Nordic Investment Bank reports 'significant increase' in demand for financing

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During the first six months of 2022, the Nordic Investment Bank, in which Latvia has a stake, has seen a significant increase in demand for its financing, the Bank said August 26.

NIB agreed a total of EUR 2,203 million in new loans and disbursed EUR 2,142 million, compared to EUR 664 million and EUR 1,266 million respectively in the same period in 2021.

The new lending was distributed across different sectors and countries and included sustainability-linked loans and NIB’s first purchase of a bond eligible under the Minimum Requirement for its own funds and Eligible Liabilities (MREL) issued by a financial institution.

“In these times, the need for the Nordic and Baltic region to accelerate the green transition and become independent of Russian oil and gas has become even more urgent. NIB has already financed numerous renewable energy and transmission projects across the member countries which is at the core of the Bank’s mandate. We continue to provide support in making these goals a reality and in transforming the hard-to-abate business sectors that must also go green,” said André Küüsvek, NIB President and CEO.

To meet the demand for financing, NIB had a record amount of funding transactions and raised EUR 5.5 billion in new funding in the first half of 2022. Among other transactions, the Bank issued its inaugural NIB Environmental Bond (NEB) denominated in Danish Kroner (DKK). The eight-year DKK 2 billion bond was driven by domestic investors focusing on ESG. The Bank has now issued a total of EUR 6.2 billion in environmental bonds under its NEB Framework since 2011.

“Earnings from NIB’s core operations saw a strong development in the first half of 2022 and net interest income ended at EUR 104 million which is an increase compared to the same period last year. The loan portfolio also remains strong and there was a reversal of EUR 8 million in loan loss provisions during the first six months of 2022,” says Kim Skov Jensen, NIB’s Vice President & CFO.  

However, net profits for the period were down by a large margin and amounted to EUR 39 million, compared to EUR 82 million in 2021.

"The decrease in net profit is mainly due to unrealised fair value losses on financial instruments used for hedging purposes and, as the Bank intends to hold these hedges until maturity, these losses will not be realised," the Bank said.

NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. The interim financial report is available on NIB website

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