DNB shares jump as Q3 results exceed market expectations

Investing.com -- Shares of DNB ASA (OL:DNB ) jumped after the Norwegian bank posted better-than-expected third-quarter results, outperforming analyst forecasts. 

At 5:10 am (0910 GMT), DNB ASA was trading 5.3% higher at NOK 235.70.

The Oslo-based bank reported clean pre-tax income of NOK 15.3 billion, exceeding consensus estimates by 11%, which pushed total revenues to NOK 22.1 billion. 

These results, driven by solid performances in net interest income, fee income, and trading income, helped offset a slight rise in operating expenses, which were marginally higher than anticipated by 1.3%.

Net interest income was up 1.5%, fee income grew 3.1%, and trading income skyrocketed by 64%, boosting overall revenue figures. 

Additionally, credit losses were lower than expected, at just 3 basis points of average loans, contributing to the bank’s impressive bottom-line performance.

As per UBS analysts, the strength of DNB’s third-quarter earnings can also be due to effective cost management, despite the slight overshoot in operating expenses. 

Analysts from UBS flagged that if DNB’s current momentum in net interest income and fee income continues, consensus forecasts for 2025 could see upgrades of around 2%. 

Moreover, the CET1 capital ratio held steady at 19%, maintaining the bank’s solid financial position.

Once the Carnegie deal closes in 2025, it is expected to consume around 120 basis points of capital, putting pressure on the bank's capital base.

However, UBS noted that despite this, DNB’s strategic focus on growing its non-interest income, particularly in investment banking and wealth management, could help cushion the impact of these capital demands in the long term.

Source: Investing.com