DNB More Leveraged Than Other Nordics To Healthy Ongoing Commercial Loan Demand

Nordic banks stand out in a lot of positive ways. They’re well-capitalized, generally have good efficiency ratios, and usually run relatively conservatively. They also skew much better than average where credit quality is concerned; between the underlying health of the Nordic economies and underwriting discipline, Nordic banks will likely make it through the COVID-19 recession with lower cumulative losses than most other banks across Europe.

Still, there are differences and distinctions among them. DNB (OTCPK:DNHBY) is more leveraged to corporate lending than its peers and appears to have a riskier portfolio as well. The bank is also less leveraged to non-spread sources of income, but generates healthy pre-provision profits that can cover a lot of losses. With so-so return prospects relative to its peers, DNB isn’t my favorite pick among the Nordic banks, but investors with a more bullish outlook on Norway’s economy may find more to like here.

 

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DNB More Leveraged Than Other Nordics To Healthy Ongoing Commercial Loan Demand