DNB (No_rec, TP: NOK) - Key rate-hike beneficiary
Boosted by sustained NII expansion, moderate underlying cost inflation and further loan loss reversals, DNB reported a strong Q2 ROE of 13.3%, again exceeding its 12% long-term target. Reflecting repricing efforts and 3.3% FX-adjusted lending growth, Q2 NII saw an organic QOQ uptick of c6%. With the bank guiding for a further NOK2.5bn annual NII benefit from June’s 50bp rate hike and sequential repricing, while highlighting still-robust asset quality, we continue to see solid earnings prospects. Driven by higher NII, we have raised our 2023–2024e EPS by c2%.
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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