|By PR Newswire||
|March 10, 2014 03:30 AM EDT||
THE HAGUE, The Netherlands, March 10, 2014 /PRNewswire/ --
Net profit EUR 283 million
BNG Bank reports a net profit of EUR 283 million over 2013. Despite a substantial increase of the interest result, the core result of the bank, this is a decrease of EUR 49 million compared to 2012, mainly due to the negative contribution from unrealized market value adjustments.
The bank views the reporting year as satisfactory. In addition to maintaining very high market shares in its core client segments, the bank realized a good return for its shareholders. Just as last year, a dividend of 25% of net profit will be proposed to the shareholders.
Market shares remain high, confirming the importance of BNG Bank's role. Around 70% of the total demand for long-term solvency-free lending from the municipal and provincial authorities, housing associations and health-care institutions was fulfilled by the bank. New long-term lending totaled EUR 11.9 billion in 2013 (2012: EUR 11.1 billion). Client demand was primarily driven by refinancing needs. In 2013, investment activity of clients was relatively limited.
In the year under review Standard & Poor's lowered its rating for the State of the Netherlands by one notch, from AAA to AA+, with a stable outlook. In the wake of the above, Standard & Poor's accordingly lowered its rating for BNG Bank. The bank retained Moody's Aaa and Fitch's AAA ratings, the highest possible ratings awarded by the two credit rating agencies. Investors continue to regard BNG Bank as one of the safest banks in the world.
For both refinancing and lending purposes, BNG Bank raised EUR 15.0 billion in
long-term funding in 2013. The increased confidence on the international capital markets in Europe generated a broader supply of long-term funds at attractive prices. This enabled the bank to further bolster its liquidity profile.
Compared to 2012, the 2013 interest result rose by EUR 57 million to EUR 530 million. The increase is mainly attributable to the long-term portfolio's higher volume and improved margin. The result on financial transactions shifted from EUR 88 million positive in 2012 to EUR 5 million negative, mainly due to negative unrealized market value adjustments. The result was also affected by a change in the valuation method applicable to derivatives following changed common market practices. This change could also lead to more volatility in the bank's future results.
BNG Bank closely monitors developments in new laws and regulations in the financial sector. At the end of 2013 it became clear that BNG Bank is to fall under the direct supervision of the European Central Bank within the framework of the Single Supervisory Mechanism (SSM) and will be subject to a comprehensive risk assessment to evaluate the quality of its balance sheet.
The financial prospects for the bank's core client sectors remain not particularly positive. Nevertheless, the bank expects the level of new long-term lending in 2014 to be broadly similar to the level of 2013 given the high demand for refinancing existing loans. In 2014, the interest result is expected to be slightly lower than in 2013, partly due to the persistently low long-term interest rates. Going forward, the result for financial transactions will remain sensitive to the level of economic recovery in the Eurozone.
In view of the persisting uncertainties in the financial markets, BNG Bank does not consider it wise to express an opinion on the level of its net profit for 2014.
BNG Bank will publish its 2013 Annual Report on April 25, 2014 on http://www.bngbank.nl.
Consolidated balance sheet as at December 31, 2013
Amounts in millions of euros
Dec. Dec. 31, 31, 2013 2012 ASSETS Cash and balances with the central banks 1,467 2,834 Amounts due to banks 8,509 10,171 Financial assets at fair value through the income statement 3,532 3,476 Other financial assets 15,494 25,824 Financial assets available-for-sale 9,604 9,018 Loans and advances 92,074 90,725 Investments in associates and joint ventures 53 89 Property and equipment 17 18 Other assets 52 73 TOTAL ASSETS 131,183 142,228 LIABILITIES Amounts due to banks 3,939 6,223 Financial liabilities at fair value through the income statement 3,553 2,730 Other financial liabilities 15,086 18,692 Debt securities 94,828 99,424 Funds entrusted 10,033 12,139 Subordinated debts 32 33 Other liabilities 282 235 Total liabilities 127,753 139,476 Equity 3,430 2,752 TOTAL LIABILITIES 131,183 142,228
Consolidated income statement 2013
Amounts in millions of euros
2013 2012 Interest income 1,514 2,115 Interest expense 984 1,642 Interest result 530 473 Results from associates and joint ventures -1 -2 - Commission income 30 31 - Commission expense 5 6 Commission result 25 25 Result on financial transactions -5 88 Other results 3 4 Total income 552 588 - Staff costs 36 38 - Other administrative expenses 26 25 Staff costs and other administrative expenses 62 63 Depreciation 2 1 Total operating expenses 64 64 Impairments 58 32 Bank levy 33 32 Profit before tax 397 460 Taxes -114 -128 Net profit 283 332