OSLO Feb 6 DNB, Norway's biggest bank,
beat all expectations with its fourth-quarter earnings on
Thursday and sharply increased its dividend as loan losses
State-controlled DNB said its quarterly pretax operating
profit rose 54 percent to 6.86 billion crowns ($1.10 billion),
well above the consensus estimate of 5.74 billion crowns in a
Reuters poll. Loan losses were less than a tenth of the market's
DNB proposed a dividend of 2.7 crowns per share, more than
the 2.43 crowns expected, but warned it still needed to build
capital as regulators force banks across the Nordics to add more
"Over the past twelve months, DNB has increased its tier 1
capital by 12.4 billion crowns," it said. "A further increase of
more than 40 billion crowns will be required towards 2016."
DNB is among the best capitalised banks in Europe and
survived the global financial crisis relatively unharmed, but
Norway's regulators, keen to avoid the banking collapse of the
1990s, are asking for even more reserves.
The new capital rules have forced the bank to rein in its
dividend plans. It expects to pay shareholders just 25 percent
of profits through 2016, before returning to a 50 percent
The bank reported a return on equity of 13.2 percent for the
full year, well above its long-term target of above 12 percent.
For "the period ahead", the bank said, lending volume would
grow by 3 to 4 percent, picking up from late 2013, while
volume-weighted spreads were seen either stable or rising.
($1 = 6.2428 Norwegian krones)
(Reporting by Balazs Koranyi; editing by Terje Solsvik and Tom