Annual figures 2020: NWB Bank fulfils its sustainable mission also during the COVID-19 pandemic

  • Lending to clients in the Dutch public sector continued throughout the COVID-19 pandemic: €10.3 billion (2019: €10.2 billion)
  • Renewable energy project portfolio increased by almost €600 million to €900 million
  • Carbon emissions of loan portfolio decreased by 8% despite portfolio growth
  • Almost one-third of long-term funding raised through sustainable bonds: €4.5 billion out of a total of €13.8 billion
  • Net profit remains solid at €80.5 million, though lower than 2019 (€94.5 million)

In 2020, NWB Bank again provided more than €10 billion of financing to the Dutch public sector. Clients are using these loans to enhance sustainability and to absorb the financial impact of the COVID-19 pandemic and its related measures, among other things. Total lending amounted to €10.3 billion, a fraction more than the €10.2 billion in 2019. Net profit was €80.5 million (2019: €94.5 million) and total assets stood at €106.9 billion (2019: €96.2 billion) at the end of December.

“We have again shown this past year that our clients can count on us even in difficult times. The ‘sustainable water bank’ strategy is bearing fruit: our lending is making a valuable contribution to the social and sustainable investment agenda of the Dutch public sector and we hope that The Netherlands will emerge from the crisis as a more sustainable country. The doubling of our lending to sustainable energy projects is a great achievement and an important step,” says Lidwin van Velden, chair of the Managing Board.

Good profit level

The profit level remained good, in part thanks to the high volume of lending and higher net interest income. The fact that the net profit of €80.5 million was lower compared with 2019 (€94.5 million) is mainly due to the introduction of the minimum capital rule for banks, which has created an additional tax burden, in combination with a more negative result on financial transactions. The recently discovered fraud incident, in which a payment of €12 million was made based on forged documents, has been included in the 2020 financial statements.

On the other hand, the bank experienced a windfall on the resolution levy and received additional net interest income as a result of the participation in the targeted longer-term refinancing operation (TLTRO) of the European Central Bank (ECB). The favourable rate of the TLTRO is valid for the initial two years, under certain conditions, but the lending that stands in return, and to which the favourable rate is passed on, has longer maturities. Consequently, the bank’s net interest income will shift over time.

The bank intends to pay out €45 million in dividends for the financial year 2020, as soon as the ECB allows it again.

Fewer carbon emissions from lending

The bank has now charted the climate impact of 94.5% of its loan portfolio. Despite a growing loan portfolio, carbon emissions decreased by about 8%. The largest reduction in emissions intensity (tonnes of CO2 equivalent/millions EUR) was a 15% reduction by the water authorities, who are leaders in the production of renewable energy.

Sustainable and affordable funding

To keep up with the demand for financing, the bank raised €13.7 billion in long-term funding on the international capital market in 2020. Almost one-third of this (€4.5 billion) was raised by issuing Environmental, Social and Governance (ESG) bonds. The bank issued four SDG Housing Bonds to finance social housing in the Netherlands and two Water Bonds to finance water authorities. Overall, NWB Bank has already raised over €16 billion with sustainable bonds since 2014.

Outlook

The bank expects to continue its lending to the Dutch public sector in 2021 in a similar way to last year and aims to further expand its position in the financing market for renewable energy projects. Given the uncertainties surrounding the COVID-19-pandemic and the impact on clients and capital markets, the bank is cautious in its forecast for net profit in 2021. If the conditions are favourable, the bank expects profit to exceed that of 2020. In 2021, the bank will set reduction targets for the carbon emissions of its loans for the first time.

NWB Bank will publish its 2020 Annual Report on 15 April 2021.

 

KEY FIGURES (in millions of euros)

 

2020

2019

BALANS

 

 

Long-term loans and advances (nominal value) 1

49,844

49,436

Equity 2

1,782

1,741

Tier 1 capital 2

2,085

2,050

Total assets

106,882

96,205

Risk-weighted assets

3,833

3,277

RESULTS

 

 

Net interest income

244

213

Results from financial transactions

-55

-39

Operating income

189

174

Operating expenses

42

27

Bank tax and resolution levy

12 3

22

Impairment of receivables

-

 

Extraordinary income

-

11 4

Tax on profit from ordinary operations

54

41

Net profit

81

95

DIVIDEND

 

 

Dividend payout

45.0

55.0

Dividend (in euros per share)

762.9

932.4

RATIOS (%)

 

 

Tier 1 ratio 2 5

54.4

62.6

CET 1 ratio 2 6

46.0

52.8

Cost/income ratio 7

22.2

15.5

Dividend payout ratio

55.9

58.2

Leverage ratio 8

13.5

15.4

Leverage ratio (not adjusted for promotional assets) 9 10

2.5

2.4

Liquidity Coverage Ratio

150

204

Net Stable Funding Ratio

122

118

CSR

 

 

Volume newly issued sustainable bonds

4,531

2,538

CO2 equivalent emissions from operating activities p.p. (in tonnes)

1.5

2.8

CO2 equivalent emissions PCAF portfolio coverage (in %)

94.5

95.1

CO2 equivalent emissions loan portfolio (in kton)

1,595

1,730

 

1 ​​loans including interest-bearing securities from regional authorities

2 including profit for the financial year less dividend

3 including €15 million refund for the years 2016 to 2018

4 income as a result of changes to the pension scheme

5 53.5 excluding profit for the current financial year (2019: 61.4)

6 45.1 excluding profit for the current financial year (2019: 51.6)

7 'cost' concerns operating expenses and 'income' concerns operating income

8 including profit for the financial year less dividend, taking into account the proportional calculation for promotional banks according to CRR II as of 27 June 2019

9 including profit for the financial year less dividend, not taking into account the proportional calculation for promotional banks

10 2.4 excluding profit from the current financial year and applying Decision (EU) 2020/1306 of 16 September 2020 on the temporary exclusion of certain exposures to central banks from the total exposure measure in view of the COVID-19 pandemic (ECB/2020/44)

 

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