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BNG Bank Annual Results 2013

THE HAGUE, The Netherlands, March 10, 2014 /PRNewswire/ --

Net profit EUR 283 million

BNG Bank reports a net profit of EUR 283 million over 2013. Despite a substantial increase of the interest result, the core result of the bank, this is a decrease of EUR 49 million compared to 2012, mainly due to the negative contribution from unrealized market value adjustments.

The bank views the reporting year as satisfactory. In addition to maintaining very high market shares in its core client segments, the bank realized a good return for its shareholders. Just as last year, a dividend of 25% of net profit will be proposed to the shareholders.

Market shares remain high, confirming the importance of BNG Bank's role. Around 70% of the total demand for long-term solvency-free lending from the municipal and provincial authorities, housing associations and health-care institutions was fulfilled by the bank. New long-term lending totaled EUR 11.9 billion in 2013 (2012: EUR 11.1 billion). Client demand was primarily driven by refinancing needs. In 2013, investment activity of clients was relatively limited.

In the year under review Standard & Poor's lowered its rating for the State of the Netherlands by one notch, from AAA to AA+, with a stable outlook. In the wake of the above, Standard & Poor's accordingly lowered its rating for BNG Bank. The bank retained Moody's Aaa and Fitch's AAA ratings, the highest possible ratings awarded by the two credit rating agencies. Investors continue to regard BNG Bank as one of the safest banks in the world.

For both refinancing and lending purposes, BNG Bank raised EUR 15.0 billion in
long-term funding in 2013. The increased confidence on the international capital markets in Europe generated a broader supply of long-term funds at attractive prices. This enabled the bank to further bolster its liquidity profile.

Compared to 2012, the 2013 interest result rose by EUR 57 million to EUR 530 million. The increase is mainly attributable to the long-term portfolio's higher volume and improved margin. The result on financial transactions shifted from EUR 88 million positive in 2012 to EUR 5 million negative, mainly due to negative unrealized market value adjustments. The result was also affected by a change in the valuation method applicable to derivatives following changed common market practices. This change could also lead to more volatility in the bank's future results.

BNG Bank closely monitors developments in new laws and regulations in the financial sector. At the end of 2013 it became clear that BNG Bank is to fall under the direct supervision of the European Central Bank within the framework of the Single Supervisory Mechanism (SSM) and will be subject to a comprehensive risk assessment to evaluate the quality of its balance sheet.

The financial prospects for the bank's core client sectors remain not particularly positive. Nevertheless, the bank expects the level of new long-term lending in 2014 to be broadly similar to the level of 2013 given the high demand for refinancing existing loans. In 2014, the interest result is expected to be slightly lower than in 2013, partly due to the persistently low long-term interest rates. Going forward, the result for financial transactions will remain sensitive to the level of economic recovery in the Eurozone.

In view of the persisting uncertainties in the financial markets, BNG Bank does not consider it wise to express an opinion on the level of its net profit for 2014.

BNG Bank will publish its 2013 Annual Report on April 25, 2014 on http://www.bngbank.nl.

Consolidated balance sheet as at December 31, 2013

Amounts in millions of euros

                                                                         Dec.     Dec.
                                                                          31,      31,
                                                                         2013     2012
    ASSETS
    Cash and balances with the central banks                            1,467    2,834
    Amounts due to banks                                                8,509   10,171
    Financial assets at fair value through the income statement         3,532    3,476
    Other financial assets                                             15,494   25,824
    Financial assets available-for-sale                                 9,604    9,018
    Loans and advances                                                 92,074   90,725
    Investments in associates and joint ventures                           53       89
    Property and equipment                                                 17       18
    Other assets                                                           52       73

    TOTAL ASSETS                                                      131,183  142,228

    LIABILITIES
    Amounts due to banks                                                3,939    6,223
    Financial liabilities at fair value through the income statement    3,553    2,730
    Other financial liabilities                                        15,086   18,692
    Debt securities                                                    94,828   99,424
    Funds entrusted                                                    10,033   12,139
    Subordinated debts                                                     32       33
    Other liabilities                                                     282      235
    Total liabilities                                                 127,753  139,476

    Equity                                                              3,430    2,752

    TOTAL LIABILITIES                                                 131,183  142,228



Consolidated income statement 2013

Amounts in millions of euros

                                                      2013         2012


    Interest income                                1,514        2,115
    Interest expense                                 984        1,642
    Interest result                                        530          473

    Results from associates and joint ventures              -1           -2

    - Commission income                               30           31
    - Commission expense                               5            6
    Commission result                                       25           25

    Result on financial transactions                        -5           88

    Other results                                            3            4
    Total income                                           552          588

    - Staff costs                                     36           38
    - Other administrative expenses                   26           25
    Staff costs and other administrative expenses           62           63

    Depreciation                                             2            1
    Total operating expenses                                64           64

    Impairments                                             58           32
    Bank levy                                               33           32
    Profit before tax                                      397          460

    Taxes                                                 -114         -128

    Net profit                                             283          332


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