Press release -
KommuneKredit reports satisfactory 2021 result with strengthened sustainability focus
KommuneKredit looks back on a satisfactory 2021 where e.g. extraordinary financing to the regions and loans to the district heating sector resulted in an increase in total lending by DKK 8.7 billion. At the same time, the company has strengthened its sustainability efforts to further support the sustainable transition in the Danish local communities.
A loan to the Museums of Varde that establishes Denmark's first museum dedicated to refugees and their histories. Loans for 82 residential care facilities in the Municipality of Rødovre and a new climate-friendly facade for the foundation of Klosterhallen in the Municipality of Tønder. Leasing of 31 ambulances for the Central Denmark Region and a bus depot for the city of Esbjerg's electric buses. These are just a few examples of financing that KommuneKredit has provided to the Danish local communities in the past year.
KommuneKredit reported satisfactory financial performance in 2021 presenting pre-tax profit for the year of DKK 487 million against DKK 278 million in 2020. The difference was due mainly to value adjustments. Total lending and leasing in 2021 rose by DKK 8.7 billion. The increase was driven, among other things, by extraordinary lending of around DKK 6 billion to the regions pursuant to the economic agreement between Danish Regions and the government.
In connection with the launch of the Annual Report 2021 CEO of KommuneKredit Jens Lundager says:
” KommuneKredit is a non-profit association, and our mission is to contribute to financial latitude in Danish municipalities and regions by providing funding and financial advice at the lowest possible cost. We do so on equal terms despite project size or post code – whether it concerns DKK 6 billion for extraordinary financing to the regions or DKK 50 million for a museum in Oksbøl dedicated to refugees and their histories.”
Read more in KommuneKredit’s Annual Report 2021.
Strengthened sustainability efforts
KommuneKredit’s customers have high ambitions for the sustainable transition of the Danish local communities. In 2021, KommuneKredit’s Green Committee approved 148 green loans totaling DKK 4.9 billion. To continue the support of the green transition in the Danish local communities and simultaneously take the opportunity to raise the standards for green financing, in 2021 KommuneKredit began work on a new framework for green financing that was launched in KommuneKredit’s Green Bond Framework in February 2022.
The updated framework meets the new market standards. At the same time, lending categories are expanded from four to six, giving municipalities and regions access to green loans for investments within the areas of Energy, Sustainable water and wastewater management, Pollution prevention and control, Green buildings, Clean transportation, and Climate change adaptation.
In 2021, KommuneKredit also reinforced the foundation of its strategic work with sustainability by establishing a Finance & Sustainability team with new environmental competencies. In addition, the company continues to focus on strengthening its ESG efforts (Environmental, Social and Governance).
” In line with our Strategy 2025, we continuously work to further support the municipalities and regions in their ambitions for local sustainable transition. This we do by strengthening the framework for our green bonds thus accommodating the increasing demand for sustainable investments that is seen worldwide. Naturally, we also seek to strengthen our own ESG efforts to futureproof our business,” says Jens Lundager.
Outlook for 2022
The strategy for the coming years includes plans for the continued transformation of KommuneKredit that currently focuses on developing KommuneKredit to become a well-functioning, accessible and sustainable financial institution.
KommuneKredit expects lending activities to normalize during 2022 as the effects of the COVID-19 pandemic on local government borrowing start to wear off. The situation in Ukraine is not expected to affect the association’s ability to source funding in the capital markets.
Key figures
▪ At DKK 383 million, net interest income was in line with expectations.
▪ Pre-tax profit for the year amounted to DKK 487 million, while comprehensive income for the year was DKK 378 million, against DKK 218 million in 2020. The difference was primarily due to value adjustments.
▪ Lending and leasing increased by DKK 2.5 billion to approx. DKK 195 billion.
▪ Common Equity Tier 1 (CET1) capital, which equals equity, increased to DKK 8,775 million from DKK 8,397 million at the end of 2020.
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KommuneKredit is an association, whose purpose is to provide lending to municipalities and regions and companies with a 100% municipal guarantee.
The association is the municipalities and regions own credit institution and exist solely for our clients.
