[ad_1]
Low interest rates contribute to lower income at the main bank in the third quarter, but credit losses also decreased. Profit before tax was reduced by NOK 690 million.
Published:,
DNB reports lower interest income and lower earnings in the third quarter.
The top bank made a pre-tax profit of NOK 6.93 billion in the third quarter, up from NOK 7.62 billion in the same period last year, the quarterly report shows on Thursday.
also read
Wework cancels DNB lease at Aker Brygge
Low interest rates
Net interest income fell to NOK 9.3 billion from NOK 9.98 billion in the third quarter of last year. The decline is due to low interest rates here at home and internationally, writes DNB.
– The low level of interest rates affects all banks, including DNB, says CEO Kjerstin Braathen in a press release.
– Although some are still fighting, there are also many who have opened
the doors and are back at work. The historically low interest rate has given retail clients greater purchasing power, which at the same time creates opportunity and growth for a large portion of our corporate clients, he says.
Analysts who, according to the bank, had anticipated that profits would decline. According to estimates compiled by Infront, they expected a profit of 5.83 billion before taxes.
also read
Clients repress major banks: – Far from being good enough
Increase in commission income
DNB’s fee and commission income, on the other hand, increased in the quarter to NOK 3.3 billion from NOK 3.28 billion in the same period last year.
– We see that customer activity is high in areas such as saving funds,
raising capital and real estate. At DNB we also benefit from this through higher revenues, says Braathen.
DNB Market, which is DNB’s brokerage house, made a pre-tax profit of NOK 706 million in the quarter, up from NOK 648 million in the same period last year.
DNB Markets receives commission income when the brokerage house facilitates capital market transactions, such as through stock listings or acquisitions and mergers.
The brokerage also trades in fixed income securities, currencies and commodities.
also read
Home Sales Increased: – Wildest I’ve Experienced in 25 Years
Credit loss reduction
The crown situation has hit banks, especially earlier this year.
In the first quarter, DNB set aside NOK 5.8 billion for future credit losses. In the second quarter, provisions were significantly lower, NOK 2.1 billion.
In the third quarter, the bank reserved NOK 776 million for losses.
Most of the credit losses are related to the offshore industry affected by the crisis.
– The situation continues to be demanding in some parts of the oil industry. Oil, gas and offshore account for more than 60 percent of the group’s loss provisions so far this year, the bank writes.
