- Lending volume more than doubled
- Non-investment grade exposure again below the guarantee reserve and fund for general risks
- Higher earnings from lending activity, lower earnings from liquidity portfolio
- Successful return to the Euro bond market
In the core lending activity to the railway sector, EUROFIMA provided financial support to its shareholder railways for a total of CHF 1.7 billion, more than twice the amount disbursed in 2015. The main beneficiaries were the national railways of Austria, Belgium, Netherlands and Switzerland. The financed rolling stock included 1 456 units, of which the majority were electric multiple-unit trains used for regional passenger transportation.
The higher lending volume generated an increase of 2% yoy (CHF 12.7 million) in the related income and helped compensate the lower return from the liquidity portfolio. The high-quality liquidity investments produced an income of CHF 17.1 million at the end of 2016, a decrease of 21% yoy as the result of the persisting low and negative interest rates in CHF and EUR.
In the course of 2016 the balance sheet was further strengthened. Leverage has decreased for the ninth consecutive year, while the Basel III capital ratio reached 36.2% at the end of the year, compared to 30.6% twelve months before. As in the past, EUROFIMA’s balance sheet was fully performing and the equity continued to grow and passed for the first time CHF 1.6 billion (+1%).
Also, the credit rating structure of the balance sheet further improved. In particular, the exposure to non-investment grade countries in the loan book decreased significantly to CHF 0.8 billion (-23%) at the end of 2016, returning below the guarantee reserve and fund for general risks as prior to the financial crisis.
As an issuer of debt instruments, EUROFIMA successfully tapped two of its core currency markets. In the first half of 2016, EUROFIMA returned to the Euro fixed-rate benchmark market with the launch of a new 7-year EUR 600 million bond, which was subsequently increased twice. In addition, EUROFIMA tapped 8 times the Australian dollar domestic market, by increasing the existing 2025 bond and adding a new curve-extending 2027 bond.
EUROFIMA’s final results for the financial year 2016 will be published upon approval by the General Assembly at the meeting scheduled for March 3, 2017.
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