AFL Group Announces Record Financial Performance for 2024
March 27, 2025 - AFL Group proudly reports strong results that showcase the effectiveness of its operational model. By the end of December 2024, AFL revealed that its net banking income surpassed €24 million and its gross operating profit reached €7.8 million.
For the first time, credit production directed toward local authorities hit an impressive €2 billion. Moreover, AFL celebrated the addition of 269 new local authority members, marking a notable milestone that brings the total to 1,045.
Key Financial Milestones
As of December 31, 2024, some key financial highlights include:
- Committed capital: €328 million, which increased by €34.6 million from the previous year.
- Credit production: Reached €2 billion, up 3% compared to the same date in 2023.
- Market funding raised: A total of €2.4 billion, reflecting a 13% increase year-on-year.
- Net profit before tax: Recorded at €7,466K, down 3.5% from 2023.
- Cost-to-income ratio: Stabilized at 67.4%.
Growth Driven by Increased Lending
Since achieving breakeven in 2020, the AFL Group has maintained a streak of 10 consecutive semesters demonstrating positive performance. The growth is attributed to a remarkable increase in lending activities to local authorities, alongside effective cost management and strategic investments in workforce and technology.
When analyzing operational efficiency, operating expenses relative to outstanding loans stood at 17 basis points by December 31, 2024, an improvement from 20 basis points at the end of the previous year.
Risk Management and Financial Resilience
Risk costs remain exceptionally low due to the robust framework of the public development credit institution model. Prudent management practices combined with the strong solvency of local authorities underpin this low risk profile. Following decisions made in June 2024, the risk weighting for local authorities dropped to 0%.
As of year-end, AFL has established a provision of €381K under IFRS 9 for expected credit losses, contrasting with a reversal of provisions of €117K noted in 2023. This provision illustrates the balance sheet growth alongside a cautious approach to macroeconomic factors.
Solid Financial Structure Supporting Sustainable Growth
AFL Group showcases a resilient financial foundation:
- CET1 solvency ratio: 63%, exceeding the regulatory requirement.
- Leverage ratio: 11.25%, well above the minimum regulatory threshold of 3%.
- LCR ratio: Exceptional liquidity at 447%, significantly exceeding the minimum requirement of 100%.
- 12-month internal liquidity ratio (NCRR): Affirmed at 90%, ensuring ample liquidity for over 11 months without market access.
- NSFR ratio: Solid at 220%, showcasing financial stability.
Highlights and Future Directions
In 2024, despite challenging refinancing conditions, AFL successfully raised €2.4 billion in funding under favorable terms. Strategic diversification and public ratings have significantly supported this effort.
Furthermore, on March 13, 2025, AFL-ST executed a robust capital increase, welcoming 57 new local authority members and lifting total promised capital to nearly €331 million. The aim is to exceed 1,300 member local authorities by the end of 2025, a promising target that reflects AFL's growth ambition.
The Executive Board and Supervisory Board have favorably reviewed the annual financial statements for 2024, ensuring a solid end to a year marked by significant accomplishments.
Frequently Asked Questions
What were AFL's key financial achievements in 2024?
AFL reported net banking income exceeding €24 million and credit production reaching €2 billion, alongside a solid growth in memberships.
How does AFL manage risk within its operations?
AFL maintains low risk costs, benefiting from a solid public development credit model and prudent financial management practices.
What was the significance of the new capital increase in 2025?
The capital increase allowed 57 new local authorities to join AFL, bolstering its total capital and enhancing financial stability.
How is AFL positioned for future growth?
AFL targets to surpass 1,300 member local authorities by the end of 2025, reflecting its commitment to expanding its reach and impact.
What is AFL's approach to sustainable finance?
AFL embodies responsible finance tailored for local authorities, enabling sustainable investments that align with their future needs.
