OSLO, April 23 (Reuters) - DNB, Norway's largest bank, reported a bigger-than-expected first-quarter net profit on Tuesday and said it believed the Norwegian economy was heading for a soft landing.
Net profit declined to 10.2 billion crowns ($928 million) in the January-March period from 10.5 billion a year earlier. Analysts had on average expected 9.69 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 risen and central banks in the region are expected to start easing monetary policy in 2024, dampening the earnings outlook.
In Norway, the central bank has said the first rate cut is currently expected in September, although some economists believe it may take longer before the cost of borrowing is reduced.
"A stronger than expected start to the year adds weight to the belief that the Norwegian economy is heading for a soft landing," DNB CEO Kjerstin Braathen said in a statement.
Loan losses for the first quarter reached 323 million crowns, while analysts had expected a loss of 897 million. This compared with a year-ago reversal of losses that added 79 million to DNB's profits.
DNB's shares are up 5.6% over the past 12 months, lagging a rise of 10% in the Oslo benchmark index.
($1 = 10.9885 Norwegian crowns)
Reporting by Gwladys Fouche and Terje Solsvik, editing by Anna Ringstrom
Source: Reuters