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IMPROVED RESULTS, BUT DEN NORSKE LOAN LOSSES REMAIN HIGH

 IMPROVED RESULTS, BUT DEN NORSKE LOAN LOSSES REMAIN HIGH
 OSLO, Norway Aug. 18 /PRNewswire/ -- In the first half of 1992 Den norske Bank Group recorded an ordinary net loss of Norwegian kroner (NOK) .162 million, of which NOK 560 million referred to the second quarter. During the first half of the year the bank initiated measures which improved operating results in most areas. The net loss has narrowed, in spite of large loan losses in Realkreditt and losses on equities trading.
 ''Although loan losses in Den norske Bank Group are still at an unacceptably high level, developments are pointing in the right direction,'' says group managing director Finn A Hvistendahl, commenting on the second quarter figures.
 ''Net interest income has been enhanced,'' he adds, ''while loan losses and operating expenses have been reduced. The rate of improvement is, however, affected by general economic conditions in Norway as well as the situation in the securities market.''
 Den norske Bank Group recorded an operating profit before loan losses and write-downs of NOK 1,014 million for the first half of the year, as against NOK 1,154 million in the first half of last year. Viewed separately, figures for the second quarter show an operating profit of NOK 545 million, representing an improvement of NOK 76 million compared with the first quarter. The accounts for the first half of 1992 have been charged with NOK 188 million in net write-downs, profits and losses on the sale of fixed assets and NOK 1,978 million in losses on loans and guarantees. The ordinary net loss for the first half of 1992 was NOK 1,162 million, compared with NOK 921 million in the same period a year earlier.
 Enhanced net interest income
 Net interest income for the first half was NOK 2,332 million, up by NOK 78 million compared with the first half of last year. Interest income in the second quarter of 1992 also showed an improvement on the first quarter. ''We find this satisfactory, particularly in view of the reduction in lending volume of around NOK 7.5 billion from the first to the second quarter,'' says Hvistendahl.
 Losses on securities
 Operating income was NOK 1,091 million in the first half, NOK 258 million below the year-earlier figure, mainly due to losses on securities. Net losses on securities for the first two quarters of 1992 were NOK 77 million, compared with profits of NOK 141 million for the same period of 1991.
 Hvistendahl points out, however, that income from trading in foreign exchange and financial instruments has shown clear improvement, having risen by NOK 111 million from the first to the second quarter and now on a level with the year-earlier figure.
 Continued cost cuts
 Cuts in operating expenses are in line with plans. Expenses in the first half of the year came to NOK 2,408 million, which is NOK 189 million below the comparable figure a year earlier, including Realkreditt. The full impact of the cost-cutting measures implemented this spring is expected to be realised in the second half of the year.
 ''The first-half figures confirm that we are in line with the projected costs reductions,'' states Hvistendahl.
 Loan losses high but abating
 Den norske Bank Group recorded NOK 1,978 million in loan losses for the first half of the year, which is NOK 241 million lower than in the same period of 1991. The 1992 figures include losses in Realkreditt. Excluding Realkreditt, the improvement shown was NOK 415 million.
 Developments within the corporate and private customer markets were positive, with lower losses in the second quarter relative to the first quarter of this year. Losses continue to be high, however, within important sectors such as real estate. In addition, shipping losses are expected to be higher in 1992 than last year.
 Capital ratio of 9.0 per cent
 ''The completion of the preference share offering was the most important single event for Den norske Bank Group in the first half of the year,'' continues Hvistendahl. The capital increase was the final step in fulfilling the agreement with the Government Bank Insurance Fund, which provided the bank with a total of NOK 5.9 billion in new core capital and gives the government a 55.5 per cent stake in the bank. With total assets of NOK 182.6 billion and NOK 168.8 billion in risk- weighted assets, the bank's capital ratio at the end of the second quarter was 9.0 per cent.
 ''Den norske Bank,'' concludes Hvistendahl, ''was thus able to maintain substantial holdings in private hands, which forms a sound foundation for the bank's operations.
 -0- 8/18/92
 /CONTACT: Den norske Bank Group, Corporate Communications (Norway) (+47) 2 48 16 91 or (+47) 2 48 10 50 CO: Den norske Bank Group ST: IN: FIN SU: ERN


DC -- NY012 -- 0850 08/18/92 09:39 EDT
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Date:Aug 18, 1992
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