DNB Bank ASA

Yes, thank you so much. Welcome to the presentation of the second quarter results for D&B. It's incredible to see so many beautiful faces in the basement in Bjørvika on the hottest day so far in 2026. So thank you for coming and listening to this presentation. First we'd like to congratulate the Norwegian men's football team for reaching the quarterfinal in the World Cup. In D&B we feel that we are playing the World Cup every day. And this time we are at our second quarterfinal, only in 2026. So our CEO, she will present the results, and our CFO Rasmus Figenschou will go into the details. So please kick it off, Kjerstin.

Thank you so much, Even, and a very good morning to all of you, and welcome to this presentation of our results for the second quarter. When reflecting on what has been the most important drivers and areas of attention in Norway this quarter, it's impossible to think about anything else than football. But I am pleased to see all of you here today and to be able to report a strong set of numbers that do testament that there has been something else going on in addition to football in Norway and in our activities internationally also this quarter. We note the turmoil and uncertainty in the world economy around us as well as an unresolved situation that continues in the Middle East but do also believe that these numbers continue to be a proof point that the Norwegian economy is resilient with the households being more than flexible and able to Thank you very much. And this is a man who walked in the doors of DNB for the first time 39 years ago. It is one of the most experienced and reputed heads of investor relations across the country and I would say across the Nordics. He has been instrumental in every quarterly presentation in the past years in D&D, and he's also been very instrumental in strategically forming our communication, but also our strategy in relation to the expectations and desires of our owners and investors. So I am sure I speak for all of us here and all of us on stream and investors having been putting their trust in us for years in expressing our appreciation for the work that you have done over the years, Rune. This is your last quarterly number of presentations before you will hand over in a few weeks to someone else to take over. But please everyone join me in giving a warm hand of applause to Rune Helland. One of the great VMBers. As every quarter, I would like to start by diving into some of the highlights in terms of what we are doing for our customers this quarter. Simplifying life for people and businesses and help them prosper, that is at the heart of our mission. And I believe all of these examples that we are highlighting here shows exactly how we work and what we deliver in order to deliver on this mission. In this quarter in particular, we're very pleased to see that many of our customers report that they're increasingly happy with the services that we provide, and we see a record high customer satisfaction for our SME customers, as well as our large corporate customers in Norway. We have, as an example, increased the efficiency and reduced the time it takes to verify an identity of a customer calling us by 77%. We use BankID to do it, and this means that 1 million customers save time when they call us to get help with something that they need. We continue also to receive very strong feedback and trust from our customers in relation to our services with DNB Carnegie. So far this year, we are the most active equity capital markets bank in the western part of Europe, if we measure by the number of transactions. This quarter, again, as last year, we also received the number one positioning from our investors in the Excel survey that is voted by the investors who use our services. Savings and investments is an area that we continue to prioritize with a rapid release of new features, services and products for our customers. We are happy to see that Norwegians continue to save with us and this quarter we have surpassed one billion kroner of monthly savings from Norwegians within our mutual fund and savings products. And these are just a few of the examples to show how we work and strive towards delivering on our mission every day and I'm very proud of the efforts also put down by the whole team during this quarter. Over to more what this looks like in terms of numbers. Our return on equity, which is our most important financial target, comes in at 14.6% this quarter. This is driven by a growth across the business areas in terms of loans and deposits, and also a very attractive fee growth driven by wealth management and BNB Carnegie this quarter. We do see a profitable growth both in loans and deposits across all of our customer segments this quarter. The impact of the growth that comes late in the quarter is somewhat offset by portfolio mix effects as well as competition and the NII as such is down by 1.1% compared to the previous quarter. Please bear in mind that the repricings that were announced after the rate hike from the central bank will start to take effect from mid-July. Net commission and fees up by 4.6% compared to the same quarter last year. The very strong drivers this quarter is within investment banking, more notably corporate finance, that is up almost 20% compared to the same quarter last year. with M&A and DCM being the strongest contributors and yet another quarter with a record high net inflow in asset management so 46 billion this quarter is one of the key drivers to asset management being up by 13% compared to the same quarter last year. The portfolio remains very robust. It's important to underline in a world that is more volatile around us. 99.4% of our portfolio is within stages one and two. A cost of risk of six basis points this quarter, 338 million kroner, which is primarily related to more customer-specific situations. Earnings per share come in at six and a half kroner Per Share this quarter, and a very strong capital position, 17.4% core equity tier one ratio, an ample headroom of 100 basis points towards the expected and required level by the FSA. We also have announced today that we will initiate another program of buying back 1% of the outstanding shares. This is in addition to the one that was recently closed last week and both of these programs totaling a buyback of 2% of our shares have been deducted from our capital ratio this quarter. The Norwegian economy, as already mentioned, remains resilient and robust in today's environment. If we look ahead at the estimates for the economic growth expected in the mainland economy, this is at 1.5% for this year and expected to remain more or less in the same area of growth in the coming few years ahead of us. The labour market continues to be balanced. Unemployment is low at 2 percentage points, and expected to remain low in the future of the forecasting period. Inflation comes down, headline inflation somewhat more than the core inflation this quarter, but it continues to move downward. However, with a more sticky tail than previously anticipated, which has led to the Norwegian Central Bank shifting their view at the beginning of the year and hiking rates one time during the second quarter, and in their communications and markets expectations, we expect one more rate hike to happen in the second half, most likely in the third quarter, taking the core policy rate to 4.5 percentage points. Their further outlook points to an expectation of two rate cuts in 2027, in the second half of the year, bringing the key policy rate down to 4%, where it's expected to remain for the remainder of the forecasting period. Again, we know the uncertainties around us, but continue to see a very robust and resilient economy that forms a very sound backdrop for our business also as we move ahead. A few comments on the key business areas or customer segments. Again, I reiterate that we see a growth both in loans and deposits across all of the customer segments this quarter. This is important and underlines the growth platform that we have been talking to you for a long time. The growth is more or less evenly spread in Norway and internationally. Most of it's coming in the corporate sector, but within the corporate sectors, it's also spread across industries and geographies. We see corporate customers in Norway contributing very strongly to the growth, also in the regions in addition to commercial real estate, and we see a strong development in our emphasized Nordic strategy with a record number of new customers coming into our Nordic activities outside of Norway. Moreover, you will also note from the slide that all of the customer areas are delivering an increase in the pre-tax profits compared to the previous quarter. For personal customers, we see a very solid activity in a market that remains very competitive. The area shows discipline and remains a focus on the return and profitability of the business. And we note a return on allocated capital of 17.1% in this area. Solid cost control also in personal customers underpins the scalability of our platform in this business. Corporate customers in Norway have already commented on the growth and the fact that it's both regional and in commercial real estate and it's an accelerating pace of growth towards the end of the quarter. More notably, I would like to highlight in this area a very strong growth in other operating income of 16% compared to the same quarter last year. This demonstrates a broad specter of cross-sell where our customer wants to use other products and services and most notably a very strong activity and cooperation together with D&D Carnegie. Large corporates is the area that contributes the strongest to the growth this area. 3% growth this quarter, currency adjusted. We see that most of the growth happened in low risk customers and low risk transactions. So we see a positive migration in the portfolio as such and a reduced A reduced share of high risk exposure within the portfolio of large corporate customers. Also here, strong and positive development of other operating income, a very solid development of asset quality and the portfolio remains robust. A few words on D&B, Carnegie and wealth management as we have shown over the previous quarters because these two are identified as the most important drivers for fee growth in our business and this is exactly what they are also delivering this quarter. Total income from DNB Carnegie is up 5.3%, but customer income, which is the most important performance-related element in the revenues, is up by 12.1%. Very strong investment banking performance. I've already mentioned M&A and DCM, debt capital markets. and a numerous number of deals have been closed this quarter and we have, amongst others, been very pleased to lead the two largest high-yield bond deals that have ever been done in the Nordics. There is also a very healthy pipeline in this business going into the second half of the year. Total income from wealth management is up by 10.1%. Yet another quarter with a record high net inflow, 46 billion flowing in, in addition to the positive market valuation during the quarter. Of these 46.3 billion, 10 billion of them are related to retail customers, which is particularly prioritized and valued. Part of these volumes again stem from what I talked about, the 1 billion in savings that we now see Norwegians saving with us on a regular monthly basis. This brings our total assets under management to the end of the quarter just below 1,800 billion Norwegian kroner. And if we look at the development of the past four years, that includes both the acquisition of Carnegie as well as a strong organic growth. You can see that assets under management have more than doubled during the past four year period. So that were a few highlights from me and I will hand over to our CFO Rasmus to give you some more details.

Thank you. Thank you, Kjerstin. I will now take you through the numbers in more detail. We see high, continuous high activity in all segments with FX adjusted loan growth up 1.4% in the quarter and 4.3% for the year over year. We note loan growth in the personal customer segment up 0.6%. Reflecting profitable and disciplined growth. Corporate customer Norway increased by 1.5%, and that's across geographies and industries. Growth in large corporates and international was up by 3%, driven by increased volumes across industries, growing primarily in low-risk customers. Geographically, we continue to see roughly half of the growth occurring outside of Norway. 3-4% growth ambition is defined at group level, and as mentioned, we will vary that growth across segments and remain focused on capturing attractive growth opportunities where we see the strongest customer demand and value creation, while maintaining a disciplined approach to risk and return. Currency-adjusted deposits are up by 1.5% this quarter. Personal customers were up 3.4%, positively affected by the holiday payments received in June. Corporate customers was up 0.3%, driven by term deposits from organizations, and partly offset by lower corporate volumes due to seasonal effects. The deposit volumes in our corporate was roughly flat. We maintain a strong deposit to loan ratio in the customer segments of 73.9%. Net interest margin was down by 4 basis points in the quarter to 170 basis points. Combined spreads were down by 6 basis points. Moving on to the NII development to look at some of these movements in more detail. Net interest income is down 167 million in the quarter in total. Net of interest on equity and treasury effects, the margin effect was 264 million. This was fairly evenly split between competition on the one hand and product and portfolio mix effects on the other. Roughly one and a half basis points on each. There's a higher average volume during the quarter, which contributed with 117 million. And we note that the volumes came late in the quarter. This was partly also partly offset by currency effects of 97 million. One extra interest day amounted to 121 million. Following the central bank's interest rate hike in May of 25 basis points, we announced the customer repricing, which became effective on July 12th, impacting the NI positive in the third quarter. We have a strong and well-diversified fee platform, which totaled up 4.6% from the corresponding quarter last year. Real estate broking delivered stable results in spite Investment Banking Services was up by 7%, and I would highlight in particular Corporate Finance up 20%, driven by DCM and M&A, partly offset by lower ECM and securities broking activity. Asset Management and Custodial Services was up by 13%. We note an all-time high net flow of 46.3 billion, of which 10.1 billion came from the retail segment. A strong testament to our position in that segment. AUM was up by 11.5% in the quarter. Guaranteed in commissions was down by 3%, though we note stable demands for trade finance products. This was offset by FXDF. and mixed effects. Money transfer and banking services were down by 29%. The lower contribution is mainly due to costs, not lower income. This is particularly related to the use of credit insurance and securitization to improve capital efficiency, as well as higher costs for card payment services. Lastly, though our car sales in D&D finance remained profitable, the reduction in profit per car sold also had an impact. Sale of insurance products was up by a solid 33%. This was mainly driven by increased income from non-life insurance and continued positive development from defined contribution pensions. Operating expenses are up 548 million compared to Q1, reflecting higher activity-related expenses than the first quarter. Higher return on the closed defined benefit scheme is related to market development and is the single highest contributor to drive costs this quarter. This scheme is partly hedged, and a corresponding gain is recognized in financial instruments. Variable salaries, fees and IT increased as expected as these expenses are directly related to activity in the quarter and had a seasonal uptick in Q2. The effect from the annual salary adjustments on fixed salary was partly offset by a further FT reduction of 37 from Q1 this year. As of Q2, we have more than absorbed the FTE increase of 820 resulting from the Carnegie merger since the announcement. In fact, we are continuously working to increase efficiency and have seen a 9% reduction in headcount since our last CMD in the autumn of 2024. Now, moving over to portfolio quality, which remains robust and well diversified With 99.4% of the portfolio being in stages 1 and 2. The personal customer's portfolio amounting to approximately 50% of our exposure remains strong. We know reversals this quarter, mainly due to the sale of non-performing loans portfolio. We see no negative development in this portfolio. For corporate customers, impairment provisions totaled 387 million. The portfolio remains robust and well diversified across industries and geographies, with no structural changes or negative migration notes. The impairments in stage 3 are related to customer-specific situations. We incur a 124 million Norwegian kroner provision related to our legacy in portfolio in Poland this year, this quarter. We remain comfortable with the credit quality in our portfolio. Our CET1 ratio remains strong at 17.4% with 100 basis point headroom to the regulatory expectations. It was positively affected with 30 basis points from profit generation in the quarter, offset by higher volume growth. We completed a 1% share buyback program last week, and as mentioned, we announced another 1% program this morning, reducing the CET1 ratio by a total of 80 basis points. The leverage ratio remains strong at 6.3, well above the regulatory expectations of 3. Combined with a CET ratio of 17.4, our capital position remains strong and enables us to continue to deliver on our dividend policy, as well as supporting the growth of our customers. Summing up, we deliver a strong set of results this quarter, reflecting in our key figures, our ROE coming in at 14.6%. The tax rate for Q2 was 24.4%, as a result of an additional tax expense related to 2024, in accordance with global minimum tax regulations. We expect the tax rate in Q3 and Q4 to be 22%, and as a result, the tax rate for the year as a whole at 23%, in line with our guidance for coming years. Before we open up to questions, I would like to invite also you all to our Capital Markets Day in London in November. With that, thank you.

Thank you so much, Rasmus, and there will be time for some questions from the audience. Simon, please, you can start with the microphone for Simon in ABG.

Yes, thank you, and congratulations on another quarter. Two questions, if I may. The first one on competition, and I know, Kjerstin, you prefer to talk about yourself rather than your competitors, but... How do you see the competitive landscape out there? Has it changed in any way since last time we spoke? Where do you see customers, maybe more so in the households and private customers, will they change their behavior when the actual rate changes? Do you see that effect being behind you? That's the first question. The second question is also related to the margin and the lending side, but even more so on the product mix and portfolio mix. You have mentioned this several quarters now. So it seems to be sort of like a structural thing, but is also most of that behind us now? How long will it last before it sort of normalizes going forward?

Thank you for two very good questions. Again, I would like to reiterate that net of interest on equity and treasury effects that needs to be taken into account when the money market rate moves, the impact negatively on spreads are 264%. Half of this is related to competition, roughly one and a half basis points, as Rasmus alluded to, and the other one to product mix effect. So overall, I would say that our assessment is that the competitive pressure that is there, and we do comment on it, is fairly well contained, I would say, within the way the business is run. Has there been... Major changes in the competitive landscape compared to last quarter. An overall assessment is that it has not. There is still a very high competitive pressure notably within household and mortgages. We see on the corporate sector in particular in the larger areas and more internationally as you see from the growth we deliver that we are Thank you very much. Thank you very much. However, as you do, we note a narrative out there that is more outspoken. So, there is signs indicating that there is still a very sound basis to state that this is a rational market. Everyone is targeting a return on equity. Everyone is over time disciplined about Deployment of Capital. This is what we have seen before, but we also have to state that still by the day-to-day business now, it does remain very competitive. In relation to portfolio mix effects, you are right, we have talked about this in the previous A couple of quarters, but the reasons vary. Some of them are similar. Also this quarter, as we talked about a positive migration, lower ratio of high risk is a result amongst other of the fact that large corporates grow in small, in low risk customers areas. So there is a mixed effect from that. Another mixed effect is the development on the deposits for corporate customers in Norway, where there is an outflow of holiday payments to employees, which are high-yielding deposits, and a growth in deposits from organizations that are more competitive in terms of the margins that are paid, which is why you will see a flat development on the deposit margin for corporate customers in Norway this quarter. So these deposits are still profitable for us, but on a nominal basis, they do not contribute positively to the margin as such. In relation to the holiday payments, of course, there is an inflow into the accounts of personal customers, but we see increasingly, and this has been one of the traits of the development in personal customers, that people are rational and they are more focused on how they manage the splits of their funds between Savings accounts versus more transactional accounts which have lower rates for them and of course a higher profitability for banks. A bit difficult to be very specific about what to expect going forward. Of course elements like holiday payments is seasonal and limited to the second quarter. There is a limit to how much money can shift between different accounts because We will always have a decent sort of level of deposits also on transactional accounts. I think that is fair to assume. But there could be other seasonal variations also that impact this as we move ahead.

Thank you. Thomas Hansen from SLV.

Good morning. So a question on lending margins for a large corporate side. It was on the Q&A. I know it's a short time period, but did you say that this most are a reflection of lower risk or increased competition? And what should we think about that going into the second half?

It is mostly a reflection of lower risk and the transactions that have been completed during the quarter. But there is a competitive pressure across. But at the same time, we continue to be very mindful of being selective and prioritizing business where we do see that we can deliver on our profitability target. I did mention amongst other things The record number of new customers coming into our Nordic portfolio outside of Norway. And we could also add that these customers already with what we have done with them so far this year, they are at the same profitability level as the existing portfolio.

Just to follow up on that, if you look at the lending growth in the second quarter, should you think that's a reflection of where you see the best risk-adjusted return, or is it too short, only one quarter?

It is important to highlight, as you're almost doing, that the growth in large corporates is a bit choppy quarter to quarter, because these are several larger transactions that we work on, and that total portfolio has a duration of less than two years, so constantly they're doing a lot of transactions. That come on to the books in addition to refinancings. But you are right when saying that we grow in areas where we do find the opportunities to deliver on our profitability requirements. There is a strong discipline in the area on how the capital is allocated. And the areas where we are growing this quarter is power and renewables. It's trade and services, trade and services, most on the services side related to our Nordics strategy. It's what is grouped as TNT, technology, media and telecom, and in this area you will find some activity related to data centers. So of course it's reflective of areas that have growth trends, but also areas where we are positioned to deliver more and we see an increasing share of non-lending income from our international business.

Thank you. Thank you. Hernan Sahl from Pareto, please.

Thank you. Just a question on the fees, on the money transfer fees being down so much. Is this something specific in the quarter on the cost side or pricing that's driving that downwards?

As Rasmus alluded to, it's the cost element in the money transfer and banking services that is instrumental in the development and not the revenue stemming from activities. Second quarter and third quarter is usually a high activity quarter in money transfer. As communicated in previous quarters, there is the cost of credit insurance. that we have built up in the large corporate portfolio and is one of the reasons why we have a very capital efficient growth this quarter if you look at the development in risk exposed amounts so there is a positive impact of it there that is impacting in particular and also the cost of the SRT that was completed in the quarter

Good, thank you.

And then on the life insurance results being quite good and seem to be at this level at least since early 25. And you have also increased your profit sharing a bit there since then. So do you think this is a sort of normal run rate level to expect going forward?

I don't think we've been completely explicit on the run rate, but of course these are two elements to consider. One of them is the risk result in the insurance business. The other one is the return on the corporate portfolio that is invested on the equity side. and of course the latter is reflective, should be reflective of the development of the market and this quarter has been a very strong market with very strong development in the return of the corporate portfolio but more longer term which we have talked to is the efforts that have been done in the life insurance business of repricing our services towards customers That hits the risk result, and this has consistently been improving and should be a long-term development.

Thank you. We do have a question from Christoffer Bergen in Arctic, just behind you, Julian.

Yes, thank you. I believe Rasmussen mentioned a sale of a non-performing loans portfolio. Perhaps you can give some more color on that, or just quantify the effect.

Actually, this was part of our, it's in the retail business, and in terms of detailed capital effects, I don't actually have them on hand. I'll have to get back to you on that.

But we do sell, I mean, we have a deal with, probably it's known who we have the deal with, that on a regular basis buys our non-performing portfolio, our small non-performing portfolio in the retail business. And that creates normally a day one effect on the time of the execution of the sales. You'll see that as a net reversal in personal customers, but what we can say is that the quality is stable. There are no material movements in the losses if you compare them to previous quarters, so it's still a very, very robust and well-performing portfolio in the personal customer segment.

Thank you. Thank you. Simon, you have another question? Just in front of you. Thank you.

Just a quick question, and I probably know the answer already, but the same thing, the non-life insurance company, another super strong quarter, really successful turnaround of that business. Do you feel it gets the sort of recognition it deserves being sort of hidden in your P&L? Is there any scenario in the future where you could see some structural

We are very pleased to see the positive development in Femtin along the lines of the same reasons as we talked to for the repricing of the life insurance business. We also see this on the non-life and we do believe that there is still a very promising potential going forward and a lot of the growth opportunities for that company lies within our Customer base, really, in corporate customers, Norway. We always think that we need to work even more to make the value of the various elements visible and of course here there is one element in fees and commissions and another one in associated companies that is sometimes hard to really give the appropriate number of lights to in a large group like ours. But we also believe that this is a very important strategic piece of the business. and we see in a world that is ever more digital the value of offering and being able to deliver a broader number of services with our customers. We believe this to be increasingly important in a world where our customers are more and more digital and as for future potential strategic choices, also noting that we are the third largest owners in this company, I will refrain from commenting specifically. As you probably expected.

Thank you, and thank you for asking questions even though you know the answer, Simon. Rune, I'll ask you for the last time, any questions from the online audience? Yes.

Okay, we got a couple of questions here from Roy Tilly from Arctic. You showed 46 billion in net flow this quarter, which is more than double the record quarter you had in Q1. Can you talk a bit about where the flow is coming from and what you have been doing to ramp this up so quickly? That's question one. And number two is, you seem to have had a better growth in TEC towards the end of the quarter. Can you say anything about what the mix in terms of distribution channels? Is S-Banken the main driver currently?

Very good. Relating to the growth in the flow, we see that this comes all start off with the retail segment. And as mentioned, we broke a record high of 1 billion per month in the recurring savings from our retail segment, an additional 9 billion coming in, totaling at 10.1. So, on top of that, we also have various institutional activity around our flow, and this quarter was one particular large transaction contributing strongly, driving that growth significantly. That being said, this is part of a larger trend where we see both institutional and retail providing to a very strong flow quarter by quarter and reaching records both quarter and 12 months trading. So in sum, this is an active approach both in terms of the actively managed funds we provide and the sales challenges that we use both on the retail and the institutional side.

As for the growth in personal customers, what we can say is that the major part of the new business this quarter is related to purchases of apartments or new homes as the bank swapping has been limited in a quarter where Our interpretation is that it's more challenging for customers to navigate in a market where prices are moving at different times and phases. So the major part of the activity is related to home acquisition. We're pleased with the development in both brands without being sort of specific as of what comes from where.

Thank you. We have one question also from Sophie Peterson from Goldman Sachs. On the competition, what pressures are you seeing on the underwriting structuring side? Do you have to compromise on underwriting to defend market share? How do you ensure your new loans have the same credit quality as the back book? Do you think underwriting could become a margin issue at some point?

We do see competitive pressure across the market that impacts both structures and price, but I would say that we are able to grow at the pace we are doing today without compromising on structure nor price. I think the testament to that in the quarterly numbers is the fact that there is a positive migration in the large corporate book, that there is a broad focus diversification in terms of areas where we're growing both geographically and in terms of industries and also the fact and the data point we shared on the 46 new customers in the Nordics outside of Norway already delivering a profitability to the group above the required hurdle.

Thank you. Alright, so if there are no further questions, members of the press will be able to talk to management afterwards in the lounge area as usual. And I think we can conclude and wish you all a very happy summer. Thank you so much.