By Victoria Klesty
OSLO (Reuters) -DNB reported a 17% rise in fourth-quarter earnings on Thursday, in line with forecasts, as a relaxation of coronavirus restrictions boosted Norway’s largest bank.
Net profit rose to 6.16 billion crowns ($698 million) for the October-December quarter from 5.27 billion a year earlier, in line with the 6.15 billion expected by analysts in a poll compiled by the bank.
“Once again large parts of the business sector are going at full speed,” CEO Kjerstin Braathen said in a statement.
DNB proposed a dividend of 9.75 crowns per share for 2021, up from 9 crowns the previous year but below the 9.94 crowns expected by analysts.
The bank will also ask its owners to sanction a plan for share buybacks as a way to boost shareholder returns, the CEO told analysts and reporters.
The Norwegian Competition Authority has rejected DNB’s plan to acquire smaller rival Sbanken, and unless the decision is overturned on appeal this could leave DNB with even more excess capital, analysts have said.
DNB’s net interest income rose 8.5% to 806 million crowns, and while its return on equity of 10.7% in 2021 fell short of its target of above 12%, it said it would deliver this by the end of 2023, helped partly by rising interest rates.
Norway’s central bank started raising its key policy rate in September last year after a series of cuts in 2020 had left it at an unprecedented zero percent. Currently at 0.5%, the central bank aims for three hikes in 2022.
While DNB’s net interest income and overall earnings were stronger than forecast, the bank’s costs also rose more than expected and the dividend fell slightly short, Credit Suisse said in a note to clients.
DNB’s shares traded down 1.1% at 1022 GMT, lagging a rise of 0.6% in European banking stocks.
($1 = 8.8271 Norwegian crowns)
(Reporting by Victoria Klesty Editing by Jason Neely and Mark Potter)