KommuneKredit Reports Impressive Growth and Future Outlook

Impressive Financial Performance in 2025

KommuneKredit has exciting news to share regarding its financial accomplishments for the first half of the year. The organization announced a profit before value adjustments and tax standing at DKK 338 million, surpassing last year's performance by DKK 108 million. This remarkable increase primarily stemmed from the successful sale of properties at Kultorvet 14 and 16, which significantly contributed to the earnings.

The comprehensive income for this period showed improvement as well, at DKK -139 million, a positive change when compared to DKK -212 million during the same time last year. The organization is clearly on a path of financial recovery and growth.

Solid Growth in Interest Income

Another commendable milestone for KommuneKredit is its net interest and fee income, which reached DKK 439 million in the first half of 2025. This figure represents an increase of DKK 110 million compared to the previous year. The value of loans and leases also experienced a notable rise, climbing by DKK 4.5 billion since the end of 2024, now totaling DKK 198.588 billion at the close of the first half of 2025. This growth reflects strong demand and solid operational management.

Changes in Capital Structure

Despite the growth in many areas, the Common Equity Tier 1 (CET1) capital witnessed a decline from DKK 10,188 million at the end of the previous year to DKK 10,004 million. The Board of Directors is focused on maintaining an appropriate capital structure, targeting an equity ratio of at least 3 percent. Currently, with an equity ratio of 4.0 percent, KommuneKredit meets this expectation, showcasing its stable financial foundation.

Transformative Funding Model

One significant development has been the transformation of KommuneKredit's funding model, effective from the beginning of 2025. For over 125 years, KommuneKredit has served as a vital funding source for municipalities and regions in Denmark through bond issuance in international markets. To enhance efficiency and financial benefits, the model has shifted, with the government now purchasing KommuneKredit’s bonds.

This new funding approach is set to lower funding costs significantly, translating to reduced loan and lease prices, which are expected to average half a percentage point lower than before. This change is anticipated to yield annual savings of approximately DKK 1 billion for society, ultimately benefiting citizens and taxpayers.

Impact on Greenland Municipalities

Since early 2024, KommuneKredit has also opened avenues for the municipal sector in Greenland to secure loans backed by the Danish Government. Post-reporting period, it has granted loans amounting to DKK 873 million to the Greenland municipal sector, further extending its financial support and fostering development within the region.

Financial Outlook for the Rest of 2025

As KommuneKredit navigates the remainder of 2025, it has adjusted expectations for net interest income down from DKK 750 million to DKK 650 million. This alteration is influenced by lower lending rates supported by bonds issued under the preceding model, which are projected to reflect in the upcoming net interest income for the latter half of the year.

Conversely, the forecast for net lending has been revised upwards from DKK 0.5 billion to DKK 2.0 billion, a shift that highlights more robust lending activity than initially anticipated, particularly with the loans granted to Greenland municipalities. The organization maintains its expectations for administrative expenses at DKK 215 million and forecasts a profit of DKK 500 million for the year prior to adjustments for value.

Long-Term Stability

Despite the anticipated value adjustments nearing DKK -516 million for H1 2025, KommuneKredit remains committed to preserving its equity ratio of at least 3 percent in both the short and long term. This strategy underscores the organization's resilience and proactive management in adapting to marketplace shifts while ensuring stable financial health.

Contact Details

For more inquiries regarding KommuneKredit’s interim report, Jens Lundager, the Chief Executive Officer, can be reached at tel. +45 3369 7622 or via email at jlu@kommunekredit.dk.

Frequently Asked Questions

What were the main financial highlights for KommuneKredit in H1 2025?

KommuneKredit reported a profit before value adjustments and tax of DKK 338 million and net interest income of DKK 439 million.

How has the new funding model impacted KommuneKredit?

The new funding model has reduced funding costs, resulting in lower loan prices and significant savings for society.

What loans were granted to Greenland, and why are they significant?

KommuneKredit granted DKK 873 million in loans to the Greenland municipal sector, which indicates an expansion of financial support amid changing funding strategies.

What is the expected profit for KommuneKredit for the rest of the year?

The organization anticipates a profit before value adjustments and tax of DKK 500 million for the year.

How does KommuneKredit's equity ratio contribute to its stability?

With an equity ratio of 4.0 percent, KommuneKredit meets its target of at least 3 percent, ensuring financial stability and capital adequacy.

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