OREANDA-NEWS. February 15, 2011. VILNIUS. In adverse but improving business environment AB DnB NORD Bankas group, owned by Norway's largest financial institution DnB NOR, earned LTL 35.1 million net profit in the fourth quarter of 2010, according to preliminary unaudited data, reported the press-centre of DnB NORD.

However, taking into account the impact of the economic downturn on some individual and corporate customers, the bank continued to pursue a conservative customer risk valuation and set aside LTL 243.1 million in provisions in 2010, LTL 200 million of it in the first half of the year. Since the financial service market started to recover and the volume of provisions went down due to lower customer risk  in the second half of the year, the consolidated net loss of the AB DnB NORD Bankas group decreased to LTL 113.1 million in full year 2010 from LTL 406.9 million the year before. AB DnB NORD Bankas net loss in full year 2010 went down to LTL 122.6 million and was more than three times lower compared to full year 2009 result.

More stable business environment
"With Lithuania’s economy returning back to path of recovery, the business environment had balanced out somewhat and operating risks began to ease gradually. The economy was lifted by a marked increase in business activity among customers oriented to export markets, the demand for financial services picked up slightly and there appeared signs of activity in mortgage market in the second half of the year. After a prolonged break we also saw an emerging demand for financing of investment projects," dr. Vygintas Bubnys, CEO and the chairman of the Management Board of DnB NORD Bankas, said.

In 2010 AB DnB NORD Bankas extended LTL 1.2 billion of new credits and its net loan portfolio totalled LTL 9.3 billion as at the end of December 2010. Due to still limited number of projects that met credit risk criteria combined with decline in volume of loans granted in the preceding years, the bank’s loan portfolio eased by 9.9 percent year-on-year.

Trend positive
"With the existing economic trend ongoing we expect the business environment to continue improving gradually. Once the domestic consumption orientated industries join the more active performance of exporters in the second half of the year, we expect the investment projects financing demand to increase further. However the faster growth in consumer and mortgage loan market is likely to remain caped by high unemployment rate and limited purchasing power of private individuals,” dr. Vygintas Bubnys said.

As a result of continued focus on service quality and consistent efforts to increase the number of customers who choose DnB NORD as their home bank and actively use various services of the Group, throughout the year the deposit portfolio peaked over the last three years. At the end of December the deposit portfolio of private individuals and legal entities made up LTL 4.3 billion. The deposit portfolio of AB DnB NORD bankas grew by 27.1 percent year-on-year.

Heading towards the new brand name
An important event to AB DnB NORD Bankas in 2010 was the fact that in late December the Norway's largest financial institution DnB NOR became the sole shareholder of DnB NORD group. On Thursday, during the presentation of 2010 results to investors in Oslo, DnB NOR announced its plans to change the name into DNB of the entire group, including DnB NORD, by the end of the year.

"The new name of the bank will emphasise that upon successful completion of the integration process we will become an integral part of Norway's largest financial institution, “said dr. Vygintas Bubnys.

The proposed new brand name DNB stands for Den Norske Bank, which translated into Lithuanian means the Norwegian bank.

The new name is subject to approval of shareholders of DnB NOR. DnB NOR is working with both Norwegian and international agencies on a graphic design and colours of the new logo.

DnB NOR group in Norway and internationally includes such well known brands as Postbanken,  Nordlandsbanken, Cresco, Carlson, Vital, Monchebank, DnB NORD, etc.

To view DnB NOR Group’s 2010 results, please visit: www.dnbnor.com