Ratios and key figures

(Amounts in EUR million unless otherwise stated) 2016 2015
Net interest income 242 247
Profit before net loan losses 232 218
Net Profit 212 215
Loans disbursed 3,373 2,716
Loans agreed 4,363 2,830
% of loans achieving good or above mandate 95.7% 94.1%
Loans outstanding 16,640 15,627
Total assets 30,178 27,311
New debt issues 6,700 4,276
Debts evidenced by certificates 23,907 20,862
Total equity 3,275 3,146
Equity/total assets (%) 10.9% 11.5%
Profit/average equity (%) 6.7% 7.0%
Cost/income (%) 16.1% 18.8%
Number of employees (average during the year) 192 188

Total comprehensive income

Total operating income increased from EUR 268 million to EUR 276 million and total operating expenses decreased by EUR 6 million resulting in an increase in profit before net losses from EUR 218 million to EUR 232 million. The main driver for the increase in operating income was one off gains related to the implementation of two way credit support annexes (CSAs).

The main change in operating expenses related to the additional depreciation and amortisations recorded in 2015. Net loan losses increased from the low amount in 2015 of EUR 3 million to EUR 20 million in 2016 resulting in a decrease in net profit from EUR 215 million to EUR 212 million.

The Bank separates the foreign currency basis spread from financial instruments used in fair value hedging and this separated amount recorded in “Other comprehensive income” amounted to EUR -28 million. The resulting total comprehensive income for the year amounted to EUR 184 million down from EUR 215 million in 2015.

Net interest income

Net interest income decreased from EUR 247 million in 2015 to EUR 242 million in 2016 mainly due to the continuing lower interest rates. The adverse impact of the negative interest rates has been mitigated by increased volumes of loans outstanding.

Despite the challenging negative rate environment interest income from lending was EUR 150.4 million which was EUR 4.5 million higher than in 2015 due to the mitigating factors described above. Treasury, on the other hand has limited options available to lessen the impact from market conditions and as a result their interest income decreased by EUR 9.5 million to EUR 91.4 million.

Commission income and fees

Fee and commission income was EUR 13 million compared to EUR 12 million in 2015. EUR 0.5 million of the increase relates to commitment fees due to higher volumes. EUR 0.5 million relates to early repayment fees on the prepayment of loans which were also higher than in the previous year.

Net interest income

EUR m

Net interest income

Commission income and fees

EUR m

Commission income and fees

Profit on financial operations

EUR m

Profit on financial operations

Profit on financial operations

The profit on financial operations of EUR 23 million is EUR 12 million higher than in 2015. The result comprises realised profit of EUR 19 million and unrealised profit of EUR 4 million. This year’s result includes one off gains related to cost compensation from counterparties for the implementation of two way credit support annexes (CSAs). Also contributing are buybacks of issued bonds and termination of related swaps, sales of amortised cost bonds, as well as income from claims. The unrealised profit is driven by positive valuation effects from spread tightening earlier in the year and hedge accounting valuations.

Total operating expenses

Although other administrative expenses are EUR 2 million higher than in 2015, largely related to IT expenditure the total operating expenses decreased by EUR 6 million mainly as a result of the decrease in depreciation due to additional depreciation and amortisations recorded in 2015.

Net loan losses

Net loan losses consist of a reduction of the collective impairment provision of EUR 19 million, an increase of EUR 41 million in individually assessed impairments and recovery on claims of EUR 2 million. The credit quality of the total loan portfolio remains high and the Bank continues to adopt a conservative approach to loan impairment provisions.

Other comprehensive income

The bank separates the foreign currency basis spread from financial instruments used in fair value hedging and this separated amount is recorded in “Other comprehensive income” (OCI). The valuation of foreign currency basis spread will be zero upon maturity and therefore the amount recorded in OCI will not be reclassified to the income statement.

Operating expenses

EUR m

Operating expenses

Net loan losses

EUR m

Net loan losses

Balance Sheet

(Amounts in EUR millions) 2016 2015
Cash and cash equivalents 4,456 2,666
Financial placements 6,600 6,110
Loans outstanding 16,640 15,627
Derivatives 2,157 2,558
Other assets 325 350
Total assets 30,178 27,311
     
Equity 3,275 3,146
Owed to credit institutions 1,329 1,467
Debts evidenced by certificates 23,907 20,862
Derivatives 1,444 1,481
Other liabilities 223 355
Total liabilities and equity 30,178 27,311

Loans outstanding

During the year, NIB experienced strong demand for its long-term financing resulting in an increase in loans outstanding from EUR 15,627 million to EUR 16,640 million as at 31 December 2016. The Bank signed 58 loan agreements (2015: 45) and invested in eight green bonds with a combined value of EUR 4,363 million (2015: EUR 2,830 million). Disbursements totalled EUR 3,373 million (2015: EUR 2,716 million).

Loans outstanding development during 2016

EUR m

Loans outstanding development during 2016

Funding

During the year, NIB raised EUR 6.7 billion (EUR 4.3 billion) in new funding through 58 issues in 9 different currencies with an average maturity of five years. The most significant transactions included, the three-year, USD 1.25 billion global benchmark in February which was followed by a five-year USD 1 billion benchmark in August and in September, NIB issued a global USD 1 billion bond, its third and final of 2016. The Bank continued to issue NIB Environmental Bonds and a total of EUR 763 million was issued during the year.