BNG Bank consolidates position as market leader
21 March 2022 - The Hague
- More than half of loan requests in public domain met
- Updated strategy takes shape following first impact measurement
- Net interest income decreases, mainly due to failure to obtain TLTRO conditional bonus rate
- Net profit up 7% to EUR 236 million
- Long-term loan portfolio increases to EUR 87 billion
- Dividend of EUR 127 million
Gita Salden, CEO BNG Bank: ‘We showed that we are a reliable and sustainable partner to our clients in 2021, which was another challenging year. We took a proactive approach with them and succeeded in meeting over half of the requests in the public domain by providing loans on favourable terms. We are thus consolidating our position as a market leader. We are proud of this and want to keep improving our position so we can make an even greater impact with our clients.
We conducted an initial measurement of our clients’ social impact. BNG Bank does this because we believe it is important to focus on what really matters and report on it. We are publishing this measurement simultaneously with our annual report and, starting in 2022, we will show each of our clients’ annual progress on these indicators. We will also report specifically on the reduction of carbon emissions in our loan portfolio. The measurement conducted in the reporting year on the loan portfolio as of 31-12-20 shows that they have decreased. This is mainly a credit to our customers.’
The net interest income in 2021 amounted to EUR 407 million, a decrease of EUR 70 million compared to 2020. EUR 57 million of this can be attributed to the fact that, due to a procedural error, BNG Bank did not comply with a reporting requirement on time to qualify for the 0.5% conditional bonus rate on the Targeted Longer-Term Refinancing Operation (TLTRO). BNG Bank acknowledges and regrets the error made and has taken measures to prevent this from happening in the future. The bank is in dialogue with DNB to reach a proportionate outcome that does justice to the intention of the TLTRO and the fact that BNG Bank materially meets the conditions for allocation.
Even without taking into account the missed conditional bonus rate, the net interest income is lower than the previous year. This is a consequence of low interest rates, which have had a particularly negative effect on the net interest income on invested equity. On a structural basis, however, we consider the net interest income to be healthy and we are satisfied with the net profit. For the reporting year 2021, BNG Bank achieved a net profit of EUR 236 million, a 7% increase compared to 2020 (EUR 221 million). An important reason for this is the positive result of financial transactions of EUR 100 million due to market value changes. In 2020, this amounted to EUR 17 million negative.
New long-term lending amounted to EUR 12.8 billion, an increase of over 9% compared to 2020. The total long-term loan portfolio at the end of 2021 amounted to EUR 87 billion. This is a net increase in portfolio value of EUR 1.2 billion.
BNG Bank is a highly capitalised bank. The Common Equity Tier 1 ratio and Tier 1 ratio at the end of 2021 were 32% and 38% respectively. Rating agencies Fitch, Moody's and S&P give BNG Bank the highest rating level. This makes BNG Bank one of the safest banks in the world. Our creditworthiness enabled us to attract funding in various currencies for the short and long term at attractive rates throughout the year.
BNG Bank proposes to distribute a dividend of EUR 127 million (EUR 2.28 per share) for 2021. This is 60% of the net profit remaining after deduction of the distribution to hybrid capital holders. The regular pay-out ratio of 50% has been adjusted to compensate for the missed TLTRO discount.
The full Annual Report will be published on 30 March 2022 on www.bngbank.com.
The Hague, 08.00 uur CET