Category: Financial / Investment
DNB may need 40 to 60 billion crowns ($7-$10.5 billion) of extra core capital by 2016, CEO Rune Bjerke said, above the bank’s projection in March for 40-50 billion.
“Therefore we must withhold more of our profit to build the capital demanded by the authorities,” Bjerke said. “We are doing three things to achieve that: pay less dividend for a while than our policy mandates, cut costs to become more efficient, and also increase revenues somewhat,” he said.
“The golden age of banking with super profits is over.”
Norway’s banks escaped the worst of the financial crisis relatively unharmed and have maintained some of the healthiest balance sheets. But regulators, recalling the region’s banking crisis of the early 1990s, have demanded tougher capital ratios than the most of Europe.
Bjerke also said that lending growth this year had been somewhat slower than earlier projected, with a slowdown also evident in economic data.
Norway’s central bank lowered its growth forecast on Thursday, expecting the mainland to expand by 2.5, well below last year’s 3.4 percent, as traditional industries are suffering from Europe’s slowdown.
Published: December 1, 2023