BNG Interim Report 2011

THE HAGUE, The Netherlands, August 30, 2011 -

Net profit BNG EUR 154 million

BNG looks back on a positive first half of 2011. BNG’s net profit rose by EUR 44 million to EUR 154 million compared to the same period in 2010. This increase in net profit was mainly caused by a higher interest result (+EUR 25 million) and a considerably less negative result financial transactions (+EUR 43 million). BNG is looking forward to the 2011 profit development with confidence.

The volume of new long-term lending decreased by EUR 1.5 billion to EUR 5.8 billion compared to the same period in 2010 and returned to a more usual level, following the historically high level in 2010. The decrease is particularly visible within the public housing sector. Housing associations refinanced significant parts of their 2011 financing needs in 2010, in anticipation of new regulation. By contrast, the demand by local authorities and health care institutions for new long-term loans rose. The bank’s market shares stabilized at the very high levels that were achieved in the previous year.

BNG obtained a total of EUR 9.4 billion in new long-term funding in the first half of 2011 (2010: EUR 9.6 billion). The bank’s liquidity profile improved further in the period under review through this large-scale funding with relatively long maturity.

The interest result for the first half of 2011 increased by EUR 25 million to EUR 227 million compared to the same period in 2010. This increase was, among others, due to the expansion of the long-term lending portfolio. The result financial transactions amounted to EUR 11 million negative in the period under review (2010: EUR 54 million negative). This result was influenced by the growing concerns about the financing problems and creditworthiness of peripheral euro countries.

BNG’s strong solvency position is reflected by the high BIS tier 1 ratio. This ratio remained practically stable at 19.9%. The Basel III regulations prescribe a minimum requirement of the leverage ratio of 3% from 2018 onwards. This ratio remained unchanged compared to the year-end 2010 at 2.0%. In the first half of 2011, BNG drew up a plan to meet this minimum requirement at the latest by year-end 2017. It was concluded that the necessary growth of equity will have to be achieved by retaining a larger percentage of the net profit, supplemented by the issuing of eligible hybrid securities. The adjustment of the dividend policy will be prepared in the next half year. The other components of the Basel III regulations are expected to have hardly any influence on the bank’s operational management.

BNG is looking forward to the 2011 profit development with confidence. The interest result 2011 is expected to be higher than in 2010. However, given the volatility of the financial markets against the background of the international debt crisis as well as all other uncertainties, the bank does not consider it wise to make a statement regarding the 2011 expected net profit.

On 30 August 2011, BNG will publish its interim report 2011 on its website (www.bng.com).

This is an unofficial translation of the press release ‘Nettowinst BNG EUR 154 miljoen’ which is provided for convenience only. In the event of any ambiguity, the Dutch text will prevail.

Consolidated balance sheet as at 30 June 2011

In millions of euros

                                                  30-06-2011  31-12-2010
    Assets
    Cash and cash equivalents                            279       1,073
    Banks                                              8,769       7,382
    Loans and advances                                87,732      86,851
    Financial assets at fair value
     through the income statement                      2,468       3,052
    Financial assets available for sale                6,877       6,412
    Other financial assets                             9,728      13,457
    Associates and joint ventures                        109         109
    Property and equipment                                20          21
    Other assets                                         229         176

    Total assets                                     116,211     118,533

    Liabilities
    Banks                                              4,748       6,037
    Funds entrusted                                    8,952       7,677
    Subordinated loans                                    93          92
    Debt securities                                   90,717      92,321
    Financial liabilities at fair value
     through the income statement                        659         351
    Other financial liabilities                        8,509       9,320
    Other liabilities                                    259         178
    Total liabilities                                113,937     116,274

    Equity                                             2,274       2,259

    Total liabilities and equity                     116,211     118,533

Consolidated income statement

In millions of euros

                                                    First    First
                                                  half of  half of

                                                     2011     2010

    -                Interest income              1,076      921
    -                Interest expenses              849      719
    Interest result                                     227      202

    Income from associates and joint ventures             0        0

    -                Commission income               18       20
    -                Commission expense               3        3
    Commission result                                    15       17

    Result financial transactions                       -11      -54

    Other income                                          4        0
    Total income                                        235      165

    -                Staff costs                     17       17
    -                Other administrative expenses   11       11
    Staff costs and other administrative expenses        28       28

    Depreciation                                          1        1
    Total expenses                                       29       29

    Profit before tax                                   206      136

    Tax expense                                          52       26

    Net profit                                          154      110

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For further information: BNG, Aart Rietveld, BNG spokesman, P.O. Box 30305, 2500 GH The Haguem, +31 70 3750 609