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DNB published results above expectations thanks to better-than-expected fee income, trading result and opex but these were overshadowed by disappointing NII and rising uncertainties surrounding NII evolution as NOK policy rate hikes are coming to an end, deposit and lending volume growth are moving into negative territory and risks of competitive pressure on deposits are starting to emerge.
Companies: DNB (DNB:STO)DNB Bank ASA (DNB:OSL)
AlphaValue
DNB has reported a good Q2 with NII momentum remaining the main earnings driver as the bank enjoyed the ongoing policy rate hikes, loan and deposit volume growth despite some quarterly corporate deposit volatility. Commissions and trading were a good surprise while cost inflation remained in line with expectations. The spike in the cost of risk was largely due to a one-off related to a legacy foreign currency loan portfolio in Poland. The buyback delay was the only negative, risking undermining
DNB realised a strong Q1 on the back of higher NII brought about by the deposit margins generated by higher policy rates. Loan volume and deposit volume growth remained healthy despite some quarterly decline in the deposit margins. Cost of risk was mild amid the reversal, while costs were in line. A request for approval to buy back 2.5% of the share capital was sent to regulator.
DNB had a good Q4 with a strong beat on jumping NII thanks to higher deposit margins induced by Norges Bank’s policy rate hikes. Costs were a negative surprise, impacted by higher variable remuneration from increased activity. Cost of risk was a miss too, although largely due to model change. The payout ratio was 60% this year. Long-term targets were maintained and do look achievable.
DNB held its capital markets day on Tuesday. Based on its strong track record of overshooting, the management maintained most of its targets for 2025 while upgrading its RoE target from above 12% to above 13%. The rationale for this upgrade is built on the bank’s top-line growth as well as its strong cost discipline, with a new cost reduction program (NOK1.5-2bn) announced through to 2025.
DNB realized a good Q3 marked by an acceleration in NII and fee income. The top-line was still a miss due to negative valuation effects on equity investments of restructured customers owned by DNB. The C/I ratio remained stable and asset quality remained strong with new provision reversals. Capitalisation was strong again but the regulatory requirements remain high leaving only limited excess capital for buybacks. The long-term targets were maintained. NII should continue to benefit from monetar
DNB again made an excellent quarter, delivering outstanding NII growth thanks to policy rate tightening, thus allowing for improved efficiency (40% C/I) while credit quality continued to remain rock-hard. As even more rate hikes are now planned by the central bank, management maintained its targets going into 2023, while remaining cautious on buy-backs as the excess capital situation has faded due to volume growth, the Sbanken acquisition and CCyB planned increases.
DNB realized a very impressive Q1 22 with a jump in the net result fuelled by strong growth in total income thanks to NII and fee income growth. As cost inflation was moderate, this resulted in a very good 39% C/I ratio which, combined with LLP releases, allowed DNB to beat consensus by 26% on its PBT. The CET1 ratio declined with the acquisition of Sbanken, displaying a 170bp buffer, while the dividend policy remained unchanged. The outlook and targets were maintained.
DnB posted good Q4 21 results, beating consensus on total income, thanks to NII and fees higher than expectations. Cost inflation also outpaced consensus but, thanks to the income generation, the C/I ratio considerably improved yoy. Guidance given on 2022 was better than consensus on the C/I ratio (expected to be lower than 40% vs a 44% consensus). Regarding capital, DnB maintained its payout ratio and stated that it could perform buy-backs with its excess capital once the potential acquisition
DnB has released its Q321 numbers. Net income was well above expectations, mostly driven by lower loan losses. Total income was also above expectations thanks to higher trading income and net interest income which remains buoyant for DnB. The CET1 ratio remains very high at 19.2%, almost 300bps above the management’s target. Expect an upwards revision to our EPS expectations (below consensus’ forecasts). We nonetheless see DnB as much too expensive and prefer the Swedish banks.
DnB released this morning its numbers for Q2 21. The Norwegian bank’s top line was roughly in line with expectations (and our forecasts) whereas it saw a big jump in total expenses both vs expectations and yoy driven by increased activity following the reopening of society. It remains to be seen whether this will negatively affect management’s guidance of a C/I ratio below 40% for 2023. We will, for that year, revise downwards the underlying numbers.
DnB released this morning its numbers for Q1 21. Net profit was comfortably above expectations (+18%), driven by lower loan losses (expected) and higher fees/commissions and volatile trading income. Net interest income was indeed slightly disappointing (-1% below expectations). The CET1 ratio was 50bp higher qoq and well above requirements (+210bp). Our expectations for 2021 will only marginally change.
DNB’s Q4 report is due on February 10th and we have only made minor estimate revisions this time around, including a NOK 400m provision in Q4 for the potential AML fine from the Norwegian FSA. We see lower risk on credit quality going forward following successful vaccines and initiated mass vaccination, but the offshore and travel sectors will remain difficult through 2021. We have lowered our 2020e EPS 6% and 2021e/2022e 2% and reiterate our Hold for now.
Companies: DNB Bank ASA
Arctic Securities
ECB concluded tonight and recommend to refrain from or limit dividend… …until September 30th 2021, but will then resume to normal supervision Max pay-out of 15% of 2019-2020 profits (approx. NOK 4.2 for DNB)… …BUT not higher than 20bps of CET1 (approx. NOK 1.3 for DNB)
Since our last update on November 9th DNB has rallied 22% following positive results from Covid-19 vaccine tests. We see a risk of a delay in resumption of distributions following ESRB’s pan-European decision, now postponed to December 15th, and the FSA and MoF’s response that will follow. We downgrade DNB to a Hold (Buy) recommendation but increase our target price to NOK 160 (155), equivalent to 12.7x 2021e EPS and 1.06x 2020e BVPS.
Research Tree provides access to ongoing research coverage, media content and regulatory news on DNB Bank ASA. We currently have 163 research reports from 5 professional analysts.
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Cavendish
Companies: Property Franchise Group PLC
Canaccord Genuity
FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi
Companies: Frenkel Topping Group plc
The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual
Companies: Bluefield Solar Income Fund Ltd.
QuotedData
2023 results are, as indicated in its February pre-close update, “slightly ahead of market expectations”. Current trading continues to improve, with 1Q24 underlying operating profit up yoy, “reflecting the benefits of the Group’s transformation programme completed in 2023 as well as improving market conditions.” With net cash of £35m at end 2023, the Board approved 7.4p final DPS and £7m buy back.
Companies: LSL Property Services plc
Zeus Capital
S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi
Companies: S&U plc
Edison
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Hardman & Co
Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web
Companies: Foresight Solar Fund Limited GBP
Companies: PensionBee Group PLC
Liberum
International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th
Companies: International Public Partnerships Ltd
Companies: NewRiver REIT plc
In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.
Companies: Regional REIT Ltd.
Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…
Companies: Witan Investment Trust PLC
Kepler | Trust Intelligence
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