DNB (No_rec, TP: NOK) - Progressing towards 12% ROE
DNB reported a Q4 ROE of 12.9% and EPS 2% above consensus, driven by strong NII and fee income, partly offset by higher costs. We believe positive Norwegian macro, increasing interest rates, and capital-light income should allow DNB to achieve its 12% ROE target for 2019. The bank seems comfortable with its capital position, illustrated by the NOK8.25 proposed DPS for 2018 and the new buyback initiatives. We have raised our 2020e EPS by 1% on higher NII and fees.DnB Nor is a holding company. Through its subsidiaries, Co. is financial services group in Norway. Co. provides a range of financial services, including loans, savings, advisory services, real estate broking, insurance and pension products for personal and corporate customers. Co.'s operations are divided into six segments: Personal Banking Norway, Corporate Banking Norway, Large Corporates and International, Markets, Wealth Management, and Products. As of Dec 31 2013, Co. had total assets of NOK2,389,438,000,000 and total deposit of NOK867,904,000,000.
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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