Higher interest rates had a positive effect on KBN’s core earnings

27 Apr 2023 17:25 CEST

KBN’s core earnings totalled NOK 280 million for the first quarter of 2023,
compared to NOK 248 million in the first quarter of 2022.

KBN’s net interest income in the first quarter of 2023 was NOK 508 million as
compared to NOK 436 million in the same period in 2022. The main reason for the
improvement in net interest income was rising interest rates. KBN’s result for
the period in the first quarter of 2023 was a profit of NOK 389 million. In the
first quarter of 2023 KBN recognised unrealised gains on financial instruments
totalling NOK 114 million.

Better market conditions

KBN’s lending portfolio totalled NOK 330 billion at the end of the first quarter
of 2023. KBN’s lending portfolio increased by NOK 1.6 billion in the first
quarter of 2023 primarily as a result of good growth in fixed rate lending.

Persistently high credit spreads to KBN’s customers in the capital markets
created better market conditions for KBN’s long-term instalment loans. The
favourable market conditions for fixed rate loans, with lower pricing for
long-term interest rates than for short-term rates, resulted in many customers
choosing to change from floating to fixed-rate loans.

- Increasing demand for new loans is expected over the course of the rest of the
year. With the capital markets continuing to be relatively unattractive for
KBN’s customers, KBN expects strong demand for long-term, instalment loans to
refinance maturing loans, says CEO Jannicke Trumpy Granquist.

Turmoil in the banking market

The final part of the quarter was characterised by a high level of uncertainty
in the banking market, which was triggered by the insolvency of two American
banks and the subsequent forced acquisition of a Swiss bank. KBN has no exposure
to these banks and has therefore not been directly impacted by the bank turmoil.

NOK 1.3 billion in green lending

KBN continued to experience a good level of growth in its green lending, and its
portfolio of green loans increased by NOK 1.3 billion in the first quarter of
2023, as compared to NOK 1.6 billion in the same period in 2022. Examples of
projects granted green loans in the quarter include new school buildings in
Trondheim municipality, Klepp municipality and Narvik municipality. At the end
of the first quarter, KBN’s green lending represented 13.6% of its overall
lending portfolio. KBN’s target is for 15% of its lending to be green lending by
the end of 2023.

15 bond issues in five currencies

The weakness of the Norwegian krone relative to the US dollar increased KBN’s
liquidity in March, and its funding activities were therefore somewhat less
extensive during the month. New borrowings in the first quarter of 2023 totalled
approximately NOK 24.5 billion through 15 bond issues in five currencies,
compared to NOK 35.6 billion in the same period in 2022.

KBN's publications: https://www.kbn.com/en/about-us/publications/

Contact information

Tor Ole Steinsland
Chief of Staff
Telephone: +47 98 24 70 16
E-mail: tost@kbn.com

More information:
Access the news on Oslo Bors NewsWeb site

588845_KBN Quarterly report Q1 2023.pdf