BNG Bank Helps Clients Achieve Sustainable Impact

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by KnowESG
KnowESG_Sustainable Banking
Image courtesy of https://www.gfmag.com/

BNG Bank had a successful year in 2022 from a banking standpoint, as evidenced by its sound financial performance. The bank's strong capital position allowed it to secure funding in favourable conditions, which, in turn, allowed it to provide its clients with appealing terms, thereby facilitating attaining their societal goals.

Gita Salden, Chief Executive Officer, BNG Bank: “I am proud that BNG Bank has steered in the right direction in these turbulent times and is again the market leader in the public domain. We managed to remain calm and confident. We did what we are good at: providing favourable loans to the public sector and helping our clients find high-impact solutions.

In 2022, BNG Bank continued to enhance its operations as part of its "Road to Impact" strategy. In the best interests of its clients, the bank invested in its personnel and systems.

Additionally, BNG Bank unveiled its "Going Green" climate plan, which represents the next step in its journey towards energy transition and CO2 reduction. The bank intends to collaborate with its clients, such as municipalities, housing associations, healthcare and educational institutions, and energy firms, to make the Netherlands more sustainable, future-proof, and eco-friendly. The bank operates under the principle that it is the bank of and for the public domain.

BNG Bank's financial results for 2022 were satisfying, with no significant impact from the developments in Ukraine, global supply chain disruptions, high energy prices, or high inflation. The bank recorded a net profit of EUR 300 million in 2022, compared to EUR 236 million in 2021. The increase in net profit was primarily due to a rise in the interest result and a higher realised result on financial transactions from the liquidity portfolio.

The interest result, which BNG Bank considers structurally healthy, was EUR 481 million in 2022, up from EUR 407 million in 2021. Despite the potential impact of rising interest rates on clients' investment decisions, the total long-term loan portfolio amounted to EUR 88 billion at year-end 2022, with a net increase of EUR 1 billion. The volume of new long-term lending was EUR 12.3 billion in 2022, compared to EUR 12.8 billion in 2021. Loan applications increased during the first half of 2022, mainly from municipalities that were anticipating the interest rate rise and sought lending earlier.

BNG Bank's capitalisation remained robust, with Common Equity Tier 1 and Tier 1 ratios of 35% and 37%, respectively, at year-end 2022. The bank received the highest possible credit ratings from rating agencies Fitch, Moody's, and S&P, making it one of the safest banks globally. Based on this, the bank attracted funding in various currencies and at attractive rates throughout the year. BNG Bank increased the use of ESG bonds under its Sustainable Finance Framework to raise funding, accounting for 36% of funding in 2022, up from below 30% in 2021.

BNG Bank proposed a dividend distribution of EUR 139 million, representing 50% of the net profit, adjusted for the additional Tier 1 capital payout, and EUR 2.50 per share, in line with its current policy.

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Source: BNG Bank

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