Solid first quarter performance for KBN
KBN’s net interest income in the first quarter was NOK 561 million compared to NOK 502 million in the same period of 2016. The increase is due to strong underlying operations and high demand for loans throughout the quarter.
- We are satisfied with the first quarter results. The underlying operations are strong as indicated by our solid margins. Given the strength of the results KBN will continue to build capital to meet increased regulatory requirements while at the same time building financial capacity to provide our customers with cost-effective financing, says KBN’s President & CEO, Kristine Falkgård.
Profit after tax for the first quarter 2017 was NOK 360 million compared to NOK 257 million in the same period of last year. The increase is due to strong underlying operations and lending growth throughout the quarter as well as to lower credit spreads on financial instruments compared to the first quarter of 2016. Unrealised losses in the first quarter is due to lower credit spreads on KBN’s debt
Lending
KBN’s new disbursements in the first quarter amounted to NOK 17.1 billion compared to NOK 14.0 billion in the first quarter of 2016. KBN has seen demand for loans with variable maturities throughout the quarter and the lending portfolio has increased in all loan categories. KBN regards long-term financing to be its core product. KBN’s total lending portfolio has increased by 3.4% during the first three months compared to 1.7% for the first quarter of 2016.
- We find that the local government sector has considerable investment requirements. A number of our customers have refinanced from short-term loans in the capital market to loans with a longer maturity. KBN’s role as the most important provider of long-term financing is then particularly evident, says Kristine Falkgård.
Stable access to funding
KBN’s funding activities in the first quarter have been stronger than the corresponding period of 2016 due to an increase in financing requirements and a more positive underlying market. A total of NOK 47 billion has been issued in bonds.
At the end of the first quarter of 2017 KBN had a common equity Tier 1 capital adequacy ratio of 16.67%. KBN achieved a return on equity after tax of 12.57% in the first three months of 2017.