- Considerable increase in lending to the public sector: €4.4 billion compared to €3.2 billion in the first half of 2018
- More financing for sustainable energy projects and drinking water companies
- Issue of new SDG Housing Bond makes NWB Bank the first issuer in the Netherlands to exceed €10 billion in sustainable bond issuance
- Net profit €41.8 million (first half of 2018: €58.5 million)
NWB Bank was able to maintain its market share in the financing of the Dutch public sector in the first half of 2019, and increased its market share in the water sector. Lending in the first half of the year increased to €4.4 billion, partly due to the acquisition of a portfolio of Dutch public sector loans from ABN AMRO Bank. Net profit for the first half of 2019 amounted to €41.8 million (2018: €58.5 million). The decline in profit compared with the previous year was expected and is mainly the result of the outflow of higher yielding positions in the bank’s loan and liquidity portfolio. Total assets stood at €90.7 billion at the end of June.
The Sustainable Water Bank
NWB Bank has positioned itself as the sustainable water bank for the public sector. With its lending, the bank ensures that the Dutch public sector can benefit from the lowest possible cost of funding, enabling it to provide citizens with affordable and high-quality key infrastructure and services, while minimising the cost of achieving sustainability goals. Building on this strategy, NWB Bank has succeeded in strengthening its position as a key financing partner for sustainable energy projects and drinking water companies in the first half of 2019.
At the forefront in sustainable funding
In order to match the demand for sustainable financing, NWB Bank has raised €4.7 billion in long-term funding over the past 6 months. Almost half of this funding is raised with Socially Responsible Investing (SRI) bonds. Given the strong investor demand for SRI bonds, this type of funding has proven to be more attractive than the issuance of traditional senior unsecured notes. The issue of NWB Bank’s first Sustainable Development Goals (SDG) Housing Bond in May of this year makes NWB Bank the first issuer in the Netherlands to exceed €10 billion in sustainable bond issuance. At an international level, the bank remains one of the front-runners in the issuance of funding instruments aimed at providing a positive social, sustainable and environmental return.
Ample capital and liquidity ratio
The capital and liquidity ratios of the bank remained strong in the first half of 2019, with the bank's Common Equity Tier 1 (CET1) ratio at 59.3% including interim net profit (versus a minimum regulatory requirement of 9.25% including a bank-specific Pillar II requirement of 2.25%). At 297%, the Liquidity Coverage Ratio (LCR) as of the end of June was comfortably above the minimum requirement of 100%, as was the Net Stable Funding Ratio (NSFR) of 113% (the minimum being 100%).
On the 27th of June, the amended European Capital Requirements Regulation CRR II entered into force. This regulation includes an adjusted Leverage Ratio definition for promotional banks. Put briefly, under this definition the bank can exclude lending to the public sector in the calculation of the leverage ratio. In that case, the leverage ratio is calculable at 25.6% as at the end of June which is well above the future minimum requirement of 3%. Without the aforementioned definition change, the leverage ratio is 2.6% which is the same as at the end of 2018.
Outlook
The bank foresees that it will be able to continue the upward trend in lending and expects its lending volume for the full year 2019 to exceed the €7.4 billion of net new lending reached in 2018. In line with earlier forecasts, however, the bank continues to expect its net profit for 2019 to be below the level of last year.
View the complete Half-year Report here.
Nederlandse Waterschapsbank N.V., Rooseveltplantsoen 3, 2517 KR The Hague
Media relations: Simon Zwagemakers, t +31 70 4166259 / +31 6 57457906, e persinfo@nwbbank.com
| HEADLINE FIGURES (in millions of euros) | ||
| BALANCE SHEET ITEMS | 30 June 2019 | 2018 |
| Long-term loans and advances (nominal value)[1] | 48,521 | 47,644 |
| Equity[2] | 1,748 | 1,706 |
| Tier 1 capital[2] | 2,058 | 2,018 |
| Total assets | 90,705 | 83,715 |
| Risk-weighted assets | 2,931 | 2,627 |
| RESULTS | 30 June 2019 | 30 June 2018 |
| Net interest income | 104 | 125 |
| Results from financial transactions | -29 | -26 |
| Operating income | 75 | 99 |
| Operating expenses[3] | 13 | 10 |
| Income tax | 15 | 20 |
| Resolution levy | 5 | 10 |
| Net profit | 42 | 59 |
| DIVIDEND | 30 June 2019 | 2018 |
| Dividend distribution | - | 20 |
| Dividend (in euros per share) | - | 339 |
| RATIOS (in %) | 30 June 2019 | 2018 |
| Tier 1 ratio[2] | 70.2[6] | 76.8[6] |
| CET 1 ratio[2] | 59.3[7] | 64.6[7] |
| Cost/income ratio[3] | 17.0 | 11.8 |
| Dividend pay-out ratio | - | 20.1 |
| Leverage ratio[4] | 25.6 | n/a |
| Leverage ratio (not adjusted for promotional assets)[5] | 2.6 | 2.6 |
| Liquidity Coverage Ratio | 297 | 222 |
| Net Stable Funding Ratio | 113 | 129 |
| CSR | 30 June 2019 | 2018 |
| Volume of Green and Social Bond issuance | 2,000 | 2,744 |
| CO2 emissions from operating activities (in tonnes) | 1.5 | 3.7 |
[1] loans including interest-bearing securities, provided to regional authorities
[2] including profit for the financial year less dividend
[3] excluding bank tax and resolution levy
[4] including profit for the financial year, taken into account the calculation for promotional banks according to CRR II as of 27 June 2019
[5] including profit for the financial year less dividend, not taken into account the calculation for promotional banks
[6] 68.8 excluding profit for the financial year (2018: 73.8)
[7] 57.8 excluding profit for the financial year (2018: 61.6)