Dnb Asa Sp/Adr

Hello and welcome to the DNB Quarter 2 conference call. My name is Caroline and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call your lines will be on listen only mode. However, you will have an opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your questions. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand over the call to your host, Rune Hellen, to begin today's conference.

Thank you so much, and hello everyone, and welcome to the Q2 quarterly analyst call. Around the table here in Oslo, we have in addition to the CFO and CFO, Captain Anita, Håkon Hansen, head of wealth, Alexander Oppstad Head of D&B Markets Harald Seidkansen Head of Corporates Before we open up for your questions, Ida will give you the highlights for the quarter.

Hello everyone and very nice to see so many of you on the call. I'll start with a brief update on the macro picture. The Norwegian economy continues to show strength with low unemployment, resilient activity level and increasing confidence among both individuals as well as corporates. Investment activity in the petroleum industry is expected to remain high in 2024 and mainland corporate investments are expected to pick up from low levels in the second half and then gradually increase in the coming years. Overall household consumption has upheld well in spite of higher inflation and increased interest rates. Purchasing power is expected to further improve this year by increasing real wages already in 2024. Unemployment remains low at 2% and expected to remain around this level in the coming years. Inflationary pressure has come down but remains higher than the long-term target of around 2%. With wage growth around 5.2% this year, continued strong Norwegian economy and low unemployment, the Norwegian Central Bank is expected to maintain the key policy rate at 4.5% until March next year, and then gradually decrease it towards 3.25% in 2027. Now moving over to this quarterly result, which was definitely impacted by higher activity and an all-time high net commissioning fee. Profitability is solid for the quarter with a return on equity of 16.6% and this is driven by a healthy economy but also strong activity across the group both in terms of different customer segments as well as product areas. Net interest income is up 1.9% driven by growth and customer activity. Loan growth comes in plus 0.6% with a stronger growth in corporate customers, but also increasing activity and growth in personal customers towards the end of the quarter, also seen in the higher activity we've seen in the property market. Net commission of fees up 22% from the corresponding quarter last year, with a strong performance across all product areas, an all-time high result in investment banking services, predominantly stemming from debt capital markets, but also an increasing activity in equity capital markets and M&A. In addition to that, we continue to see a solid performance in asset under management, which continues to increase savings from both personal customers, but also institutional. The portfolio continues to be solid and well diversified. We take impairment provisions of 560 million in the quarter, predominantly related to customer-specific events in small and medium-sized enterprises and large corporates. The capital position remains strong with a core tier 1 capital ratio of 19%, 210 basis points above the regulatory expectation. In spite of the fact that we've now also taken the share buyback program that was announced in June of 1% of outstanding shares into account. So the fact that we have a profitability increasing the core tier one capital ratio, that is outweighed by the deduction from the share buyback. With that, I think we will open up for questions.