Strong rise in profits

DnB NOR recorded pre-tax operating profits before write-downs of NOK 4.0
billion in the second quarter of 2007, an increase of 19.5 per cent compared
with the corresponding period in 2006. 
 
Financial highlights:
         Pre-tax operating profits before write-downs were NOK 4.0 billion (3.4)
         Profit for the period was NOK 3.4 billion (2.9)
         Expenses represented 49.1 per cent of income (50.7)
         Return on equity was 20.4 per cent (19.2)
         Earnings per share came to NOK 2.50 (2.11)
         The core capital ratio, including 50 per cent of interim profits, was
7.4 per cent (6.9) 
 
(Figures for the corresponding period in 2006 in parentheses.)
 
"We are experiencing a strong development in all markets, both in Norway and
internationally. There is a greater increase in income than in expenses both at
home and abroad, and the level of write-downs and non-performing commitments
remains low. After a period of narrowing spreads, pressure now seems to be
easing," says 
Rune Bjerke, group chief executive.
 
There was a rise of 15.7 per cent in total group income compared with the
second quarter of 2006. The rise in costs reflects higher wage and pension
costs and greater investments in product development and international
start-ups. The cost/income ratio was reduced from 50.7 to 49.1 per cent. In
operations located in Norway, the cost/income ratio was brought down to 47.8
per cent. 
 
In late 2006, DnB NOR acquired the Polish BISE Bank through its partially owned
subsidiary DnB NORD. A concession for the purchase was granted in April 2007,
and DnB NORD now holds 91.9 per cent of the shares in BISE Bank. In June 2007,
DnB NOR entered into an agreement to purchase the Swedish real estate brokerage
chain Svensk Fastighetsförmedling AB, making the real estate brokerage
operations of DnB NOR the most extensive in the Nordic region. Operations
outside Norway accounted for 13 per cent of total group income in the second
quarter of 2007, compared with just under 10 per cent a year earlier. 
 
"There is profitable growth in international operations," emphasises Bjerke. 
 
Average lending increased by NOK 122 billion or 16.6 per cent from the second
quarter of 2006. The rise mainly represented well-secured hous­ing loans and
corporate customer loans with relatively low risk. Lending spreads contracted
by 0.26 percentage points compared with the year-earlier period, while deposit
spreads expanded by 0.21 per cent. Higher volumes contributed to a NOK 438
million rise in net interest income. 
 
Other income also showed a strong increase during the twelve-month period.
Other operating income rose by NOK 643 million, totalling NOK 3.7 billion in
the second quarter. 
 
"We have achieved a significant increase in income from life insurance
activity, the bank's equity investments, corporate finance activity and sales
of savings and insurance products," says Rune Bjerke. 
 
Write-downs on loans and guarantees came to NOK 140 million in the second
quarter of 2007. Net non-performing and impaired commitments represented 0.44
per cent of net lending at end-June 2007, down from 0.60 per cent a year
earlier. 
 
In July 2007, DnB NOR entered into an agreement to sell its premises at Aker
Brygge as part of plans to sell all of the Group's bank buildings. The gain of
NOK 860 million will be recorded as income in the third quarter of 2007. DnB
NOR Boligkreditt completed its first issues of covered bonds in July. The bonds
were assigned an AAA rating. 
 
 
 
Contact person:
Eivind Grønstad, group executive vice president, 
Corporate Communications, 
tel. +47 920 31 505