Healthy profits for DnB NOR in 2008

DnB NOR achieved pre-tax operating profits before write-downs of NOK 5 573
million in the fourth quarter of 2008, an increase of NOK 1 937 million
compared with the year-earlier period, which is the best quarterly financial
performance ever. Profit for the period was NOK 1 943 million. The year as a
whole showed strong underlying earnings in spite of a deep downturn in the
global economy. 
 
Fourth quarter 2008
          Pre-tax operating profits before write-downs were up 53.3 per cent to
NOK 5.6 billion (3.6) 
          Profit for the period declined by 61.7 per cent to NOK 1.9 billion
(5.1) 
          Return on equity was 12.3 per cent (28.4)
          Expenses represented 50.2 per cent of income (51.9)
          The core capital ratio was 6.7 per cent (7.2) 
(Figures for the fourth quarter of 2007 in parentheses)
 
"We are satisfied that we achieved healthy profits in the fourth quarter, in
light of the significant turmoil in the financial markets and the subsequent
consequences for the real economy. Both interest income and other operating
income showed sound increases in the fourth quarter, while expenses were well
under control," says Rune Bjerke, group chief executive of DnB NOR. 
 
Total income rose by 31 per cent, while expenses increased by 2.9 per cent
adjusted for impairment losses for goodwill in 2008 and allocations to
employees in 2007. 
 
The brisk lending growth from the last few quarters abated markedly in the
fourth quarter. Nevertheless, the effect of the strong growth earlier in 2008
and a certain widening in spreads ensured a NOK 1 180 million rise in total net
interest income compared with the year-earlier period. 
 
The downturn in the real economy gained momentum in the fourth quarter and
resulted in a significant increase in write-downs on loans. There were
particularly large write-downs in DnB NORD's operations in Denmark, but there
was also an increase in write-downs among small and medium-sized enterprises in
Norway. Write-downs totalled NOK 2 314 million in the fourth quarter, an
increase from close to zero in the year-earlier period. 
 
Full year 2008
          Pre-tax operating profits before write-downs were up 5.8 per cent to
NOK 16.0 billion (15.1) 
          Profit for the year declined by 38.5 per cent to NOK 9.2 billion
(15.0) 
          Return on equity was 12.9 per cent (22.0)
          Expenses represented 53.9 per cent of income (50.6)
          Earnings per share were NOK 7.15 (11.08)
          The proposed divided per share is NOK nil (4.50) 
(Figures for 2007 in parentheses)
 
"The market turmoil has presented challenges, but also opportunities. Not least
for DnB NOR Markets, which achieved very sound profits throughout the year. The
Group is considered to be well capitalised relative to the risk in the loan
portfolios and other operations," says Rune Bjerke. 
 
DnB NOR aims to strengthen the core capital ratio to over 8 per cent by the end
of 2010. 
 
The DnB NOR Group's profit for the year was NOK 9 233 million, a reduction of
NOK 5 790 million from 2007. 
 
Average lending growth from 2007 to 2008 was 20.3 per cent and deposit growth
was 8.3 per cent for the same period. Total income rose by 10.0 per cent, while
total costs increased by 13.8 per cent. Adjusted for impairment losses for
goodwill in 2008 and allocations to employees in 2007, expenses rose by 10.6
per cent. 
 
The Group introduced a cost programme in 2008 which is expected to have total
annual effects of approximately NOK 1.4 billion through 2010. The Group is
ahead of schedule in phasing in the cost programme. 
 
The financial crisis had a strong negative influence on the real economy
towards the end of 2008. Net write-downs on loans and guarantees totalled NOK 3
509 million in 2008, compared with NOK 220 million in 2007. 
 
Vital Forsikring ASA achieved pre-tax operating profits of NOK 644 million for
2008. The recorded return on capital was 1.9 per cent, while the value-adjusted
return, including held-to-maturity bonds, was 1.1 per cent. 
 
Government measures and future prospects
On 8 February 2009, the Norwegian government presented measures to increase
Norwegian companies' access to credit. 
 
"We are positive to the measures presented by the government and, in our
opinion, the measures will offer opportunities to increase lending capacity and
strengthen capital adequacy for those who participate in the schemes," says
Bjerke. 
 
2009 will be a demanding year. DnB NOR has sound earnings from existing
operations, strict cost control and a good platform for meeting future
challenges. 
 
There is great uncertainty about future macroeconomic developments, but DnB NOR
currently has no reason to believe that the level of write-downs on loans will
be higher than in the fourth quarter of 2008. 
 
 
Contact person:
Trond Bentestuen, group executive vice president, Corporate Communications, 
tel.: +47 950 28 448