By Dominic Chopping
DNB Bank ASA on Tuesday posted a forecast-beating rise in second-quarter net profit, as earnings were boosted by higher net interest income.
Norway’s largest lender made a profit attributable to shareholders of 7.61 billion Norwegian kroner ($745.6 million), compared with NOK6.21 billion a year earlier. Net interest income rose 22% to NOK11.53 billion, it said.
Analysts polled by FactSet had expected net profit of NOK6.9 billion and net interest income of NOK11.22 billion.
The bank said it experienced strong lending growth in the quarter, adding that the Norwegian economy is proving robust in the face of international turmoil.
“The Norwegian business community is maintaining its momentum, and the high level of activity is reflected across all areas of the bank,” Chief Executive Kjerstin Braathen said.
“We are also expecting that Norwegian companies’ investments will continue to grow, well above what we are seeing in other countries.”
DNB is targeting a return on equity above 12%, and it said it is still aiming for an annual increase in lending volumes of around 3%-4% over time, as well as a 4%-5% rise in net commissions and fees, and a cost-to-income ratio below 40%.
DNB’s common equity Tier 1 capital ratio–a measure of a bank’s financial strength–fell to 18.0% from 19.1%, it said.
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