BNG 2011 Financial Statements
THE HAGUE, Netherlands, March 5, 2012 /PRNewswire/ --
Net profit EUR 256 million
BNG maintains its stable course despite the continuing turmoil in the international capital markets. In 2011 the bank achieved almost all of its objectives. In addition to maintaining very high market shares in its most important client segments, the bank made a net profit of EUR 256 million in 2011, down EUR 1 million compared to 2010. The proposed dividend pay-out to shareholders is EUR 64 million (EUR 1.15 per share).
BNG serviced over 70% of demand from the bank's most important client segments - regional governments, housing associations and healthcare institutions. The bank's very high market shares confirm the significance of BNG's role, especially during tense times in the financial markets. As expected, the volume of new long-term lending decreased in 2011 compared to 2010, falling 25% to EUR 12.3 billion. This returns the volume of new business to a more usual level, following the historically high level of 2010.
For both refinancing and lending purposes, BNG raised a total of EUR 16.4 billion in long-term funding in 2011 (2010: EUR 18.2 billion). In the first half of 2011, BNG improved its liquidity profile by attracting funding with relatively long maturity. The second half of 2011 was marked by reduced activity in the international capital markets. As a result, the credit and liquidity spreads the bank pays on funding with longer maturities increased during the last two months of the year.
BNG's triple A ratings were reconfirmed by Moody's, Fitch and Standard & Poor's in 2011. Investors consider the bank to be one of the safest in the world. The bank's creditworthiness has always allowed BNG to maintain an adequate liquidity profile. In line with their view of the creditworthiness of the Dutch State, Standard & Poor's added a 'negative outlook' to BNG's rating.
BNG's 2011 net profit decreased fractionally compared to last year, down EUR 1 million to EUR 256 million. The development of the underlying result is clearly positive. The interest result was significantly higher than in 2010 and exceeded the forecast for 2011. This increase was not reflected in the net profit level. Due to the lack of a structural solution to the European debt crisis, the 2011 net profit was again negatively influenced by the development of the result financial transactions. Nevertheless, the debtors concerned are still expected to be able to meet their future obligations.
Capital requirements for banks will increase considerably as a result of the financial crisis. Among others, the Basel Committee has proposed raising the minimum values of the solvency ratios and setting a 3% lower limit on the leverage ratio (total equity as a percentage of the balance sheet total). These values should come into effect in 2018. BNG already amply meets the stricter requirements for the BIS tier 1 ratio. This is not the case for the leverage ratio. The bank concluded that the necessary growth in equity needs to be achieved by retaining a larger part of the profit, possibly supplemented by a limited issue of hybrid debt securities with equity characteristics. The proposed dividend pay-out for 2011 is 25% of the net profit (2010: 50%).
The 2012 interest result is expected to increase slightly compared to that of the year under review. The development of the 2012 net result may deviate from the relatively favorable development of the interest result. Pressure on the result financial transactions may continue to grow depending on how the European debt crisis will be solved. In addition, BNG has to take into account new regulation which may affect the bank's profitability. For instance, the government intends to introduce the bank levy mid-year 2012, and additional financial burden for banks are currently being discussed. Given the numerous uncertainties, the bank does not consider it wise to make a statement regarding the 2012 net profit.
BNG will publish its 2011 Annual Report on its investor's site (bng.com) on 25 April 2012.
This is an unofficial translation of the Dutch press release 'BNG Jaarcijfers 2011' which is provided for convenience only. In the event of any ambiguity, the Dutch text will prevail.
Consolidated balance sheet as at 31 December 2011
Amounts in millions of euros
31-12-2011 31-12-2010
Assets
Cash and balances with the central bank 5,149 1,073
Amounts due from banks 8,448 7,382
Financial assets at fair value through the income statement 3,322 3,052
Other financial assets 21,519 13,457
Financial assets available-for-sale 6,919 6,412
Loans and advances 90,775 86,851
Associates and joint ventures 108 109
Property and equipment 19 21
Other assets 201 176
Total assets 136,460 118,533
Liabilities
Amounts due to banks 7,469 6,037
Financial liabilities at fair value through the income statement 628 649
Other financial liabilities 14,367 9,320
Debt securities 100,907 92,321
Funds entrusted 10,944 7,677
Subordinated loans 93 92
Other liabilities 155 178
Total liabilities 134,563 116,274
Share capital 139 139
Share premium reserve 6 6
Revaluation reserve (271) (62)
Cash flow hedge reserve (282) -
Currency translation account - (5)
Other reserves 2,049 1,924
Unappropriated profit 256 257
Total equity 1,897 2,259
Total liabilities and equity 136,460 118,533
Consolidated income statement 2011
Amounts in millions of euros
2011 2010
- Interest income 2,327 1,898
- Interest expenses 1,865 1,488
Interest result 462 410
Results from associates and joint ventures 0 2
- Commission income 33 35
- Commission expenses 6 6
Commission result 27 29
Result financial transactions (89) (37)
Addition to the incurred loss provision (1) (4)
Other results 0 0
Total income 399 400
- Staff costs 35 35
- Other administrative expenses 23 26
Staff costs and other administrative expenses 58 61
Depreciation 2 2
Total operating expenses 60 63
Profit before tax 339 337
Taxes (83) (80)
Net profit 256 257
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