Increased interest income and growth in green lending
KBN’s core earnings (1) were NOK 1,276 million in 2024, as compared to NOK 1,211 million in 2023.
Result for the year
Net interest income was NOK 2,253 million as compared to NOK 2,105 million in 2023. Money market interest rates were higher in 2024 than in 2023, which is the main reason for the increase.
– KBN saw a good level of demand in 2024 for long-term instalment loans. The demand was particularly driven by the largest municipalities and county authorities, which had the highest lending growth. KBN’s portfolio of green lending for investment in climate and environmentally friendly projects increased by 25.0% in 2024, equivalent to NOK 13 billion, says CEO of KBN, Jannicke Trumpy Granquist.
KBN’s result for the period for 2024 as a whole was a profit of NOK 1,474 million as compared to a profit of NOK 1,432 million in 2023.
KBN’s total assets at 31 December amounted to NOK 568 billion, compared to NOK 522 billion at the end of 2023. The increase was largely due to the weakness of the Norwegian krone and to lending growth.
Lending
KBN saw a good level of demand in 2024 for long-term instalment loans. There was also good demand for fixed rate loans, and this is thought to reflect the favourable market conditions for this type of loan from time to time in 2024. As in previous years the main areas of investment for which loan financing was used were schools, health and care, and water and wastewater.
At 31 December 2024, KBN’s market share, based on its aggregate customer financing and after adjusting for loans from the Norwegian State Housing Bank, was 50.2% (2), a decrease from 51.1% at the close of 2023. The decrease was partially due to a high rate of debt growth in the sector, but also the strong level of competition for new loans from time to time in 2024.
KBN’s total portfolio of green lending for investment in climate and environmentally friendly projects increased by 25.0% in 2024, equivalent to NOK 13 billion for 72 projects. At the end of 2024, 152 municipalities, seven county authorities and a total of 84 other customers had green loans from KBN, and outstanding green lending totalled NOK 68 billion (3). The environmental impact of these loans is reported annually in KBN’s separate Impact Report.
Funding
KBN’s AAA/Aaa credit ratings ensure it has stable access to funding on favourable terms, which benefits the local government sector. KBN pursues a diversified funding strategy that ensures it has a broad investor base and low refinancing risk.
New long-term borrowings amounted to NOK 92 billion in 2024, as compared to NOK 77 billion in 2023. KBN enjoyed good access to funding from the capital markets throughout 2024. Europe, the USA and Asia are KBN’s most important markets for funding. KBN issued bonds in 8 currencies in both 2024 and 2023.
Allocation of surplus
The Board of Directors of KBN proposes the following allocation of the surplus for the 2024 accounting year: NOK 700 million to be paid in dividend to the owner, NOK 162 million to be paid in interest to Additional Tier 1 capital holders, and NOK 612 million to be transferred to other equity. Dividends are decided by the Annual General Meeting.
