Real estate outlook in focus
We expect a Q3 ROE of 15% (results due at c07:30 CET on 26 October), as lower activity in the real estate segment should be offset by increased deal flow in corporate project financing. Longer-term, a slowing residential market in the Oslo region could hamper the bank’s lending growth given its high turnover and short maturity on loans. However, we expect excess capital from lower growth to be distributed as dividends and forecast a 2018 dividend yield of 9%. We reiterate our BUY recommendation but have lowered our target price to NOK42 (NOK44).
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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