The Asset and Liability Management (ALM) unit is responsible for managing NIB’s market risks on the balance sheet. ALM also handles daily cash, including collateral management, and calculates transfer pricing between treasury and the lending operations.
In 2016, the Bank disbursed new loans of EUR 3,373 million and obtained new funding of EUR 6,700 million in nine different currencies.
Short-term money market instruments increased from EUR 2,653 million in 2015 to EUR 4,361 million in 2016 due to record high funding volume. The amount covers the expected net cash outflows of the coming three months. Reverse repos (collateralised placements) are actively used by the ALM unit to reduce the total treasury counterparty exposure. The instrument distribution is shown here:
Money market instruments in 2016
The amount of cash collateral received decreased from EUR 1,449 million at the end of 2015 to EUR 1,311 million at the end of 2016. As NIB moved to two-way credit support annex agreements during 2016, NIB has posted EUR 222 million in cash collateral.
In total, the balance sheet increased from EUR 27,311 million at the end of 2015 to EUR 30,178 million at the end of 2016.
In 2016, ALM contributed EUR 28.2 million to NIB in net interest income earnings.