the willingness to put these stabilizers to work if that becomes necessary to the economy. So altogether, we continue to believe that this represents a very sound backdrop for our business going forward. I mentioned the legal close of Carnegie that took place in March. Next week will be the official launch of the joint investment bank, DNB Carnegie, a merger of equals forming the foundation for a Nordic powerhouse in both investment banking and wealth management.

The complementarity of this business and the strengthening of the competitive offering has been further confirmed during the earlier days of the integration. And we maintain our outlook and expectations of revenue synergies for our joint efforts in this area of SEK 800,000,000 per year to be realized in the coming two to three year period. We are very excited about this venture and already see that customers really appreciate the improved offering that we are able to deliver. And we have many strong positions and number one positions across the Nordic businesses in both Investment Banking and Asset Management. A few highlights on each of the segments.

Our three customer segments that represents not equal but similar parts of the revenue and the profits in the business. For the Personal Customer segments, profits are up 1,600,000,000.0 from the fourth quarter, ’8 percent if we compare to last year. The clear highlights in this quarter has been very high activity in the mortgage market as well as the real estate brokerage sector. And we have a record demand and a record inventory of finance certificates, which are 30% higher going into the second quarter than they were going into the first quarter. Corporate customers, Norway, again, a very solid development across SME customers where the underlying growth is 1.5% on the lending side for the quarter.

I would also like to emphasize in this area the strong growth in other income, 13% increased revenue stemming from other products than deposits and loans, further demonstrating the increased cooperation with investment banking across different products towards these customers as well as a continued growth in defined pension activity with this customer group. Large Corporates’ pretax profits are down compared to fourth quarter by 10%, with the fourth quarter being a seasonally very high activity quarter for fees and commissions, but up 20% if we compare to the first quarter last year. Volume development, more stable this quarter after a very strong growth in the second half last year, but a record growth in revenue from other areas than lending and deposits and a material increase in the share of this revenue compared to the total revenue. The revenue from other areas than lending and deposit now represents 35% of the revenue, up from 30% during the same period last year, and this is by only including one month of the Carnegie revenue in the month of March. So as you can see, clearly a broad improved and good performance across all of the business and our customer segments.

And with that, I will leave it to Ida to take you through more of the details.

Ida Lerner, CFO, DNB: Thank you, Sestin, and a warm welcome to everyone here in the room and also listening in online. I would now like to turn in more detail to the quarterly results. We noted continued good momentum in all customer segments with FX adjusted loan growth of 0.5%. Unadjusted, this was down by 0.3% driven by the FX effects we saw in particularly in large corporates. We note that Justin said a continued strong growth in the personal customer segments where lending volumes were up by 0.8%.

Corporate customer Norway noted a volume growth in loans of 0.5%, where continued low activity, in particular in the real estate and construction industries, were counteracted by a stronger growth across the other parts of the small and medium sized enterprises. Large Corporates and International noted a solid quarter with stable volumes compared to a very high level we saw in the fourth quarter, and FX adjusted volumes were up by 0.1%. Deposit volumes were up by 3.8% in the quarter unadjusted, up 2.1% personal customers saw an uptick of 4.1% corporate customers by 2.3% and in large corporate and international, deposits were up by 4.7%. We continue to maintain a strong deposit to loan ratio, and this quarter, this ends up at 76.1 percent. The net interest margin was down by four basis points, now ending up at 190 basis points.

The reduction reflects increased average volumes in the quarter and in particularly a relatively larger share of increase in deposit volumes. The combined spreads are down by three basis points, reflecting product mix effects and continued strong but rational competition in the Norwegian market. NII was down by $3.00 €8,000,000 in the quarter, positively impacted by profitable loan volumes and volumes in deposits but offset by two fewer interest days in the quarter. The reduction in money market rates affected interest on equity as well as spreads. The latter is also affected by some portfolio and product mix effects in the quarter.

The decreased treasury related NII reflect the high positive contribution that we saw in the fourth quarter related to liquidity management. Our platform is strong and well diversified. The results represent, as Gerstin said, an all time high results when combining the results with the Carnegie inclusion, up 29.5%. But also, when taking out the Carnegie transaction, we see a record high result in the commission and fee line, up 15% year over year. In addition to what you can see on this slide, there is a continued strong contribution from FICC related to strong customer activity also in this area.

When looking more specifically on to commission and fees, we’re happy to see an increased activity in the real estate market and in particularly in the secondary real estate market where we see a strong uptick resulting in a 28% higher income stemming from real estate brokerage. Investment banking was up 83% from the corresponding quarter last year with record high income stemming from high yield and investment grade bonds but also a good momentum in the M and A part of the business. As Justin mentioned, we see positive prospects in the combination of DNB and Carnegie and are really looking forward to seeing the results of that in the coming quarters. Carnegie contributes with $244,000,000 in this line, representing their March numbers. Asset management and custodial services was up by 44% from the first quarter in twenty twenty four.

We continue to see that the majority of our customers stick to their long term savings schemes. Asset under management in the quarter was down by $47,000,000,000 driven by reduced market values. We noted some net outflow towards the end of the quarter from retail customers, which was offset by an increased net inflow from institutional customers, leaving the positive net inflow at €800,000,000 in the quarter. We note continued strong demand for trade finance products. And as you can see from the slide, guarantee commissions are up by 12%.

Money Transfer and Banking Services was down by 13%, but increased income stemming from the travel activity was somewhat offset by reduced income from banking services. Sale of insurance product was up by 19%, driven by continued strong development, and particularly in the defined contribution pension area. Operating expenses are seasonally lower in the first quarter compared to the fourth quarter, but costs in this quarter also shows effects of the announced downsizing of support functions as personnel expenses are down quarter on quarter. Important to note in this quarter is also that the March numbers for Carnegie is included, adding $318,000,000 to our cost base. We estimate a full year one off cost associated with the Carnegie transaction of approximately $250,000,000 in 2025, of which $77,000,000 was taken in the first quarter.

Moving on to portfolio quality, which remains robust and well diversified with 99.3% of the portfolio in Stage one and two. For personal customers, representing approximately 50% of our exposure at default, the portfolio remains strong. We’re not seeing any negative developments in the portfolio, if anything, the opposite. For corporate customers Norway and LCI, impairment provision totaled €119,000,000 and €225,000,000 respectively. The corporate portfolio remains solid and well diversified across geographies as well as industries with no systematic change, negative migration within any segment or industry.

We remain comfortable with our credit portfolio, but please bear in mind that losses will vary from quarter to quarter. Let’s now proceed to capital. The core Tier one capital ratio remained strong at 18.5% with 180 basis points above the regulatory expectation. The core Tier one capital ratio was positively impacted by 40 basis points from profitability as well as an ordinary dividend from D and B Life Insurance of $1,500,000,000 in the quarter. The Carnegie transaction reduced the core Tier one capital ratio by 120 basis points, well in line with what we have communicated previously.

Leverage ratio remained strong at 6%, well above the regulatory requirement of 3%. We have now received approval from the NFSA to move the Espanken portfolio from standard approach to IRB. This will be done in the second quarter alongside the implementation of CRR three. These two effects in combination will have a neutral effect on the core Tier one capital ratio. The increased risk weight flows on residential real estate being implemented on the 07/01/2025 will have an estimated negative effect on the core Tier one capital ratio of approximately 60 basis points now implemented in the third quarter.

The Board of Directors has, as Shashdin said, received an authorization by the Annual General Assembly to buy back up to 3.5% of outstanding shares. We will intend to send in an application later on this week for a share buyback of up to 1%, And we’ll come back to you once that has been approved. With a core Tier one capital ratio of 18.5%, a leverage ratio of 6%, our capital position remains strong. We are very well equipped to handle the announced regulatory changes but also, at the same time, to support our customers in the times ahead as well as standing up to our dividend policy ahead. So summing up.

We are delivering a strong set of results in the first quarter reflected in the key numbers you see on this slide. Return on equity came in at 15.9% earnings per share at $7.04 an increase of 8.6% from the corresponding quarter last year costincome ratio at 36.1% a strong set of results. And with that, I would like to thank you for your attention. And we are now opening up for questions.

Evan, Moderator/Host, DNB: Thank you so much, Ida. Thank you, Justin. We will open up for questions from the audience. And there’s also possible to ask questions online. I see we have a few usual suspects in the audience for questions.

Start with you, Roy from Arctic. There’s a microphone waiting.

Roy Tilly, Analyst, Arctic: Thank you very much. Roy Tilly from Arctic. I have two questions. The first one, so we had fairly good growth again this quarter. I was just looking in the Stage one volumes.

So you seem to have very high originations, but also high. So it seems to be a lot more movement within the portfolio. Are you seeing customers switching more? Are you seeing more active customers generally? Is question both for the personal customers and the corporate customers.

Gersten Brotten, CEO, DNB: Mean activity is high. And as you’re saying, volumes on the lending side in the personal customer area is up by SEK 6,900,000,000.0, representing a lot of house loans. I think this quarter has been characterized by less bank switching than if we compare to first quarter last year, but a substantial activity in house acquisition, which we also tend to have a stronger competitive edge. I think there’s some model calibration impacting the Stage one numbers without a material impact to the risk exposed amounts. So customer activity is more in line with what is reflected as traditional activity and business, an increasing number of customers choosing us.

And you also see this in the real estate brokerage numbers. For SMEs, I would say 1.5% is a pretty strong number, taking into consideration that we are still not really seeing a material uptick in house constructions, which is expected to be one of the economic drivers. But overall, I would say we see growth in the areas where we most would like to see them. And also on the deposit side, there’s a very healthy development with more than SEK 20,000,000,000 increased deposit amount compared to the same time or compared to last quarter, actually.

Roy Tilly, Analyst, Arctic: Okay. And then just one more question. You’ve done a lot of work over the last decade to become less exposed to oil and gas. And I think that’s fairly well highlighted year to date with oil prices down, I think, 16%. The DNB share price is up 25%.

So ten years ago, it would have been different. So just wondering if you’re seeing anything in your oil and gas exposure. Is $60 okay for the oil price? Is $50 okay? Where will we see any issues arise?

Gersten Brotten, CEO, DNB: Well, first of all, we are pleased that the market also appreciates the clear reduction of exposure concentration in the sector that we had ten years ago. It has decreased gradually over time, but we also have very limited exposure directly to the oil price. The transactions that we do based on reserve based lending is really the only direct impact, and those are done at very conservative levels. So we’re still very comfortable with the prices we have today. And overall, I would say we remain comfortable with the combination of oil and gas prices as well as the exposure in the servicing sector, which is more dependent on the activity level.

But overall, it’s a solid book and very good returns on the oil and oil services.

Roy Tilly, Analyst, Arctic: Thank you very much.

Evan, Moderator/Host, DNB: Thank you. Next question from Johannes Thormann from HSBC. Julia? Yes. Okay.

So let’s give the mic to Thomas Wenson first as it was passing on to him and then Johannes afterwards.

Thomas Wenson, Analyst: Yes. Good morning. So in your annual report, you write that you want to become a leading Nordic bank. So sorry, in light of that, do you plan to increase your Nordic corporate lending on a broader basis than your sort of highlighted prioritized international sectors in Sweden?

Gersten Brotten, CEO, DNB: We have clearly stated the ambition to become a or the leading Nordic investment bank and have also substantially strengthened our platform in the Nordic perspective in the wealth management area. So a clearly strengthened position in this area on the top of having grown organically our business both in the corporate lending side as well as investment banking over the past ten years or so. From here, we see ample opportunities to grow and develop that business. Primarily, these are capital light areas, but we have been very successful across cooperating with large corporates and investment banking. And naturally, we intend to build on that also across the other Nordic markets where we have a very much strengthened position in Sweden but also materially strengthened our position across Denmark and Finland.

We have also stated that in the Nordic context, we are doing corporate business across sectors, not as limited to our international strategies as we have if you go outside of The Nordics.

Thomas Wenson, Analyst: Okay. Question number two. Some of your Norwegian peers have pointed to increased competition for personal client deposits. While this doesn’t seem to be so much the case for you, at least looking at the basis points, so what do you see there going forward?

Gersten Brotten, CEO, DNB: We see intense competition. Right now, I think supply surpasses demand even though demand has been picking up substantially over the past couple of quarters if we’re looking at the lending side. I think we would qualify competition as even fiercer on the lending side than what we see in deposits. In deposits, we mainly see a continued behavior where some customers move savings from transaction accounts to saving accounts. However, that development, the activity level has somewhat leveled off.

So margins are holding up pretty well, and we see that customers are choosing on the back of competitive pricing absolutely, but also on the base of a more broad evaluation of the offering.

Evan, Moderator/Host, DNB: Thank you. Thank you. And then we will have the next question from Johannes from HSBC.

Johannes Thormann, Analyst, HSBC: Morning. Johannes Thormann, HSBC. Three questions from my side. First of all, on the Carnegie deal. You mentioned the €244,000,000 revenues in Investment Banking Services.

Can you mention also the full contribution in this quarter? And as I’m guesstimating, it must be around €350,000,000 or more. The run rate would be about €4,000,000,000 revenues per year. When it’s time to think about raising the revenue guidance at least from the Carnegie deal and also the profit contribution? That’s my first question.

Secondly, on the real estate broking and housing loans. First of all, you mentioned increased competition in the market. And you still it looks like you’re gaining market share. Or how would you describe your better revenues? Is this due to pricing?

Have you improved your offering where you can say this is one USP we didn’t have before? And last but not least, on your loan growth, slightly a bit different angle in the current political environment. If you want to diversify, a lot of European or Eurozone banks are talking about increasing lending to defense. Is this possible with your current lending policies? Are you thinking of changing it?

Thank you very much.

Gersten Brotten, CEO, DNB: Thank you for a very good question, Johannes. The revenue contribution overall from Carnegie this quarter is €433,000,000 and that represents the revenue for March as a whole. The sort of indication and guiding that we have provided for Carnegie has been on a bottom line perspective, where we have said that normalized annual results would be in the area of SEK 1,000,000,000. That is what the multiple of the acquisition was built on. And again, we reiterated our guiding and our indication that we anticipate revenue synergies in the area of SEK 800,000,000 annually to be realized over the coming two- to three year period.

I think where this is reflected in the overall guiding for us as a group is in the fee and commission side, where we have said we expect a growth in fee and commissions annually above 9% growth. I think we do not expect to continue to guide on a Carnegie specific level as from next week, these will be two merged businesses and be reported in line with customer segments. But pretty much, we continue to see the same or even a strengthened rationale. And even though having somewhat volatile markets and uncertain markets as we speak, we have seen a normalization. We see that business are coming back, in particular, in the DCM area and see that customers appreciate the strengthened offering that we have with our joint efforts.

With regards to the housing market, we are very pleased with the customer activity and the inventory we have going into the second quarter with finance certificates of being more than 30% higher than coming into the first quarter. I think our competitive edge is a combination of, yes, competitive pricing that we have had all along, but it’s also how we are continuously developing the digital offering, listening to customers, fixing the things that are posing friction in the processes. There has been a strong alignment of efforts also from the sales force or the first line, if you will, in the personal customers really focusing on a systematic work towards the mortgage area. And I would also highlight the cooperation together with corporate customers Norway, where we send our teams to our larger customers on the corporate side, present our offering and see that, that is also a good source for winning customers on the personal customer area. This has also been a quarter with not much negative news around banks, and we tend to see that we also perform better when there is absence of negative news related to the industry.

But competitive pricing will always be important, but it is a testament to the quality also in the processes related to buying a house. That can be for many a time where you would like to talk to a person, and this is an area where we have focused on building good processes, good advice over time. And we are also maintaining our position as the most preferred bank for young people who are very active in this market. With regards to loan growth and diversification, we have an exposure to the defense sector as such, which is somewhat less than 1% of our portfolio. Activity really limited to Norway in this area.

I think that we would grow with our customers, with the industry and the supply chain in the important work that is to be done ensuring improved security for Europe as a whole. But we do not have any ambitions to expand in defense lending outside of our core market.

Evan, Moderator/Host, DNB: Thank you. Any further questions from the audience or from the online? Yes, there is one online question. Let’s give the microphone to Roy Tilley first and then from the online audience. Roy?

Roy Tilly, Analyst, Arctic: Just a very quick one on tax. So you have some tax benefits this year from the debt interest distribution. There was a proposal recently to change the tax code, which seemed aimed at you. If that changes, does the long term guidance of 23% change? Or is that kind of incorporated already?

Ida Lerner, CFO, DNB: That’s already incorporated in the long term guiding of twenty three percent.

Roy Tilly, Analyst, Arctic: Okay. Thank you.

Evan, Moderator/Host, DNB: Thank you. Aruna, if you would like to present the questions from online viewers.

Aruna, Online Moderator: Yes. Got two questions from Jan Erik Kjerlan, ABG, on asset quality. So there are no negative migration in sum. Can you give more insight to the gross movements? Which type of customers are better and which are weaker?

And the second question, could you give some kind of sensitivity to lower interest rates expectations during the second half for your NII?

Ida Lerner, CFO, DNB: Yes, if we start with the impairments. I think overall, I mean, what we’re saying is that we’re not seeing any systematic changes in the portfolio. Of course, there are customers being moved from one stage to another, which is natural. We are also saying that we expect to see customer specific situations also in the years ahead and in the quarters ahead as we have seen before. But again, these are customer specific situation.

We see an increase in Stage three volumes, but that’s related to a customer drawing on more facilities, not increasing volumes in terms of number of customers moving into Stage three. So we’re not seeing any changes. And also, of course, and as Justin pointed to, the construction industry hasn’t really picked up even though that accounts for a very small part of our portfolio, approximately 1%. That doesn’t really impact the overall picture. But of course, that is still a challenging part of the industry, I would say, and we will need to see the uptick in terms of houses being built and projects being started.

But doesn’t really impact our impairment levels in the quarter. NII sensitivities, think you know, Jan Erik, that we are not commenting upon apart from what you know that the Norwegian Central Bank is expected to decrease the key policy rate twice this year. And of course, you will see an automatic impact in terms of interest on equity. But apart from that, you know that we can’t comment on it.

Aruna, Online Moderator: Thank you. We also have a question from an individual shareholder. Should shareholder expect to see stable or adjusted dividend levels in light of the expected lower interest rate path?

Gersten Brotten, CEO, DNB: I think we remain very firmly committed to our dividend policy that has been very consistent for many years now. And that states that we will pay out more than 50% of our net result as cash dividend, and we aim to increase the nominal payment per share per year. In addition to this, we use actively share buyback as a tool to optimize around the desired capital level, and we have proven our ability to deliver on this dividend policy through many different rate cycles even through the pandemics where many other banks held back and were not able to deliver. So we are confident in our ability to deliver on this also in the times ahead and are stating today that we will send an application for up to 1% buyback, again showing that we are actively pursuing our policy in the dividend area.

Evan, Moderator/Host, DNB: Thank you. Thank you so much. Good to see that Mr. Eilan is always with us. I think I haven’t seen any more questions from the audience.

That will sum up our presentation here. Thank you for presenting. Thank you for watching and joining in. And there will be time for journalists afterwards in the couch area outside. Have a nice Wednesday.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.