DNB in brief

We are here

As Scandinavia’s largest financial services group, we offer a complete range of financial services through mobile solutions, online banking, 24/7 customer service centres, branch offices, real estate broking and international offices.

We are Norway’s leading financial services group with 2.1 million personal customers and 221 000 corporate customers.

DNB carried out 269 million payment transactions in 2018. This provides insight that DNB can transform into new value for the customers.

More than one million customers use our mobile bank, and in 2018, we registered on average 769 000 logins per day.

327 113 customers have downloaded the savings app Spare and saved NOK 1.6 billion in mutual funds since the beginning in 2017. At present, 25 per cent of all new mutual fund sales take place in Spare.

In 2018, a total of 5 061 start-up and growth companies received help and advice from DNB’s start-up pilots.

As Norway’s largest bank, we have a particular responsibility and opportunity to contribute positively to society. As the only Nordic bank, DNB received the highest score of A from CDP (formerly the Carbon Disclosure Project), which has evaluated 6 500 companies internationally and is particularly aimed at investors.

DNB offers super-fast processing of digital mortgage applications – it only takes 2 minutes. The share of mortgage applications received digitally has increased to above 80 per cent.

DNB Eiendom sold 23 563 residential properties in 2018. This represents an average market share of 18.7 per cent.

In 2018, DNB Markets participated in arranging bond and commercial paper issues to customers worth over NOK 400 billion.

DNB Livsforsikring had just over 1.2 million personal customers with individual and group agreements and approximately 27 000 agreements with companies at year-end 2018.

Financial highlights

Income statement 2018

wdt_ID	Amounts in NOK million	2018	2017	2016	2015	2014
1	Net interest income	36 822	35 422	34 110	35 358	32 487
2	– Net commissions and fees	9 310	8 448	8 280	8 862	8 969
3	– Net gains on financial instruments at fair value	1 342	4 548	6 513	8 683	5 317
4	– Net financial and risk result, DNB Livsforsikring	969	1 295	664	(389)	609
5	– Net insurance result, DNB Forsikring	622	683	648	534	491
6	– Other operating income	1 302	744	1 948	959	1 490
7	Net other operating income, total	13 546	15 718	18 053	18 648	16 877
8	Total income	50 368	51 140	52 163	54 006	49 363
9	Operating expenses	(21 490)	(21 429)	(20 693)	(21 068)	(20 452)
10	Restructuring costs and non-recurring effects	(567)	(1 165)	(639)	1 157	(223)

Balance sheet 2018

wdt_ID	Amounts in NOK million	31 Dec. 2018	31 Dec. 2017	31 Dec. 2016	31 Dec. 2015	31 Dec. 2014
1	Total assets	2 634 903	2 698 268	2 653 201	2 598 530	2 649 341
2	Loans to customers	1 597 758	1 545 415	1 509 078	1 542 744	1 438 839
3	Deposits from customers	927 092	971 137	934 897	944 428	941 534
4	Total equity	223 966	216 897	206 423	190 425	159 059
5	Average total assets	2 771 998	2 856 988	2 841 117	2 946 119	2 711 624
6	Total combined assets	2 950 748	3 026 065	2 930 891	2 900 714	2 936 331

Key figures and alternative performance measures 2018

wdt_ID	-	2018	2017	2016	2015	2014
1	Return on equity, annualised (per cent)¹⁾	11.7	10.8	10.1	14.5	13.8
2	Earnings per share (NOK)	14.56	12.84	11.46	14.99	12.67
3	Combined weighted total average spread for lending and deposits (per cent)¹⁾	1.30	1.30	1.32	1.33	1.31
4	Average spread for ordinary lending to customers (per cent)¹⁾	1.94	2.07	2.04	2.17	2.33
5	Average spread for deposits from customers (per cent)¹⁾	0.29	0.17	0.21	0.01	(0.25)
6	Cost/income ratio (per cent)¹⁾	43.8	44.2	40.9	36.9	41.9
7	Ratio of customer deposits to net loans to customers at end of period¹⁾	58.0	62.8	62.0	61.2	65.4
8	Net loans and financial commitments in stage 2, per cent of net loans¹⁾	6.99
9	Net loans and financial commitments in stage 3, per cent of net loans¹⁾	1.45	1.12	1.65	0.91	1.20
10	Impairment relative to average net loans to customers (per cent)¹⁾	0.01	(0.15)	(0.48)	(0.15)	(0.12)

¹⁾ Defined as alternative performance measure (APM). APMs are described on ir.dnb.no.

For additional key figures and definitions, please see the Fact book on ir.dnb.no.

Global systemically important bank and indicator values
DNB Bank ASA has been defined by the EBA (European Banking Authority) as a potential global systemically important bank, as its total on and off-balance sheet exposures exceed EUR 200 billion. As a result, DNB Bank ASA delivers data to the EBA for the calculation of defined indicator values. See bis.org/bcbs/gsib/ for more information.DNB’s indicator values are available on ir.dnb.no.

Important events

Q1

At the beginning of January, DNB and StartupLab, Norway’s leading start-up community, entered into a cooperation agreement that will enable the bank to explore commercial partnerships in several areas of operation.

The app Enkel Bilhandel (simple car purchase) was launched in mid-February. The app is for second-hand car purchases and handles the purchase contract, payment, any loan financing, insurance and re-registration.

DNB Markets was ranked best brokerage house in the Norwegian bond market by Prospera. In addition, Morningstar named DNB best fixed-income fund house in Norway for the fourth consecutive year, while one of DNB’s funds was ranked best fixed-income fund.

At the end of March, Standard & Poor’s upgraded its credit rating of DNB Bank from A+ stable to A+ positive.

Q2

The Norwegian Competition Authority and Finanstilsynet approved the merger between Vipps, BankID Norge and BankAxept thereby laying the foundation for creating even better customer experiences and strengthening our competitive position in the global market.

To support DNB’s commitment to corporate responsibility, Banking without Internet was launched on 22 April, targeting the bank’s non-digital customers.

DNB launched Grønt Boliglån (green home mortgages), giving more favourable terms to customers who take up loans for residential properties with an energy efficiency marking of A or B. DNB Boligkreditt issued its first green bonds.

DNB started cooperating with four other Nordic banks to develop a common Know Your Customer (KYC) infrastructure.This will ensure better customer experiences and prevent the criminal misuse of banks. The plan is to establish a joint venture with the other banks. However, the establishment of the company is subject to approval by the European Commission. The company will offer KYC services to all players in the Nordic market who need this.

In early June, DNB was ranked Norway’s fourth most innovative company by the innovation magazine Innomag.

At the Annual General Meeting in April 2018, Olaug Svarva took over as chair of DNB’s Board of Directors, succeeding Anne Carine Tanum, who held this position for ten years.

Q3

DNB and SpareBank 1 Gruppen entered into an agreement to merge the non-life insurance operations. The merger was approved just before end of 2018, making the new company, Fremtind, operative from 1 January 2019. DNB owns 35 per cent and has an option to increase its holding to 40 per cent.

An agreement was signed with Blackstone to sell part of the Baltic bank Luminor. The agreement implies that Blackstone will purchase 60.1 per cent of the Luminor Group from today’s owners DNB and Nordea. DNB’s ownership interest will be reduced from 43.5 per cent to 20 per cent as a consequence of the transaction. The transaction is expected to be completed during the first half of 2019, subject to regulatory approvals.

When Google Assistant was launched in Norway in the third quarter, DNB was one of few contributors. This underpins the bank’s focus on digitalisation and this type of platform for customer communication. to the voice platform.

DNB was ranked as the third best bank in the world on environmental, social and governance (ESG) issues. The rating was done by the company Sustainalytics, a global leader in ESG and Corporate Governance research and ratings. on

Moody’s changed their outlook on Norwegian banks from negative to stable when it comes to economic prospects.

Q4

DNB established the company 11:FS Foundry together with the British company 11:FS, one of the world’s leading technologists. 11:FS is a highly profiled fintech player within banking and finance, and is right at the forefront of their field. Together with 11:FS, DNB will explore a whole new mind-set when it comes to technology and IT architecture, and develop the banking solutions of tomorrow.

A unique further education programme called Architect Greenhouse has been developed in collaboration with Oslo University, with an aim to educate more IT architects. The programme involves full-time, job-related studies over a period of three years for new DNB employees, and includes both practical and theoretical aspects.

DNB Puls was launched in the corporate market. This is an app created for managing directors or board chairpersons of small businesses, to provide improved overview and control – a pocket-sized digital adviser and accountant for companies.

DNB decided to prioritise law firms focusing on increasing the number of female partners. The bank therefore terminated its cooperation with one company and entered into closer cooperation with other law firms that are working proactively to improve the gender balance in partnerships.

For the fourth year running, DNB was voted Norway’s best brokerage house by Prospera. DNB topped the rankings within the categories Domestic Equity, Research & Advisory, Execution and Corporate Access.

Morningstar rated DNB Teknologi as the world’s best mutual fund among close to 48 000 mutual funds, based on the average returns through a ten-year period.

As part of DNB’s new business strategy, DNB Venture was established in 2017 to make investments in growth companies in the fintech industry. At the end of 2018, DNB Venture fund had made four investments in such companies in accordance with the investment mandate.

DNB’s reputation score increased from 66.9 points in 2017 to 72.5 in 2018. In the same period, DNB’s customer satisfaction index increased from 69.5 to 74.7 points.

After two years of climbing the rankings of the Norwegian ethical bank guide (Etisk bankguide, part of the Fair Finance Guide initiative), DNB was named «Full Spectrum Bank of the year» for our sustainability efforts within both governance and credit activities. Overall, the bank ended up in fourth place in the rankings.

As the only Nordic bank, DNB received the highest score of A from CDP (formerly the Carbon Disclosure Project), which this year evaluated 6 500 companies internationally and is particularly aimed at investors. Corporate governance, how the companies handle climate-related risks and opportunities, greenhouse gas emissions, reduction plans and general information about sustainability are some of the factors that are reported to CDP.

The European Banking Authority (EBA) launched the results of the EBA stress test for European banks. The test was very positive for DNB and revealed that the DNB Bank Group shows a robust earning capacity and capital position.

Standard & Poor’s ranked DNB number three in the risk-adjusted capital (RAC) ranking for the top 50 rated Western European banks. In January 2019, they upgraded DNB Bank ASA’s long-term credit rating from A+ to AA-, and the short-term rating from A-1 to A-1+. The outlook was changed to «stable».

This is an overview of the development of the DNB share. You can find more information about the share on ir.dnb.no.

At year-end 2018, DNB was the third largest primary listed company on the Oslo Stock Exchange in 2018, and the largest financial services group in Scandinavia, with a market capitalisation of NOK 220 billion. The total return on the DNB share, including dividends, was negative 4.5 per cent in 2018. The unweighted average total return for the other Nordic financial services groups was negative 13.4 per cent.

In the same period, the OSEBX¹⁾ index rose by 2 per cent, while the OSEFX²⁾ index was negative 2.2 per cent. Over the past ten years, the DNB share has generally been priced higher than the Group’s recorded book value (P/B ratio). At year-end, the share was traded at NOK 138.15 and 1.1 times the book value. The share price peaked at NOK 173.15 in September, while the lowest price of NOK 136.40 was recorded in December.

¹⁾ Oslo Stock Exchange Benchmark Index
²⁾ Oslo Stock Exchange Mutual Fund Index
³⁾ Nordic financial services groups: an unweighted average of Nordic Banks
(Danske Bank, Nordea, SEB, Svenska Handelsbanken, SEB and Swedbank) in local currencies

TRADING

Trading volume in 2018 ended at 1 703 million shares, equal to 6.8 million shares per day, which is in line with the volume in 2017. The value of all traded DNB shares was NOK 265 billion. The trading in open market places, such as Oslo Børs (Oslo Stock Exchange), represented 46.9 per cent while the volumes traded by systematic internalisers increased from 1.5 per cent in 2017 to 23.6 per cent in 2018. Correspondingly, the volumes traded “off book” or in dark pools decreased to 29.5 per cent.

At the beginning of 2019, the DNB share was weighted on all relevant Oslo Stock Exchange indices, hereunder OSEBX, OSEAX¹⁾, OBX²⁾ and OSEFX with 11.0, 9.2, 13.4 and 9.1 per cent weight, respectively.

DNB’s share price and book value per share including reinvested dividend³⁾
NOK

Source: DNB, Oslo Stock Exchange

¹⁾ Oslo Stock Exchange All-share Index
²⁾ OBX Total Return Index
³⁾ Recorded equity and the share price for the period 2008–2009 have been adjusted for the share issue in the autumn of 2009. Return on equity, which is used to calculate reinvested dividends, has not been adjusted for the share issue.

DIVIDEND POLICY

DNB’s Board of Directors has approved a dividend policy which aims to create value for shareholders, both through increases in the share price and dividend payments. Overall, this will ensure an attractive and competitive return. The Group’s long-term dividend policy is to have an ordinary dividend payout ratio of more than 50 per cent and to increase nominal ordinary dividends per share each year. In addition to dividend payments, DNB has issued share buy-back programmes. For more information, please see the Directors’ report.

Share dividends and payout ratio
NOK

SHARE CAPITAL AND SHAREHOLDER STRUCTURE

At year-end 2018, DNB’s share capital was NOK 16 044 million divided into 1 604 million shares, each with a nominal value of NOK 10. Adjusted for completed repurchases and government holdings, there were a total of 1 594 million outstanding shares.

DNB has approximately 41 500 private and institutional shareholders, of which the two largest are the Norwegian government, represented by the Ministry of Trade, Industry and Fisheries, and Sparebankstiftelsen DNB (the DNB Savings Bank Foundation). A further description of the government’s ownership can be found in the section on Equity and dividends in Corporate governance.

Largest shareholders as at 31 December 2018

wdt_ID	Shareholders as at 31 December 2018 1)	Number of shares in 1000	Ownership in per cent
1	Norwegian Government/Ministry of Trade, Industry and Fisheries ²⁾	545 485	34.21
2	Sparebankstiftelsen DNB	130 001	8,15
3	Folketrygdfondet	96 989	6,08
4	Fidelity International	30 680	1,92
5	The Vanguard Group	30 011	1,88
6	BlackRock	29 814	1,87
7	DWS Investment GmbH	24 788	1,55
8	Schroder Investment	20 452	1,28
9	Capital World Investors	18 601	1,17
10	Storebrand Kapitalforvaltning	16 483	1,03

¹⁾ The owners of shares in nominee accounts are determined on the basis of third-party analyses. See note 50 for an overview of the 20 largest shareholders.

²⁾ In connection with DNB’s share buy-back programme, the Norwegian government will, according to an agreement, redeem shares on a proportional basis so as to maintain its holding at 34 per cent. For further information on the share buy-back programme, see Directors’ report.

Source: DNB, VPS, Nasdaq

RATING

The creditworthiness of DNB Bank ASA is assessed by the rating agencies Moody’s and Standard & Poor’s (S&P). DNB Bank ASA had the following ratings as at 6 March 2019: Aa2 from Moody’s (negative outlook) and AA- from S&P (stable outlook). Covered bonds issued by DNB Boligkreditt was rated AAA by S&P and Aaa by Moody’s.