Annual figures 2023: NWB Bank more relevant than ever

• Loan portfolio has continued to grow to a record level of €54 billion

• Climate footprint loan portfolio 26% decreased since 2018

• Healthy profit of €126 million

• New collaboration with EIB leads to €400 million even more attractive financing for flood protection and water quality

2023 was both the warmest and wettest year since the Royal Netherlands Meteorological Institute (KNMI) began measuring. As a bank of and for the Dutch public sector, NWB Bank is committed to the fight against climate change and the consequences thereof. The climate footprint of the bank’s loan portfolio has continued to decrease, even though the size of this portfolio grew to a record €54 billion last year. Net profit for 2023 reached €126 million, of which €60 million will be distributed as dividends to the bank’s shareholders: the water authorities, the Dutch state and several provinces.

The 1953 North Sea Flood was the immediate reason for establishing the Nederlandse Waterschapsbank (NWB Bank) in 1954. Now, 70 years later, NWB Bank is more relevant than ever. CEO Lidwin van Velden: “Due to climate change, we are now once again wondering how to keep our feet dry. Our clients and shareholders are working hard to protect and adapt our land. By providing them with appropriate financing at the lowest possible cost, we ensure that that sustainability remains affordable and the burden on citizens is kept to a minimum. The recently concluded €400 million loan facility with the European Investment Bank (EIB), with an aim at improving flood protection and water quality, will even further contribute to this.”

Healthy figures

Lending to the Dutch public sector and renewable energy projects amounted to €7.4 billion last year. By the end of 2023, NWB Bank’s total loan portfolio amounted to €53.9 billion, the largest it has ever been. The bank recorded a healthy profit of €126 million for 2023, and its capital and liquidity ratios remain as strong as ever. The Tier 1 ratio was 48.0% and the leverage ratio was 20.6% as of 31 December. Both are well above the minimum requirements of 13.77% and 3% respectively. The Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) are also well above the minimum requirement of 100% at 160% and 133% respectively.

Reduced climate footprint

Since 2018, the absolute climate footprint of NWB Bank’s loan portfolio has decreased by 16% and the relative impact (CO2 equivalent per euro financed) by as much as 25.5%. This is quite an achievement considering the further growth of the bank’s loan portfolio. However, NWB Bank’s focus is not only on climate impact, but also on social impact and biodiversity, with a view to circularity and nature-inclusive solutions. The bank will therefore expand its climate action plan, presented in 2022, into a broader sustainability action plan in 2024. Being transparent about the impact of activities and dilemmas is a priority for NWB Bank. Last year, the bank was ranked fourth in the Transparency Benchmark, which ranks the 500 largest Dutch companies in terms of transparency in corporate social responsibility (CSR) reporting.

Outlook

NWB Bank will continue to provide appropriate and affordable financing to the Dutch public sector in a socially responsible and sustainable manner in 2024. In particular, the demand for financing from the water authorities, drinking water companies and housing associations is expected to increase in the coming years due to the major transition tasks they are facing. As a result, the bank expects its loan portfolio to grow even further . The bank is cautious about its forecast for net profit in 2024. Partly because of the higher bank tax and also because of the ECB's decision to stop paying interest on the minimum reserve requirements that banks must hold with the central bank, it is probably going to be lower than last year.