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OSLO, Feb 9 (Reuters) – DNB, Norway’s largest bank, reported a much bigger-than-expected increase in fourth-quarter profit on Thursday, as rising interest rates helped lift income, and said the country’s economy was resilient.
Net profit rose to 9.95 billion Norwegian crowns ($969.3 million) in the October-December quarter, from 6.2 billion crowns a year earlier, while analysts on average had expected 7.6 billion crowns, according to a poll compiled by the bank.
DNB proposed a dividend of 12.50 crowns per share for 2022, compared to 9.75 crowns for the preceding year, while analysts’ mean forecast was for 10.82 crowns.
“DNB is well equipped for supporting personal customers and businesses through uncertain times,” Chief Executive Officer Kjerstin Braathen said in a statement.
DNB and its Nordic peers, including the region’s biggest lender Nordea and Sweden’s top corporate bank SEB , have seen a year of rapid rate hikes by central banks seeking to curb inflation, boosting the industry’s profits.
Norges Bank was the first major central bank to begin hiking rates in September 2021 and expects to raise rates again in March.
While DNB’s loans to customers rose by 12.3% last year, net interest income surged 36.8%, the bank said.
Credit losses and impairments amounted to 674 million crowns in the quarter, while analysts on average expected 443 million.
The country’s Financial Supervisory Authority (FSA) warned in December that Norwegian banks should brace for higher loan losses due to rising rates and a weaker economic outlook.
“Never before have we spoken with more customers and we find that, on the whole, our customers are well prepared,” Braathen said. ($1 = 10.2657 Norwegian crowns) (Reporting by Victoria Klesty, editing by Terje Solsvik and Savio D’Souza)