Interim Report, January – August 2003
NIB A MAJOR ENVIRONMENTAL FINANCIER
The Bank shows good results for the first eight months of the year, notwithstanding the general slackness of economic activity in the Euro region. Period profits rose by 3.6% to EUR 100 million (corresponding period in 2002: EUR 97 million). Total assets amounted to EUR 17.3 billion compared with EUR 15.9 billion at year-end 2002. Net liquidity rose to EUR 3,802 million compared with EUR 2,947 million at year-end 2002.
NIB distributed EUR 40.3 million in dividends to its owners, the Nordic countries, from profits for the year 2002.
New lending for the period totalled EUR 910 million (937). Loans outstanding amounted to EUR 10,323 million at 31 August 2003, compared with EUR 10,110 million at year-end 2002.
New borrowing for the first eight months of the year equalled EUR 2,759 million as compared with EUR 1,679 million at the corresponding time last year. During the spring the Bank launched its second USD 1 billion global benchmark issue in the form of five-year bonds. These were well received by investors and were sold worldwide.
The Bank has continued to maintain the quality of its lending portfolio and financial counterparties at a high, stable level.
The favourable development of the Bank’s profits is expected to continue during the remainder of the year.
Baltic membership
At the meeting of Nordic Prime Ministers in June, the five heads of government reached an agreement of principle in favour of offering membership in NIB to Estonia, Latvia and Lithuania. The Prime Ministers instructed the Nordic Ministers of Economy to prepare, in time for the meeting of Prime Ministers in October, a proposal for conditions of affiliation.
Infrastructure and industry in the Nordic countries
NIB’s lending activities in the Nordic countries were dominated by infrastructure and industrial investments. Lending to the manufacturing and food industries was largest, with several loans to environmental investments or cross-border company acquisitions. One quarter of disbursements went to the energy sector-to company acquisitions in Sweden, biofuelled power station investments in Finland, wind power investments in Denmark, hydropower investments in Norway, and distribution network enlargement in both Denmark and Iceland. The proportion of environmentally related investments in the Nordic countries shows a clear increase, accounting for 25% of disbursements.
International focus on energy loans
International lending was dominated by loans for infrastructure investments, above all in energy, transport and telecommunications. There was a growth of lending for projects in the environmental and health care sectors. At present NIB has loans outstanding in 32 countries outside the Nordic area. Lending through financial intermediaries accounts for a growing proportion of the Bank’s international activities.
The Bank further increased its involvement in the Baltic countries and Poland, above all in the energy sector thereby contributing towards safer energy supply and improved energy efficiency. During the period, e.g., a loan agreement was signed with the state-owned Latvian power company.
Environmental financing
Financing of environmental investments plays an important part in NIB’s lending. During the period under review the Bank granted eight new environmental loans totalling EUR 135 million. Upwards of 18% of the loans disbursed during the period were environmental loans. The proportion of environmental loans, especially in the neighbouring areas, has continued to increase during the year.
The increase in the Bank’s environmental lending facility for the neighbouring areas (MIL) from EUR 100 million to EUR 300 million, which took effect on 1 January 2003, has increased the Bank’s possibilities of financing urgent environmental projects in the neighbouring areas.
The Bank plays an active role in the Northern Dimension Environmental Partnership (NDEP), a partnership aimed at coordinating and streamlining the financing of environmental projects with cross-border effects in the Northern Dimension area. The NDEP has set up an investment programme of twelve environmental projects to be prepared within the Partnership framework. NIB is responsible for preparing and coordinating seven of them. In addition, the NDEP has initially set up a EUR 500 million programme for nuclear waste projects in the Kola Peninsula.
Wastewater treatment in northwest Russia
In March NIB signed a credit agreement with a Russian project company for completion of the Southwestern Wastewater Treatment Plant in St. Petersburg. Construction work on the plant has begun and will be completed within three years. Disbursements for the project have also been inaugurated. Since 2000 NIB has been the lead bank for the financing operations of the banking consortium. This wastewater project is the most important environmental project in the Baltic region and will have a substantially beneficial ecological impact.
The Bank has established a lending programme with a Russian intermediary bank for financing smaller environmental projects in northwest Russia, the intention being to allocate credits for water supply and wastewater treatment, among other purposes, in a number of small communities in the Leningrad region.
NIB’s interim report for January – August 2003 is available here (PDF).
Key figures (in EUR million)
| 1-8/2003 | 1-8/2002 | 1-12/2002 | |
| Net interest income | 102 | 100 | 150 |
| Profit | 100 | 97 | 142 |
| Loans disbursed | 910 | 937 | 1,648 |
| New loan agreements | 1,029 | 1,020 | 1,807 |
| New debt issues | 2,759 | 1,679 | 3,320 |
| Profit / average equity (%) | 9.5 | 9.9 | 9.5 |
| 31 Aug 2003 | 31 Aug 2002 | 31 Dec 2002 | |
| Loans outstanding | 10,323 | 9,929 | 10,110 |
| Total assets | 17,303 | 14,892 | 15,948 |
| Net liquidity | 3,802 | 2,287 | 2,947 |
| Number of employees | 147 | 141 | 144 |