DnB NOR in second quarter 2008: Sound performance in a challenging market

7/10/2008, 8:01 AM (Source: GlobeNewswire)
DnB NOR's pre-tax operating profits before write-downs were NOK 4.6
billion in the second quarter, an increase of close to NOK 600
million compared with the year-earlier period. The rise in profits
reflected strong growth in lending and a positive development in
other operating income, including a rise in value of the securities

Second quarter 2008
* Pre-tax operating profits before write-downs were NOK 4.6
billion (4.1)
* Profit for the period was NOK 3.4 billion (3.4)
* Return on equity was 18.1 per cent (20.4)
* Earnings per share were NOK 2.47 (2.50)
* Expenses represented 49.0 per cent of income (49.1)
* The core capital ratio at the end of the quarter,
including 50 per cent of first-half profits, was 6.9 per cent (7.4)
(Figures for the second quarter of 2007 in parentheses)

"We are very satisfied with our financial performance, not least on
account of the international financial market turmoil. Our loan
portfolio is of high quality, with a low level of write-downs. DnB
NOR has a satisfactory capital base and good access to liquid funds,"
says Rune Bjerke, group chief executive.

The turmoil in international financial markets has led to widening
credit risk margins and has thus reduced the value of the Group's
bond portfolio in the four preceding quarters. The values are
recovered over the bonds' residual maturity, and DnB NOR recorded
NOK 331 million as income in the second quarter due to changes in
bond prices.

"The recovery of bond values is in line with what we have previously
communicated, but that does not mean that the turmoil in
international financial markets is over. This is still a difficult
time internationally. Nevertheless, our accounts show that the
Group's underlying operations are very sound, and based on the
situation at end-June the ambition of achieving pre-tax operating
profits before write-downs in 2008 on a par with last year and NOK 20
billion in 2010 is retained," says Rune Bjerke.

"The cost programme, as previously communicated, is on schedule and
has been extended from NOK 1 billion to NOK 1.4 billion with full
effect from the end of 2010," says Rune Bjerke.

Strong growth in income and lending

Income in the second quarter rose by 14 per cent compared with the
year-earlier period. The business areas generally showed a healthy
performance and took new initiatives to strengthen future operations.
The Group's diversified operations ensured a rise in income which
counteracted financial market volatility.

Total lending rose by close to twenty per cent and passed NOK 1 000
billion during the quarter. The rise was a result of several
small-scale acquisitions, general growth in the international
corporate market portfolio and growth in the Norwegian retail market.

"Our markets continue to show a healthy trend, but we expect more
subdued growth in credit demand in the coming quarters. Write-downs
and non-performing commitments remain at a low level. DnB NOR has a
sound platform for the years to come," says Bjerke.

Contact person:
Trond Bentestuen, group executive vice president, Corporate
tel.: +47 950 28 448

The quarterly report, presentation and Supplementary Information for
Investors and Analysts can be downloaded from www.dnbnor.com

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