Solid first quarter performance for KBN
- We are well satisfied with the first quarter results. The underlying operations are good. Given the strength of the result KBN will continue to provide its customers with cost-effective financing of important local welfare investments in 2016, says KBN’s President & CEO, Kristine Falkgård.
Profit for the first quarter was NOK 257 million as compared to NOK 39 million in the same period of last year. This is mainly owing to an increase in net interest income and decrease in net unrealised losses on financial instruments compared to the first quarter of 2015.
Growth in long-term loans
KBN’s new disbursements amounted to NOK 14.0 billion compared to NOK 16.8 billion in the first quarter of 2015. The lending portfolio increased by 1.7% relative to a 3.0% increase for the same period of last year. KBN prioritized long-term loans in the first quarter and the volume of short-maturity loans decreased.
- We find that municipalities increasingly demand long-term loans which is our core product. At the same time municipalities choose to finance some of their investment requirements using the capital markets, says Kristine Falkgård.
Satisfactory liquidity situation
A satisfactory liquidity situation with less need to raise funding has influenced the level of funding activities in the first quarter compared to the same period of last year. Despite a turbulent market situation KBN has achieved long-term financing on attractive terms throughout the period raising bonds amounting to approximately NOK 20 billion.
At the end of the first quarter of 2016 KBN had a common equity Tier 1 capital adequacy ratio of 14.91%. KBN achieved a return on equity after tax of 9.6% in the first three months of 2016.