NIB keeps lending at EUR 2 billion, focus on high-mandate projects

The financial markets showed increasing signs of normalisation in 2009. However, credit supply remained restrained, the real economy continued adjusting, and output fell in the Nordic-Baltic area. In this environment, the demand for NIB’s loans continued to be strong.

“As the capital base puts limits on the expansion of our activities, new disbursements were kept at a lower level than in the two previous years. This required a higher degree of prioritisation of loan projects in line with our mandate to support competitiveness and the environment,” says Johnny Åkerholm, NIB President and CEO.

All in all, the Bank signed 40 loan agreements in 2009. The disbursement of loans amounted to EUR 1,954 million (2008: EUR 2,486 million).

Loans agreed reached EUR 1,417 million (2008: EUR 2,707 million). Of that amount, 77% was in the Bank's focus sectors—energy; the environment; transport, logistics and communications; and innovation.

Environment-related lending accounted for half of agreed loans with projects supporting the use of renewable energy, energy efficiency, clean technologies, wastewater treatment and green transport solutions.

Financial results

Core earnings* increased steadily to EUR 192 million, somewhat above the outcome of 2008. NIB’s profit rose significantly to EUR 324 million. Positive valuations on financial instruments in the Bank’s treasury portfolios contributed to the profit together with positive adjustments to the Bank’s hedge accounting.

Impairments to the loan portfolio amounted to EUR 43 million in 2009 (EUR 79 million in 2008). As a consequence of the economic situation, NIB paid increasing attention to monitoring the loan portfolio in order to identify and mitigate possible problems among existing borrowers.

“Loan impairments have been well under control despite the difficult economic situation in our member countries”, says Johnny Åkerholm.          

The Bank’s funding plan was fulfilled through the issuance of two benchmark bonds and a number of smaller public and private placements. The Bank issued its first EUR 1 billion benchmark bond in April and a USD 1 billion global benchmark followed in September.

Outlook

NIB assumes that the economic activity in the member countries will pick up slightly in 2010 but still remain rather subdued. The financial institutions within the Bank’s member countries will continue to apply tight credit standards. Projects within the focus sectors are expected to continue to be subject to tight credit conditions.

In this environment, NIB anticipates demand for its loans to persist in 2010. NIB also expects to continue to have good access to funding in the financial markets.

NIB's Financial Statements for 2009 are available here.

Key figures
in EUR million unless otherwise noted

	Y2009	Y2008
Net interest income	219	212
Core earnings*	192	189
Profit	324	-281
Loans disbursed	1,954	2,486
Loan agreements	1,417	2,707
Member countries	1,201	2,027
Non-member countries	216	680
Loans outstanding	13,763	13,063
Member countries	10,888	10,142
Non-member countries	2,874	2,921
Guarantee commitments	12	17
New debt issues	4,137	4,681
Debts evidenced by certificates	17,998	17,549
Total assets	22,423	22,620
Equity/total assets	9.1%	7.6%

* Core earnings consist of the profit before adjustments to hedge accounting, realised and unrealised gains and losses of the trading portfolio and credit losses and reversals of these

The Nordic Investment Bank (NIB) is the common international financial institution of the eight Nordic and Baltic countries. NIB provides long-term financing to the energy, environmental, transport, logistics and communications, and innovation sectors for projects that strengthen competitiveness and enhance the environment. NIB has the highest possible credit rating, AAA/aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

For further information, please contact

Mr Johnny Åkerholm, NIB President and CEO, at +358 10 618 001,

Mr Jukka Ahonen, Director, Head of Communications, at +358 10 618 0295,