In the past six months, we have further strengthened our position as the financing partner of choice for enhancing sustainability in the Netherlands. Thanks to new project financing and the acquisition of part of Triodos Groenfonds’ loan portfolio, our renewable energy portfolio now exceeds €1.3 billion. Our total loan portfolio grew to a record €52.7 billion in the last six months, and we have now raised more than €25 billion in funding with ESG bonds since the issuance of our first Water Bond in 2014. Net profit for the first six months comes in at €72 million.
“With the growth in our financing of renewable energy projects, we have taken an important step towards our audacious goal of making our loan portfolio energy positive by 2035 and climate neutral by 2050. By 2035, we want the renewable energy projects we have financed to generate more renewable energy than the rest of our clients consume in fossil fuels. The water authorities are setting a good example with their ambition to already be 100% energy neutral by 2025,’ says Lidwin van Velden, CEO of NWB Bank.
Our total loan portfolio grew to a record level of €52.7 billion in the last six months. In the first half of 2023, total new lending amounted to €2.8 billion. This is down from €4.0 billion in the first half of 2022, but we expected this decline. As interest rates have been extremely low in recent years, our clients have mostly opted for longer maturities and therefore now have lower financing needs.
Despite the volatile financial markets, we have continued to secure attractive funding over the past six months. We raised a total of €8.2 billion in long-term funding in the international capital markets. Almost half of this, approximately €3.8 billion, we raised with ESG bonds by issuing Water Bonds and SDG Housing Bonds. In total, we have raised more than €25 billion with ESG bonds since 2014. As such, we are and remain the largest issuer of such bonds in the Netherlands.
Capital and liquidity ratios
Our capital and liquidity ratios remain strong. The Tier 1 ratio stands at 44.3% and the leverage ratio at 8.6% as at 30 June. Both are well above the minimum standards of 12.75% and 3% respectively. The Liquidity Coverage Ratio (LCR) at 320% and the Net Stable Funding Ratio (NSFR) at 148% are also well above the minimum requirement of 100%.
Net profit for the first half of 2023 reached €72 million. The profit is slightly lower than last year, which was expected since by the end of 2022 we had repaid all the TLTRO funds we had previously attracted. The ECB had offered the TLTRO funds to support economic activity at the time of the COVID-19 pandemic. This attractive funding has had a significant temporary positive impact on our earnings in recent years. This positive impact will gradually diminish in the coming years as we have already passed on the advantage of the TLTRO to our clients by offering them loans with lower interest rates however, these loans generally have longer maturities than the funds we have attracted from the ECB. Following the ECB's decision to adjust the terms of the TLTRO last year, it was no longer attractive for us to hold these funds.
We expect to meet the financing needs of our clients the Dutch public sector in the remainder of the year in the same socially sustainable way as in the first six months and we foresee that the total size of our loan portfolio will continue to grow in the coming months. We are and remain cautious about our expectations for net profit in 2023.
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