Ministry of education tashkent financial institute department of economics

Picture 3. Balance sheet of DNB ASA Group (2017-2021) ⁹
The internal control process for financial reporting follows the general framework of internal control at DNB. Financial and environmental, social and corporate governance (ESG) risks have been integrated into the credit process, also discussing DNB's work on climate risks in the annual report.
As part of the audit, the Audit Group assesses the established internal control over financial reporting in individual processes. Annually, the state auditor prepares a report summarizing the results of the financial audit. The report reports on any weaknesses and shortcomings in the internal control of financial reporting. The report is sent to those who are responsible for financial reporting in the units and companies audited for comments before they are considered by the auditor committee and the board of directors of DNB ASA.
The recovery of the Norwegian economy continued through most of the fourth quarter, although activity levels eased slightly in December due to the outbreak of the Omicron variant virus following infection control measures. Norway's key policy rate was increased by an expected 0.25% in December, with five additional rate hikes expected before the end of 2024 Strengthening the Norwegian economy coupled with strong capital conditions at the end of 2021 means DNB is well poised for further growth and dividend policy .



Picture 4. Income Statement of DNB ASA Group (2017-2021) ¹⁰.

Picture 5¹¹. Key figures and alternative performance measures.
Profit for the quarter was NOK 6,155 million, an increase of NOK 881 million from the previous year. Compared to the previous quarter, profit decreased by NOK 728 million. Earnings per share for the quarter was NOK 3.79 compared to NOK 3.28 in the prior year and NOK 4.29 in the third period. quarter of 2021. Tier 1 core capital ratio (CET1) was 19.4 ppm. % compared to 18.7% a year earlier and 19.2% last year. third quarter of 2021. The leverage ratio was 7.3% compared to 7.1% in the previous year. fourth quarter of 2020 and from 6.8 percent in the third quarter of 2020. 2021 Return on equity (ROE) ended at 10.3%, which is positive. under the influence of stable performance in consumer segments and an increase in net interest income. The corresponding figures were 8.9% in Q4 2020 and 11.4% in Q3 2021. The Board of Directors is proposing a 2021 dividend of NOK 9.75 per share, or a total of NOK 15,116 million. Profitable growth in volumes, lower long-term financing costs and a higher equity interest rate driven by a rise in the Norwegian krone money market rate led to an increase in net interest income of NOK 806 million, or 8.5 percent from the fourth quarter of 2020. Compared to the third quarter of 2021, net interest income increased by NOK 519 million, or 5.3 percent, due to increased volumes and higher equity interest.
Net other operating income was NOK 4,348 million in the fourth quarter, which is NOK 501 million more than in the corresponding period in 2020. The increase was driven by net fees and charges from asset management and investment banking, which were at record highs this quarter. Compared to the third quarter of 2021, net other operating income decreased in NOK 229 million due to a negative impact on other market market value. the impact of adjustments and credit spreads on bonds and loans. Net commissions and fees increased by NOK 601 million.
The stable performance across all product lines has had a positive impact. Operating expenses amounted to NOK 6,427,000,000. fourth quarter, at a comparable level to the corresponding quarter last year. Operating expenses were affected by higher wages and other staff costs associated with an increase in staff and higher activity. Compared to the previous quarter, operating expenses increased by NOK 675 million, driven by high performance and higher wages and fees. Impairment of financial instruments amounted to NOK 275 million in the fourth quarter of 2021.
This is an improvement from the fourth quarter of last year, when there was an impairment of the provisions of NOK 1,250 million, and showed a net reversal of NOK 200 million in the third quarter of 2021. Impairment provisions in the quarter were attributable to several specific customers in the industry's corporate customer segment.
The purpose of DNB ASA is to own or have interests in other banking, insurance and finance businesses and related activities, subject to prevailing Norwegian law.
Future prospects¹²
The Group's financial target of a return on equity (ROE) of above 12 percent remains unchanged and the Group intends to meet this target by the end of 2023. The following factors will help DNB meet its ROE target during the target period: increased net interest income as a result of the increase in Norwegian kroner interest rates and growth in loans and deposits, as well as growth in fees and commissions from capital-light products, combined with cost control measures. The 2021 dividend payment will also contribute to a higher return on equity, as well as the effect of the potential acquisition of DNB Sbanken.
Between 2022 and 2023, annual growth in lending volumes is expected to be between 3 and 4 percent, while maintaining a good deposit-to-loan ratio. Norges Bank's own forecasts indicate that the key discount rate is expected to increase by 0.25%. cents in March. Two more increases of 0.25% are also planned. expected, bringing the key rate to 1.25% by the end of 2022. After that, the second half of 2024, raising the key discount rate to 1.75%.
DNB aims to increase net fees and commissions by 4 to 5 percent per annum and to achieve cost-to-revenue ratios below 40 percent. The tax rate is expected to be 23 percent in the future. Supervisory Expectations for Tier 1 Common Shares (CET1) DNB's capital adequacy ratio is 16.3%, including component 2. The forecast was 1.5 percent, while the actual value was 19.4 percent.
The Norwegian Ministry of Finance has announced an increase in the need for a countercyclical buffer from 1 to 1.5 cents per cent effective from June 2022 and an additional increase to 2 percent cents from December 2022. In capex planning, DNB took into account the requirement for a full countercyclical buffer of 2.5 per cent in Norway, which is expected to come into effect in 2023, which will raise supervisory expectations for the CET1 level to 17.6 percent. The supervisor's expectations plus some margin of safety will be the target capital level for DNB. Headroom will reflect expected future capital requirements, including expected future regulatory changes in capital and CET1 market fluctuations.
The potential acquisition of Sbanken will have an initial and immediate impact on the CET1 ratio by about 120 basis points from the expected close, subject to approval by the Norwegian Competition Authority, after DNB appealed the Authority's decision to stop the acquisition.
EU Banking Package, CRR II/CRD V, expected to be effective in 2022 with little impact on CET1 capital adequacy ratio. The Group's dividend policy remains unchanged, with a payout ratio of over 50 percent to cash dividends and a commitment to annually increase the nominal dividend per share.The potential acquisition of Sbanken will have an initial and immediate impact on the CET1 ratio by about 120 basis points from the expected close, subject to approval by the Norwegian Competition Authority, after DNB appealed the Authority's decision to stop the acquisition.
EU Banking Package, CRR II/CRD V, expected to be effective in 2022 with little impact on CET1 capital adequacy ratio. The Group's dividend policy remains unchanged, with a payout ratio of over 50 percent to cash dividends and a commitment to annually increase the nominal dividend per share.