The Bank's target is to ensure a sufficient level of liquidity to be able to continue disbursing new loans and fulfil all its payment obligations for at least one year ahead, without additional new funding.
At the end of August 2017, NIB’s total liquidity amounted to EUR 9,105 million, of which EUR 2,557 million (28% of the total) was in short-term money market instruments, and EUR 6,548 million (72% of the total) was invested in bonds with longer maturities.
|Counterparty risk class distribution|
During the first eight months of 2017, NIB's loan disbursements totalled EUR 1,813 million, and the Bank obtained EUR 4,027 million in new funding in 13 currencies. The EUR 2,557 million held in the short-term money market is used to manage the Bank's daily payment obligations. The instrument distribution is shown in the graph below.
|Cash instruments. Distribution by instrument|
*Reverse repos - repurchase agreements in which a bond is given as collateral for a cash deposit
The liquidity investments are limited by the counterparty and market risk framework that applies to Treasury operations.
Along with the counterparty and market risk framework, Treasury’s liquidity investments follow guidelines that will ensure the assets remain liquid even under stressed market conditions. At the end of August 2017, 81% of the liquidity was invested in accordance with the Basel III liquidity rules of being high-quality liquid assets (HQLA), and 89% of the liquidity was eligible as repo collateral in one or several central banks. NIB does not have direct access to central bank repos, but can repo its bond securities via intermediating banks.
The Portfolio Management unit manages the bond security portfolios. The market value of these portfolios amounted to EUR 6,548 million at the end of August 2017. The securities are held on both amortised cost and fair value bases, and include both floating-rate and fixed-coupon instruments. The instrument distribution of the portfolio can be seen in the graph below.
|Bond Group||Bond instruments. Distribution by instrument|
|Sovereign and sov. guaranteed agencies||23.2%|
|Non-sovereign public sector||18.0%|
The Bank's five-year NZD 400 million transaction has become inaugural in the New Zealand bond market this year.
5 Jan 2018
In the first eight months of the year, NIB experienced good demand for long-term financing from the municipal sector in the Bank’s member countries. NIB publishes the Interim Management Statement for Jan-Aug 2017.
10 Oct 2017
On 13 September, NIB issued its second global USD bond this year. The three-year USD 1 billion deal was priced at mid-swaps -5 bps.
14 Sep 2017