DNB (No_rec, TP: NOK) - Continued revenue momentum
Boosted by continued core revenue momentum, DNB reported a Q2 ROE of 15.6%, above its >13% target. While seeing sustained NII expansion (+4.3% QOQ), the bank guided for still-meaningful rate hike benefits, expecting an annual positive NII impact of cNOK1.1bn per 25bp uplift from the total 75bp hikes in May and June. Helped by the strong earnings generation, the CET1 ratio rose by ~30bp QOQ, leaving an ample ~1.8% buffer to its supervisory expectation. The bank is still awaiting FSA approval of its application for a 1.5% share buyback programme. We have raised our 2024–2025e EPS by ~3%, driven by higher NII.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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