The underlying business operations for the Eksportfinans Group showed continued good performance in the fourth quarter of 2008. Net interest income in the fourth quarter was NOK 467 million, compared to NOK 148 million in the fourth quarter of 2007. For the year 2008 as a whole, net interest income increased by NOK 507 million to NOK 1.1 billion.
Net profit excluding unrealized gains and losses was NOK 376 million at December 31, 2008, compared to NOK 294 million at December 31, 2007. However, the Eksportfinans Group experienced substantial unrealized gains in the accounts in 2008 due to the decrease in the mark-to-market value of Eksportfinans’ own debt, which is measured at fair value in the financial statements according to IFRS. These unrealized gains were the main reason for the profit of NOK 3.5 billion in the fourth quarter of 2008, compared to a loss of NOK 85 million in the equivalent period in 2007. For the year 2008 as a whole, the Group experienced a profit of NOK 3.4 billion, compared to a loss of NOK 149 million in 2007. The unrealized gains related to Eksportfinans' own debt will be reversed as unrealized losses in the years to come.
Export Lending
The Norwegian maritime industry and the oil and gas sector were experiencing a continued high level of activity through 2008. The volume of outstanding export loans increased by 43 percent during the year and was NOK 80.4 billion at December 31, 2008 compared to NOK 56.4 billion at December 31, 2007.
Local Government Lending
Total loans from Eksportfinans’ wholly owned subsidiary Kommunekreditt Norge AS to the public sector in Norway at December 31, 2008 were NOK 58.8 billion, which was a reduction of 14 percent compared to year-end 2007. The decrease was due to a decision to re-price parts of Kommunekreditt’s loan portfolio at a higher level due to the limited access to long-term funding in the international capital markets in the autumn of 2008. For the same reason Eksportfinans’ Board of Directors made a strategic decision in the fourth quarter of 2008 to search for alternative solutions for Kommunekreditt.
Funding
Despite the demanding situation in the international capital markets, Eksportfinans has experienced good access to funding in 2008. Total new funding during 2008 amounted to NOK 93.7 billion through 836 individual trades, compared with NOK 80.7 billion and 889 trades during 2007.
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