France Full Rating Report Ratings Long-Term IDR AA+ Short-Term IDR F1+ Outlook Long-Term IDR Financial Data Stable Council of Europe Development Bank Dec 15 Dec 14 Total assets (EURm) 25,116.4 25,545.4 Equity/adj. assets (%) 11.1 10.3 Average rating of BBB+ BBB+ loans & guarantees Impaired loans ratio 0.0 0.0 5 largest exposures/ 31.6 32.2 total exposure (%) Share of nonsovereign 52.6 53.2 exposure (%) Net income/equity (%) 4.8 5.3 Average rating of key shareholders AA AA Key Rating Drivers Very Low Solvency Risks: Within Fitch Ratings new supranationals rating criteria (see Related Criteria), the solvency assessment is broken down into capitalisation and risks. Council of Europe Development Bank (CEB) has a very low risk profile owing to the excellent performance of its loan book (no loan impairments), a low concentration assessment, and strong risk management policies. Low Risk Operating Environment: This assessment is driven by the focus of CEB s financing operations on member states, which in general are high-income, politically stable countries (with the notable exception of some Balkan states). This is supported by the bank s headquarters being located in Paris. The bank looks set to emphasise its lending portfolio in the coming years to counterparties in low-risk operating environments, such as Finland, Germany and Sweden. Moderate Capitalisation, High Leverage: CEB s moderate capitalisation is driven by its equity/adjusted assets ratio of 11.1% at end-2015, which is weak compared to those of other Fitch-rated multilateral development banks (MDBs). Fitch projects this figure to stabilise at 11.0% over the medium term. CEB s leverage remains high, especially relative to peers, although it did fall in 2015, with a debt/equity ratio of 728.8% at end-2015 compared to 814.4% at end-2014 a trend that Fitch expects to continue. Excellent Liquidity: CEB s rating is also driven by its strong liquidity profile among Fitchrated MDBs. Liquid assets accounted for 35.9% of CEB s total balance sheet at end-2015, and short-term liabilities are well covered by liquid assets (288% at end-2015). Of treasury assets, 58.8% are rated AA or above, and the bank has excellent access to financial markets. Stable Asset Quality: CEB s asset quality remained stable in 2015, as in 2013 and 2014, with the average rating of loans at BBB+ at the year-end. The total loan book grew by 4.0% last year, with a 6.6% increase in loans to investment-grade counterparties. Over 80% of total loans at end-2015 were to investment-grade counterparties (78.5% at end-2014). Low Concentration Risk: Of CEB s loan book at end-2015, 31.6% was concentrated in its five largest counterparties (32.2% at end-2014). Sovereign exposure is dominated by Turkish (9.1% of the loan book), Hungarian (7.0%) and Romanian (6.3%) entities, and loan exposure to Spanish counterparties remains significant (4.8% of total loans). Total loans to non-sovereign counterparties banks and public entities have slightly decreased to 52.6% of total loans at end-2015 (53.2% at end-2014). Analysts Nicholas Perry +44 20 3530 1795 nicholas.perry@fitchratings.com Vincent Martin +44 20 3530 1828 vincent.martin@fitchratings.com Rating Sensitivities Capitalisation: Should CEB s capitalisation metrics (equity/adjusted assets and/or internal capital generation) deteriorate, this would lead to downward pressure on its rating. Rapid growth in lending could affect capitalisation measures, which would have a negative impact on the rating. In turn, capital injection from shareholders would strengthen the solvency of the bank and would have a positive effect on the long-term rating. Average Rating of Loans: Should the average rating of CEB s loans deteriorate, this could affect the very low risk assessment of CEB which underpins its rating. A relaxation in the bank s underwriting standards could also lead to downward pressure on the rating. www.fitchratings.com 12
Intrinsic Rating Assessment Indicative value Solvency Liquidity Business environment Intrinsic credit quality Source: Fitch Risk Assessment Indicative value Credit Concentration Equity risk Market risks Risk mgmt. policies Source: Fitch Assessment aaaaa Low risk aa+ Risk level Very low Low Very low Very low Strong Business Environment CEB is an MDB established in 1956 to finance social projects, with the objective of improving living conditions in the least advantaged parts of Europe. Its membership comprises 41 states of the Council of Europe. CEB is legally and financially independent of the Council, being based on a partial agreement among the latter s member states. CEB s headquarters are in Paris, and the bank employed 196 staff at end-2015. Initially conceived to finance projects aimed at alleviating social problems relating to refugees, displaced persons or migrants, CEB s operations have since expanded to encompass the financing of social, environmental and infrastructure projects. However, given the ongoing refugee crisis in Europe, the bank has refocused its attention on support for displaced persons, both through the establishment of the Migrant and Refugee Fund (MRF), which provides immediate grants to member countries, and through increasing its loan approvals and disbursements to non-target countries to help with the long-term integration of such refugees. The MRF is a trust fund set up by CEB to help its member states deal with migrants and refugees. The MRF is funded by CEB member states, the European Investment Bank (EIB; AAA/Stable) and CEB itself. At end-june 2016, CEB had approved almost EUR16.6m in MRF grants in favour of 11 projects. The bank s main instruments are loans to state or state-guaranteed projects, public institutions and banks but its by-laws prohibit investment in equity stakes. As a supranational entity, CEB is not subject to any banking regulation and is exempt from all direct and indirect taxation. Its claims on sovereign states also benefit from the bank s preferred-creditor status. The Council of Europe s business environment is deemed low risk by Fitch. Target Countries Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Georgia, Hungary, Kosovo, Latvia, Lithuania, Malta, Montenegro, Poland, Slovakia, Romania, Serbia, Moldova, Slovenia, Macedonia, Turkey Source: Fitch Business Profile In Fitch s view, CEB has a medium-risk governance and business profile, due to the following key factors: The size of its banking portfolio, at EUR13.1bn, is at the low end of the range for European and regional MDBs, such as Inter-American Development Bank (AAA/Stable; USD78.9bn), Islamic Development Bank (AAA/Stable; USD19.9bn) and African Development Bank (AAA/Stable; USD19.7bn). Other Countries Belgium, Denmark, Finland, France, Germany, Greece, Holy See, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Portugal, San Marino, Spain, Sweden, Switzerland Source: Fitch The bank has high risk exposure to the non-sovereign sector at 52.6% of its total portfolio at end-2015 (53.2% at end-2014). The focus of CEB s non-sovereign lending is to financial institutions and local governments with a small number of loans extended to corporates. The strategy of the bank is deemed medium risk. Its loan approvals have been growing steadily in recent years, but they are set to increase rapidly from EUR2.3bn at end-2015 to EUR3.5bn at end-2016. This increase is largely due to the rise in non-target counterparties in Northern Europe (such as Finland, Sweden and Germany) to help with the long-term integration of refugees and migrants. CEB s low risk governance reflects the bank s experienced senior staff and prudential risk framework. There is a very transparent organisational structure and a comprehensive set of internal policies, which are firmly enforced. Fitch expects the bank to maintain highquality risk and underwriting standards in the coming years. Furthermore, its governor, Rolf Wenzel, was unanimously re-elected on 8 April 2016 by CEB s member states, providing ongoing stability for the bank. Related Criteria Supranationals Rating Criteria (July 2016) 2
2011 2012 2013 2014 2015 Supranationals Operating Environment Fitch assesses CEB s operating environment as low risk, due to the following key factors: The average credit quality of the bank s countries of operations is assessed as high. CEB only extends its financing operations to its 41 member countries, all of which are within Europe. Of the loan portfolio, 80.5% is to investment-grade counterparties. The average income per capita in CEB s countries of operations is high, owing largely to the bank s strategy to focus its operations solely on its member countries. Despite having operations in certain less advantaged European states, CEB continues to operate significantly with Western and Northern European counterparties. CEB is headquartered in Paris. It therefore enjoys very limited political risk, and the business climate in its country of head office (France; AA/Stable) is sound. The business climate in CEB s countries of operations is also assessed as low risk overall, as the bank operates solely within Europe, the countries of which is broadly assessed as a low risk environment, especially compared to peers. The operational support provided by CEB s member states is significant, as illustrated by the immunities and privileges granted to the bank, such as preferred-creditor status. Equity/Adj. Assets (%) 12 11 10 9 8 7 6 5 Source: CEB, Fitch Leverage 1,100 1,000 900 800 700 600 Solvency CEB s solvency is assessed as aa- by Fitch, driven by the bank s very low risks and moderate capitalisation. Capitalisation Peer Comparison: Capital Ratios and Profitability CEB (AA+) EIB (AAA) AsDB (AAA) AfDB (AAA) End-2015 Projectionª End-2015 End-2015 End-2015 Equity/adjusted assets (%) 11.1 11.0 11.1 20.2 26.7 Net income/average equity 4.8 2.5 4.5 3.3-0.5 ª Medium-term projections EIB: European Investment Bank (AAA/Stable); AsDB: Asian Development Bank (AAA/Stable; AfDB: African Development Bank (AAA/Stable) Source: MDBs, Fitch calculations, estimates and methodology CEB s capitalisation is a weakness for the rating. The equity/adjusted assets ratio of 11.1% at end-2015 (11.0% at end-2014) is assessed as moderate on Fitch s new supranationals methodology. Fitch projects this figure to be 11.0% at end-2018. This projection is based on total assets remaining broadly stable, owing to CEB s strategy of replacing liquid assets with loans, and the slower paced, but still increasing, level of equity. Furthermore, CEB s internal capital generation (ROE) is steadily declining and had reached 4.8% at end-2015 (5.3% at end-2014). This decline was largely driven by the fall in net income from EUR134.4m in 2014 to EUR127.0m in 2015. Fitch expects ROE to continue to decline to 2.5% by end-2018. This three-year projection is primarily based on Fitch s view that, given the low interest rate environment currently being experienced in Europe, CEB s net income levels will continue to fall and, in turn, lead to a decrease in ROE. CEB s leverage ratio (debt/equity) remains high compared to MDB peers at 728.8% at end- 2015, albeit down from 814.4% at end-2014. Fitch expects this ratio to continue to decline to 590%-620% over the medium term based on CEB s deleveraging strategy. 500 2011 2012 2013 2014 2015 Source: CEB, Fitch 3
2011 2012 2013 2014 2015 Supranationals Risks Peer Comparison: Risks CEB EIB AsDB AfDB End-2015 Projectionª End-2015 End-2015 End-2015 Estimated average rating of loans & BBB+ BBB BBB+ BBB BB guarantees Impaired loans/gross loans (%) 0.0 0.0 0.3 0.03 4.1 Five largest exposures/total loans (%) 31.6 30.0 16.5 73.4 38.1 Equity stakes/(loans + equity stakes) (%) 0.0 0.0 0.9 1.4 5.1 ª Medium-term projections Source: MDBs, Fitch calculations, estimates and methodology Fitch assesses CEB s overall risks as very low. 5 Largest Exposure/Total Loans (%) 40 The bank s overall loan performance is excellent with no impairments. There have been only two impairments in its history: default of an Icelandic private bank, which was fully provisioned; and default on loans to the former Yugoslavia, following the break-up of the country, which has been fully recovered since. 30 20 10 0 Source: CEB, Fitch According to Fitch s new criteria, CEB s concentration assessment is deemed low risk, with the five largest exposures accounting for 31.6% of total exposures at end-2015 (32.2% at end-2014). This falls comfortably within the low threshold range of 20%-40%, as set out in Fitch s new Supranationals Rating Criteria. CEB s asset quality remained stable in 2015, as in 2013 and 2014, with the average rating of loans at BBB+ at the year-end. The total loan book had grown by 4.0%, with a 6.6% increase in loans to investment-grade counterparties. Over 80% of total loans at end-2015 were to investment-grade counterparties (78.5% at end-2014). CEB s exposure to market risk is limited and is assessed as very low. Regarding currency exchange risk, the bank s strategy is not to take any currency positions and instead to finance assets and liabilities in a single currency. The interest rate risk in CEB s balance sheet is limited and is closely monitored. Like other MDBs, CEB is not subject to any bank regulation or supervisory regime. Instead, CEB has its own prudential risk framework. The effectiveness of the self-imposed risk management framework is contingent on CEB s willingness to adhere to its own limits following the review of its financial and risk policy in June 2016. As a result of massive sovereign rating downgrades after the financial crisis in the eurozone, CEB has introduced in its financial and risk policy a number of key changes, including greater flexibility in interest risk management through a balance sheet approach and management of the liquidity risk. 4
Liquidity Assessment Indicative value Risk level Liquidity buffer Excellent Quality of treasury assets Strong Access to cap markets & Excellent alt. sources of liquidity Source: Fitch Liquid Assets/ST Debt (%) 350 300 250 200 150 100 50 0 2011 2012 2013 2014 2015 Source: CEB, Fitch Liquidity Fitch assesses CEB s liquidity at aaa. Peer Comparison: Liquidity CEB EIB AsDB AfDB End-2015 Projectionª End-2015 End-2015 End-2015 Liquid asset/short-term debt (%) 288 250 76.5 170.0 261.2 Share of treasury assets rated AA and above (%) 59 55 61.3 71.4 88.0 ª Medium-term projections Source: MDBs, Fitch calculations, estimates and methodology Liquidity Buffer Liquidity buffers are excellent and compare favourably with those of peers. Treasury assets accounted for 35.9% of total assets at end-2015 (39.6% at end-2014), with the coverage of short-term liabilities by liquid assets improving to 2.88x at end-2015 (1.88x at end-2014). Fitch expects CEB s strong liquidity profile to remain a key rating strength over the medium term. However, given the bank s strategy to reduce its liquid assets, Fitch expects the coverage of short-term liabilities by liquid assets to reach 2.50x by end-2018. Quality of Treasury Assets Fitch assesses CEB s quality of liquid assets as strong. At end-2015, 59% of treasury assets were rated AA or above. Following the bank s strategy to reduce its level of liquid assets, Fitch expects the AAA - AA share to fall to 55% over the medium term. Access to Capital Markets and Alternative Sources of Liquidity Fitch assesses CEB s access to capital markets as excellent, with the bank able regularly to issue on the international capital markets. The bank has a well-diversified investor base but focuses its debt issuance in three currencies: euros (57.4%), US dollars (29.3%) and pounds sterling (13.3%). Debt Issuance in 2015 GBP 13.3% For the bonds issued in 2015, the average funding maturity was 7.1 years (6.9 years at end-2014 and 5.1 years at end-2013). CEB s most significant issuances in 1H16 include: a EUR1bn bond with a 10-year maturity (0.375% coupon); a USD1bn bond with a five-year maturity (1.625% coupon); and a GDP300m bond with a three-year maturity (1.125% coupon). USD 29.3% EUR 57.4% Source: CEB, Fitch 5
Shareholders Support Peer Comparison: Shareholder Support CEB EIB AsDB AfDB End-2015 Projectionª End-2015 End-2015 End-2015 Coverage of net debt by callable capital N.C. N.C. N.C. AA+ AAA Average rating of key shareholders AA AA AA A+ BBB+ Propensity to support -3-3 0 0 0 a Medium-term projections Source: MDBs, Fitch calculations, estimates and methodology CEB s IDR benefits from no credit uplift for support. Capacity to Provide Extraordinary Support The average rating of key shareholders is AA. Fitch defines key shareholders as the countries or institutions that own the largest shares of callable capital and whose cumulative share ownership accounts for at least 50% of total capital. CEB s key shareholders are France (AA/Stable), Germany (AAA/Stable) and Italy (BBB+/Stable). They each account for 16.8% of total callable capital, or a total of 50.3% between them. The average rating of key shareholders at end-2015 was AA, the same level as at end-2014. However, CEB s callable capital subscribed by shareholders does not cover the bank s net debt. In addition, member states willingness to provide support is weak, in Fitch s view. There has been no cash contribution in capital increase procedures in recent years, and CEB does not play an essential role in the financing of member states. To reflect this, Fitch applies a three-notch downward adjustment to the average rating of key shareholders. 6
Income Statement 31 Dec 2015 31 Dec 2014 31 Dec 2013 31 Dec 2012 Year End Year End As % of Year End As % of Year End As % of Year End As % of USDm EURm Earning EURm Earning EURm Earning EURm Earning Original Original Assets Original Assets Original Assets Original Assets 1. Interest Received 189.8 174.3 0.71 224.5 0.89 211.0 0.87 304.0 1.15 2. Interest Paid 8.1 7.4 0.03 54.8 0.22 47.3 0.20 146.5 0.55 3. NET INTEREST REVENUE 181.7 166.9 0.68 169.7 0.67 163.7 0.68 157.5 0.59 4. Other Operating Income 8.7 8.0 0.03 (1.5) (0.01) (8.5) (0.04) (1.2) (0.00) 5. Other Income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6. Personnel Expenses 38.2 35.1 0.14 22.2 0.09 33.4 0.14 25.5 0.10 7. Other Non-Interest Expenses 13.9 12.8 0.05 11.6 0.05 10.5 0.04 10.6 0.04 8. Impairment charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 9. Other Provisions 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.PRE-DERIVATIVE OPERATING PROFIT 138.3 127.0 0.52 134.4 0.53 111.3 0.46 120.2 0.45 11. Net gains / (losses) on non-trading derivative instruments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12. POST-DERIVATIVE OPERATING PROFIT 138.3 127.0 0.52 134.4 0.53 111.3 0.46 120.2 0.45 13. Other income and expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 14. NET INCOME 138.3 127.0 0.52 134.4 0.53 111.3 0.46 120.2 0.45 15. Fair value revaluations recognised in equity 11.3 10.4 0.04 14.2 0.06 78.4 0.32 87.5 0.33 16. FITCH'S COMPREHENSIVE NET INCOME 149.6 137.4 0.56 148.6 0.59 189.7 0.79 207.7 0.78 7
Balance Sheet 31 Dec 2015 31 Dec 2014 31 Dec 2013 31 Dec 2012 Year End Year End As % of Year End As % of Year End As % of Year End As % of USDm EURm Assets EURm Assets EURm Assets EURm Assets Original Original Original Original Original Original Original Original Original A. LOANS 1. To / Guaranteed by Sovereigns 6,748.0 6,198.0 24.68 6,077.0 23.79 5,789.0 23.64 5,647.0 21.03 2. To / Guaranteed by public institutions 3,651.6 3,354.0 13.35 3,360.0 13.15 3,202.0 13.08 3,051.0 11.36 3. To / Guaranteed by Private Sector 3,832.3 3,520.0 14.01 3,130.0 12.25 3,590.0 14.66 3,433.0 12.78 4. Of which Trade Financing Loans (memo) 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 5. Other Loans 353.7 324.9 1.29 404.5 1.58 190.1 0.78 319.4 1.19 6. Loan Loss Reserves (deducted) 2.1 1.9 0.01 1.9 0.01 1.9 0.01 1.9 0.01 TOTAL A 14,583.6 13,395.0 53.33 12,969.6 50.77 12,769.2 52.15 12,448.5 46.35 B. OTHER EARNING ASSETS 1. Deposits with Banks 2,497.4 2,293.9 9.13 2,299.2 9.00 2,806.8 11.46 4,021.1 14.97 2. Securities held for Sale & Trading 3,888.4 3,571.5 14.22 4,806.7 18.82 4,548.8 18.58 4,930.0 18.36 3. Investment Debt Securities - (incl. other invest.) 2,906.5 2,669.6 10.63 2,812.0 11.01 2,631.0 10.75 2,477.9 9.23 4. Equity Investments 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 5. Derivatives (incl. Fair-value of guarantees) 2,871.1 2,637.1 10.50 2,379.5 9.31 1,391.0 5.68 2,603.1 9.69 TOTAL B 12,163.4 11,172.1 44.48 12,297.4 48.14 11,377.6 46.47 14,032.1 52.25 C. TOTAL EARNING ASSETS (A+B) 26,747.0 24,567.1 97.81 25,267.0 98.91 24,146.8 98.62 26,480.6 98.60 D. FIXED ASSETS 50.6 46.5 0.19 46.2 0.18 44.7 0.18 44.9 0.17 E. NON-EARNING ASSETS 1. Cash and Due from Banks 518.8 476.5 1.90 203.9 0.80 286.6 1.17 327.4 1.22 2. Other 28.6 26.3 0.10 28.3 0.11 6.7 0.03 4.7 0.02 F. TOTAL ASSETS 27,345.0 25,116.4 100.00 25,545.4 100.00 24,484.8 100.00 26,857.6 100.00 G. SHORT-TERM FUNDING 1. Bank Borrowings (< 1 Year) 0.0 0.00 0.0 0.00 0.0 0.0 0.00 0.0 0.00 2. Securities Issues (< 1 Year) 3,254.8 2,989.5 11.90 5,214.2 20.41 5,062.5 20.68 4,615.6 17.19 3. Other (incl. Deposits) 148.7 136.6 0.54 158.0 0.62 127.4 0.52 83.4 0.31 TOTAL G 3,403.5 3,126.1 12.45 5,372.2 21.03 5,189.9 21.20 4,699.0 17.50 H. OTHER FUNDING 1. Bank Borrowings (> 1 Year) 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 2. Other Borrowings (incl. Securities Issues) 18,110.0 16,634.0 66.23 15,358.0 60.12 15,124.4 61.77 16,942.7 63.08 3. Subordinated Debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4. Hybrid Capital 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TOTAL H 18,110.0 16,634.0 66.23 15,358.0 60.12 15,124.4 61.77 16,942.7 63.08 I. OTHER (Non-Int Bearing) 1.Derivatives (incl. Fair value of guarantees) 728.7 669.3 2.66 831.7 3.26 1,057.0 4.32 1,024.0 3.81 2. Fair value portion of debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3. Other (Non-Int Bearing) 1,904.2 1,749.0 6.96 1,198.7 4.69 482.7 1.97 1,771.0 6.59 TOTAL I 2,632.9 2,418.3 9.63 2,030.4 7.95 1,539.7 6.29 2,795.0 10.41 J. GENERAL PROVISIONS & RESERVES 246.6 226.5 0.90 239.4 0.94 170.8 0.70 159.2 0.59 L. EQUITY 1. Preference Shares 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2. Subscribed Capital 5,957.8 5,472.2 21.79 5,472.2 21.42 5,472.2 22.35 5,465.7 20.35 3. Callable Capital (5,291.0) (4,859.8) (19.35) (4,859.8) (19.02) (4,859.8) (19.85) (4,854.0) (18.07) 4. Arrears/Advances on Capital 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 5. Paid in Capital (memo) 666.7 612.4 2.44 612.4 2.40 612.4 2.50 611.7 2.28 6. Reserves (incl. Net Income for the year) 2,348.0 2,156.6 8.59 2,029.5 7.94 1,895.1 7.74 1,781.7 6.63 7. Fair-value revaluation reserve (62.6) (57.5) (0.23) (96.5) (0.38) (47.5) (0.19) (131.7) (0.49) TOTAL L 2,952.1 2,711.5 10.80 2,545.4 9.96 2,460.0 10.05 2,261.7 8.42 M. TOTAL LIABILITIES & EQUITY 27,345.0 25,116.4 100.00 25,545.4 100.00 24,484.8 100.00 26,857.6 100.00 Exchange rate USD1 = EUR0.91850 USD1 = EUR0.82370 USD1 = EUR0.72510 USD1 = EUR0.75790 8
Ratio Analysis 31 Dec 2015 31 Dec 2014 31 Dec 2013 31 Dec 2012 Year End Year End Year End Year End % % % % Original Original Original Original I. PROFITABILITY LEVEL 1. Net Income/Equity (av.) 4.83 5.37 4.71 5.50 2. Net Income/Total Assets (av.) 0.50 0.54 0.43 0.45 3. Net Interest Revenue + Commitment Fees / Gross Loans + Treasury Asse 0.86 0.86 0.80 0.75 4. Cost-Income Ratio 27.39 20.10 28.29 23.10 5. Income from Equity Investment / Equity Investment (av.) 0.0 0.0 0.0 0.0 6. Provisions / Average Total Banking Exposure (excl LCs) 0.0 0.0 0.0 0.0 II. CAPITAL ADEQUACY 1. Net Total Banking Exposure (excl LCs) / Subscribed Capital + Reserves 175.58 172.89 173.32 171.77 2. Equity/Adjusted Total Assets 11.09 10.30 10.50 8.75 3. Equity /Adjusted Total Assets + Guarantees 11.09 10.30 10.50 8.75 4. Paid-in capital / Subscribed capital 11.19 11.19 11.19 11.19 III. LIQUIDITY 1. Liquid Assets / Debt < 1 Year 288.27 188.41 197.95 250.19 2. Liquid Assets / Total Assets 35.88 39.62 41.96 43.77 3. Liquid Assets / Undisbursed Loans & Equity 288.92 352.92 333.33 391.75 IV. ASSET QUALITY 1. Impaired Loans /Gross Loans 0.0 0.0 0.0 0.0 2. Loan Loss Reserves / Gross Loans 0.01 0.01 0.01 0.02 3. Equity Loss Reserves /Equity Investment 0.0 0.0 0.0 0.0 4. Total reserves / Gross Loans, Equity Investment & Guarantees 0.01 0.01 0.01 0.02 5. Loan Loss Reserves/Non Accrual Loans 0.0 0.0 0.0 0.0 V. LEVERAGE 1. Debt/Equity 728.75 814.42 825.78 956.88 2. Debt/Subscribed Capital + Reserves 260.99 279.94 277.53 304.14 3. Debt/Callable Capital 406.60 426.56 418.01 445.85 4. Net Income + Interest Paid/Interest Paid 1,816.22 345.26 335.31 182.05 9
Spread Sheet Annex 31 Dec 2015 31 Dec 2014 31 Dec 2013 31 Dec 2012 EURm EURm EURm EURm Original Original Original Original 1. LENDING OPERATIONS 1. Loans outstanding 13,071.7 12,971.5 12,771.1 12,450.4 2. Undisbursed Loans 3,119.0 2,868.0 3,082.0 3,001.0 3. Approved Loans 2,301.0 2,065.0 2,274.0 1,798.0 4. Disbursed Loans 1,843.0 1,746.0 1,845.0 1,584.0 5. Loan Repayments 1,387.0 1,791.0 1,362.0 1,591.0 6. Net disbursments 456.0 (45.0) 483.0 (7.0) 2. OTHER BANKING OPERATIONS 1. Equity participations 0.0 0.0 0.0 0.0 2. Guarantees 0.0 0.0 0.0 0.0 3. LCs and other off BS credit commitments 0.0 0.0 0.0 0.0 4. Total banking exposure (BS & off BS) 13,071.7 12,971.5 12,771.1 12,450.4 5. Growth in total banking exposure (BS and off BS) 0.8 1.6 2.6 1.3 3. SUPPORT 1. Share of AAA / AA shareholders in callable capital 48.46 48.41 48.46 48.52 2. Share of A / BBB shareholders in callable capital 42.76 42.76 42.76 43.21 3. Share of Speculative Grade shareholders in callable capital 8.78 8.83 8.78 8.28 4. Callable capital from shareholders rated AAA - AA / outstanding debt 11.9 11.3 11.6 10.9 5. Weighted Average Rating of Key Shareholders AA- AA- AA- AA 6. Rating of callable capital ensuring full coverage of net debt NC NC NC NC 4. BREAKDOWN OF BANKING PORTFOLIO 1. Loans to Sovereigns / Total Loans & Equity participations 47.41 46.85 45.33 45.36 2. Loans to Non Sovereigns / Total Loans & Equity Participations 52.29 53.15 54.67 54.64 3. Equity participation / Total Loans & Equity Participations 0.0 0.0 0.0 0.0 4. Non Sovereign Exposure (incl. guarantees)/total Banking Exposure 52.59 53.15 54.67 54.64 5. CONCENTRATION MEASURES 1. Largest exposure 1,192.5 1,074.0 1,222.0 1,313.0 2. Five largest exposures 4,132.9 4,181.7 4,213.1 4,210.2 3. Largest exposure / Equity (%) 43.98 42.19 49.67 58.05 4. Five largest exposures/ Equity (%) 152.42 164.28 171.26 186.15 5. Five largest exposures / Total Loans (%) 31.62 32.24 32.99 33.82 6. CREDIT RISK 1. Average Rating of Loans BBB+ BBB+ BBB+ BBB+ 2. Loans to Investment Grade Borrowers / Gross Loans 170.93 102.38 100.17 98.43 3. Share of Treasury Assets rated AAA-AA 58.76 48.03 41.67 33.18 10
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