Robust core earnings

Press release
KBN’s net interest income was NOK 399 million in the first quarter, up from NOK 379 million for the same period of last year mainly due to lower funding costs. During the first three months of 2015 KBN’s lending to the local government sector increased by more than three per cent totalling NOK 254.6 billion.

- KBN’s first quarter results are solid owing to operations going well and to robust core earnings. Our loan portfolio is growing due to high level of investments in the local government sector and steady demand for long-term loans with fixed interest rate, explains KBN’s President & CEO, Kristine Falkgård.  

Profit after tax for the period was NOK 39 million compared to NOK 230 million for the same period of last year. The financial results are influenced by fluctuations in the fair value of financial instruments totalling NOK 308 million during the first quarter of 2015 compared to unrealised losses of NOK 30 million during the first quarter of 2014. During the first quarter of 2015 KBN experienced a reduction in borrowing costs. In KBN’s balance sheet tighter credit spread on KBN’s own bonds show up as unrealised losses on existing contracts. These unrealised losses will be reversed when KBN’s debt matures.

Green funding

In the first quarter KBN issued new bonds totalling NOK 32.2 billion across 145 issues. KBN issued its second green bond in February, a USD 500 million 10-year transaction.

- KBN experiences strong demand for its bonds. We are proud to be a significant player in the market for green bonds. KBN wants to take increased action when it comes to environmental sustainability. Our goal is to contribute to sustainable social development. We want to do our share in order to support Norwegian municipalities in their climate friendly aspirations by providing stable and affordable financing. We are well pleased with our second green bond being so well received, enabling us to provide the local government sector with green financing for investments in climate friendly projects, says Kristine Falkgård.

Building capital

KBN is adequately capitalised according to government requirements. In the National Budget for 2015 the government proposed an increase in KBN’s equity of NOK 1.4 billion. The increase will ensure that KBN achieves the increased capital requirements for systemically important institutions by 1 July 2015. KBN adapts its business to meet capital requirements with a satisfactory margin. 

For further information, please contact:
President & CEO Kristine Falkgård:   tel +47 2150 2010/ +47 484 01 738
Chief Communications Officer Tor Ole Steinsland: tel +47 2150 2016/+47 982 47 016