Annual Report 2020 Financial Highlights
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DNB Bank A company in the DNB Group Annual report 2020 Financial highlights Income statement DNB Bank Group Amounts in NOK million 2020 2019 2018 2017 2016 Net interest income 39 285 39 908 37 388 35 914 34 517 Net commissions and fees 6 266 6 618 6 605 5 884 5 634 Net gains on financial instruments at fair value 5 938 3 173 1 351 4 513 6 506 Other operating income 2 374 2 482 2 522 2 029 3 176 Net other operating income, total 14 578 12 272 10 478 12 425 15 316 Total income 53 862 52 181 47 866 48 339 49 833 Operating expenses (22 103) (21 952) (20 681) (20 801) (19 892) Restructuring costs and non-recurring effects (474) (326) (565) (1 128) (624) Pre-tax operating profit before impairment 31 286 29 903 26 620 26 410 29 317 Net gains on fixed and intangible assets (1) (33) 529 735 (19) Impairment of financial instruments (9 918) (2 191) 139 (2 428) (7 424) Pre-tax operating profit 21 366 27 678 27 288 24 718 21 874 Tax expense (3 926) (4 825) (4 976) (4 903) (3 964) Profit from operations held for sale, after taxes 221 (49) (204) (1) 4 Profit for the year 17 661 22 805 22 109 19 813 17 914 Balance sheet DNB Bank Group 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. Amounts in NOK million 2020 2019 2018 2017 2016 Total assets 2 582 304 2 470 640 2 307 710 2 359 860 2 348 272 Loans to customers 1 703 524 1 671 350 1 598 017 1 531 345 1 492 268 Deposits from customers 1 112 058 977 530 940 087 980 374 945 694 Total equity 236 161 229 619 207 933 203 685 190 078 Average total assets 2 905 570 2 564 525 2 434 354 2 537 681 2 545 103 Key figures DNB Bank Group 2020 2019 2018 2017 2016 Return on equity, annualised (per cent) 1) 7.8 11.1 11.5 10.5 10.3 Combined weighted total average spread for lending and deposits (per cent) 1) 1.27 1.33 1.30 1.30 1.32 Average spread for ordinary lending to customers (per cent) 1) 2.04 1.84 1.94 2.07 2.04 Average spread for deposits to customers (per cent) 1) 0.12 0.51 0.29 0.17 0.21 Cost/income ratio (per cent) 1) 41.9 42.7 44.4 45.4 41.2 Ratio of customer deposits to net loans to customers at end of period 1) 67.3 57.9 58.2 61.7 62.7 Net loans at amortised cost and financial commitments in stage 2, per cent of net loans at amortised cost 1) 10.39 6.81 7.07 Net loans at amortised cost and financial commitments in stage 3, per cent of net loans at amortised cost 1) 1.53 1.12 1.49 1.13 1.67 Impairment relative to average net loans to customers at amortised cost (per cent) 1) (0.60) (0.14) 0.01 (0.16) (0.48) Common equity Tier 1 capital ratio at year-end (per cent) 19.6 18.3 17.3 16.6 17.7 Leverage ratio (per cent) 7.3 7.2 7.4 6.9 7.1 Number of full-time positions at year-end 8 643 8 617 8 597 8 544 10 366 1) Defined as alternative performance measure (APM). APMs are described on ir.dnb.no. Contents – annual accounts Directors' report .................................................................................... 4 Balance sheet Note 26 Classification of financial instruments ........................................ 75 Annual accounts Note 27 Fair value of financial instruments at amortised cost ................. 77 Income statement ......................................................................................... 11 Note 28 Financial instruments at fair value .............................................. 79 Comprehensive income statement ................................................................ 12 Note 29 Offsetting .................................................................................... 84 Balance sheet ................................................................................................ 13 Note 30 Shareholdings ............................................................................. 85 Statement of changes in equity ..................................................................... 14 Note 31 Transferred assets or assets with other restrictions .................. 86 Cash flow statement ...................................................................................... 16 Note 32 Securities received which can be sold or repledged .................. 87 Note 33 Investment properties ................................................................. 87 Notes to the accounts Note 34 Investments accounted for by the equity method ........................88 Note 1 Accounting principles .................................................................. 17 Note 35 Investments in subsidiaries ........................................................ 89 Note 2 Segments .................................................................................... 26 Note 36 Intangible assets ........................................................................ 90 Note 3 Capitalisation policy and capital adequacy ................................. 28 Note 37 Fixed assets ................................................................................ 93 Note 38 Leasing ....................................................................................... 95 Credit risk Note 39 Other assets ............................................................................... 96 Note 4 Credit risk management ............................................................... 32 Note 40 Deposits from customers by industry segment .......................... 96 Note 5 Measurement of expected credit loss .......................................... 35 Note 41 Debt securities issued ................................................................ 97 Note 6 Credit risk exposure and collateral .............................................. 40 Note 42 Subordinated loan capital and perpetual Note 7 Credit risk exposure by risk grade ............................................... 44 subordinated loan capital securities ........................................... 99 Note 8 Impairment of financial instruments ............................................ 46 Note 43 Other liabilities .......................................................................... 100 Note 9 Development in gross carrying amount and maximum Note 44 Equity ......................................................................................... 100 exposure ...................................................................................... 47 Note 10 Development in accumulated impairment of financial Additional information instruments .................................................................................. 49 Note 45 Remunerations etc. .................................................................. 101 Note 11 Loans and financial commitments to customers by industry Note 46 Information on related parties .................................................. 107 segment ....................................................................................... 53 Note 47 Contingencies .......................................................................... 108 Market risk Statement pursuant to the Securities Trading Act ....... 109 Note 12 Market risk ................................................................................... 57 Note 13 Interest rate sensitivity ................................................................ 57 Auditor's report ................................................................................. 110 Note 14 Currency positions ...................................................................... 58 Note 15 Financial derivatives and hedge accounting ................................ 59 Governing bodies ............................................................................ 115 Liquidity risk Note 16 Liquidity risk ................................................................................. 63 Income statement Note 17 Net interest income ..................................................................... 66 Note 18 Interest rates on selected balance sheet items .......................... 67 Note 19 Net commission and fee income ................................................. 67 Note 20 Net gains on financial instruments at fair value .......................... 68 Note 21 Salaries and other personnel expenses ..................................... 68 Note 22 Other expenses .......................................................................... 69 Note 23 Depreciation and impairment of fixed and intangible assets ...... 69 Note 24 Pensions ...................................................................................... 70 Note 25 Taxes ........................................................................................... 72 DNB BANK – ANNUAL REPORT 2020 / 3 Directors’ report The DNB Bank Group is part of the DNB Group 1). The DNB Group, hereinafter called DNB, is Scandinavia’s largest financial services group. DNB offers a full range of financial services, including loans, savings, advisory services, real estate broking, insurance and pension products for retail and corporate customers and the public sector. The banking group serves customers in Norway through its customer service centres, online banking services and branch offices. Despite a pandemic, the most far-reaching measures introduced in income from money transfer and banking services as a result of Norway in peacetime, zero interest rates and a major restructuring the COVID-19 situation. of the Norwegian economy, DNB Bank Group has shown itself to Total operating expenses were up NOK 299 million from 2019, be very robust. During the course of 2020, the banking group has or 1.3 per cent. built up capital and is now in a stronger position than ever, while Impairment of financial instruments