DNB braces for losses

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Norway’s biggest bank, DNB, has long been highly profitable but now feels compelled to brace for losses tied to the Corona virus crisis. It has set aside nearly NOK 6 billion (USD 582 million) to cover potential losses, characterized as “an extremely large amount” by analyst Johan Ström.

The loan loss reserves were included in the bank’s first-quarter report, released just days after DNB’s new CEO had written a commentary about how well-equipped Norway and not least its banks are to deal with the Corona crisis. Newspaper Dagens Næringsliv (DN) reported that most of the total expected losses, around NOK 5 billion, are tied to business customers, while NOK 734 million are tied to private customers.

DN noted that that one customer alone, in DNB’s so-called Private Banking division in Luxembourg, has cost the bank NOK 345 million. The bank’s securities division DNB Markets also lost NOK 300 million in the first quarter, when stock markets all over the world took a dive on the Corona slowdown.

DN reported that DNB’s total potential losses are “a powerful increase” from the NOK 316 million set aside in the first quarter of last year. Fully NOK 2.6 billion is tied to companies in the oil, gas and offshore supply sector, while NOK 2.9 billion is tied to other industries. Real estate losses are expected to be relatively modest, accounting for NOK 143 million of the total.

NewsInEnglish.no staff