Dnb Asa Sp/Adr

Hello and welcome to DNB Q1 conference call. My name is Alan. I'll be a coordinator for today's event. Please note this call has been recorded and for the duration, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. If you require assistance at any time, please press star zero and you'll be connected to an operator. I'll now hand you to your host, Roon Helen, to begin today's conference. Thank you.

Thank you very much, and a warm welcome to all of you for D&B's analyst call for the first quarter of 2024. Around the table here in Oslo, we have the CEO Kerstin, the CFO Ida, Head of Personal Banking Inger, and Corporate Harald, Head of Wealth Håkon, and the Chief Risk Officer Sverre. Before we start the Q&A, Ida will give you the highlights for the quarter. Ida?

Thank you, Diana, and a warm welcome to all of you listening in. The Norwegian economy continues to show strength and clear signs of a soft landing ahead. Mainland GDP growth is expected to be 0.8% in 2024 and 1.5% in 2025, and then pick up further towards 2027. Mainland corporate investments are expected to be muted in the short term before picking up in 2026 and 2027. The energy transition is, in addition to this, expected to continue to push investments in manufacturing and power supply in the coming years. Overall household consumption is expected to rebound in the second half of 2024 on the back of positive real wage growth, even though we haven't seen such a decline as we would have expected on the consumption, bearing in mind the increased interest rates as well as the increased overall cost. Unemployment remains low at 1.8% and is expected to remain low even if it will move up towards 2.4% in 2026 and onward. Inflation levels have gradually come down and are expected to continue to decline in the coming years but still remain at higher levels than the Norwegian central bank target of 2%. This combined with an anticipated strong wage growth of 5.2% in 2024 and 4.2% in 2025 further supports our economists' view that interest rates are expected to remain higher for longer and gradually start to trend down from the level of 4.5% to 3.25% starting in December this year and moving on to 2025. Moving over to d&b's first quarter results where we saw a continued strong performance and a solid asset quality. Return on equity is at 15.6% in the quarter and we see solid results across customer segments as well as product areas. We are recognising a loan growth of 0.7%, stemming from corporate banking of up 2.8% and 1.1% for currency adjusted, and personal customers a decrease of 0.7%. The profit we also saw a growth of 3.9% in the quarter, coming from corporate banking of 7.2% and 4.8% currency adjusted, and personal customer a decrease of 0.9%. Net interest income was down by 2.9% from the fourth quarter, driven by lower credit growth, product mix effects and fewer interest pays. But NII was also negatively impacted by a number of other items, totalling £322 million, including interest on impaired loans and amortisation effects and fees. Net commission and fees were up 2.6% from a strong semi-quarter last year, All-time high first quarterly results, and we also would like to point to the positive development we are continuing to see in asset under management, which now surpassed 1,000 billion Norwegian kroner during the first quarter. The credit quality continues to be robust, and we have low impairment provisions in the quarter. 99.3% of our portfolio is in stages one and two. And we have a total of impairment provisions of £323 million in the quarter. A strong capital position of a Q1 capital ratio of 19% and leverage ratio of 6.2%, as well as earnings per share that is up at now 6.48 in the quarter, also provides a strong foundation to continue to deliver on our dividend policy also in the years ahead.