November 20, 2019 / 12:29 PM / 15 days ago

Norway's DNB eyes NOK 2 billion cost cuts by 2022

FILE PHOTO: A woman walks past DNB bank's local office in Riga November 20, 2013. REUTERS/Ints Kalnins

OSLO (Reuters) - Norway’s biggest bank DNB (DNB.OL) will expand its share buybacks in the near term and aims to cut costs by between 1.5 billion and 2 billion Norwegian crowns (£169 million) in the next three years, it said on Wednesday.

Savings will come from initiatives in IT, distribution and automation, as well as structural changes, the bank said in a statement ahead of a strategy update in London.

The company last month said it would buy back 0.5% of its shares by April of next year, but on Wednesday doubled the target to 1%.

DNB maintained its current goal that operating costs should amount to less than 40% of operating income. In the third quarter, the cost-income ratio stood at 38.8%.

It also increased its targeted capital level to 17.9% of so-called common equity Tier 1 capital (CET1), from the earlier ratio of 16.8%, and said it was well positioned for future capital requirements.

The bank maintained that it aims to reach a return on equity (ROE) above 12% in the same period. By the end of September, the year-to-date ROE was 12.1%.

Reporting by Victoria Klesty, editing by Terje Solsvik

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