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TURMOIL IN MONEY AND SECURITIES MARKETS IMPAIRS DEN NORSKE BANK THIRD QUARTER RESULTS

 TURMOIL IN MONEY AND SECURITIES MARKETS IMPAIRS
 DEN NORSKE BANK THIRD QUARTER RESULTS
 OSLO, Norway, Nov. 4 /PRNewswire/ -- Den norske Bank Group recorded an ordinary net loss of Norwegian kroner (NOK) 2,464 million for the first three quarters of the year, which is NOK 131 million weaker than results in the first nine months of last year. A net loss of NOK 1,302 million was recorded for the third quarter.
 "The turmoil in the money and securities markets, along with losses on the Norwegian investment company Investa and on Realkreditt's portfolio of commercial loans, have had a negative effect on the positive trends which appeared at the end of the first half of the year," says group managing director Finn A. Hvistendahl. "It is positive that the results in the private customer market show visible improvement, and activity in this area has produced profits so far this year."
 Net interest income in the third quarter was NOK 1,064 million, down NOK 131 million on the second quarter.
 "This is a direct consequence of the extra interest expenses incurred by the bank in connection with the volatility in interest rates in August and September," says the group managing director. "The bank has sought to safeguard customers against short-term fluctuations in the interest rate market."
 Share and bond portfolios weakened, better for foreign exchange and interest rate instruments.
 Other operating income has been cut in half from the second to the third quarter, and has declined by NOK 547 million in the first nine months of the year compared with the corresponding year-earlier period. Negative developments in the stock market from January to September resulted in losses and write-downs on the bank's share portfolio totalling NOK 365 million. In addition, substantial losses on the bond portfolio were incurred in connection with the interest rate turbulence this autumn. Trading in foreign exchange and interest rate instruments showed good results in the third quarter with earnings at NOK 302 million, counteracting the slide in bond prices. During the month of October the value of the share and bond portfolios has gone up again by NOK 225 million.
 Massive cost cuts implemented
 "Looking at the positive aspects, we can ascertain that the enormous effort which the bank has put into improving cost efficiency in recent years has born fruit," says Mr. Hvistendahl.
 "In the current year the bank aims to reduce costs by 10 percent. Since 1988 Den norske Bank's cost levels have been reduced by NOK 1.5 billion. Staff has been reduced by over 3,600 full-time positions and over 100 branches have been closed."
 "I have no doubt that the merger between Bergen Bank and Den norske Creditbank and the subsequent reorganization of the bank were the correct steps to take in view of the recent challenges facing the bank," says Mr. Hvistendahl.
 Reduction in loan losses
 Losses on loans and guarantees have been reduced from NOK 3,785 million in the first three quarters of 1991 to NOK 3,288 million in the corresponding period this year. Loan losses in the third quarter are, however, higher than in the two preceding quarters of the year. A large part of this increase is related to the problems in the financial markets this autumn. The bank is still incurring heavy losses stemming from the property crisis in Great Britain.
 Mr. Hvistendahl emphasizes, however, that the private customer sector, and in most regions of the corporate customer sector, loan-loss levels thus far in 1992 are clearly below those recorded in 1991.
 Capital adequacy
 Den norske Bank had a capital ratio of 8.3 percent at the end of the third quarter, based on risk-weighted assets of NOK 162.3 billion. Total assets as at Sept. 30, 1992, were NOK 183.7 billion. The bank is carrying on discussions with the Government Bank Insurance Fund regarding the strengthening of the capital base.
 -0- 11/4/92
 /CONTACT: Glenda Tefre of Den norske Bank, corporate communications dept., in Norway, +47-2-48-15-98/ CO: Den norske Bank ST: IN: FIN SU: ERN


PS -- NY001 -- 2270 11/04/92 06:52 EST
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Date:Nov 4, 1992
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