The war in Ukraine - KBN little affected

Russia's invasion of Ukraine is an attack on freedom, human rights and democracy, and a serious violation of international law. Our thoughts go first and foremost to the people who are now exposed to great suffering and loss. KBN's operations are not affected to any great extent, and the bank is well prepared for the turmoil in the financial markets.

Heavy sanctions 

Heavy sanctions have been imposed on Russia, particularly to hit the economy, the financial system, companies and individuals. Norway has joined the EU's sanctions and decided that the Government Pension Fund Global will sell itself completely out of Russian securities. The rating companies have downgraded Russian government debt to the notch above bankruptcy and there is uncertainty about whether the Russian government will be able to meet its payment obligations on debts that fall due in the future. Sanctions against individuals and companies are followed up and are not expected to have a direct impact on KBN.

Well equipped for market turbulence

The war has also caused turbulence in the international financial markets. KBN is affected by currency fluctuations through the exchange of collateral for derivative contracts, but this is well managed through liquidity management. The fluctuations have been smaller than at the start of the pandemic in 2020. Russia is a small economy and KBN does not hold Russian or Ukrainian securities and does not use Russian or Ukrainian banks as counterparties. KBN operates with a liquidity portfolio that over time will correspond to 12 months' financing needs, including lending growth for the municipal sector, among other things to be prepared for external shocks.

There has been an increase in credit spreads both internationally and in Norway. 3-month NIBOR has risen slightly more than expected in the last two weeks.

Increased awareness of cyber security

KBN has a high level of awareness of the increased cyber threat and has close contact with our suppliers. Employees and employees have been made aware of the danger of cyber attacks and how to deal with it.

Russia is one of our neighboring countries and there has long been trade, cultural exchange and other cooperation between companies and municipalities in Norway and Russian companies and people. For several Norwegian municipalities, it is an important contribution to, among other things, business and the economy that disappears as a result of Putin's war of aggression.