Record-high green growth in a year marked by global unrest and increased interest rates

27 Feb 2023 19:14 CET

KBN's core earnings increased from NOK 908 million in 2021 to NOK 1,081 million
in 2022.

Net interest income increased by NOK 280 million from 2021 to 2022. However,
unrealised losses weighed on the annual result.

About the result

Net interest income totalled NOK 1,866 million in 2022 as compared to NOK 1,585
million in 2021. The result for the year was a loss of NOK 60 million in 2022 as
compared to a profit of NOK 1,208 million in 2021. The fall in profit was
largely due to unrealised losses from changes in the value of financial
instruments in 2022, very largely relating to changes in the value of fixed rate
loans, but also in part from hedging contracts and the liquidity portfolio.

Unrealised losses for 2022 amounted to NOK 1,622 million as compared to
unrealised gains of NOK 322 million in 2021 and are the result of market
turbulence in 2022.

KBN’s financial instruments are normally held to maturity and the effects of
unrealised gains and losses on KBN’s profits reverse either when fluctuations in
the market reverse or as instruments approach maturity.

- Unrest in the global financial markets has affected us both negatively and
positively in 2022. On the negative side, the unrest has affected unrealised
gains and losses. On the positive side, we have had record high demand for our
core products, long-term instalment loans. KBN has never paid out such a large
volume of these loans before, says CEO Jannicke Trumpy Granquist.

Over NOK 8 billion disbursed in green loans

KBN granted new loans totalling NOK 39 billion. The portfolio of green lending
for investment in climate and environment friendly projects increased by 24%,
equivalent to NOK 8.4 billion, in 2022. KBN disbursed over NOK 8 billion in
green loans to 68 projects in 2022. At the end of 2022, 134 municipalities, five
county authorities and a total of 70 other customers had green loans from KBN,
and outstanding green lending totalled NOK 43.5 billion. The environmental
impact of these loans is reported annually in KBN’s separate Impact Report.
KBN‘s Criteria Document for green lending is updated annually in pace with
developments in the market.

Green lending accounted for 13.3% of KBN's total lending portfolio at year-end
of 2022.

NOK 87 billion in new long-term borrowings

New long-term borrowings amounted to NOK 87 billion in 2022, as compared to NOK
97 billion in 2021. The reduction in the amount raised in NOK terms was
primarily due to less debt maturing in 2022 than in 2021. KBN issued bonds in 10
currencies in 2022, an increase from 2021 when KBN issued bonds in 9 different
currencies.

KBN’s funding program was not materially affected by the market turbulence seen
in 2022, and KBN enjoyed good access to the capital markets throughout the year.
KBN’s total outstanding bonds and other borrowings increased in 2022 from NOK
395.4 billion to NOK 429.2 billion. The increase in total borrowing measured in
Norwegian kroner, is largely due to the weakening of the krone through 2022.

KBN issued three green bonds in 2022 with a total nominal value equivalent to
NOK 7.5 billion and denominated in Australian dollars, Canadian dollars and
Swedish krona respectively.

Capital

KBN’s total primary capital at 31 December 2022 was NOK 19,691 million. Of this
amount, NOK 15,299 million is common equity Tier 1 capital. The solvency ratio
is sufficient, and above the bank's internal targets at the end of 2022.

Contact information
Harald Jacobsen
Head of Communications and Sustainability
+47 995 38 005
haj@kbn.com

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583701_KBN Annual Report 2022.pdf