DNB Bank ASA

DNB reported Q2 ROE of 14.6%, EPS of NOK 6.5, and a cost/income ratio of 40.3%. Net interest margin was 1.70%, down 4 bps sequentially, and net interest income declined by NOK 167 million in the quarter. Net commission and fees were up 4.6% y/y, with Corporate Finance up almost 20% y/y and Asset Management up 13% y/y, supported by a record NOK 46.3 billion of net inflows. Cost of risk was 6 bps, or NOK 338 million, and 99.4% of the portfolio remained in Stages 1 and 2. CET1 was 17.4%, leverage ratio 6.3%, and management said it had 100 bps of CET1 headroom. The tax rate was 24.4% in Q2, and management expects 22% in Q3 and Q4, or 23% for the full year. For guidance, group loan growth ambition remains 3% to 4%, and management expects another policy-rate hike in the second half, most likely Q3, taking the key rate to 4.5% before two cuts in 2027.

Kjerstin Braathen emphasized that the quarter showed resilient Norwegian economic conditions and broad-based business momentum despite global uncertainty. She highlighted strong customer satisfaction, record-high SME and large-corporate satisfaction in Norway, and continued progress in savings, investments, and international Nordic growth. Her tone was confident and steady, with repeated emphasis on disciplined growth, profitability, and the strength of the platform.

Rasmus Figenschou focused on the mechanics behind the quarter’s performance: FX-adjusted loans were up 1.4% q/q and 4.3% y/y, deposits were up 1.5% q/q, and the deposit-to-loan ratio was 73.9%. He explained that NII fell by NOK 167 million, with a NOK 264 million margin effect split roughly evenly between competition and product/portfolio mix, partly offset by higher volumes, one extra interest day, and currency effects. He also cited a strong balance sheet with CET1 at 17.4%, leverage at 6.3%, and a total 80 bps CET1 impact from the two 1% buybacks, while noting the Q2 tax rate of 24.4% and expected 23% for the full year.

Analysts pressed management on competitive pressure, lending margins, underwriting discipline, and whether the current mix/margin headwinds are temporary. Management said competition remains high, especially in mortgages and parts of the household market, but that DNB is still growing without compromising structure or price; they pointed to positive migration in large corporates, diversified growth, and new Nordic customers already meeting profitability hurdles. On weaker money-transfer fees, management said the main driver was cost rather than lower activity, including credit insurance and the SRT completed in the quarter. On record asset-management inflows, management said the NOK 46.3 billion came from both retail recurring savings and institutional activity, plus one large transaction.