DnB NOR in third quarter 2008: Satisfactory performance in a highly challenging market

DnB NOR's pre-tax operating profits before write-downs were NOK 4.4 billion in
the third quarter of 2008, an increase of 18.1 per cent compared with the
year-earlier period. An increase in net interest income and tight control on
costs contributed to the rise in profits. 
 
Third quarter 2008
•	Pre-tax operating profits before write-downs were NOK 4.4 billion (3.7)
•	Profit for the period was NOK 2.8 billion (3.7)
•	Return on equity was 15.5 per cent (21.8)
•	Earnings per share were NOK 2.12 (2.72)
•	Expenses represented 50.6 per cent of income (51.3)
•	The core capital ratio, including 50 per cent of interim profits, was 6.7 per
cent (7.2) 
(Figures for the third quarter of 2007 in parentheses)
 
"I am satisfied with our financial performance in the third quarter in light of
the financial turmoil which we are still experiencing. Net interest income
increased during the quarter, reflecting both rising volumes and recoveries on
previous margin shortfalls. Cost developments were satisfactory, and the
Group's cost programme yielded good results in the third quarter," says Rune
Bjerke, group chief executive. 
 
The amortisation of previous write-downs on the bank's bond portfolio also had
a positive effect on profits. 
 
"The measures launched by the authorities have a stabilising effect, but the
financial turmoil is far from over. Access to long-term funding became more
challenging during the quarter, and the price of such funding soared. The
global economic downturn has also had an impact on the Norwegian economy and
will probably lead to a sharp levelling off of general credit growth and an
increase in write-downs on loans," says Rune Bjerke. 
 
Increase in write-downs and slowing lending growth
The profit for the period was NOK 2.8 billion, a reduction of NOK 0.9 billion
from the year-earlier period. The reduction reflected a rise in write-downs, as
well as the fact that the profit for the year-earlier period was affected by
sales gains and low taxes. 
 
DnB NOR is still experiencing lending growth, though it is slowing down.
 
"High interest rate levels and a decline in economic activity resulted in a
rise in both non-performing commitments and write-downs during the quarter.
However, the increase took place from a very low level, and the level is still
lower than a long-term normalised level," says Bjerke. 
 
The core capital ratio was 6.7 per cent when 50 per cent of interim profits is
included. 
 
"Ordinary operations in DnB NOR are stable and sound, with a solid and growing
customer base. DnB NOR is well equipped to meet a recession and will continue
to work to reinforce the Group's robust operations and bolster its financial
strength, while upholding a conservative liquidity profile," says Rune Bjerke. 

Third quarter report 2008 attached.

Contact person:
Trond Bentestuen, group executive vice president, Corporate Communications, 
tel.: +47 950 28 448