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Lower impairments boost DNB Q4'17 profit

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Lower impairments boost DNB Q4'17 profit

DNB ASA reported fourth-quarter 2017 profit attributable to shareholders of 6.13 billion Norwegian kroner, up from 5.14 billion kroner earned in the year-ago period.

EPS amounted to 3.79 kroner, compared to 3.16 kroner in the fourth quarter of 2016. The S&P Capital IQ normalized EPS estimate for the period was 3.29 kroner.

The group's net interest income rose year over year to 8.86 billion kroner from 8.37 billion kroner. Net commission and fee income totaled 2.06 billion kroner in the period, compared to the year-ago 2.14 billion kroner.

Impairment of loans and guarantees was 402 million kroner in the quarter, compared to 1.75 billion kroner a year earlier.

Annualized return on equity stood at 12.3% in the fourth quarter of 2017, up from 10.9% in the same period in 2016.

For full year 2017, DNB's profit attributable to shareholders rose on a yearly basis to 20.87 billion kroner from 18.66 billion kroner. EPS for the year increased to 12.84 kroner from 11.46 kroner.

Impairment of loans and guarantees for the 2017 full year amounted to 2.43 billion kroner, compared to 7.42 billion kroner a year earlier.

Annualized ROE was 10.8% for full year 2017, compared to 10.1% a year ago.

The bank's common equity Tier 1 capital ratio, under transitional rules, stood at 16.4% at the end of 2017, compared to 16.0% a year ago.

The board of directors proposed a dividend of 7.10 kroner per share for 2017, representing 54.6% of profits for the year and up from 5.70 kroner per share for 2016. DNB's long-term target is to distribute roughly 50% of profits as dividends to its shareholders.

The lender also said that it will initiate a new share buyback program, similar to the one it completed in December 2017. The new share buyback program would also comprise up to 0.5% of its registered shares, representing a total of approximately 8.1 million shares.

As of Jan. 31, US$1 was equivalent to 7.70 Norwegian kroner.