(Bloomberg) -- DNB Bank ASA is doubling a goal for growth in net commissions and fees to prepare for coming interest rate cuts which will put pressure on margins on loans.

The Oslo-based bank raised a target for annual growth in commission and fee income to more than 9% “over time” from 4% to 5%, it said ahead of its capital markets day in London Tuesday. The bank also raised a target return on equity for the coming three years to more than 14% from more than 13% for the prior period.

The bank announced in September that it would eliminate about 500 jobs, or about 5% of its headcount, over the next six months as it braces for lower rates and tougher competition. While the Norwegian central bank is still trailing many other central banks in easing monetary policy, most economists expect it to do so at the end of the first quarter. Falling interest rates tend to hit bank revenue by reducing how much they earn on lending.

DNB maintained targets for a cost-to-income ratio below 40%, a dividend payout ratio of more than 50% and increasing nominal dividends per share per year. Its goal for a capital ratio of more than 16.7% also remains intact.

The bank said the Norwegian economy was sound, with low unemployment and an ability to withstand high interest rates. It also flagged gross cost cuts of about 3 billion kroner ($270 million) through measures including digitalization and automation.

DNB last month announced that it will acquire rival Swedish firm Carnegie Holding AB for about 12 billion kronor ($1.1 billion), a deal still pending approval by regulators.

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