OSLO (Reuters) -DNB, Norway's largest bank, reported a slightly bigger-than-expected fourth-quarter profit on Wednesday and proposed a larger dividend increase than analysts had forecast.
Net profit fell to 9.40 billion Norwegian crowns ($897.8 million) in the October-December period from 10.1 billion a year earlier. Analysts, on average, expected 9.23 billion crowns, according to a poll compiled by the bank.
While rising interest rates have boosted profits at Nordic banks over the past two years, loan losses have also increased and central banks in the region are expected to start easing monetary policy in 2024, dampening the earnings outlook.
"The Norwegian economy has proven to be remarkably sound, and we still believe in a soft landing in 2024," CEO Kjerstin Braathen said in a statement.
"However, there are two sides to this picture. The situation is bleak in some industries, such as the building and construction industry, but momentum remains high in the energy and supplier industry, among others," she added.
Loan losses for the fourth quarter amounted to 920 million crowns, broadly in-line with the 933 million seen in the poll, but up from 674 million in the year-ago quarter.
DNB's net interest income, measuring revenue from lending and borrowing, rose to 16 billion Norwegian crowns in the quarter period from 14.1 billion a year earlier. Analysts,on average, expected 16.2 billion crowns, according to the poll.
The board proposed a full-year 2023 dividend payment of 16 Norwegian crowns per share, up from 12.50 crowns for 2022, while analysts, according to the poll, on average, expected 14.05 crowns.
DNB's shares have risen 13.5% in the last 12 months, outperforming a 7.2% increase in the pan-European bank index.
($1 = 10.4697 Norwegian crowns)