Annual figures 2021: larger impact through increased lending and reduced carbon emissions
- Record amount of loans provided to clients in Dutch public sector: €12.1 billion (2020: €10.3 billion)
- Renewable energy portfolio continues to grow and important social role fulfilled in Vestia loan swap
- Climate impact loan portfolio down almost 14% in past three years
- More than 40% of long-term funding raised with ESG bonds
- Net profit amounts to €121 million (2020: €81 million)
In 2021, NWB Bank granted a record amount of loans to its clients in the Dutch public sector. Total lending amounted to €12.1 billion compared to €10.3 billion in 2020. As such, we were able to consolidate our position in the financing of the Dutch public sector and contribute actively to the social and sustainable investment agenda in the Netherlands. The climate footprint of our loan portfolio is also decreasing in line with our commitment to the national climate agreement.
Thanks in part to the high volume of lending and a better interest rate result, profit was higher at €121 million compared to €81 million in 2020. As in 2020, our participation in the targeted longer-term refinancing operation (TLTRO) also contributed to the profit level last year because of the attractive rates. We intend to make €50 million of the net profit available to our shareholders as dividend.
Social and sustainable impact
As a bank of and for the public sector, we do not pursue profit maximisation. With our tailor made lending activities, we focus on achieving social and sustainable returns. Last year, for example, we were able to further expand our lending to renewable energy projects, including two wind farms owned by water authorities, and we fulfilled an important social role by facilitating a €650 million loan exchange between Vestia and other housing associations.
To meet our funding needs, we issue bonds in the international capital market. Last year, we raised over 40% (€3.6 billion) of our own long-term funding by issuing Environmental, Social and Governance (ESG) bonds. We issued four SDG Housing Bonds to finance social housing in the Netherlands and a Water Bond to finance water authorities. In total, we had over €18 billion in ESG bonds outstanding at the end of 2021. This is 31% of our total outstanding long-term funding.
Carbon emissions in loan portfolio down again
Since 2019, we have been calculating the climate impact of our loan portfolio using the Partnership for Carbon Accounting Financials (PCAF) methodology. Due to the availability of relevant data, we use the composition of the loan portfolio of the previous year for this purpose. The latest calculation shows that, at the end of 2020, our loan portfolio represented a total emission of 1,481 kilotons of CO2 equivalent. This is 125 kilotons less than the total emissions at the end of 2019 and 237 kilotons less than at the end of 2018. The so-called emission intensity (tonnes CO2 equivalent/millions EUR) of our loans has also decreased in recent years: at the end of 2020, it was 31.7 tonnes per million euros compared to 34.3 at the end of 2019 and 37.9 at the end of 2018. We will soon publish our climate action plan outlining how we aim to bring CO2 equivalent emissions from our lending to zero by 2050.
We expect to be able to meet the financing needs of the Dutch public sector in 2022 in the same socially responsible and sustainable manner as last year. We are cautious in our forecast for net profit in 2022, partly because of uncertainties related to geopolitical developments. For the time being, the war in Ukraine, and its effect on the international capital markets, has had little or no negative impact on our bank. The positive effects of participating in the TLTRO will be more limited this year but, on the other hand, we expect a lower tax burden from the minimum capital rule and bank tax.
We will publish our 2021 Annual Report on 14 April 2022.