BNG advanced long-term loans worth â‚¬8 billion in 2001, an increase of over 80%. Thanks to the higher lending volume, the cost control measures taken by the bank and an interest rate trend which benefited the bank particularly in the second half the year, net profit was 8% higher, up by â‚¬18 million to â‚¬249 million. The balance sheet total increased by 9% to â‚¬67.8 billion. A dividend of â‚¬107 million is proposed for 2001, representing a pay-out ratio of 43% of net profit.
Half of the bankÂ's share capital is held by municipal authorities, provincial authorities and a water board (waterschap) and the other half by the State of the Netherlands. Barring unforeseen circumstances, net profit in 2002 is expected to show an improvement on 2001.
BNG strengthened its position as market leader in lending to the Dutch public sector in 2001. Whereas demand for credit in 2000 had fallen short of the level of previous years, total long-term lending volume in 2001 was â‚¬3.7 billion higher at â‚¬8.0 billion. While virtually all target groups contributed to this substantial growth, the fastest growth in demand for long-term credit in absolute terms was among municipal authorities and housing associations. In relative terms, growth in lending volume was fastest in the healthcare sector, driven partly by the Guarantee Fund (WFZ). Demand for short-term credit also increased significantly in 2001, reflecting the lower short-term interest rates and the greater freedom afforded to local and regional authorities by the Local and Regional Government Financing Act (Dutch acronym FIDO) to raise short-term finance.
The bankÂ's funding requirement increased sharply and, for the first time in its history, over â‚¬10 billion of bonds were issued on the international capital market, mostly under the terms of BNGÂ's standardised â‚¬50 billion Debt Issuance Programme. BNGÂ's triple A credit ratings were confirmed by the rating agencies.
Serving the Public Sector
BNGâ€™s specialised financial services for local authorities and public-sector institutions in the field of housing, healthcare, education and public utilities help to minimise the cost to the public of social provisions. As well as being the market leader in lending to these sectors, BNG can also provide solutions to meet clientsÂ' more specific requirements. In response to the growing interest in investment products and services, for example, BNG offers vehicles for FIDO-compliant investment in euro bond funds. The capital invested in these funds has grown to around â‚¬250 million. BNG Consultancy Services (BCS) was retained by many municipal authorities last year to assist with the formulation of the funding rules which are now required by law. O.P.P., the bankÂ's development and equity investment subsidiary for public/private and public/public partnerships, positioned itself more strongly in the market last year. It was involved in a growing number of projects in 2001 and ended the year in profit.
Research has shown that clients are very satisfied with the bankÂ's service and feel that the quality of service has improved. The satisfied clients, good result and high lending volume suggest that BNG, as a bank for the public sector, succeeded in enhancing added value still further in 2001.
The outlook for the current year is not unfavourable. Barring unforeseen circumstances, net profit in 2002 is expected to show an improvement on 2001.
(source: Bank Nederlandse Gemeetnen)