Norway's largest bank DNB reported higher-than-expected second-quarter earnings on Thursday and said it expected loan growth to pick up in the second half of 2024, supported by a stable Norwegian economy.

"Increasing wages and more stable interest rates have helped shift the mood among our customers," CEO Kjerstin Braathen said in a statement.

DNB's net profit rose 13.4% from a year earlier to 10.77 billion Norwegian crowns ($1.01 billion) in the April-June quarter. Analysts had expected 9.59 billion crowns on average, a poll compiled by the bank showed.

Braathen said DNB saw an increase in mortgage applications during the quarter, and it expects loan growth to pick up somewhat in the second half of the year, after a muted first half.

Its net interest income, showing income from lending and deposits, grew by 3.9% to 15.82 billion Norwegian crowns in the quarter, also beating analysts' expectations.

While high interest rates have boosted profits at Nordic banks over the past two years, loan losses have also risen. Some central banks in the region have recently started to ease their monetary policy, dampening lenders' earnings outlooks.

Norway's central bank has said it expects to make the first rate cut in 2025, pushing back its earlier prediction for a September cut, with policy rates standing at 16-year highs of 4.50%. ($1 = 10.7034 Norwegian crowns)

(Reporting by Greta Rosen Fondahn in Gdansk; editing by Milla Nissi)