The Portfolio Management unit manages bonds with longer maturities. Bonds may be sold or lent out for short term liquidity operations, in which case they do not constitute a part of the liquidity buffer. Additionally, the Bank receives bonds as collateral.
The market value of the bond portfolios grew from EUR 6,264 million at the end of 2015 to EUR 6,736 million at the end of 2016, and the net of bonds received and given as collateral was EUR 112 million, resulting in a total of EUR 6,848 million at end of 2016.
The bond portfolios contain both interest risks and credit spread risks directly affecting NIB, while securities movements for collateral purposes do not affect NIB’s income. The bond portfolios include bonds held both at amortised cost and at fair value, and with floating and fixed-rate coupons.
During 2016, the currency distribution of the bond portfolios became more diversified, with increased holdings of bonds denominated in USD and DKK, while the EUR share decreased. The rating and instrument distribution, however, were largely unchanged. The instrument distribution of the portfolio can be seen here:
Bond instruments in 2016
In 2016, Portfolio Management contributed EUR 63.2 million to NIB in net interest income earnings.