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Solid results and good growth in green lending

KBN’s core earnings increased from NOK 1,081 million in 2022 to NOK 1,211 million in 2023.

14.03.2024 / News

Strong growth in lending

Net interest income increased from NOK 1,866 million in 2022 to NOK 2,105 million in 2023. The increase was principally due to rising money market interest rates, which increased in pace with increases in the key policy rate by Norges Bank.

- In the second half of 2023, the capital market was a less attractive source of funding for municipalities and counties. Less competition contributes to lending growth for us, while also showing the importance of KBN as a financial institution. Without sufficient capacity in KBN, the borrowing costs for new loans would have been significantly more expensive for many customers, says CEO of KBN, Jannicke Trumpy Granquist.

KBN’s result for 2023 was a profit of NOK 1,432 million as compared to a loss of NOK 60 million in 2022.

NOK 55 billion in green loans

KBN’s portfolio of green lending for investment in climate and environmentally friendly projects increased by 25% in 2023, equivalent to NOK 11 billion for 114 projects. At the end of 2023, 141 municipalities, five county authorities and 72 other customers had green loans from KBN, equivalent to NOK 55 billion.

- Passing NOK 50 billion in green loans is a milestone we are proud of. We work purposefully and with success to ensure that our green loans are also relevant for small and medium-sized municipalities. Two out of five municipalities now have green loans from KBN and we are experiencing that a growing number of municipalities are working on the transition to a low- and zero-emission society, says Trumpy Granquist.

The environmental impact of these loans is reported annually in KBN’s separate Impact Report. KBN’s Criteria Document for green lending is updated annually in pace with developments in environmental standards.

Weakness of the Norwegian krone resulted in less need for financing

KBN’s AAA/Aaa credit ratings ensure it has stable access to funding on favourable terms, which benefits the local government sector.

New long-term borrowings amounted to NOK 78 billion in 2023, as compared to NOK 87 billion in 2022. The reduction was primarily due to the weakness of the Norwegian krone in 2023, which resulted in a lower financing requirement for KBN. KBN enjoyed good access to funding from the capital markets throughout 2023.

Europe, the USA and Asia are KBN’s most important markets for funding. KBN issued bonds in 10 currencies in both 2023 and 2022. KBN is one of the most active Norwegian issuers of green bonds and is one of the leading participants in the development of green finance in the Nordic region. KBN’s green bonds finance its loans to customers for their green projects.

NOK 700 million in dividend to the owner

The Board of Directors of KBN proposes the following allocation of the surplus for the 2023 accounting year: NOK 700 million to be paid in dividend to the owner, NOK 131 million to be paid in interest to Additional Tier 1 capital holders, and NOK 601 million to be transferred to other equity.

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