ANNUAL REPORT 2015 - Nordic Investment Bank

1 ANNUAL REPORT2015 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT . You can find the complete REPORT at REPORT 2015 ContentsNIB 2015 1 Key figures 2 President s review 3 Five-year comparison 4 Graphs 2011- 2015 5 Capital structure 9 Economic landscape 11 Our Impact 13 Mission fulfilment 14 Improving competitiveness 15 Enhancing the environment 17 Sustainability management 21 Our environmental footprint 23 Our stakeholders 24 NIB s stakeholder survey 26 Ethics and integrity 28 Codes of conduct 29 Defining what matters 30 Operations 33 Lending 34 Business areas 36 Other activities 38 Loans agreed 2015 39 Treasury 41

2 Capital markets 43 NIB Environmental Bonds 46 Asset liability management 48 Portfolio management 49 About NIB 50 NIB in brief 51 Our people 52 Governance 56 Board of Governors 59 Control Committee 60 Board of Directors 61 Executive Committee 66 GRI index 68 REPORT of the Board of Directors 87 Proposal by the Board of Directors to the Board of Governors 94 Statement of comprehensive income 95 Statement of financial position 96 Changes in equity 97 Cash flow statement 98 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT . You can find the complete REPORT at REPORT 2015 ContentsNotes to the financial statements 100 Note 1: Segment information 119 Note 2: Interest income and interest expense 121 Note 3: Commission income and fees received 122 Note 4: Net profit/loss on financial operations 123 Note 5: General administrative expenses 124 Note 6: Impairment of loans 128 Note 7: Financial placements 129 Note 8: Loans outstanding and guarantee commitments 131 Note 9: Intangible assets, tangible assets (property and equipment) 136 Note 10: Depreciation 138 Note 11: Other assets 139 Note 12: Debts evidenced by certificates and swaps 140 Note 13: Other liabilities 141 Note 14.

3 Authorised capital paid-in capital 142 Note 15: Statutory reserve and credit risk funds 143 Note 16: Collateral and commitments 144 Note 17: Fair value of financial instruments 145 Note 18: Maturity profile of financial assets and liabilities 148 Note 19: Interest rate risk 150 Note 20: Currency risk 152 Note 21: Related party disclosures 154 Note 22: Cash flow statement 155 Note 23: Exchange rates 156 Note 24: Post balance sheet events 157 Auditor s REPORT 158 Statement by the Control Committee 160 NIB 2015 Joneta DanielssonSenior Manager, Head ofFinancial AccountingOur comprehensive financial reporting is keyto understanding NIB s business operations.

4 And that opens new routes to internationalfinancial 2015 NIB s Board of Directors proposes thatEUR 55 million be paid as dividends to theBank s member countries for the year 201594% of NIB s lending achieved a good or excellent mandate ratingPROSPECTS 2016 NIB to better serve SMEs and mid-sizedcorporatesNIB to increase flexibility in non-membercountry lendingNIB - ANNUAL REPORT - NIB 20151 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT . You can find the complete REPORT at 2015 Key figures(IN EUR MILLION UNLESS OTHERWISE SPECIFIED)20152014 Net interest income247239 Profit/loss215210 Loans disbursed2,7162,274 Loans agreed2,8302,389 Loans outstanding15,62715,156 Guarantee commitments New debt issues4,2763,361 Debts evidenced by certificates20,86219,446 Total assets27,31124,870 Equity/total assets (%) equity (%) of employees (average during year)188186 NIB - ANNUAL REPORT - Key figures2 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT .

5 You can find the complete REPORT at FIGURESP resident s review2015 was a year of surprises for NIB. In general, bankers do not like surprises, but for NIB, the past year brought a positive surprise as thedisbursements of loans substantially exceeded our expectations, resulting in an all-time high of EUR billion for projects that improve thecompetitiveness and environment of the Nordic Baltic region. This growth was attributable to a good number of new borrowers in the municipaland private sectors and the growing needs in the municipal field, as well as the Bank s efforts to broaden its customer we consider that 94% of this lending received an internal mandate rating of good or excellent , it becomes apparent that a long-termlender like NIB has a role to 2015 , most of our loans to projects that improve the competitiveness were in the sectors of R&D, infrastructure and energy projects.

6 Examplesinclude a loan to develop natural ingredient solutions for the global food and health industries, and loans to construct the Rail Baltica majority of our environmental loans related to climate change mitigation and protection of the marine environment in the Nordic Baltic region,such as constructing a wastewater treatment plant in Helsinki. Several loans support both competitiveness and the environment, such asconstructing the energy-efficient research laboratory MAX IV at Lund University and the Investment in a new hydropower plant by Lyse Energi can find out about our loan projects on our website at .We also raised EUR billion in new funding and continued to issue NIB Environmental Bonds to investors following socially responsibleinvestment made a profit of EUR 215 million in years ago, the Nordic Investment Bank was established to become a co-financier and coordinator of major projects of joint Nordic Bank has since developed into a Nordic Baltic long-term lender with a strong commitment to sustainability and growth.

7 As such, NIB continuesto serve as a regional forum for intergovernmental dialogue and 2015 , NIB s Board of Directors concluded a strategy review aimed at further strengthening our ability to fulfil the Bank s mission. We will continueto implement new strategic initiatives to increase our lending to SMEs, mid-sized corporates, projects in the Arctic and also to counterparts outsidethe Nordic Baltic the year 2016 has started out in turmoil in the financial markets and with Investment activity still constrained, we hope that it will turn outto be another year of positive surprises for the Bank. There is a need, in particular, for infrastructure investments in the Nordic Baltic region, andNIB expects to play a constructive role in enabling these to NormannPresident and CEONIB - ANNUAL REPORT - President s review3 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT .

8 You can find the complete REPORT at S REVIEWFive-year comparisonAMOUNTS IN EUR MILLION20152014201320122011 STATEMENT OF COMPREHENSIVE INCOME, 1 Jan-31 DecNet interest income247239244252228 Commission income and expense administrative expenses, depreciation and write-downs-50-41-39-38-37 Realised and unrealised gains/losses of financial assets held at fair value-92615369 Impairment of loans and bonds held at amortised cost-3-21-15-56-24 Adjustment to hedge accounting21-12-1-2 Profit/loss for the year215210217209194 STATEMENT OF FINANCIAL POSITION, as of 31 DecAssetsCash and cash equivalents, placements and debt securities8,7767,1587,1318,0926,788 Loans outstanding15,62715,15614,66715,13114,15 3 Intangible and tangible assets2834353435 Accrued interest and other assets2,8802,5231,6572,7262,826 Total assets27,31124,87023,49025,98323,802 Liabilities and equityAmounts owed to credit institutions and repurchase agreements1,5898723721,6091,597 Debts evidenced by certificates20,86219,44618,42120,33218,4 33 Accrued interest and other liabilities1,7131,5671,8661,3771,315 Paid-in capital419419419419419 Statutory Reserve686686686686684 Credit risk funds1,8261,6711,5091,3521,158 Payments to the Bank s Statutory Reserve and credit risk funds, receivable 3 Other value adjustments Profit/loss for the year215210217209194 Total liabilities and equity27.

9 3112487023,49025,98323,802 ACTIVITIESD isbursements of loans2,7162,2741,9222,3551,946 Guarantees issued Loans outstanding at year-end15,62715,15614,66715,13114,153 Guarantee commitments at year-end 4 New debt issues (including capitalisations)4,2763,3614,0804,3552,88 7 Number of employees (average during year)188186183180175 NIB - ANNUAL REPORT - Five-year comparison4 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT . You can find the complete REPORT at 2011- 2015 Net interest incomeProfit / lossNIB - ANNUAL REPORT - Graphs 2011-20155 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT . You can find the complete REPORT at 2011 2015 Total assetsLoans outstandingNIB - ANNUAL REPORT - Graphs 2011-20156 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT .

10 You can find the complete REPORT at 2011 2015 Borrowings outstandingLoans in member countriesNIB - ANNUAL REPORT - Graphs 2011-20157 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT . You can find the complete REPORT at 2011 2015 Loans in non-member countriesBorrowingsNIB - ANNUAL REPORT - Graphs 2011-20158 NIB ANNUAL REPORT 2015 This page is generated from NIB s electronic ANNUAL REPORT . You can find the complete REPORT at 2011 2015 Capital structureNIB s capital base consists of authorised capital subscribed by the member countries and reserves accumulated through internal profit Bank s authorised capital was EUR 6, million as of 31 December 2015 .