Årsrapport 2012 Annual Report 2012
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ÅRSRAPPORTANNUAL REPORT 2012 2012 MANAGEMENTBERETNING & REGNSKAB COMMENTARY & FINANCIAL STATEMENTS KontaktpersonerContacts Adm.Søren direktør Høgenhaven, Søren CEO,Høgenhaven Managing director DirektørJohnny Munk, Johnny Managing Munk director ØkonomichefJens Bloch Behrendt, Jens Bloch CFO Behrendt AdresseAddress KommuneKredit Kultorvet 16 1175DK-1175 København Copenhagen K K TelefonTelephone 33 +4511 15 33 12 11 15 12 [email protected] www.kommunekredit.dk CVR nr.no. 22 22 12 12 86 86 12 12 OffentliggjortAnnouncement den date: 7. 7marts March 2013 2013 ÅrsrapportenThe annual report omfatter comprises 60 sider 60 pages BilledserienPhotos from er Esbjerg fra Esbjerg Harbour Havn – etone af of mange the many projekter, projects som that KommuneKredit erhas med financed. til at finansiere. CONTENTS KommuneKredit in brief . 4 Financial summary for KommuneKredit . 5 Management commentary Operating review . 6 Local governments and the economy . 9 Organisation and governance . 12 Risk management . .15 . Financial statements Statement of comprehensive income . 18 Statement of financial position . 19 Statement of changes in equity . 20 . Statement of cash flows . 21 List of notes . 22 Statements . 53 . Management . 56. Managerial posts . 57 ANNUAL REPORT 2012 3 KommuneKREDIT IN BRIEF KommuneKredit has the same credit rating as that of the Kingdom of Denmark which is the highest possible international credit rating A Board of Directors is responsible for the general management KOMMUNEKREDIT of KommuneKredit . The Board of Directors has ten members, IN BRIEF of which eight are appointed by the municipalities and two by the regions . A Management consisting of one chief executive officer and one managing director is responsible for the dayto day management . KommuneKredit is a credit association with the objective to pro vide funding and leases to Danish municipalities and regions as KommuneKredit‘s lending is financed by the issue of securities well as companies and institutions against full municipal guaran in the Danish and international capital markets . tee . KommuneKredit operates under a special act and is under supervision by the Ministry of Economic Affairs and the Interior . KommuneKredit is rated by Moody‘s Investors Service and Standard & Poor‘s, KommuneKredit‘s longterm rating is Aaa/ KommuneKredit‘s mission is: AAA, and the shortterm rating is P1/A1+, which is the same . to provide the funding and related services required by Dan rating as that of the Kingdom of Denmark and the highest pos ish municipalities and regions and thereby contribute to sible international credit rating . greater financial latitude in the Danish society . The high rating is attributable to the joint and several liability KommuneKredit‘s vision is: of the municipalities and regions and the fact that they are . to be the absolute leading provider of funding to municipali strong players in the domestic economy, which is also why ties and regions, KommuneKredit can raise funding at attractive prices . More . to be acknowledged as a professional advisor and trust over, KommuneKredit‘s cost level is low, which means that the worthy cooperative partner, funding raised can be relent at a modest margin . to be an attractive, developmentoriented organisation com mitted to effective processes and high quality achieved by KommuneKredit is a modern service organisation based on dedi dedicated and highly qualified employees . cated employees and modern technology . The core values of KommuneKredit are: KommuneKredit‘s members are municipalities and regions that have raised loans in or entered into leases with KommuneKredit . Customers in focus or have guaranteed or are liable for loans raised in or leases en . Job satisfaction and a positive working environment tered into with KommuneKredit . The members are jointly and . Quality in work severally liable for KommuneKredit‘s liabilities . All municipalities . Openness and a positive working relationship and regions in Denmark are members of KommuneKredit . D elegation and responsibility 4 ANNUAL REPORT 2012 FINANCIAL SUMMARY FOR KOMMUNEKREDIT LENDING BY TYPE 2003-2012 TOTAL ASSETS AND EQUITY 2003-2012 50 DKKbn 250 Total assets, DKKbn Equity, DKKbn 6 40 200 5 30 150 4 20 100 3 10 50 2 0 0 1 03 04 05 06 07 08 09 10 11 12 03 04 05 06 07 08 09 10 11 12 Tailor-made loans Bond loans Total net lending Total assets Equity FINANCIAL SUMMARY FOR KOMMUNEKREDIT DKKm 2012 2012 2011 2010 2009 2008 EUR DKK DKK DKK DKK DKK Lending, nominal values Bond loans 251 1,870 2,396 1,373 2,346 8,174 Tailormade loans 4,556 33,992 23,403 33,478 28,474 32,280 Total gross lending 4,807 35,862 25,799 34,851 30,820 40,454 Conversions/refinancing 2,525 18,837 10,167 13,904 16,007 18,464 Total net lending 2,282 17,025 15,632 20,947 14,813 21,990 Leasing Gross lending 109 813 1,539 756 892 738 Instalments and repayments 121 905 847 783 787 732 Net lending 12 92 692 27 105 6 Key figures Net interest income 81 603 611 453 350 378 Administrative expenses 13 97 95 90 88 77 Value adjustments of financial instruments 26 191 175 47 4 39 Profit before tax 93 694 691 411 255 338 Tax on profit for the year 24 178 175 102 63 84 Profit for the year 69 516 516 309 192 254 Profit for the year excl . value adjustments 51 378 388 274 195 225 Total lending 18,269 136,296 128,979 125,136 111,538 105,213 Debt securities issued 22,257 166,045 164,751 156,235 133,926 117,254 Total assets 24,380 181,885 177,113 166,206 143,207 128,788 Equity 766 5,716 5,200 4,684 4,375 4,183 Number of fulltime employees 59 59 60 60 57 50 Exchange rate EUR 100 = DKK 746 .04 . ANNUAL REPORT 2012 5 OPERATING REVIEW LENDING IN PER CENT BY BORROWER LENDING BY TYPE OF PURPOSE Municipalities and regions 67 % Municipalities 57 % Waste, heating and energy 17 % Regions 10 % Water and waste water disposal 10% Guaranteed loans 29 % Public transportation and harbours 3 % Partnerships 4 % 57+10294z Other purposes 3 % 67+17103z when the ECB announced new monetary policy initiatives in OPERATING REVIEW September . As a result of Denmark‘s relatively low public debt, investors showed significant interest in Danish high credit qua lity securities . Therefore, KommuneKredit had easy access to funding at very favourable prices in 2012, and in April, a bench 2012 was a good year for KommuneKredit with easy access to mark issue of USD 1 billion took place . funding and continued growth in lending . During the year, the importance of municipalities having their own funding institution Liquidity resources amounted to DKK 24 .4 billion at year end was clearly demonstrated . 2012, which is largely unchanged compared to year end 2011 . KommuneKredit‘s refinancing risk is very limited as all binding Gross lending amounted to DKK 35 .9 billion against DKK 25 .8 lending commitments must be fully financed before the com billion in 2011 . Net lending amounted to DKK 17 .0 billion against mitment is entered into . DKK 15 .6 billion in 2011 . The credit risk is reduced by means of high rating requirements The increase in gross lending is primarily attributable to the for counterparties and by entering into special collateral agree significant increase in loan conversions . Many borrowers have ments (CSA), covering 78 per cent of the market value of finan converted KommuneKredit‘s bond loans to loans with a lower cial instruments at year end 2012 . interest rate, and loans in CHF have to a significant extent been converted into DKK . This is due to the fact that no interestrate KommuneKredit‘s net interest income amounted to DKK 603 million advantage may be gained from raising loans in CHF compared in 2012 compared to DKK 611 million in 2011 . Owing to the favour to loans in DKK . Moreover, some borrowers have decided to take able funding situation, KommuneKredit reduced its prices in January advantage of the historically low interest rate levels and refi 2012, and in July 2012, a further price reduction was made . How nance their loans from floatingrate to fixedrate loans . ever, this price reduction has still to fully impact net interest income . In order to gain administrative advantages, a merger was carried Value adjustments of financial instruments amounted to a total out in 2012 between KommuneKredit and KommuneLeasing with income of DKK 191 million in 2012, which is among other things KommuneKredit as the continuing enterprise . KommuneLeasing‘s attributable to nonrecurrent income of DKK 148 million from activities are continued as an independent business area which is buybacks of securities issued . In 2011, positive value adjust still marketed under the name of KommuneLeasing . ments of financial instruments amounted to DKK 175 million, of which gains from buybacks amounted to DKK 90 million . Year 2012 showed increased interest in publicprivate partner ships (PPPs) with public funding, and in 2012, KommuneKredit Costs, including depreciation of DKK 97 million, were largely un funded two PPP projects in progress . changed compared to year end 2011 . The financial markets continued to be affected by the Euro KommuneKredit‘s profit was DKK 516 million which is unchanged zone crisis in 2012, however, the markets became more stable from 2011 . In the interim report, a profit of DKK 350 million, 6 ANNUAL REPORT 2012 OPERATING REVIEW LEASE RECEIVABLES YEAR END FUNDING, ADDITIONS BY MARKET Properties 35 % Cars 23 % Denmark 25 % IT equipment 20 % Europe 53 % Medical-tech. equipment 10 % North & South America 11 % Office equipment 6 % Asia 10 % Technical equipment 3 % The Middle East & Africa 1% Vessels 3 % 35+23201063z 25+53+11+101z excluding value adjustments, was estimated; however, the actual total lending increased from 91 percent to 95 percent of total profit was DKK 378 million .