DNB Bank (DNB.OL) on Tuesday unveiled plans for a share buyback worth up to 4.76 billion Norwegian kroner, even as the financial services group's first-half profit was squeezed by compressed net interest income.
The lender's net interest income for the six months ended June 30 dropped 6.5% year over year to 30.43 billion kroner, as narrowing spreads offset positive volume growth. This headwind, alongside increased competition, led to a 6.3% decline in second-quarter net interest income to 15.13 billion kroner.
Meanwhile, the group's first-half attributable profit declined to 18.87 billion kroner from 20.48 billion kroner earlier, while its total income dropped to 44.12 billion kroner from 44.40 billion kroner a year ago. In the second quarter, attributable profit came in at 9.40 billion kroner, against the prior year's 10.05 billion kroner, as total income edged down to 22.32 billion kroner from 22.49 billion kroner.
DNB's stock declined nearly 3% by Tuesday midday trade in Oslo.
On the flip side, the bank highlighted its broad-based lending growth in the second quarter, with volume climbing 4.3% year on year, alongside a 13.4% spike in asset management income amid increased savings activity. This growth brought in a record net flow of 46 billion kroner and boosted assets under management to an all-time high of 1.78 trillion kroner.
In a separate release, DNB announced a plan to repurchase up to 14,406,648, or 1%, of its shares to optimize its capital structure and reduce its common equity tier 1 ratio. Approved by the Financial Supervisory Authority of Norway, the scheme will run until Oct. 16 and includes purchasing up to 9,508,388 shares on trading venues at a per-share price of 10 kroner to 400 kroner and redeeming up to 4,898,260 shares from the Norwegian government.
