BNG Maintains its Stable Course: Net Profit EUR 257 Million
THE HAGUE, The Netherlands, March 8, 2011 /PRNewswire/ -- BNG looks back on an very positive year, despite market conditions continuing to be uncertain. A more than reasonable return for shareholders was combined with record scores with regard to new lending and market shares. The net profit for 2010 was EUR 257 million. The proposed dividend pay-out to shareholders is EUR 128 million (EUR 2.30 per share). BNG is confidently looking forward to the development of the result in 2011.
Due to the historically low interest rates, cautiously decreasing spreads for credit and liquidity risks and uncertainty regarding the future scope of guarantees in the housing association sector, the volume of new long-term lending in 2010 was at a record high. BNG's market share was also higher than ever before. In 2010 long-term lending to clients rose by 89% to EUR 16.3 billion.
At EUR 257 million net profit was EUR 21 million lower than for 2009. The net profit was positively influenced by a significantly higher interest result, primarily due to the increase in the long-term lending portfolio. The unrealised result financial transactions was negative, mainly due to the debt crisis in various Euro-countries. BNG expects the results in the coming years to gain from the reverse movements of these value adjustments. Without these adjustments the net profit 2010 would have exceeded the 2009 result.
BNG's liquidity profile improved still further in 2010. The bank was able to raise more long-term funding with more favourable conditions. By integrating the so-called Rule 144A into the existing Debt Issuance Programme, BNG offers US institutional investors the possibility of investing directly in issues by the bank. In 2010 BNG raised EUR 18.2 billion (2009: EUR 14.5 billion) in long-term funding. The bank's triple A ratings were reconfirmed and investors' confidence in BNG was maintained.
BNG's strong solvency position is expressed in the high BIS tier 1 ratio. Due to retained earnings this ratio rose to 19.6%. Despite the considerably higher balance sheet total the bank's leverage ratio remained stable at 2.0%.
At the end of 2010 the Basel Committee for Banking Supervision issued new guidelines in respect of bank capital adequacy and liquidity. For BNG the most important of these guidelines is the intention to fix the minimum leverage ratio at 3% as of 2018. It was, however, indicated that whether this demand will be applicable for all banks in the same way is still under consideration. BNG is investigating ways to be able to comply with this regulation in due course.
BNG is confidently looking forward to 2011. The interest result is expected to be around the high level of 2010. However, given the volatility of the financial markets against the background of the debt crisis and all the other uncertainties, the bank does not consider it wise to make a statement concerning the net profit for 2011.
BNG is the bank of and for public authorities and public sector institutions. BNG strives to be a financial institution that can be assured of the appreciation of its stakeholders. This means that the bank continuously scans its environment and anticipates and responds to issues timely en responsively. BNG's clients are at the heart of its mission. The banks core clients are local authorities, housing associations and healthcare institutions. Long-term, solvency-free lending to these clients is BNG's core activity. With its services BNG flanks the government's policy.
BNG will publish its Annual Report 2010 on its investors site (http://www.bng.com) on 29 April 2011.
This is an unofficial translation of the press release 'BNG blijft stabiel op koers: nettowinst EUR 257 miljoen' which is provided for convenience only. In the event of any ambiguity, the Dutch text will prevail.
Consolidated balance sheet as of 31 December 2010
In millions of euro
31 31
December December
2010 2009
Assets
Cash and cash equivalents 1,073 655
Banks 7,382 7,683
Loans and advances 86,851 79,305
Financial assets at fair value
through the income statement 3,052 2,983
Financial assets available for
sale 6,412 5,531
Other financial assets 13,457 8,002
Associates and joint ventures 109 106
Property and equipment 21 23
Other assets 176 208
Total assets 118,533 104,496
Liabilities
Banks 6,037 5,615
Funds entrusted 7,677 7,070
Subordinated loans 92 174
Debt securities 92,321 79,935
Financial liabilities at fair value
through the income statement 649 351
Other financial liabilities 9,320 8,854
Other liabilities 178 244
Total liabilities 116,274 102,243
Equity 2,259 2,253
Total liabilities and equity 118,533 104,496
Consolidated income statement 2010
In millions of euro
2010 2009
- Interest income 1,898 2,628
- Interest expenses 1,488 2,291
Interest result 410 337
Income from associates and joint ventures 2 2
- Commission income 35 36
- Commission expenses 6 6
Commission result 29 30
Result financial transactions -37 40
Addition to the loan loss provision -4 -
Other results 0 2
Total income 400 411
- Staff costs 35 35
- Other administrative expenses 26 24
Staff and other administrative expenses 61 59
Depreciation 2 2
Total expenses 63 61
Profit before tax 337 350
- Movement in deferred tax -1 -
- Tax -79 -72
Taxation -80 -72
Net profit 257 278
For further information:
BNG
Aart Rietveld, spokesman BNG
P.O. Box 30305
2500 GH THE HAGUE
The Netherlands
PRN NLD
SOURCE BNG (Bank Nederlandse Gemeenten)
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