KommuneKredit announces Annual Report 2020

Summary

▪ Lending and leasing increased by DKK 7 billion to DKK 192 billion.

▪ At DKK 440 million, net interest income was slightly higher than full-year expectations.

▪ Pre-tax profit for the year amounted to DKK 278 million, while comprehensive income for the year was DKK 218 million, against DKK 441 million in 2019. The difference was due to lower value adjustments.

▪ Common Equity Tier 1 (CET1) capital, which equals equity, increased to DKK 8,397 million from DKK 8,179 million at the end of 2019.

Today, 11 March 2021, KommuneKredit released its Annual Report 2020.

KommuneKredit continued its stable financial performance in 2020, and the pre-tax profit of DKK 278 million and a net profit for the year of DKK 218 million is satisfactory.

In accordance with KommuneKredit’s articles of association, the association may not pay dividends, which is why net profit is transferred to equity. KommuneKredit had an equity ratio of 3.6 pct. at the end of 2020, against 3.5 pct. at 31 December 2019.

In connection with the announcement of the annual report, Chairman of the Board Lars Krarup states: "In 2020, we defined a new strategy for KommuneKredit – Strategy 2025 – which will continue the developments we have achieved in recent years.”

He continues: "We have put every ounce of energy into creating the KommuneKredit of tomorrow – exclusively to the benefit of our customers. We will create cohesion and a platform allowing municipalities and regions and, ultimately, our citizens to get as much growth and development for their money as possible.”

We offer our members financing on equal terms across all parts of the country – regardless of whether it is small projects supporting local association activities or large, long-term investments in critical infrastructure like waste incineration and district heating.

CEO Jens Lundager comments: "I am proud that KommuneKredit has been able to meet our customers’ financing needs as usual – despite the COVID-19 pandemic. We have continued to fulfil our role, creating financial latitude for local communities across Denmark.”

Outlook for 2021

We expect that the situation following from COVID-19 will continue not to affect KommuneKredit’s results in 2021 as our business model is highly robust to financial market instability. We expect to maintain our equity ratio above 3 pct. In addition, we expect net lending of a little over DKK 4 billion and net interest income of around DKK 400 million. 

Provided the COVID-19 pandemic eases its grip on society in 2021, we expect administrative expenses to be approximately DKK 160 million.