By Jesus Calero
(Reuters) -Norway’s largest bank DNB reported better than expected first-quarter earnings on Wednesday, boosted by lending growth, strong demand for advisory services and higher commission income following the acquisition of Nordic investment bank Carnegie.
DNB’s net profit rose by 5.9% to 10.8 billion Norwegian crowns ($1.05 billion) in January-March, from 10.2 billion a year earlier. Analysts, on average, had forecast 10.34 billion crowns, according to a bank-compiled poll.
High interest rates have boosted Nordic banks’ profits over the past two years.
While other central banks in the region have already started to ease their monetary policy, Norway has kept its policy rate unchanged to curb inflation, cool economic activity, and manage growing business costs.
Economists expect Norway’s monetary policy to start catching up this year with that of other Western central banks, most of which began cutting rates in 2024 as growth slowed and inflation waned.
Net interest income, a key metric measuring banks’ income from lending and deposits, rose to 16.41 billion crowns in the quarter from 15.53 billion a year earlier. Analysts were expecting 16.28 billion crowns on average.
“Globally, we see increased uncertainty associated with trade conflicts, and a weakened global economy will affect growth in a small, open economy like ours,” DNB CEO Kjerstin Braathen said in a statement.
However, Braathen added that the Norwegian economy remains strong, and the country has considerable capacity to stimulate growth when needed.
Norway’s central bank kept interest rates on hold at a 17-year high of 4.50% and reiterated plans to start cutting borrowing costs in March.
It warned that cutting rates too soon could fuel further price growth, even as economic activity remains subdued and unemployment low, citing a recent and sharper-than-expected rise in inflation.
($1 = 10.2854 Norwegian crowns)
(Reporting by Jesus Calero; Editing by Jacqueline Wong and Sherry Jacob-Phillips)
