Healthy profits for DnB NOR in 2008
On Thursday (Feb. 12) Dnb NOR, Norway’s largest bank, reported a 62 percent drop in fourth quarter net profits, due to volatile markets amid the financial crisis, but said the company’s earnings were “healthy.”
“We are satisfied that we achieved healthy profits in the fourth quarter, in light of the significant turmoil in the financial markets and the subsequent consequences for the real economy. Both interest income and other operating income showed sound increases in the fourth quarter, while expenses were well under control,” says Rune Bjerke, group chief executive of DnB NOR.
The bank reports that it achieved pre-tax operating profits before write-downs of NOK 5 573 million in the fourth quarter of 2008, an increase of NOK 1 937 million compared with the year-earlier period. Profit for the period was NOK 1 943 million. This was better than expected by most financial analysts.
Total income rose by 31 per cent, while expenses increased by 2.9 per cent adjusted for impairment losses for goodwill in 2008 and allocations to employees in 2007.
The brisk lending growth from the last few quarters abated markedly in the fourth quarter. Nevertheless, the effect of the strong growth earlier in 2008 and a certain widening in spreads ensured a NOK 1 180 million rise in total net interest income compared with the year-earlier period, the bank says.
The year as a whole showed strong underlying earnings in spite of a deep downturn in the global economy, the report states.
Bjerke said 2009 will be a demanding year but that the group is “well capitalized relative to the risk in the loan portfolios and other operations.”
Oslo-based DnB Nor, with a staff of 13,800, claims 2.3 million private customers and 200,000 corporate clients.