DNB reports Q3 profit slightly ahead of forecasts (updated)
22/10/2025 06:49
Writes through with CFO quotes and context; adds share move in paragraph 2, analyst comment in paragraph 7 DNB shares fall more than 4% after NII miss, higher loan losses Norway's monetary easing impacts interest income and margins Anticipates further rate cut to 3.75% by June next year By Jagoda Darlak and Agnieszka Gosciak Oct 22 (Reuters) - Norway's largest bank DNB DNB.OL reported weaker-than-expected interest income and higher loan losses for the second consecutive quarter on Wednesday, despite robust economic activity in its home market. Its shares were down 4.3% at 0920 GMT. After years of benefiting from high rates, DNB faces a shifting landscape as Norway kicks off monetary easing, signalling slimmer margins and a weaker inflation and growth outlook. "There is strong market activity, but there is also strong competition in the Norwegian economy among a lot of solid, well-capitalized banks that are also active in the market," DNB's finance chief Ida Lerner told Reuters. A wave of consolidation among Norwegian savings banks is stirring up competition, challenging DNB's dominance in the market. DNB's third-quarter profit fell 12.1% to 10.68 billion Norwegian crowns ($1.06 billion), narrowly beating analysts' expectations in a poll compiled by it. However, Norne Research said in a note to investors that DNB's loan losses rising for the second straight quarter suggested normalization from previously low levels that was adding pressure to core earnings. Net interest income, a key metric measuring banks' income from lending and deposits, missed market expectations at 15.99 billion crowns. Norway's central bank has made two cuts to the key interest rate this year. DNB will see the full impact of the first cut in the fourth quarter, while the latest one is set to take effect in mid-November. Despite the negative effect on interest income and "fierce but rational" competition in Norway, Lerner said that DNB was seeing growth in lending volumes, both on the personal customer and the corporate banking side. The lender expects Norway's policy rate to go down to 3.75% from the current 4.0%, with a final cut in June next year, which Lerner said would be a "fairly acceptable" level for DNB. ($1 = 10.0431 Norwegian crowns) (Reporting by Jagoda Darlak and Agnieszka Gosciak-Rabalska in Gdansk; editing by Matt Scuffham and Milla Nissi-Prussak) ((jagoda.darlak@tr.com))