By Dominic Chopping

 

DNB ASA on Thursday posted a smaller-than-expected drop in third-quarter net profit on lower impairment losses, and said that it will propose a dividend of up to 9 Norwegian kroner ($0.98) for 2019.

Norway's largest lender made a profit attributable to shareholders of NOK5.29 billion compared with NOK5.76 billion a year earlier, while net interest income fell 6.9% to NOK9.3 billion.

Analysts polled by FactSet had expected net profit of NOK4.48 billion with net interest income of NOK9.52 billion.

Impairments of financial instruments totaled NOK776 million in the quarter versus expectations of NOK1.44 billion. The impairment provisions for oil-related industries ended up at NOK1.04 billion, but were somewhat offset by NOK360 million in reversals in the personal-customers market.

DNB's common equity Tier 1 capital ratio--a measure of a bank's financial strength--rose to 18.9% from 18.3%.

The bank said its financial ambitions, including the overriding financial target of a return on equity above 12%, remain unchanged.

"However, due to the Covid-19 pandemic and the subsequent developments in the macroeconomic environment, the ROE target and the ambition of a cost/income ratio of less than 40% are unlikely to be achieved in 2020."

In the period from 2020 to 2022, the annual increase in lending and deposit volumes is still expected to be around 3% to 4%.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

October 22, 2020 02:21 ET (06:21 GMT)

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