Kommunalbanken AS
Kommunalbanken AS
08/11/2022 | Press release | Distributed by Public on 08/11/2022 08:45
KBN: Good growth in KBN’s core earnings - turmoil in the financial markets impacted KBN’s unrealised profit and loss
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KBN: Good growth in KBN's core earnings - turmoil in the financial markets impacted KBN's unrealised profit and loss
KBN's net interest income in the second quarter of 2022 was NOK 477 million as compared to NOK 364 million in the same period in 2021.
- The second quarter saw good growth in KBN's core earnings. At the same time, turmoil in the financial markets impacted KBN's unrealised profit and loss, says CEO Jannicke Trumpy Granquist.
In the second quarter of 2022, KBN recognised unrealised losses on financial instruments totalling NOK 583 million, while in the second quarter of 2021 it recognised unrealised losses totalling NOK 121 million. KBN's lending portfolio decreased by NOK 4.0 billion in the second quarter of 2022 primarily as a result of KBN's desire to reduce its provisions of loans with maturities of 12 months and under. KBN's result for the period in the second quarter of 2022 was a loss of NOK 77 million as compared to a profit of NOK 119 million in the second quarter of 2021. The decrease in KBN's profit for the period was the result of unrealised losses on financial instruments caused by market turmoil.
KBN's core earnings [1] totalled NOK 342 million in the second quarter, compared to NOK 195 million in the second quarter of 2021.
KBN's unrealised gains and losses are expected to reverse, either as market conditions normalise or as the instruments approach maturity.
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 1.5 billion in the second quarter, as compared to NOK 0.9 billion in the second quarter of 2021. The projects financed by a green loan from KBN in the second quarter of 2022 include a recycling centre in Molde, a new lower secondary school and nursery in Malvik, and electric cars and charging points in Ringsaker.
- We want to help our customers to succeed in achieving their climate objectives, therefore we have a strategic focus on green lending. KBN has set a target of green loans representing at least 12% of its lending portfolio by the end of 2022. We are pleased to see that green lending now represents 11.4% of the overall lending portfolio, says CEO Jannicke Trumpy Granquist.
Results for the first six months of 2022
KBN's net interest income in the first half of 2022 was NOK 913 million as compared to NOK 748 million in the same period of 2021. The increase was primarily due to higher interest rates in combination with higher lending margins.
KBN's result for the period in the first six months of 2022 was a loss of NOK 429 million as compared to a profit of NOK 516 million in the same period in 2021. The decrease was due to unrealised losses on financial instruments in 2022, which were caused by the turmoil in the global financial markets.
Future prospects
The level of demand for KBN-issued bonds continues to be good, and the increase in the credit spreads on KBN's bonds has been relatively moderate. This means that KBN is in a good position to improve its profitability and to further strengthen its long-term capitalisation and lending capacity.
[1]: Profit after tax for the quarter adjusted for unrealised gains or losses on financial instruments after tax and the portion allocated to owners of additional Tier 1 capital. This performance measure is included to give relevant information about the company's underlying operations.
For further information, please contact: Harald Jacobsen, Head of Communications and Sustainability
Tel.: +47 995 38 005
E-mail: [email protected]
- The second quarter saw good growth in KBN's core earnings. At the same time, turmoil in the financial markets impacted KBN's unrealised profit and loss, says CEO Jannicke Trumpy Granquist.
In the second quarter of 2022, KBN recognised unrealised losses on financial instruments totalling NOK 583 million, while in the second quarter of 2021 it recognised unrealised losses totalling NOK 121 million. KBN's lending portfolio decreased by NOK 4.0 billion in the second quarter of 2022 primarily as a result of KBN's desire to reduce its provisions of loans with maturities of 12 months and under. KBN's result for the period in the second quarter of 2022 was a loss of NOK 77 million as compared to a profit of NOK 119 million in the second quarter of 2021. The decrease in KBN's profit for the period was the result of unrealised losses on financial instruments caused by market turmoil.
KBN's core earnings [1] totalled NOK 342 million in the second quarter, compared to NOK 195 million in the second quarter of 2021.
KBN's unrealised gains and losses are expected to reverse, either as market conditions normalise or as the instruments approach maturity.
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 1.5 billion in the second quarter, as compared to NOK 0.9 billion in the second quarter of 2021. The projects financed by a green loan from KBN in the second quarter of 2022 include a recycling centre in Molde, a new lower secondary school and nursery in Malvik, and electric cars and charging points in Ringsaker.
- We want to help our customers to succeed in achieving their climate objectives, therefore we have a strategic focus on green lending. KBN has set a target of green loans representing at least 12% of its lending portfolio by the end of 2022. We are pleased to see that green lending now represents 11.4% of the overall lending portfolio, says CEO Jannicke Trumpy Granquist.
Results for the first six months of 2022
KBN's net interest income in the first half of 2022 was NOK 913 million as compared to NOK 748 million in the same period of 2021. The increase was primarily due to higher interest rates in combination with higher lending margins.
KBN's result for the period in the first six months of 2022 was a loss of NOK 429 million as compared to a profit of NOK 516 million in the same period in 2021. The decrease was due to unrealised losses on financial instruments in 2022, which were caused by the turmoil in the global financial markets.
Future prospects
The level of demand for KBN-issued bonds continues to be good, and the increase in the credit spreads on KBN's bonds has been relatively moderate. This means that KBN is in a good position to improve its profitability and to further strengthen its long-term capitalisation and lending capacity.
[1]: Profit after tax for the quarter adjusted for unrealised gains or losses on financial instruments after tax and the portion allocated to owners of additional Tier 1 capital. This performance measure is included to give relevant information about the company's underlying operations.
For further information, please contact: Harald Jacobsen, Head of Communications and Sustainability
Tel.: +47 995 38 005
E-mail: [email protected]