High level of disbursements of export related loans and strong results from operationsNew disbursements amounted to NOK 24.8 billion in the first nine months of 2011, compared to NOK 21.2 billion for the corresponding period in 2010. The volume of outstanding export loans was NOK 112.8 billion at September 30, 2011, compared to NOK 99.8 billion at December 31, 2010, and NOK 92.7 billion at September 30, 2010. Net profit according to IFRS totaled NOK 374 million in the first nine months of 2011, compared to NOK 177 million for the same period in 2010. Adjusted for unrealized and realized gains and losses the profit totaled NOK 678 million at September 30, 2011, which was NOK 30 million higher than at the same time last year.
Anotherone year temporary exemption from EU's directive
EU's capital requirement directive (directive 2006/48/EF) was incorporated into Norwegian Law by a regulation in December 2010. The directive implies that the maximum exposure (guaranteed by banks) Eksportfinans is allowed to have per single client is reduced by 80 percent, from NOK 6.5 billion to NOK 1.3 billion (based on the Company's capital at September 30, 2011). Since January this year Eksportfinans has been subject to a temporary exemption, valid until December 31, 2011.
In a common press release from the Ministry of Finance and Ministry of Trade and Industry dated October 19, 2011, the temporary exemption was extended by one year, until December 31, 2012.
Concurrently, the Authorities announced that they found no grounds for granting Eksportfinans a permanent exemption at the expiration of the temporary exemption period. Eksportfinans will use the temporary exemption period to adapt to the regulations towards December 31, 2012. As requested by the Authorities, a capital increase will be considered among other alternatives. At September 30, 2011, the capital adequacy ratio was 16.5 percent versus 14.4 percent at the same time last year.
Downgrade by Moody's
On October 28, 2011, Moody's Investor Services downgraded Eksportfinans with two notches from Aa1 to Aa3. The rating is placed on review for further downgrade. The rating action follows the Norwegian Ministry of Finance's decision not to grant Eksportfinans a permanent exemption from the regulations on large exposures in the EU's Capital Requirement Directive.
Click here to read the report for the 3rd quarter 2011 (pdf).
Click here to read the press release (pdf).