DNB SWOT and PESTLE Analysis

Strengths

1. Large market share: DNB's market share is more than 25% across all its offerings. It has a strong customer base comprising of 2.1 million retail customers, 1.3 million active internet bank users and 220,000 corporate clients. DNB offers Norway's largest mobile banking service, with 758,000 users in the 2nd quarter of 2017. DNB is the largest asset management company in Norway having around 486,000 mutual fund clients in Norway and upto 120 corporate clients in Norway and Sweden.

2. Operations in 21 countries: DNB has its operations in the US, Brazil, Estonia, Chile, Denmark, China, Finland, Greece, Latvia, Germany, Poland, Lithuania, Luxembourg, Norway, Sweden, the UK, India, and Singapore. Having a presence in numerous countries gives a brand broader and more diversified market base, thus helping the brand increase its revenue and profits. Also, brand equity/image is enhanced with a presence in multiple nations.

3. Strong capital position: DNB has a stable core shareholder, that is, the Norwegian government having a 34% stake which represents a long-term commitment by the government and is willing to extend its support. Having the government on its side is the best that any company can think of.

4. A quarter of Norway uses Vipps: Vipps is DNB’s response to companies such as Facebook, Google, and Apple venturing in the mobile payments service. According to TCS, 25% of Norway’s population uses Vipps as of March 2016. Also, 106 Norwegian banks have decided to join hands in order to create one single, strong and distinct mobile wallet for all Norwegian customers. DNB will still hold 52% of stake in Vipps to maintain control.

Weaknesses

1. Inherent risks in Insurance sector: The traditional business models of insurance sector combined with regulations offer inherent operational risks, market risks and policyholder guarantees.

2. Possible real estate bubble: According to Goldman Sachs, Norway is constructing houses at a faster rate than the demand . Households Debts amount to 101 %of GDP in the first quarter of 2017 and the real estate market is believed to have peaked.

Opportunities

1. New Insurance markets: Opportunities of insurance have been growing across Asia-Pacific. Swiss Re, global reinsurance giant, forecasts a growth of nearly 8% in 2017 and 9% in 2018. China’s One Belt One Road initiative will spearhead this growth with increasing demand for commercial insurance.

2. Mergers & Acquisitions: DNB Bank ASA has entered into a joint venture with Swedish Nordea Bank AB to provide banking and financing services in the Baltic states, that is, Lithuania, Latvia, and Estonia. Both combined will emerge as 2nd largest player with a market share of around 20%.

The unpublished sections of the entire SWOT analysis is available in the 'Complete Report' on purchase.

Political

1. Stable government: We can establish that Norway remains at a superior balance than any other nation with regards to economic and political stability. Norway has dependably been a government with definitely no resistance weights. This is proof of political fulfilment among its masses and a steady guarantee for the future too.

2. Rising Tensions with Russia: Norway’s decision in Jan’17 to extend the presence of some 330 US marines on Norway’s soil for a six-month training on winter warfare, and to participate in joint exercises might cause destabilization in the region. As pointed out by the Russian embassy, it is against the policy of the Norway Government to deploy foreign military bases in times of peace.

Economic

1. Government Pension Fund Investments: Norway's $1 trillion oil fund, namely Government Pension Fund has prompted its government to divert core debt holdings into dollars, euros, and sterling, dropping Japanese and developing business sector bonds by and large.

2. Decrease in the unemployment rate: As measured by Norway’s labor force survey, there has been a drop in unemployment rate to 4.2% in Jan’17 from 5.0% in Jul’16. Increased employment leads to purchasing power, thus involving financial services.

Social

1. World’s Happiest Country: Norway, climbing up 4 places, has been ranked as the World’s Happiest Country according to the World Happiness Report 2017 released by UN. Happiness of a country is measured using factors such as freedom, honesty, health, caring, income, generosity and good governance and helps drive spending.

The unpublished sections of the entire PESTLE / PESTEL analysis is available in the 'Complete Report' on purchase.