Continued good performance – results influenced by exposure to Iceland
The underlying business operations in the Eksportfinans Group showed continued good performance in the third quarter of 2008. Net interest income was 61 percent higher in the third quarter 2008 compared to the corresponding period in 2007.
The situation in the international financial markets in the third quarter of 2008 led to a decline in the fair value of financial instruments of NOK 343 million. In particular, the current situation in Iceland has caused a loss to Icelandic banks of NOK 318 million in the third quarter 2008.
In the first nine months of 2008 as a whole, net interest income was NOK 601 million, which is NOK 188 higher than the corresponding period in 2007. The increase was mainly due to a higher volume of export lending, income from higher equity due to the equity increase of NOK 1.2 billion in the first quarter of 2008, and higher interest rates in Norwegian kroner.
The Group experienced a net loss in the first nine months of 2008 of NOK 180 million, compared to a net loss of NOK 64 million in the corresponding period in 2007. The loss is by and large caused by losses on lending to Iceland (see above).
Export Lending
The strong demand for new export financing continued during the first nine months of 2008. The volume of outstanding export loans was NOK 71.0 billion at September 30, 2008 compared to NOK 56.3 billion at the end of 2007 and NOK 51.2 billion at the end of the first nine months of 2007.
Local Government Lending
Total lending from Eksportfinans’ subsidiary Kommunekreditt Norge AS at September 30, 2008 amounted to NOK 61.5 billion, compared to NOK 68.3 billion at year-end 2007. The decrease was due to a repricing of parts of the company’s lending portfolio based on somewhat higher funding costs.
Funding
Despite the demanding situation in the international capital markets, Eksportfinans has experienced good access to funding in the first nine months of 2008. Total new funding in the first nine months of 2008 amounted to NOK 69.2 billion through 710 individual trades compared with NOK 62.9 billion and 659 trades for the same period in 2007.
To view the press release please clik here (pdf)
To read the third quarter report (pdf) please clik here