KommuneKredit presents first impacts of new funding model in Interim Report 2025
18 September 2025KommuneKredit published its Interim Report 2025. The report presents the first impacts of the new funding model, which is expected to release annual societal savings of about DKK 1 billion when fully phased in. The report also presents the first loans to the municipal sector in Greenland, made possible following an agreement between Naalakkersuisut, the Danish Government and KommuneKredit at the beginning of 2024.
For more than 125 years, KommuneKredit has provided funding to municipalities and regions in Denmark through the issuance of bonds in the international Capital markets. This funding model was changed on 26 March 2025. In the future, the Government will purchase KommuneKredit’s bonds.
The new funding model has resulted in lower Funding costs and, hence, lower prices of loans and leases which will on average be half a percentage point lower than previously. This will amount to annual savings for society of about DKK 1 billion when the model is fully phased in, savings that will ultimately benefit citizens and taxpayers.
Since early 2024, the municipal sector in Greenland has had the possibility to take out loans with KommuneKredit guaranteed by the Danish Government. After the reporting date, loans totalling DKK 873 million have been granted to the municipal sector in Greenland.
New funding model leaves its mark
Profit before value adjustments and tax came to DKK 338 million, up by DKK 108 million on the year-earlier period. The profit covers total net interest income of DKK 368 million in H1 2025, an increase of DKK 32 million on the year-earlier period, extraordinary income of DKK 76 million stemming from the sale of our properties at Kultorvet 14 and 16 as well as administrative expenses which totalled DKK 101 million compared to DKK 99 million for the same period last year.
We recorded negative value adjustments of DKK -516 million for H1 2025 versus DKK -502 for H1 2024. The negative value adjustments were expected in light of the large positive value adjustments recorded in recent years. As a result, comprehensive income was a loss of DKK -139 million for H1 2025, all of which is taken to Equity which then amounts to DKK 10,004 million. According to the Board of Directors’ target, earnings must ensure suitable capitalisation corresponding to an equity ratio of at least 3 per cent. With an equity ratio of 4.0 per cent, our capitalisation is in line with previous years and meets the Board of Directors’ target.
Outlook for 2025
We lower our expectation for net interest income from DKK 750 million to DKK 650 million due in part to lower lending rates which are partly financed by bonds issued under the previous model and which are expected to show through to net interest income in H2 2025. Also, we have adjusted our expectation for net lending upwards from DKK 0.5 billion to DKK 2.0 billion reflecting higher-than-expected net lending in H1 2025, including loans totalling DKK 873 million granted to the municipal sector in Greenland. Our expectation for administrative expenses is unchanged at DKK 215 million. Accordingly, we expect profit for the year before value adjustments and tax of DKK 500 million.
In light of the value adjustments of DKK -516 for H1 2025, comprehensive income for the year is likely to come to a loss. We still expect to maintain an equity ratio of at least 3 per cent both in the short and long run.