Annual figures 2022: Loan portfolio grows to record level; €9.6 billion in new lending; and on track with climate action plan
· Loan portfolio grows to record level of over €52 billion
· New financing to clients in the Dutch public sector and renewable energy projects in 2022: €9.6 billion (2021: €12.1 billion)
· Net profit up 18% to €143 million (2021: €121 million)
· On track with our climate action plan: CO2e emissions of loan portfolio down by over 17% in last four years
· More than 40% of long-term funding raised with ESG bonds
NWB Bank provided a total of €9.6 billion in financing to its clients in the Dutch public sector and renewable energy projects in 2022. Despite the uncertain times in the world, we were again able to consolidate our position in the Dutch public sector. In addition, through our climate action plan, we are encouraging our clients to become more sustainable and, as a bank, we are committed to a loan portfolio that, on balance, will generate zero CO2e emissions in 2050.
Thanks to a better net interest income and lower bank tax, the net profit increased to €143 million compared with €121 million in 2021. As in 2020 and 2021, our participation in the TLTRO also contributed last year to the net profit because of the attractive rates. The benefit of this was largely passed on to our clients through lower lending rates, but the difference in maturity of the TLTRO funding and the corresponding lending resulted in higher profits in recent years, which will be offset in the coming years. We intend to make €60 million of the net profit available as dividend to our shareholders.
Social and sustainable impact
As a bank of and for the public sector, we do not aim to maximise profits. With our tailor-made lending activities, we focus on achieving social and sustainable returns. Last year, our loan portfolio grew to a record level of €52.2 billion.
In April 2022, we published our climate action plan and provided our first sustainability-linked loan to the Zuiderzeeland Water Authority (€21 million). The water authority will receive a discount on the annual interest rate of the loan if it meets ambitious sustainability milestones. These milestones focus on climate mitigation, biodiversity and diversity, as these are important issues for both the water authority and the bank. With our sustainability-linked loans, we aim to encourage and accelerate our clients’ (further) sustainability efforts.
Last year, we raised 42% (€4.7 billion) of our long-term funding by issuing Environmental, Social and Governance (ESG) bonds. In total, we had almost €23 billion in ESG bonds outstanding by the end of 2022. That represented 37% of our total outstanding long-term funding.
On track with our climate action plan
In line with our climate action plan, we aim to achieve a reduction of at least 43% in CO2e by 2030 compared to the emissions of our loan portfolio in 2019, the first year in which we mapped the climate impact of our financing using the PCAF methodology. The goal is to have a loan portfolio that causes zero net CO2e emissions by 2050. With a 17% reduction compared to the 2019 baseline year, we are on track with our climate action plan despite growth of the underlying loan portfolio.
As part of our climate action plan, we have set ourselves an audacious goal: to make our loan portfolio energy-positive by 2035 as we work towards a climate-neutral portfolio by 2050. By 2035, we want the renewable energy projects we finance to generate more renewable energy than the rest of our portfolio consumes in fossil fuels. We aim to achieve this by encouraging our clients to (further) reduce their energy consumption and use renewable energy wherever possible. Financing renewable energy projects is an important part of this.
We expect to meet the financing needs of the Dutch public sector and renewable energy projects in 2023 in the same socially sustainable way as last year. Although the war in Ukraine had little or no negative impact on our organisation in 2022, we remain cautious in our forecast for net profit in 2023, also in light of the recent volatility in the financial markets amid banking sector concerns. Net profit is expected to be lower than in 2022, mainly because we will no longer be able to benefit from the positive effects of participation in the TLTRO in 2023.
We will publish our 2022 Annual Report on 31 March 2023.