The country’s largest financial group DNB increased its interest income and profit in the third quarter. The bank is profiting well from the many interest rate increases that have come from Norges Bank in the past year. Because while most people with loans are less able to afford it when interest rates rise, the effect is the opposite for the bank. Every interest rate jump means billions in increased earnings for DNB, confirms the CEO. – For the latest interest rate increase, we have given an estimate of a positive effect overall of NOK 2.4 billion, says CEO Kjerstin Braathen. The figures show that DNB made a total of NOK 2 billion after tax on personal customers in the third quarter. – Interest rate increases are essentially good business, but it is important to say that the money market interest rate, which is the interest we pay to borrow money, increases faster than we set the interest rates, she says. The figures show that DNB made a total of NOK 2 billion after tax on personal customers in the third quarter. Photo: Terje Pedersen / NTB Increased deposits and increased deposit margins Over the past year, households have increased their bank deposits in DNB by around NOK 100 billion compared to a year ago. This is partly due to the fact that Sbanken is now part of the country’s largest financial group. The bank earned far more from its personal customers with bank deposits in the third quarter of this year, compared to the same period last year, the figures show. The difference between what personal customers received in interest on their deposits and the money market rate was 1.75 per cent in the third quarter. This is an increase of 0.84 percentage points in one year. – We have increased both our deposit rates and our lending rates, and feel that we have competitive conditions. Our deposits are also growing this quarter, says Braathen. – We have increased both our deposit rates and our lending rates, and feel that we have competitive conditions. says Braathen in DNB. Photo: William Jobling / news But at the same time, the figures show that the bank has less margin on its lending compared to a year ago. The reason for the fall in the lending margin is rising market interest rates, and the fact that it has thus become more expensive for the bank to finance itself in the market. The group increased its net interest margin by 0.02 percentage points from the second to the third quarter. But the trend is clear. Every quarter of the past year, DNB has increased its net interest margin. DNB now earns an average of 1.5 per cent net on the money the bank lends. The interest margin is the difference between the interest income the bank receives from its lending compared to what it costs the bank to obtain the money, through bank deposits from customers or loans in the financial markets. The figures show that during the last three months the bank had net interest income of NOK 12.2 billion – and achieved a profit after tax of NOK 7.6 billion. The Consumer Council’s Jorge Jensen says interest rates at DNB are lower than many other banks. Photo: Stig Jaarvik / news Can benefit from moving the savings account from DNB The Consumer Council informs news that DNB has among the country’s best conditions for young people who save for housing through the BSU scheme. Most other people who have a savings account at DNB obtain a savings interest rate of 1.05 per cent. The interest on current accounts is normally zero. There are far better savings rates in other banks. – A customer (aged 41) who has NOK 100,000 in a savings account at DNB will, within one year, earn NOK 1,770 by moving their savings from DNB to LEA bank, says specialist director Jorge Jensen at the Consumer Council.
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