Skip to main content
This webpage does not support Internet Explorer anymore. We recommend changing browser, to increase your online safety. Read more on Microsoft's webpages
bygg

Stable margins and continued growth in green lending

KBN’s net interest income in the third quarter of 2021 was NOK 413 million as compared to NOK 437 million in the same period in 2020. The third quarter saw good growth in KBN’s green lending, and its portfolio of green loans grew by NOK 2.1 billion in the quarter.

29.10.2021 / News

KBN’s core earnings1 totalled NOK 232 million in the third quarter, compared to NOK 265 million in the third quarter of 2020. The main explanation for the decrease in KBN’s core earnings was lower net interest income. The decrease in money market rates in the second quarter benefitted KBN’s customers in the form of lower lending rates with effect from 2 June 2021. Money market rates increased in the third quarter in anticipation of the expected increase in rates by Norges Bank.

- We are experiencing stable margins and continued growth in green lending. The total loan portfolio is somewhat reduced in the third quarter. This is partly due to lower demand for financing and the fact that KBN has reduced its presence in the market for lending with shorter maturities where margins are under pressure. We have thus strong capacity when the expected demand for loans with longer maturities picks up towards the turn of the year, comments Jannicke Trumpy Granquist, CEO of KBN.

KBN’s profit for the period in the third quarter of 2021 totalled NOK 450 million as compared to NOK 517 million in the third quarter of 2020. In the third quarter of 2021 KBN recognised unrealised gains on financial instruments totalling NOK 271 million, while in the third quarter of 2020 it recognised unrealised gains totalling NOK 317 million. KBN’s fixed rate loans, which are carried at fair value, contributed an unrealised loss totalling NOK 1 million in the third quarter of 2021, as compared to an unrealised gain totalling NOK 159 million in the third quarter of 2020. 

Strong growth in green lending

KBN continued to experience a good level of growth in its green lending, and its portfolio of green loans increased by NOK 2.1 billion in the quarter. KBN’s portfolio of green loans increased by NOK 4.5 billion or equal to 15.6% in the first nine months of the year. The projects financed by a green loan from KBN in the third quarter include new trams procured by the City of Oslo, Rana municipality’s construction of a new school building, and Trondheim municipality’s construction of Nidarvoll school.

KBN’s lending portfolio totalled NOK 314.4 billion at the end of the third quarter of 2021. In the third quarter of 2021 the lending portfolio decreased by NOK 3.8 billion. In the first nine months of 2021 the lending portfolio also decreased by NOK 3.8 billion. The decrease in the size of KBN’s lending portfolio in the first nine months of 2021 and the difference compared with 2020 are due to KBN reducing its lending with maturities of 12 months and under. This is because new loans of this type are not sufficiently profitable for KBN. As before, there continues to be a trend for increased demand for loans with no instalment payments prior to maturity.

KBN’s funding activities in the third quarter of 2021 were less extensive than in the third quarter of 2020 due to KBN having a good level of liquidity and less need for refinancing, as well as to the Norwegian krone being somewhat weaker. New borrowings in the third quarter of 2021 totalled approximately NOK 8.0 billion through five bond issues in four currencies, as compared to NOK 24 billion in the same period in 2020. 

Despite the modest volume of funding in the third quarter, KBN achieved a good level of diversification in terms of markets and currencies, and issued bonds in US dollars, British pounds, Hong Kong dollars and Australian dollars.

In the first nine months of 2021 KBN’s new borrowings totalled NOK 72 billion as compared to NOK 79 billion in the first nine months of 2020.

At the end of the third quarter of 2021, KBN had a common equity Tier 1 capital adequacy ratio of 18.8%, a Tier 1 capital adequacy ratio of 21.7%, and a total capital adequacy ratio of 24.2%. The capital adequacy ratio requirements imposed by the authorities at the end of the second quarter were 15.1% (common equity Tier 1 capital), 16.6% (Tier 1 capital) and 18.6% (total capital). On 29 June KBN was assigned an updated Pillar 2 requirement of 2.2% by the Financial Supervisory Authority of Norway, which represented a decrease of 0.1 percentage points. The Norwegian Ministry of Finance has decided that the counter-cyclical buffer requirement, to which KBN is subject, will increase by 0.5 percentage points with effect from 30 June 2022.

KBN’s leverage ratio at the end of the third quarter was 3.9%, as compared to the requirement of 3.0%.

Download full report (pdf)

Contact Us

  • Tor Ole Steinsland

    Chief of Staff
    +47 98 24 70 16

    Employed since 2012. Steinsland previously worked as partner and advisor in PR agency Kreab Gavin Anderson. He has been employed as a financial journalist in various print and broadcast media. Steinsland has a finance degree in from Norwegian School of Economics and Business Administration.