DNB (No_rec, TP: NOK) - Solid distributions after 2022 ROE >13%
Supported by further NII expansion and a cNOK1.3bn tax benefit, DNB reported a strong Q4 ROE of 16.2%. Consequently, the 2022 ROE was 13.8%, above its updated >13% target. Despite generous proposed 2022 distributions (65% dividend/buyback ratio), the bank has a 1.3%-point headroom to its 17.0% CET1 supervisory expectation, leaving scope for further solid distributions ahead. We have increased our 2023–2024e EPS by ~5–4%, as higher NII was only partly offset by higher costs.
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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