Norwegian banks have never earned as much money as they’re earning now. Analysts are calling it a “golden age” for the banks, with Norway’s largest, state-controlled DNB, leading the way.
Norway’s largest banks boosted their collective profits by an average of 20 percent last year, reported newspaper Dagens Næringsliv (DN) late last week. DNB alone is handing out dividends totalling NOK 4.4 billion (USD 700 million) after reporting its best results ever.
Not everyone is pleased by the record profits, much of which has been generated by a controversial rise in mortgage rates last year that the banks claimed was necessary to meet new capital requirements imposed by the former left-center government. That means that mortgage customers are paying interest that’s way above the central bank’s prime lending rate, and consumer advocates are crying foul.
They’re urging DNB customers to dump the bank and move their business to smaller banks that charge much less than DNB. DNB chief executive Rune Bjerke, was unrepentant.
“I think the majority of our customers realize that it’s very important that Norway’s banks are stong,” Bjerke told state broadcaster NRK late last week. He tried to downplay the biggest annual profit in DNB’s history, saying it was critical that DNB was “solid,” and able to meet any financial challenges ahead.